Mark Sadd, a member of Lewis Glasser Casey & Rollins PLLC and a recognized land attorney in West Virginia, published a commentary recently in the Charleston Daily Mail that questions the significance of another study that focuses on land ownership in the state.
Lewis Glasser Casey & Rollins PLLC has expanded its law
offices in Morgantown with a new location in the Wharf District. New, larger
offices on the third floor of Marina Tower are helping our law firm meet the
needs of our growing clientele in the region. The address for the new office is
48 Donley Street Suite 300, Morgantown WV 26501.
"Lewis Glasser is very pleased to be expanding to this new office
space in Morgantown, which now allows our law firm to better serve our clients,
particularly those engaged in the state’s energy and shale industry," said Richard Gottlieb, Managing Member. "Our law
firm has a long history of representing the oil and natural gas industry –
producers, midstream companies and interstate pipelines – and we pride
ourselves on our high-quality, personal and results-oriented services."
Lewis Glasser first opened an office in Morgantown in 2012 and
since that time has continued to add new lawyers and staff. Rudolph P.
"Buck" Duranti, Jr., heads the Morgantown office's six lawyers under
the leadership of Mark A. Sadd. The
law firm’s other offices are located in Charleston, W.Va. and in Columbus
Tom Taylor, the executive director of the state’s one-call/811 system, testified at a legislative interim meeting this week that he would propose to include “production lines” on a required basis in the system—effectively meaning that maps would be mandated for such lines for submission to the state—and that companies would have a responsibility to keep those maps updated and to have someone assigned as a liaison to the 811 system when calls came in. The committee took no action. The many natural gas industry reps in the room seemed generally upset at the proposal, and that they knew nothing about the gentleman’s remarks prior to the meeting.
The West Virginia Legislature is in Charleston this week for its monthly legislative interim meetings. As part of these meetings, the Joint Standing Committee on Judiciary held a meeting yesterday, and the committee’s agenda included two items related to the state’s oil and natural gas industry. The agenda items were:
1. Dr. Alan Collins, Professor and Assistant Director, Division of Resource Management, West Virginia University: “Split Estates and Surface Owner Reported Problems with Marcellus Shale Gas Drilling”
2. “Response to WVDEP study – Air, Noise, and Light Monitoring Results for Assessing Environmental Impacts of Horizontal Gas Well Drilling Operations and Air Quality Impacts Occurring from Horizontal Well Drilling and Related Activities.” Dave McMahon, Co-Founder, West Virginia Surface Owners’ Rights Organization, was one of the presenters.
Dr. Collins presented the findings of a public opinion survey (which was not sourced as to who paid for it) indicating that split estate owners who had not benefited from the sale of the minerals, had a disproportionately higher number of complaints about oil and gas drilling activities than those owners who had received compensation directly for their property.
McMahon presented a lengthy rebuttal to DEP's presentation on oil and gas production activities and regulations that was presented at a previous meeting of the committee. McMahon's remarks and recommendations focused on his notion that the minimum setback distance should be increased to 1500'; noise and light impacts of drilling activities on adjacent property owners should be more strictly regulated and; "radioactive" drill cuttings should be banned from disposal in public landfills.
Lewis Glasser and its government relations affiliate, LGCR Government Solutions, are available to share additional insights into either of these presentations. We also will continue to monitor future meetings to see whether any legislative proposals are developed.
During a legislative interim meeting this week, industry presenters from the state’s two natural gas trade associations touted the need for follow-up legislation to the state’s 2011 Horizontal Drilling Act. The trade executives encouraged lawmakers to develop legislation related to pooling and lease integration. They cited statutes from other states and noted that West Virginia’s industry needs to have lease integration provisions that will help to attract further investment, economic development and employment. The association leaders told lawmakers that the two groups have been meeting regularly to work out the internal industry differences on the issue.
Several other groups -- surface owners, mineral owners and farmers – also were in attendance at the meeting, and representatives of several of them offered significantly different viewpoints on the matter, including outright opposition to any lease integration bill. Among their comments were ones to do a significant rewrite to property law, negate existing leases, and beef up surface owners’ rights to block or impede development and production.
Lewis Glasser and its government relations affiliate, LGCR Government Solutions, will continue to monitor this issue and further legislative interim meetings. To learn more, please call (304) 345-2000.
The West Virginia Center on Budget & Policy has released a new report that highlights how increased natural gas activities are resulting in increased property taxes for several counties in the Mountain State.
The ongoing development of natural gas resources in West Virginia, particularly from Marcellus production, continues to give rise to potentially tumultuous relationships between surface owners and the producer/mineral estate owners whose operations substantially impact the surface estate. However, a recent and important decision decided by the Supreme Court of Appeals of West Virginia better defines surface owner rights and, thereby, lessens risk to producers and mineral owners.
In Faith United Methodist Church v. Morgan, decided June 13, 2013, The Supreme Court of Appeals of West Virginia overruled its previous holding in Ramage v. South Penn Oil Co. Ramage held that the word “surface,” when used in a deed, is ambiguous on its face, thereby opening the door to interpretation from extrinsic evidence as proof of the Grantor’s original intent. However, the Court in Faith United Methodist Church overturned its prior decision, holding that a deed using the words “surface only” as the language of conveyance does express the clear and unambiguous intent of the Grantor. Moreover, the Court held the word surface, when used in a conveyance “generally means the exposed area of land, improvements on the land, and any part of the underground actually used by a surface owner as an adjunct to surface use.”
The high court in Faith United Methodist Church, based its decision, at least in part, upon the unpredictable results which occur when leaving seemingly unambiguous terms open to interpretation. This new interpretation adds uniformity and certainty to words of conveyance for both the practitioners drafting deeds and title opinions, as well as the West Virginia Courts interpreting the sometimes archaic language encountered in land titles.
