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West Virginia Panel to Tackle Four Outstanding Shale Issues

A bipartisan panel of West Virginia lawmakers seeking a consensus on possible Marcellus Shale regulatory reform are scheduled to meet Wednesday afternoon and Thursday morning in Charleston.

According to the agenda for the Joint Select Committee on Marcellus Shale (JSCMS), four areas of concern -- casing and cement requirements, the protection of water supplies, surface owners' agreements and well location restrictions -- have yet to be decided by the 10-member committee.

The regulatory reform comes at a time when natural gas production in the state is booming, thanks to Marcellus Shale development. According to data from the West Virginia Department of Environmental Protection (DEP), natural gas production in the state has increased 36% from 56 Bcf during 1Q2007 to 79.1 Bcf during 4Q2010.

All of the changes have been proposed by Dels. Tim Manchin (D-Marion), Barbara Evans Fleischauer (D-Monongalia), Thomas Campbell (D-Greenbrier), Bill Anderson (R-Wood) and Lynwood Ireland (R-Ritchie). Among the highlights:

"We're hearing that a lot of the remaining issues to be dealt with are contentious," Julie Archer, spokeswoman for the West Virginia Surface Owners' Rights Organization (WV-SORO), told NGI's Shale Daily on Wednesday. "But it's hard for us to understand what is so contentious about making sure that these operations are a safe distance from people's homes and requiring the companies to make an effort to work with the landowners. It just seems like that is the least they could do."

On the issue of negotiating with landowners, Archer said WV-SORO wasn't sure that a $25,000 surety bond would be sufficient.

"We certainly would also like to see landowners have a little more time to consider these agreements," Archer said. "[Thirty days] is a lot more than what surface owners get currently, but we don't feel like it's asking too much to give them 60 days to be able to consider these agreements, or to get legal counsel if they need it. The companies get a lot more time to respond [within] other aspects of oil and gas law."

The JSCMS will meet at 4 p.m. Wednesday in the Senate Judiciary Committee meeting room, and again at 10 a.m. Thursday in the House Judiciary Committee meeting room.

During its meetings last month, the committee recommended steep increases in permit fees and bonding requirements, expanding the public notice and comment period over drilling activities and changing the way DEP hires natural gas well inspectors (see Shale Daily, Sept. 16; Sept. 14).

"We appreciate what the committee is trying to do," Archer said. "It's a good start."

The JSCMS is using the Natural Gas Horizontal Well Control Act, also known as SB 424, as the basis for a new bill. SB 424 passed the Senate by a unanimous vote on March 2, and a different version of the bill was approved by the House of Delegates on March 10. But legislators could not pass a reconciled version of the bill before the legislature convened for the 2011 session (see Shale Daily, March 15; March 11; March 4).

The JSCMS has so far reached agreement on 22 areas of Marcellus Shale regulatory reform. The legislature will convene Jan. 11, 2012 for its next 60-day session.

Gov. Earl Ray Tomblin issued an executive order in July directing the DEP to enforce several new safeguards and to issue an emergency rule over Marcellus regulations. The DEP complied by submitting an emergency rule to Secretary of State Natalie Tennant in August (see Shale Daily, Aug. 24; July 14). Tennant signed the rule on Aug. 29, putting its changes into effect for 15 months while the legislature debates and enacts legislation to make the changes permanent.

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