Thursday, May 31, 2012

W.Va. DEP's Second Workshop on State's New Horizontal Well Control Act Focuses on Ways To Ensure Timely, Complete Permitting Process

The West Virginia Department of Environmental Protection is conducting a second workshop for the state's oil and natural gas industry. The workshop is addressing the recently passed horizontal drilling legislation (Natural Gas Horizontal Well Control Act). At today's workshop, DEP officials focused on working together with the industry to help foster the timely and complete application and processing of drilling permits. State officials stressed the importance of following the new permitting check list and the filing of a complete water management plan in order to ensure a successful permitting process.

Here is a link to the W.Va. DEP's Office of Oil & Gas:
http://www.dep.wv.gov/oil-and-gas/Pages/default.aspx

Tuesday, May 29, 2012

DEP Continues To Work To Address Delays Involving Horizontal Drilling Permits

The following is a reprint of an article posted today on MetroNews.com:

DEP Attempting to Gain Ground On Permits

DEP Secretary Randy Huffman admits it is taking his department longer to process permits for horizontal drilling than he wants.  Recent reports indicate the DEP is trying to defray a backlog of permits, Huffman says it's more a matter of getting their legs under them.

"All the rule changes we've gone through over the past year has effectively slowed down the permitting process.  That creates a backlog, but the backlog is just a number," Huffman said. "What we are really focused on is trying to create a stable and predictable regulatory environment here."

Huffman says it will take a while to reach that level.   Presently the average time to have a well permit approved is 94 days.  Huffman says when they started the process it was 104 days.  Although not a long period of time, he says it's still longer than the drilling industry is used to waiting.  "The reasonable expectation for how long it would take to process a typical horizontal gas well permit is 45 and 60 days," he said. "That's our objective because there's just no way to do it any sooner than that."

The public comment period required in the permitting process is one of those obstacles to speeding the process.  Another is personnel.  The DEP hired two staffers to handle the horizontal drilling permits, but one stayed only a brief period of time and left.  The other quit before he started because of personal reasons. 

"We have reworked the office of oil and gas and reprioritized their work so we could still get everything done, but at the same time we wanted to make sure we were processing the horizontal well permits in a timely manner," he said.

Huffman says he expects to have the process down and streamlined by midsummer.

Tuesday, May 22, 2012

WV DEP Still Struggling To Add Staff To Meet Permit Backlog; Solution Expected By End Of Summer

The West Virginia DEP continues to struggle with the challenge of adding more workers and inspectors while trying to keep up with the increase in horizontal well permits.  The agency updated producers about the situation at a meeting yesterday in Charleston.  Provided is an article that appears in the May 22 edition of The State Journal:

WVDEP: Trouble hiring, attempting to reduce gas permit backlog

The State Journal, May 22, 2012

More employees are coming, but the West Virginia Department of Environmental Protection continues to battle a backlog of horizontal well drilling permits. Randy Huffman, DEP secretary, said the agency continues to struggle with a backlog of more than 250 horizontal well permits.

"We're going through the process right now of staffing up," Huffman said. "The permit backlog, the horizontal well permits are stacking up in the queue. They're coming in faster than they're going out."

The DEP recently received increased funding for more staff through increased permit fees for horizontal well permits.  Huffman spoke at the West Virginia Chamber of Commerce's Environmental Conference Tuesday morning. At an event in February, Huffman also spoke of the backlog issue. Then, he said the average permitting time for a horizontal drilling permit was about 110 days.

"The worst thing that can happen is backlog. That is just a dirty word in the agency," Huffman said. "I've worked on backlogs before in mining, and we're going to get this one in oil and gas resolved."

The challenge for the DEP, Huffman said Tuesday, has been hiring the new staff. While he said he has the ability to now hire nine to 10 inspectors and four to five office staff, the hiring process has not gone well. One new hire quit less than a month after joining, Huffman said, and another quit before the first day on the job.

"Since December, I've been able to add one new resource to the program to help with the permitting, the influx of permit applications that are coming in," Huffman said, referencing a newly hired employee.