For West Virginia surface owners, mineral owners and oil and gas operators, the Faith United Methodist Church decision eliminates an undeniable business risk. The court noted however, as new technologies and drilling techniques develop, conflicts between surface owners and mineral owners will continue.
For more information, please contact Mark Sadd or Richard Gottlieb.
Subcommittee B of the Joint Standing Committee on the Judiciary met for an extended period on the afternoon of October 21 to receive presentations on various aspects of Marcellus Shale geology, engineering, land management and production. Presenters included Dr. Michael Hohn, Director of the West Virginia Geological and Economic Survey (and State Geologist); Dr. Robert Chase, Chair of the School of Petroleum Engineering at Marietta College; David Elkin, Vice President of EQT and Roger Cutright, of Stone Energy. Each presenter offered a detailed analysis of the industry from his particular professional perspective and provided the committee a wealth of information on the opportunities and challenges facing Marcellus producers going forward. There was an extensive question and answer session with members of the committee on the topics discussed. The subcommittee took no action and made no recommendations.
The Joint Standing Committee on the Judiciary received a presentation at its meeting on Monday, October 21 from Dr. Michael McCawley, Research Assistant Professor at the West Virginia University School of Public Health on his study of “Air, Noise and Light Monitoring Results for Assessing Environmental Impacts of Horizontal Gas Well Drilling Operations.” Dr. McCawley’s recommendation to the committee was that DEP develop regulatory standards for air quality, noise and lighting, and further that all oil and gas production permits should be required to include provisions for the installation of monitoring equipment to ensure compliance with the standards. The committee took no action on the presentation and the recommendation.
In addition, the committee discussed the current set-back requirements. Read more:
Starting tomorrow, the U.S. Energy Information Administration (EIA) will start publishing a new monthly Drilling Productivity Report (DPR). The report will provide region-specific insights into rig efficiency, new well productivity, decline rates at previously existing wells and overall production trends. The DPR information initially will cover six regions, including the Marcellus region. Click to learn more.
The West Virginia Department of Environmental Protection (“WVDEP”) recently issued an NPDES general water pollution control permit for stormwater associated with oil and natural gas related construction activities that disturb more than one acre of land. This permit regulates all oil and natural gas construction activities not permitted by WVDEP’s Office of Oil and Gas (“OOG”) under a well work permit or impoundment certification. Since most access roads and gathering pipelines are generally permitted with the well site as part of OOG’s well work permit given to the producer, their construction would not be covered by this permit. However, if gathering lines were not covered by the well work permit or a new gathering line is constructed after the well work permit has expired, the construction of a gathering line to a well site may be required to obtain coverage under the permit.
Producers and midstream companies are reminded that it is important to determine at the outset of project planning (i.e. before construction activity is even slated to begin) whether or not the project is required to be covered by the permit and if so, which process must be followed. For example, there is a streamlined process for projects that disturb more than one acre but less than three acres. It is important to know which process to follow because construction activities requiring coverage CANNOT BEGIN until notice of WVDEP’s approval of the application is received by the applicant and some applications have to be submitted at least ninety days prior to the start of construction.
The permit focuses mainly on controlling erosion and sediment, but measures also must be taken to control fugitive dust from the construction activities. And preventative and proactive measures are required that include employee training, spill prevention and response procedures, a maintenance program and frequent inspections.
For questions about this new permit, please contact Joe Jenkins at LGCR – firstname.lastname@example.org.
Lewis Glasser Casey & Rollins PLLC successfully defended Triad Hunter, LLC in another oil and natural gas lease-busting case filed in the U.S. District Court for the Southern District of Ohio. In Egnot v. Triad Hunter, LLC, Case No. 2:12-CV-1008, the Federal Court held that the lessor’s failure to sign the oil and natural gas lease in the presence of a notary does not invalidate the lease as between the lessor and the lessee. The Court then held that a husband’s failure to sign over his dower interest in an oil and natural gas lease does not invalidate the lease between the wife, as titled owner, and the oil and natural gas company. Finally, the Federal Court agreed with other Ohio State and Federal Courts that the lessee’s “Preferential Right to Renew” language in Paragraph 14 of the oil and natural gas lease does not give the lessor the right to invalidate the lease if the oil and natural gas company does not agree to match a third-party bona fide offer.
In addition to upholding the validity of Triad Hunter’s oil and natural gas lease, the Federal Court also made sure Triad Hunter did not lose any of the primary term of the lease while the lawsuit was pending. The Court held that the running of the primary term of the lease must be tolled, or delayed, during any lawsuit or appeal challenging the validity of the lease. Such a holding is critical to the oil and natural gas industry as it makes sure a lessor/landowner cannot run out the clock on an oil and natural gas lease by tying up the lease in litigation during the primary term of the lease. The oil and natural gas company can now have the business security that it will not lose any of the primary term while the lawsuit is pending.
The U.S. District Court for the Southern District of Ohio has held that oil and natural gas leases challenged by the landowners/lessors will be tolled, or delayed, during the pendency of any lawsuit and appeal. The Court found that the oil and natural gas company/lessee should not be penalized for an unsuccessful lawsuit challenging a valid lease. In Wiley v. Triad Hunter, LLC, Case No., 2:12-CV-00605, a group of lessors challenged the validity of the oil and natural gas leases they entered with Anschutz Exploration Corporation, which were subsequently assigned to Triad Hunter, LLC. Lewis Glasser Casey & Rollins PLLC represented Triad Hunter in this matter.
