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West Virginia Governor Seeks Funding for Gas Inspectors

West Virginia Gov. Earl Ray Tomblin has asked state legislators, who this week are working through an extended budget session, to come up with an additional $2 million to pay for additional oil and gas inspectors at the state's Department of Environmental Protection (DEP).

The funding, which Tomblin said would come from general revenue, would add eight-10 inspectors in the field, DEP Secretary Randy Huffman said during a press conference in Charleston Wednesday.

"We need to make sure that we are not overloading the inspectors in the field with more permits than what they can handle," Huffman said. "We've never had to make those kind of decisions, and as the data would point out now, we're still not in a position to have to scale back permitting in order to keep up in the field. That's just not the case yet, but it's something that we constantly look at...We would put those resources directly in the high-traffic Marcellus areas. We would put them there immediately."

The funding would replace $2 million that had been included in a bill (SB 465) currently awaiting Tomblin's signature. That bill had called for $2 million to be redirected to DEP from oil and gas severance tax revenue already collected by the state, but the funding mechanism was removed in the closing days of the legislature's regular session, according to a Tomblin spokesman.

Tomblin, a Democrat, said he was proud of many of the accomplishments of the 2011 legislative session, but it was "extremely disappointing...that the legislature was unable to pass a piece of reasonable legislation regulating" Marcellus Shale gas drilling operations.

The Natural Gas Horizontal Well Control Act (SB 424), which would have required drillers to give surface owners advance notice of any seismic activity on or near their property; prohibit oil and gas wells from being drilled within 1,000 feet of water wells and homes; and require drillers to submit detailed water management plans and lists of chemicals to be used in hydraulic fracturing, was not brought up for a final vote by the House of Delegates (see Shale Daily, March 15). Amendments to the original bill had already removed a proposal to significantly increase horizontal permit fees to fund more DEP inspectors and language that would have allowed forced pooling.

DEP had proposed increasing horizontal drilling permit fees to $10,000 from the current $650 paid by all drillers. DEP told lawmakers it currently employs 32 oil and gas inspectors who are tasked with covering approximately 59,000 wells -- about 750 of them active -- across the state.

A DEP task force worked "many months" last year on legislation to fund more inspectors through increased horizontal drilling permit fees, only to see the state's Senate and House come up with alternative bills that watered down the original proposal before falling short of passage. Tomblin said he has asked Huffman to bring the task force back together "to continue to try to get a compromise reached from all of the interested parties." The reconstituted task force will probably have more members than before and they will represent "a much broader range of perspective," Huffman said. "This is a complex issue and a lot of people have a lot of different interests, and we need to address it that way."

Tomblin has extended through Friday the West Virginia legislature's budget session, which had been scheduled to end Tuesday, but a special session of the legislature to address Marcellus regulations is not likely.

"Given the divide that exists, I do not believe that a special session is warranted at this time," Tomblin said. "Until an agreement is reached, I will not waste the taxpayers' money and call a session. However, let me assure all parties that as governor I will see to it that the Marcellus Shale development will be regulated in a reasonable manner by our Department of Environmental Protection. The DEP has wide authority to establish the needed regulations, and I'm confident that the gas in the Marcellus Shale will be developed in an environmentally friendly manner.

"The DEP does have significant authority through its permitting and regulatory process. It is true that there are some things that need to be resolved by statute, but in the absence of any agreement on these issues, I have a duty to work with our Department of Environmental Protection to provide reasonable regulations governing the industry."

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