Tuesday, March 22, 2011

DEP Opposes Marcellus Moratorium, But May Explore Emergency Rules

West Virginia DEP Secretary Randy Huffman says he is opposed to calls to place a moratorium on Marcellus drilling permits, which is a position being advocated by a small number of liberal legislators. Calls for the drilling moratorium have arisen following the failure of the state Legislature to enact a DEP bill that would have increased drilling fees and imposed additional regulations on the state’s natural gas industry. Huffman, in an article in today’s The Register-Herald, says he does not think the current situation justifies a moratorium. “If I ever felt the industry was so far out in front of our ability to properly regulate it, then I would consider such a thing,” Huffman is quoted in the article. “I just don’t think we are there at this point.” He noted that he thinks his agency “can regulate the industry well enough — not perfectly, but well enough to get by in the near term.” The Secretary said, however, that he is exploring possible emergency rules now that the Legislature has adjourned for the year.

Click to read article.

Wednesday, March 16, 2011

Acting Governor Calls For $2 Million To Fund 8-10 Additional Inspectors

Acting Governor Earl Ray Tomblin is calling on legislators to appropriate an additional $2 million from the state's General Revenue fund so the state DEP can hire 8-10 additional Office of Oil & Gas inspectors for increased Marcellus well drilling activities in West Virginia. The Governor reiterated his funding request during a press conference this afternoon. Governor Tomblin also said he does not think a special session on Marcellus regulatory bill is in order at this time. The Associated Press notes in an article that "Tomblin says the various stakeholders are no closer to a compromise than they were when their disagreements derailed a proposal during the just-completed regular session."

Tuesday, March 15, 2011

Acting Governor Tomblin To Address Post-Session Marcellus Regulation

Acting Gov. Earl Ray Tomblin will hold a press conference tomorrow (March 16) to discuss regulation of Marcellus Shale development as well as a wrap-up of the 2011 Legislative Session. Click to read announcement.

Sunday, March 13, 2011

Legislative Session Ends With Passage Of Ethane Cracking Incentive Bill; Regulatory Bill Fails

The West Virginia Legislature concluded its 60-day regular session last evening after completing action on one of two bills related to Marcellus production in the state. Lawmakers passed a measure (S.B. 465) that will provide tax incentives for the location of a ethane "cracking" plant in the state. Lawmakers failed to come to agreement on legislation (Com. Sub. for S.B. 424) that would have imposed new drilling and hydraulic fracturing regulations, expanded surface owner rights and increased drilling permit fees.

Click to read articles -
Sunday Gazette-Mail

The Register-Herald

Saturday, March 12, 2011

State Geological Survey Creates On-Line Marcellus Map With Drilling Locations

The West Virginia Geological & Economic Survey has created an interactive web site that shows the Marcellus Shale formation in the Mountain State and locations of actual drilling sites. WVGES's "Marcellus Shale Mapping System" displays locations of completed Marcellus wells as well as permitted wells. The web site also provides general information about the Marcellus formation, including depth and thickness.

Click to see the WVGES Marcellus Shale Mapping System.

Friday, March 11, 2011

Marcellus Drilling Bill Appears Headed To Conference Committee

Marcellus drilling legislation (Com. Sub. for S.B. 424) is expected to go to legislative conferees tomorrow, which is the last day of the 2011 regular legislative session. The bill, as amended by the House Judiciary Committee, contains a better defintion of a horizontal well based on water usage, preemption of local regulation and no severance tax increase. However, the bill's surface owner rights and water reporting provisions remain in controversy.

Thursday, March 10, 2011

House Ready To Pass New Version Of Horizontal Drilling Regulatory Bill; End Of Session Looms

Horizontal drilling legislation adopted yesterday by the House Judiciary Committee moved along today as the House Finance Committee also gave its approval to the bill. The bill, Com. Sub. For S.B. 424 (as amended by the House Judiciary Committee) is pending Second Reading on the House floor. If the full House passes the measure by Saturday night (when the 2011 session ends), the measure then will go back to the West Virginia Senate. At that point in time, the upper body either will accept the House’s rewrite of this bill or the measure will go to a conference committee. The version modified by the House Judiciary Committee includes tougher environmental and regulatory provisions than passed by the state Senate. All action on bills must be completed by midnight on March 12.

Click to read article in The Charleston Gazette.

Wednesday, March 9, 2011

House Judiciary Committee Planning Tougher Environmental Regs In Horizontal Drilling Bill

The House Judiciary Committee is scheduled to take action this morning on legislation related to horizontal drilling activities in West Virginia, and the committee members are expected to insert tougher environmental and regulatory provisions in the bill. The committee will be taking up S.B. 424, which was passed by the upper house last week. The committee is expected to insert provisions to make drillers develop water management plans and disclose information about the fluids used in hydraulic fracturing. Any changes to the bill would have to be passed by the full House and then accepted by the Senate...or they will have to go to a conference committee. The 2011 regular session of the Legislature ends this Saturday, March 12.

Click to read article in The Charleston Gazette.

Click to read article in The Register-Herald.

Tuesday, March 8, 2011

Natural Gas A Bargain Compared To Oil

Natural gas is one-fourth the cost of oil on an energy equivalent basis, according to a study by a WVU professor. "...a unit of natural gas currently costs about $4, while the price of oil is skyrocketing to well over $100 per barrel. This means that natural gas can produce the same amount of energy that oil can, and do so for about $24, or less than one-fourth the cost of a barrel of oil." Click to read an article in today's The Intelligencer/Wheeling News-Register.

Thursday, March 3, 2011

State Senate Passes Marcellus Drilling Fee, Regulatory Bill; House To Determine Bill's Fate

Legislation to increase permit fees and establish added regulatory requirements for Marcellus drilling activities is sitting in the House of Delegates. The bill, Com. Sub for SB 424, was passed by the Senate yesterday and was communicated to the House and read a first time. The bill does not include key provisions sought by horizontal producers, such as forced pooling. It is unclear as to whether the bill, as passed by the Senate, will be accepted by the full House and enacted...or sent to a House committee for further modification during the final two weeks of the 2011 regular session. Passage of a final bill likely will be dependent upon the degree to which changes, if any, are made by the House versus what the Senate passed.

Tuesday, March 1, 2011

Horizontal Drilling Regulatory Bills Alive, Moving In West Virginia Legislature

The West Virginia Senate Judiciary Committee passed out the Committee Substitute for the Committee Substitute for Senate Bill 424, and the bill is on the first of three readings today (March 1). This bill regulates horizontal drilling activites in West Virginia and would enact water and road use requirements where water use exceeds 210,000 gallons and where horizontal rigs and supply vehicles use state highways. The measure, however, does not provide for forced pooling. The West Virginia House read for the first time its version of a horizontal drilling regulatory bill (Committee Substitute for House Bill 2878). This House version regulates much more pervasively then Senate Bill 424. H.B. 2878 also does not include forced pooling.

It is expected both bills will be read three times by the end of this week and then each legislative body will appoint conferees to work out differences in the bills and agree to any other modifications. It is hoped the conferees will be open to streamlining the regulatory requirements. The 60-day regular legislative session will end Saturday, March 12.

Efforts also are being made to get lawmakers to pass a Study Resolution on unitization of gas mineral interests and co-tenancy issues. The study would be conducted during legislative interim sessions over the summer and fall of 2011.