The Wiley lawsuit followed other similar lawsuits in which the lessors argued that the natural gas company/lessee’s Preferential Right to Renew in Paragraph 14 of the Anschutz leases required the lessee to match any bona fide third-party offers or terminate the leases. The court first agreed with other Ohio state and federal courts by holding that the preferential right to renew does not allow the lessor to terminate the lease. The court then solidified Ohio law requiring the tolling of a lease during any lawsuit challenging the lease’s validity. The court’s decision allows oil and natural gas companies to keep the full remaining term of their oil and natural gas lease after a lawsuit is resolved.
A Judiciary interim committee of the West Virginia Legislature heard a presentation yesterday on the complex issue of lease pooling. The "impartial" presentation was provided by a lobbyist for the W.Va. Surface Owners Rights Organization (SORO). Click to read story in today's Dominion Post.
There is renewed interest by many in the state's natural gas industry to try to work toward passage of a lease integration bill during the 2014 regular session of the West Virginia Legislature. That 60-day session starts Jan. 8, 2014.
West Virginia's Secretary of the Department of Environmental Protection defended his agency's new rules on horizontal well activities and stated that the rules are sound, sufficient. The Secretary made his comments during the recent Annual Meeting of the West Virginia Oil & Natural Gas Association. The DEP's regulations continue to come under fire by environmental and surface owner groups. Click to read news story: http://www.theintelligencer.net/page/content.detail/id/589743.html
According to a report released this week, the United States will continue to reap enormous economic and job-creation benefits from domestic oil and shale gas production. This will be the case, however, unless federal and state lawmakers overregulate Shale production.
“This report confirms that manufacturers’ best days are ahead and that the shale revolution could spur economic growth and job creation for years to come,” said National Association of Manufacturers (NAM) President and CEO Jay Timmons in reaction to the recent IHS report cosponsored by the NAM and other trade associations. “Unfortunately, this growth is not a foregone conclusion. Overreach by state and federal lawmakers and regulators could slow this progress and, in the worst case, stop it.”
A study done by the West Virginia Department of Environmental Protection has found that hydraulic fracking does not endanger air quality. That is what was shared with lawmakers this week as part of this month's legislative interim meetings. Click to read news article.
Martin J. Glasser, a member of Lewis Glasser Casey & Rollins PLLC, has been named “Lawyer of the Year” for his corporate practice. Glasser has been named the Best Lawyers’ 2014 Charleston-W.Va. Corporate Law "Lawyer of the Year." Only a single lawyer in each practice area in each community is being honored as the “Lawyer of the Year" in 2014. In addition, eight other attorneys at Lewis Glasser have been named “Best Lawyers” in their practice areas.
Best Lawyers in America is one of the most visible and targeted peer review publications in the legal profession. Glasser also was selected by his peers for inclusion in the 20th edition of Best Lawyers in United States in the practice areas of Corporate Law.
Last year another Lewis Glasser attorney, Richard Gottlieb, has named Best Lawyers' 2013 Charleston, W.Va. Oil & Gas Law “Lawyer of the Year”.
Glasser is a veteran corporate attorney in West Virginia, and he represents business and commercial matters including energy and utility companies, commercial real property developers and the general representation of businesses.
The Tyler County Clerk has established a daily lottery system where by oil and natural gas abstractors must draw numbers to determine who will get one of the 96 coveted daily slots to research property deeds, according to a Wheeling, W.Va. newspaper. County leaders say the system has been put into place due to extraordinary demand by abstractors wanting to research property deeds and land records. Click to read article.
For the past two years, the W. Va. Legislature and the W. Va. Department of Environmental Protection (“WVDEP”) have been focused on developing and implementing new regulations regarding horizontal natural gas wells. As of today, July 1, 2013, the WVDEP’s rules for horizontal wells are effective, and any permit application submitted to the WVDEP today and into the future will be subject to the new requirements (the new rules codified as 35 CSR 8-1, et seq. can be found on the Secretary of State’s website here). Many of the requirements in the rules are comprehensive and technical in nature and simply repeat many of the requirements found within the Horizontal Well Act. As such, this blog post is not intended to summarize them all or repeat every requirement also found within the Act, but to highlight some of the new or more noteworthy provisions. Click to read LGCR's summary of the new rules.
Questions about these rules can be sent to Joe Jenkins at email@example.com or by calling him at (304) 345-2000.
The West Virginia Department of Environmental Protection has scheduled public hearings for its 2014 proposed legislative rules. The state’s natural gas industry should take note of two of the proposed air rules – 45 CSR 16 and 45 CSR 34 – both of which adopt amendments to EPA regulations that became effective October 15, 2012. Provided are overviews of these rules that have been prepared by Joe Jenkins, an associate at LGCR and a former Senior Counsel at the W.Va. Department of Environmental Protection:
• 45 CSR 16 adopts by reference EPA’s New Source Performance Standards (“NSPS”) (mainly Subpart OOOO to 40 CFR Part 60) for the listed oil and natural gas source category to regulate volatile organic compound (“VOC”) emissions from gas wells, centrifugal compressors, reciprocating compressors, pneumatic controllers and storage vessels (note that EPA is in the process of reconsidering the NSPS for storage vessels after receiving several petitions for reconsideration) and VOC and sulfur dioxide emissions from natural gas processing plants. WVDEP adopts new EPA standards each year to maintain consistency with current federal regulations and to fulfill the State’s responsibilities under the Clean Air Act in order to continue as the primary enforcement authority for NSPS. In addition to the standards noted above, this rule adopts other NSPS potentially of interest to those in the oil and gas industry including petroleum refineries and stationary internal combustion engines, as well as NSPS for other industries: Portland cement plants, utility steam generating units and nitric acid plants.
