Monday, November 21, 2011

Proposed Marcellus Bill To Be Reviewed By Governor's Office; Consensus Still Uncertain

A special study committee of the West Virginia Legislature has completed its drafting of proposed Marcellus regulatory legislation, and the committee's bill is now undergoing review by Governor Tomblin and his top aides. The study group spent the past several months crafting their regulatory provisions, which will impose higher drilling permit fees and more regulations on horizontal drilling and production. Provided is a link to the study group's final proposed bill - click to read.

Both state natural gas trade groups and horizontal producers have expressed concerns about the added costs and a number of the new regulations contained in the bill.

Governor Tomblin's Chief of Staff told the Associated Press last week that the administration will review the committee's recommendations. He noted, however, that the study group's bill needs work in order to reach added consensus.

"There are a handful of, some issues that we think we can work out," Chief of Staff Rob Alsop said. "There's no doubt that the committee made progress, but there are significant issues we want to work through."

Click to read the AP article.

Some lawmakers are calling on the Governor to take up the bill in a special session prior to the start of the 2012 regular legislative session, which starts January 11, 2012. The Governor has stated he will consider the legislation only after there is general agreement for its many provisions.

Tuesday, November 15, 2011

Marcellus Issues Discussed As Part Of State, Federal Hearings In Charleston

Issues related to Marcellus drilling and production were discussed at two events yesterday in Charleston. Provided are news articles and editorials:

Delegate: Hire More W.Va. Workers in Natural Gas Industry -

EPA ‘Confident’ of State’s Ability to Regulate Drilling -

Legislative Committee To Vote On Marcellus Bill This Week -

Commentary: Getting closer on Marcellus Shale -

Marcellus revisions approved; select committee to vote on measure Wednesday -

Editorial: Leadership on Marcellus Shale question -

Editorial: State’s overall interest should prevail in regulating Marcellus:

Warning sounded on regulating Marcellus drilling -

W.Va. Legislature's special study panel adds final Marcellus amendments -

Special Marcellus legislative study co-chair says he might ask feds for Marcellus help -

Sunday, November 13, 2011

Governor Restates Pledge For Permanent Rules, Certainty For State's Natural Gas Industry; Consensus Lacking Among Lawmakers

Governor Earl Ray Tomblin used his inaugural address this afternoon to reinforce his pledge to bring certainty to the state's natural gas industry. Tomblin told the audience on the steps of the state Capitol that "working with members of the Legislature, we will put permanent rules in place to provide certainty to the natural gas industry, while also protecting landowners and our environment." He also noted that this certainty will help aid the state's manufacturing sector, which is projected to be "rejuvenated by taking advantage of natural gas byproducts."

Tomblin, serving as Acting Governor for the past year, has called for balanced regulations. He also has been aggressively working to get an ethane cracker located in the state. "I look forward to, not just one, but hopefully two multi-billion-dollar [cracker] investments, so our children can stay home, secure good paying jobs and raise their families' right here in West Virginia," he said.

Click to read the entire inaugural address.

Uncertainty exists in West Virginia due to an ongoing effort by lawmakers to develop added regulations and fees on the state's horizontal producer community. A special legislative study group's proposed regulations have raised concerns and strong objections from horizontal producers and the state's two natural gas trade groups. The study group is nearing the end of its effort, but consensus seems ellusive even among lawmakers. According to a new Associated Press story, "the main players involved in the months-long quest for compromise appear as divided as ever." Click to read the article.

Friday, November 11, 2011

West Virginia Supreme Court Clarifies Rights Of Royalty Owners

On October 11th, by Memorandum Decision, the West Virginia Supreme Court of Appeals affirmed the entry of a Summary Judgment Order by the Circuit Court of Doddridge County in Gassaway v. Dominion Exploration and Production, Inc., upholding the Circuit Court’s determination as a matter of law that a party who had been mistakenly receiving royalty payments had not established title to the oil and gas estate by adverse possession.

In Gassaway the petitioner’s parents had entered into the chain of title of the surface and a portion of the oil and gas estate underlying a 192-acre tract in Doddridge County in 1957. In 1965 the petitioner’s parents lost their interest in the property as a result of a foreclosure. The petitioner’s parents ended up with title to a smaller 10 acre parcel that was a part of the same original tract as the 192 acre parcel but they, and later the petitioner herself, continued to receive royalty payments from the respondent, or its predecessors in interest for oil and gas production underlying the entire 192 acre tract. In 2007, the respondent, as a result of completing title on the 192 acre tract prior to drilling another well on the property, determined that the petitioner had been inappropriately receiving royalty payments. The producer ceased royalty payments to petitioner and began paying royalties to the parties that respondent had determined were properly vested with title.

In the litigation that followed, the petitioner asserted a number of claims, with her claim for title based on adverse possession being central to the importance of this Memorandum Decision. The respondent argued, and the Supreme Court of Appeals agreed, that the Circuit Court correctly found that the petitioner’s claim of adverse possession failed as a matter of law. Specifically the Court’s Memorandum Decision held that collecting a royalty payment does not constitute “actual, hostile possession of oil and gas, and that royalty payments are personal property to which adverse possession does not apply.” (Gassaway v. Dominion Exploration and Production, Inc., No. 11-0535 at 4 (W.Va. 2011)).

LGCR has extensive experience defending producers in all manner of royalty payment actions in West Virginia, and Richard Gottlieb is available by phone ((304) 345 2000) or email ( to answer questions in this area.

Thursday, November 10, 2011

U.S. Senate Committee Field Hearing On Marcellus Shale Set For November 14 In Charleston

The U.S. Senate Energy and Natural Resources Committee will hold a field hearing at 10 a.m. Monday, Nov. 14 in the 7th Floor Courtroom of the Robert C. Byrd Federal Courthouse in Charleston, W.Va. The hearing will address the issue of Marcellus Shale and will be chaired by U.S. Senator Manchin, who will be conducting his first field hearing in the Senate.

The Energy Committee hearing on the 14th will allow witnesses from the Federal and State government, as well as local stakeholders, to testify to the potential of our nation’s shale gas reserves, and the important economic and safety issues that must be addressed if these resources are to be developed responsibly. Provided is a link to the list of witnesses.

Wednesday, November 9, 2011

Marcellus Legislative Study Group To Consider Final Amendments On Sunday

Members of the Legislature's special Marcellus study group are scheduled to convene on Sunday to consider four final amendments. The group has been working for the past several months to develop a regulatory bill for horizontal drilling and production activities in West Virginia. Many of the provisions of the proposed bill are ones that will add new burdensome requirements and costs on horizontal producers. One pending amendment that will be considered during Sunday's meeting involves giving added rights to surface owners. Click to read more in this story in The Register-Herald.