One solution, titled the "Oil and Gas Control Room," on the slide presented by Huffman at the conference, has been to insulate permitting staff "from the daily barrage" of things such as permitee pressure, the hiring process or Freedom of Information Act requests.

About a week ago, he said, the members of the permitting staff began focusing on reducing the horizontal well permit backlog, a frequent sore point among those industry who want to develop.
"We got word just yesterday, they've been in there for about a week, that, hey, it's working," Huffman said.

It's not that the permits take that long to process, he said. It's the sheer number of applications. In 2006, Huffman said, no permits for horizontal drilling operations were issued. By 2011, more than 500 permits were issued.

Meanwhile, conventional permits have been dropping, from 2,400 in 2007 to about 300 in 2011. The conventional wells typically produce less gas, sustain fewer jobs and are generally simpler than a larger horizontal drilling operation.

Prior to the December legislation, any gas drilling permit was just a few hundred dollars. With total permits issued decreasing, the WVDEP was under immense strain because workloads were increasing due to the complexity of the horizontal drilling permits.

In February, Huffman explained that prior to the new Horizontal Well Act, workloads were increasing without significant increases staffing. While the DEP was "going broke and not hiring people," Huffman said in February, workloads were increasing "exponentially," putting the organization in a "serious jam."

"Without this special session, we would have imploded, or without something happening during this session, if the special session had not occurred, we would not have survived another year," Huffman said in February. "We would have imploded and the industry would have been in trouble because getting permits would have been a nightmare."

The new legislation will provide the DEP with an estimated $2.4 million, enough to fill seven vacant positions and add an additional 14.

Because of the way the legislation is structured, Huffman said, the minimum amount of time to issue a permit would be about 33 days. The agency is aiming for a window closer to 45 to 60 days to issue a permit, Huffman said Tuesday.

"We're optimistic, confident, that by the end of summer we will have this backlog under control," he said

Thursday, May 17, 2012

WV Legislative Interim Study Meetings To Examine Natural Gas Issues

The West Virginia Legislature has established a list of study topics that lawmakers will consider as part of their monthly interim meetings during the remainder of 2012. Of these, there are three key study topics that relate to the state’s natural gas industry. The Joint Finance Committee will take up SCR 38, which calls for a study on whether the State of West Virginia should revise its current Uniform Common Interest Ownership Act. The committee also will take up HCR 106, which calls for s study on how to best use the natural gas Severance Tax from gas produced from shales. Also, Judiciary Subcommittee A will study the relation between seismic events and hydrocarbon production.

Other study topics will include:
- Economic Development: study of legislation enabling the Energy Producing States Coalition
- Finance: SCR 52 - study the need for proposing legislation promoting a shared prosperity from the development and recovery of natural gas reserves in underground shales and other geologic formations and establishing a Future Generations’ Fund for the benefit of the general public welfare.
- Finance: HB 4511 – study the establishment of a Shale research center at WVU

LGCR Government Solutions will be monitoring and tracking activities of these interim meetings, and will provide information and updates as warranted.

Friday, May 4, 2012

W.Va. DEP To Host Second Workshop On State's New Horizontal Well Control Act

The West Virginia Department of Environmental Protection will be conducting another oil and gas industry workshop addressing the recently passed horizontal drilling legislation (Natural Gas Horizontal Well Control Act). The workshop will be from 8 a.m. to 3:30 p.m. on May 31, 2012 at the Flatwoods Days Hotel and Conference Center. DEP indicates that the principal focus of the workshop will be related to permitting/approval of activity covered under the article. "The information addressed will be the same as the workshop that was held on February 1, 2012 in Charleston with the addition of a presentation on requirements under the Dam Control and Safety Act," DEP stated. The primary audience is those who get into the details of putting such information together for application submittal, which may include contractors, consultants, etc. Click here to see the agenda. Please be advised that space is limited.

To RSVP for the workshop, a registration form (click to download) should be completed by each person planning to attend and e-mailed to B.J.Chestnut@wv.gov by May 17, 2012.