Many of the NSPS for activities conducted at the natural gas well pads are anticipated to be regulated through a new general permit (G70-A) that is currently in draft form (public comment closed in May but the draft permit is available here on WVDEP’s website). Although WVDEP is now going through the process of formally adopting EPA’s regulations promulgated last year, WVDEP has already started implementing the standards. For example, as of October 15, 2012 operators are required to submit notice no later than two days before commencing the well completion operations for the fracturing or refracturing of wells drilled after August 23, 2011 and WVDEP has begun to issue individual permits for well pad sites that incorporate the new NSPS.
• 45 CSR 34 is similar to 45 CSR 16 in that WVDEP also is formally adopting EPA’s National Emissions Standards for Hazardous Air Pollutants (“NESHAP”) for the oil and natural gas production source category and natural gas transmission and storage source category to regulate glycol dehydrators and equipment leaks. The proposed general permit does not address these sources as they are not typically located at the well pad.
The public hearing for the rules noted above will begin at 6 p.m., Monday, July 8 in the Dolly Sods Conference Room in WVDEP's Charleston headquarters, located at 601 57th St., S.E., Charleston, WV, 25304. The comment period will end at the conclusion of the hearing. Oral and written comments will be limited to the proposed revisions and will be made part of the rulemaking record. Written comments may be submitted to the Public Information Office at the above address. Comments may also be emailed to DEP.Comments@wv.gov.
Questions about these rules should be sent to Joe Jenkins at firstname.lastname@example.org or by calling him at (304) 345-2000.
In a June 13, 2013 decision, the Supreme Court of Appeals of West Virginia overruled a 1923 holding that the word “surface,” when used in a deed, is ambiguous on its face and always subject to interpretation with extrinsic evidence, setting forth a more useful and concrete definition and interpretation framework. The opinion, written by Justice Menis Ketchum, is based on the long held principle in West Virginia that if the intent of the grantor in an instrument is clear and unambiguous, the Court has no right or province to alter it.
The underlying dispute centered around the oil and gas ownership of a 225-acre parcel of land in Preston County, West Virginia. A 1907 deed from a sister to a brother conveyed a 1/7 undivided interest in and to the “surface only” of the land and also recited that the coal and mining rights had been previously sold. The Circuit Court of Preston County followed the old rule and found that “surface only” was ambiguous and subject to modern day interpretation. In finding that the deed did not convey the oil and gas, the Circuit Court cited evidence that the oil and gas interest was not taxed or entered into the Land Books and that the grantor did not lease or later convey the interest. The Circuit Court held that this showed intent to transfer everything the grantor owned to her brother and keep nothing for herself.
The Supreme Court of Appeals of West Virginia overruled this decision and found that the term “surface only” is clear and unambiguous, stating that parties are bound by general and ordinary meanings of words used in deeds. In the Court’s view, the old rule violated two public policy principles. First, courts and practitioners need terms with a definite meaning when drafting instruments; and second, courts want to reach the intended result of the parties and therefore confine themselves to the four corners of the document.
The new definition of the word “surface” when used in a conveyance “generally means the exposed area of land, improvements on the land, and any part of the underground actually used by a surface owner as an adjunct to surface use [.]” The Court gave several examples of “adjunct to surface use,” including use as a medium for the roots of growing plants, groundwater, water wells, roads, basements, and construction footings.
While the Court’s decision should make such determinations easier for those in the mineral title field, the effect of the new definition on the oil and natural gas production industry remains to be seen.
In December of 2012, Doddridge County’s floodplain ordinance was declared unconstitutional by the Circuit Court. As a result, the Doddridge County Commission issued a moratorium on all floodplain permits. Jay-Bee Oil & Gas had already begun drilling two horizontal wells when the Doddridge County Floodplain Administrator issued a stop work order. Due to the moratorium, Jay-Bee could not comply with the order’s requirement to obtain a floodplain permit. To address this legal catch-22 and to get its operations back on track, Jay-Bee challenged the stop work order in Circuit Court.
In an attempt to resolve its challenge, Jay-Bee agreed with the County to proceed with the permit application process under the new floodplain ordinance enacted on May 21, 2013. As part of this agreement, LGCR is helping Jay-Bee navigate through the numerous requirements found in the new ordinance to ensure compliance therewith and to ultimately obtain the necessary permit so Jay-Bee can proceed with its operations. A brief article on the matter can be found at: http://www.statejournal.com/story/22511347/doddridge-ends-ban-on-flood-plain-drilling-permits.
The new ordinance greatly expanded the number of people entitled to notice and the types of notice to be given, including certified mail, personal service and publication of a legal ad. These notice provisions were included to directly address the Circuit Court’s decision that found the previous ordinance unconstitutional. However, the new ordinance also expanded the public’s participation in the permit process, including the ability to comment on permit applications and to appeal the granting of a permit and left unanswered questions regarding fees and costs associated with the permit process. There are many more requirements, some old and some new, that are too numerous to mention in one article.
Additionally, obtaining a floodplain permit is not limited to Doddridge County. Although Doddridge County has been front and center with recent developments regarding floodplain permits, most counties, and some municipalities, have a floodplain ordinance, many of which are similar to the ordinance struck down by the Circuit Court as unconstitutional. As such, it is possible some counties may amend their ordinance to address the constitutional infirmities and potentially use the new Doddridge County ordinance as a template. Furthermore, one does not even need to be in the floodplain to fall under the jurisdiction of a floodplain ordinance. Many ordinances, including Doddridge County’s new ordinance, require those undertaking any type of development, or substantial improvements or repairs, regardless of whether or not the development is in the floodplain, to still seek a determination from the County that the development is not within the floodplain prior to beginning any work.
The requirement to obtain a floodplain permit not only entails more work on the part of the operator but the regulatory process can now take longer to complete. Therefore, it is important oil and gas operators take into account these requirements when planning future operations to ensure the proper floodplain permits are obtained in a timely fashion. Having been at the forefront of this issue, LGCR can assist operators and developers in navigating the numerous and varied floodplain ordinances found within the state.
Richard Gottlieb will be among the presenters at this week's 59th Annual Meeting of the American Association of Professional Landmen. Gottlieb heads the natural gas practice at Lewis Glasser Casey & Rollins PLLC. The conference, which is being held in Washington, D.C., brings together professional landmen from across the nation. Gottlieb will be part of a panel discussion on "Comparative Oil & Gas Law Review." The panel will be held from 1:15 p.m. to 4:45 p.m. on Wednesday, June 5. For more information, please go to" http://www.landman.org/events/annual-meeting
Vision Shared West Virginia has published a new report that highlights West Virginia's potential for realizing the benefit of shale resources as well as certain policies currently in place in West Virginia that promote the State as an ideal environment for long term industry development. The 45-page report, titled "Value Added Opportunities For Natural Gas," notes that:
"Production of natural gas from the Marcellus Shale has lowered the price of natural gas for millions of consumers and greatly increased demand for the commodity. The availability of this resource is transforming markets and will continue to do so. Natural gas is not only a basic commodity. It is also a foundation of numerous value-added products upon which market clusters and economic activity are built. If West Virginia and the broader region, that also includes the similarly extensive Utica Shale, are able to grow regional supply of these value-added products more of the economic benefits of the resource can be retained in the region."
Among the discussion points in the report are how natural gas vehicles are being used in other states, benefits to manufacturers in West Virginia, and the long-term outlook for natural gas supply and pricing. Click to read the report.
Governor Earl Ray Tomblin, joined by Community and Technical College System of West Virginia Chancellor Jim Skidmore, announced yesterday the establishment of the Appalachian Petroleum Technology Training Center in Fairmont. The Center will address the growing workforce needs of the oil and gas industry within the State and provide training opportunities for individuals who are interested in working in the field. "This new Center, and its hands-on curriculum, will better prepare West Virginians for the highly-skilled, good-paying jobs needed to meet the demand of our growing oil and gas industry," Gov. Tomblin said. "I'm thankful for the industry's collaboration during the development of this much-needed program and look forward to congratulating the first class of graduates." Click to read more.
The United States Court of Appeals for the Fourth Circuit has issued an important decision upholding viability of flat rate leases in face of challenges that the lack of production terminated the lease. Here is a synopsis of the ruling:
In Wellman v. Bobcat Oil & Gas, Inc., Docket No. 12-1533, an unpublished per curiam opinion, the Fourth Circuit recently addressed the issue of whether lack of production and a missed or late payment could invalidate a flat-rate lease. The Court held that under longstanding West Virginia law, “the quantity of production is irrelevant to the expiration of the secondary term” of a flat-rate mineral lease. In addition the Court held that the lessors’ claims that missed or late rental payments resulted in a forfeiture of the lease failed on the basis of ratification and the principles of equity. The Court specifically stated that absent a clear and unequivocal stipulation in the lease that a failure to pay will result in forfeiture, missed or late payments are insufficient to justify cancelling or forfeiting the lease.
Lewis Glasser Casey & Rollins PLLC has been involved in representing other lessees in similar claims by lessors. We will continue to keep you apprised of these legal matters.
Lewis Glasser Casey & Rollins PLLC has hired Heather R. Bates to expand the law firm’s capabilities for its growing natural gas practice. Bates’ focuses on a wide range of legal services (title, deeds, leases, joint-operating agreements, etc.) to oil and natural gas clients. Prior to joining the law firm Bates worked for CONSOL Energy, Inc. where she analyzed, reviewed, and drafted various oil and gas documents such as title opinions, drilling opinions, deeds, leases, pooling agreements, farm-in agreements and joint operating agreements for horizontal drilling operations in the Appalachian Basin.
Thanks to horizontal drilling activities over the past several years, the vast Marcellus Shale formation is now the most prolific producing region of natural gas in the United States. And West Virginia is positioned right in the middle of the "shale gas revolution," said David McCurdy, president and chief executive officer of the American Gas Association. McCurdy provided these comments yesterday at the West Virginia University College of Law's spring natural gas conference in Morgantown, W.Va. Click to read a news story on his comments.
The West Virginia Department of Environmental Protection has made progress on its efforts to reduce the time it takes to review and approve a horizontal well drilling permit. DEP Secretary Randy Huffman says his agency has cut the average time to get a drilling permit to be about 75 days...instead of 110-130 days a year ago. He also reported that permitting activity remains steady so far this year. As of mid-April this year, the W.Va. DEP had received applications for 194 well permits and issued 168. That compares to a total of 500 well permits being issued in 2011, which was the peak year.
If natural gas demand continues to grow as predicted, shale production could be a billion dollar industry in West Virginia in a couple decades. That was the upbeat message delivered recently by Chris Guith, the Vice President for Policy at the Institute for 21st Century Energy at the U.S. Chamber of Commerce. He was the guest speaker at the 2013 Marcellus2Manufacturing Conference at the Charleston Civic Center. Shale production is becoming a bigger and bigger part of West Virginia's economy and it looks like that's going to continue for years to come. "It's transformational. It has changed the entire landscape both from an economic stand point, from an energy stand point and, frankly, a geo-political stand point,” Guith said. Click to read more.
Lewis Glasser Casey & Rollins PLLC has expanded and opened an office in the state of Ohio. The office is located on the northeast side of Columbus, 81 Mill Street, Suite 300, Gahanna, Ohio, and it is needed to serve the firm’s significant client growth in the Buckeye State. “Lewis Glasser is very pleased to be expanding and opening this new office in Ohio, which will allow our law firm to better serve our new clients, particularly those engaged in the state’s booming shale production industry,” said G. Nick Casey, LGCR’s Managing Member. He noted that Lewis Glasser is nationally recognized as one of the leading law firms in the Utica/Marcellus region. “Our law firm has a long history of representing the oil and natural gas industry – producers, midstream companies and interstate pipelines – and we pride ourselves on our high-quality, personal and results-oriented services.”
The opening of the Ohio office also follows the law firm’s recent hiring of attorney Paul Garinger, who has experience providing a variety of legal services and has litigated on a number of areas pertinent to Ohio oil and natural gas industry: title, lease, permitting, pipeline work and environmental matters. He also represented a multinational oil and natural gas company in a large-scale federally regulated pipeline project across the State of Ohio and aided financial institutions in consumer banking disputes under federal and state regulations
Garinger’s legal career also has included representing employers before state and federal courts and state and federal administrative agencies such as the Ohio Department of Labor, Ohio Equal Employment Opportunity Commission and Ohio Civil Rights Commission.
Ohio's oil-rich shale deposits may exist further west in Ohio than previously thought, according to information provided by the Ohio Department of Natural Resources. In a recent article published by The Associated Press, revised maps from the department indicate that the counties between Mansfield and Lima show promising results. Those counties are Hancock, Hardin, Seneca and Wyandot. The ODNR also reported that as of March 2, production companies had taken out nearly 300 well permits. Click to read more.
The Energy & Mineral Law Foundation will host a two-day conference on "Title and Development Issues in the Utica Shale – Ohio" on April 14-16 in Columbus, Ohio. The event is being held at the Hilton Columbus at Easton, 3900 Chagrin Drive. A number of presentations will be provided on important and timely title, deed, ownership and mineral law issues. (Click to see agenda.)
The conference registration fee covers all educational sessions, looseleaf handbook with written materials by speakers, CD containing all written materials and PowerPoint presentations plus selected mineral titles articles previously published by the EMLF. Sunday night reception and dinner program, Continental breakfasts, Monday lunch and Monday reception, and refreshment breaks on both days are included in the registration fee
Hotel Accommodations: The EMLF has lined up a block of hotel rooms at the Hilton at a special rate, but that block will be released on Sunday, March
24th. Complete information and online registration and link to hotel
reservations is available on the website at http://www.emlf.org
MCLE Credit: Conference accreditation is pending from states with mandatory Continuing Legal Education. The conference consists of 885 minutes (14.75 hours in 60-minute states and 17.7 hours in 50-minute states). Registrants may be required to reimburse EMLF for MCLE filing fees for certain states.
Derek Scarbro has joined LGCR Government Solutions, LLC (a wholly-owned subsidiary of the law firm Lewis, Glasser, Casey, & Rollins, PLLC) to assist with LGCRGS government relations activities. He brings more than 10 years of political experience to the firm, most recently serving as the Executive Director of the West Virginia Democratic Party. Scarbro has years of experience in working with state and national officials and with the media. He earned his Bachelor’s Degree from Marshall University majoring in Political Science and International Affairs. In addition to the WV Democratic Party, Scarbro has also worked in the State Treasurer’s Office and the WV Development Office.
XTO and Beck Energy are now attempting to appeal adverse decisions by the trial court in the Monroe County (Ohio) Common Pleas case, Hupp v. Beck Energy Corp. The plaintiff landowners filed suit against Beck Energy claiming their leases with Beck Energy were void and should be terminated because Beck never drilled wells on their properties. According to the trial court’s decision, a range of three to nine years had elapsed since the various plaintiffs executed their leases. The trial court granted summary judgment to the Plaintiffs on July 31, 2012, finding that the leases violated Ohio’s public policy encouraging oil and gas production. The trial court also held that Beck Energy breached the implied covenant to reasonably develop the land by failing to drill any wells on any acreage under the leases. The trial court then forfeited all of Beck Energy’s rights to the oil and gas under the plaintiffs’ properties.
On August 28, 2012, Beck Energy appealed the trial court’s decision granting summary judgment. The Seventh District Court of Appeals, however, held that the appeal was premature and delayed the filing of Beck Energy’s appellate brief until after a final order was issued by the trial court. While Beck Energy’s appeal was placed on hold, the plaintiffs filed a motion to certify a class action against Beck Energy. The plaintiffs alleged there were more than 600 to 700 landowners that executed the same form oil and gas lease with Beck Energy. On February 8, 2013, the trial court granted the plaintiffs’ motion for class certification finding that all of the properties were covered by the same leases with the same basic terms. The trial court then held this was a final appealable order, and Beck Energy’s appeal of the decision granting summary judgment could go forward. On March 7, 2013, Beck Energy filed another notice of appeal of the decision and order certifying the class action.
After Beck Energy’s original appeal was filed, XTO Energy filed a motion to intervene as a necessary party on September 7, 2012. XTO purchased Beck Energy’s “deep rights” to plaintiffs’ leases. The purchase took place on November 9, 2011, after the plaintiffs filed the initial complaint against Beck Energy on September 14, 2011 and the Amended Class Action Complaint on September 29, 2011. Because XTO purchased the “deep rights” to the plaintiffs’ leases after the lawsuit was filed, the trial court denied XTO’s motion to intervene. The trial court relied on the fact that all of the parties with interest in the leases were parties to the lawsuit when it was filed, and XTO was not a necessary party. The trial court also relied on the fact that the sales agreement between XTO and Beck Energy provided that Beck would defend title to the leases, which Beck did attempt to do.
On March 1, 2013, XTO appealed the trial court’s denial of its motion to intervene, as well as the trial court’s order granting summary judgment and class certification. Plaintiffs then filed a motion to dismiss XTO’s appeal on March 8, 2013, challenging XTO’s ability to appeal the decisions granting summary judgment and class certification.
Both Beck Energy and XTO have now taken this case to the Ohio Court of Appeals in an attempt to reverse the trial court’s decisions voiding the Beck Energy leases and certifying a class action. Appellate briefs have not yet been filed as both landowners and the oil and gas industry await the outcome and ultimate effect of the trial courts decisions.
West Virginia DEP Secretary Randy Huffman updated lawmakers this week on the status of key regulatory studies his department is undertaking as part of the 2011 passage of the state's new Horizontal Well Act. That act called for the DEP to undertake three studies and have two of those completed by the end of 2012. The DEP has yet to complete those two studies, and Secretary Huffman explained that he decided "to be late rather than turning in something we wouldn't be proud of." He noted that his agency has "taken a lot of time with these studies to try to be as scientific and comprehensive as we could."
Legislative Rule-Making Committee of the West Virginia Legislature has given
its approval to proposed rules for state's Horizontal Well Act.The committee's recommendation will now go to
the full Legislature for consideration during the 2013 legislative session,
which gets underway later today.
Provided is a link to the Horizontal Development Rule (35 C.S.R. 8 ) as filed pursuant to the state’s Natural Gas Horizontal Well Control, which became effective on Dec. 4, 2011. This rule contains recent modifications by the W.Va. Department of Environmental Protection. The rule now will be considered by lawmakers during the upcoming 2013 session of the West Virginia Legislature. That 60-day session starts next week on February 13. Click to read the rule: http://apps.sos.wv.gov/adlaw/csr/readfile.aspx?DocId=24229&Format=PDF (NOTE: To see final modifications done by the WV DEP, please go to this web page, and click on the Microsoft Word document 9/14/2012. The modifications are indicated in red.)
State regulators are behind schedule on the release of two key studies mandated as part of the horizontal drilling legislation that was enacted in late 2010, according to an article in The Charleston Gazette. The newspaper reports that the W.Va. Department of Environmental Protection is required to conduct studies of noise, light and dust from drilling operations, air pollution from well sites, and the use of wastewater impoundments by the oil and gas industry. Click to read the entire article.
Lewis Glasser Casey & Rollins PLLC has hired Joseph L. Jenkins, formerly Senior Counsel for the W.Va. Department of Environmental Protection, to expand the law firm’s environmental practice and services. Joseph has joined the firm as an associate, and his practice focuses mainly on energy and natural resources law, environmental law, legislation, rule-making and litigation with an emphasis in oil and natural gas, mining and quarrying, including SMCRA, Clean Water Act and state and federal environmental permitting, compliance and enforcement.
Jenkins previously served as Senior Counsel for the West Virginia Department of Environmental Protection and served as Counsel to the West Virginia Senate Committees on Energy, Industry and Mining and Transportation and Infrastructure during the 2011 Legislative Session. He also is familiar with federal criminal law, having served as a CJA panel attorney for the U.S. District Court for the Southern District of West Virginia for several years. Jenkins began his legal career as a law clerk to the Honorable H. L. Kirkpatrick III, Circuit Judge of Raleigh County, West Virginia.
Jenkins’ more recent experience includes:
Successfully defending a challenge to the State’s notice, comment and appeal procedures for surface owners with regards to the issuance of oil and natural gas well permits before the Supreme Court of Appeals of West Virginia. Martin v. Hamblet, No. 11-1157, 2012 W.Va. LEXIS 904 (W. Va. Nov. 21, 2012).
Preparing an amicus brief on behalf of the Interstate Mining Compact Commission, the W.Va. Department of Environmental Protection, the Commonwealth of Virginia and the State of Alaska for filing in the United States Court of Appeals for the Tenth Circuit in support of Farrell-Cooper Mining Company and Oklahoma Department of Mines’ challenge to the Office of Surface Mining Reclamation and Enforcement’s use of the ten-day notice process for permit defects under SMCRA. Farrell-Cooper and Okla. Dep’t of Mines v. U. S. Dep’t of Interior, et al., 12-7045 & 12-7048 (10th Cir.).
Being actively involved in the administrative appeal of and challenge to the W.Va. Environmental Quality Board’s decision regarding conductivity, TDS and sulfate associated with coal mining operations.
Successfully defending challenges to NPDES and SMCRA permits issued by the W.Va. Department of Environmental Protection.
Being actively involved in the legislative and rule-making processes regarding the W.Va. Natural Gas Horizontal Well Control Act, W. Va. Code § 22-6A-1, et seq.
Being actively involved in the successful representation of a defendant in a forty-four count federal indictment that charged fifty-five defendants with numerous offenses including RICO, kidnapping, robbery, conspiracy, gambling, guns and drugs. And serving as a liaison for defense counsel in this expansive case to the U. S. District Court for the Southern District of West Virginia on matters relating to discovery and CJA management.
Jenkins attended Concord College (now University) in Athens, West Virginia where he received his undergraduate degrees, summa cum laude, in Biology (B.S.) and Geography (B.A.). He then obtained his law degree (J.D.) from the University of Oregon School of Law earning a certificate in environmental and natural resources law. While in law school, Jenkins served as co-director of the Public Interest Environmental Law Conference.
“As one of the premier energy law firms in the Appalachian Basin, we wanted to enhance Lewis Glasser’s full-service capabilities with Joe’s unique environmental law and regulatory knowledge,” said Nick Casey, managing member. “Joe’s background in regulatory matters, litigation and legislative rule-making will serve our clients well.”
Casey noted that over the past year Lewis Glasser has expanded its legal capabilities with the hiring of several new attorneys, many of whom are part of the firm’s growing natural gas and energy practice.
NiSource's Columbia Gas Transmission has received approval from the Federal Energy Regulatory Commission (FERC) for a customer settlement that facilitates Columbia's comprehensive pipeline infrastructure investment plan in the Appalachian Basin. The settlement covers the initial five years of Columbia's investment plan, which will include pipeline replacements and upgrades totalling more than $1.5 billion. Click to read the company's press release.
The biggest impediment to the orderly development of the Marcellus and Utica shale formations in West Virginia is the inability to deal in a timely manner with non-participating minority mineral owners. This can be due to missing or unknown owners or know owners who just won’t participate. These non-participating minority owners, who cannot be compelled to participate in a lease or if they are leased cannot be compelled to modify lease to provide for pooling, are preventing the orderly development of WV’s gas resource. The resulting sterilization and waste is contrary to the stated public policy of het state. This also negatively impacts surface owners and the environment because pad locations and the extension of laterals are dictated less by geology and topography and more by how to avoid unleased or unpooled tracts.
To find a resolution, interested parties have been meeting in West Virginia and discussing lease integration to deal with pooling and other administrative processes to deal with non- participating minority mineral interest owners. They also are doing this in advance of the start of the 2013 West Virginia legislative session, which begins in earnest on February 13, 2013. Given the continued development in Ohio, this is expected to be the session when West Virginia lawmakers give careful consideration to the reality that non-participating minority ownership interests are impeding development in West Virginia.
Lewis Glasser Casey & Rollins PLLC and its government relations affiliate, LGCR Government Solutions LLC, have been actively involved in these meetings and will be monitoring this issue closely during the 2013 legislative session.
According to an article in The State Journal, natural gas production rose 50 percent in West Virginia in 2011. The state's production rose to 385,500 thousand cubic feet, or mcf, up from 256,600 mcf in 2010, according to the U.S. Energy Information Administration's Natural Gas Annual. The reprot was released January 7. In West Virginia, shale gas represented 58 percent of the state's production.
Another newspaper in West Virginia, the state's largest, has come out with an editorial that highlights the significant positive economic effects from natural gas drilling activities. The Charleston Gazette published an editorial on Sunday, January 6, that focuses on two recent reports and the "upside" that is being provided from the Marcellus/Utica boom. The editorial concludes with: "Both projections are hopeful. More gas drilling jobs. More insulating jobs. With
the coal industry retreating, West Virginia needs all the new employment it can
Provided is an editorial published in the Jan. 2, 2013 edition of the Bluefield Daily Telegraph.
A new study is predicting that West Virginia’s vast Marcellus shale field could support more than 29,000 jobs by 2020, and 58,000 by the year 2035. That is — of course — if the industry is allowed to continue shale-gas development in the Mountain State, and if the federal government doesn’t attempt to curtail natural gas growth as we have seen in recent years with coal.
The report issued last week by the U.S. Chamber of Commerce’s Institute for 21st Century Energy says the natural gas industry has already created more than 11,800 direct and indirect jobs in the state and generated about $283 million this year alone in tax revenue. Those revenues could hit $884 million a year for state and local governments by 2020, the Associated Press reported. In all, the study predicts West Virginia could see more than $25 billion in shale-driven revenues between 2012 and 2035.
Last week’s report is the second of a three-part study co-sponsored by the institute, which launched a campaign to promote gas drilling in July. The findings of the study are encouraging, and paint a brighter future for West Virginia — if the industry growth is not impeded by the federal government.
For their part — environmentalist are already working hard to slow the Marcellus shale gas boon. Several environmental and citizens’ groups claim groundwater will be contaminated by the process known as hydraulic fracturing, which uses water and chemicals to break gas deposits free from rock. They also suggest that the process will create air pollution, and damage to roads and streams. Several groups are calling for a moratorium on drilling.
Time will now only tell if the industry will be allowed to grow, or if the federal government will intervene, and attempt to curtail this great energy boon potential. All eyes are now on President Barack Obama to see who he will pick to succeed EPA Administrator Lisa Jackson, and whether or not this person will be reasonable and willing to work with the coal and natural gas industries.
Just imagine what 29,000 new jobs, and ultimately 59,000 new jobs, could mean not only for West Virginia, but America. And just imagine what this emerging industry could do in terms of meeting America’s future energy needs.
We must be willing to embrace this emerging industry. The vast Marcellus shale field offers not only great potential to West Virginia, but our nation as a whole. The industry should be allowed to grow and prosper. And the same goes for the still strong coal industry of southern West Virginia and Southwest Virginia.
A common sense national energy policy should include all abundantly available fossil fuels, including coal and natural gas, in addition to wind, solar and the other green energy sources so strongly advocated by the Obama administration.
The Appalachian Shale Gas Blog is prepared by Lewis Glasser Casey & Rollins, PLLC. The firm has an extensive background representing natural gas companies, pipelines and other energy businesses in regulatory, litigation, title and commercial matters.
Lewis Glasser's natural gas practice is led by Richard Gottlieb, who is listed in Best Lawyers in America® for Energy Law and Oil & Gas and was recently named the Best Lawyers® 2013 Charleston, West Virginia Lawyer of the Year in Oil & Gas Law. He is also listed in West Virginia SuperLawyers® for Business Litigation and Energy & Natural Resources.
Learn more at http://www.lgcr.com.
Lewis Glasser also has a government relations affiliate business - LGCR Government Solutions -- that provides legislative affairs, issue management and lobbying services to clients in the natural gas industry. Learn more at: http://www.lgcrgs.com/.
The information posted on this blog is designed to inform the public but not for the purpose of giving specific legal advice. This blog's readers understand that no attorney-client relationship is created just because they are reading it. Readers may link to this site but only if they do not misrepresent the nature of this blog or its contents.