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West Virginia Legislators: Marcellus Bill On Horizon

The co-chairs of a West Virginia panel trying to reach a consensus on Marcellus Shale regulatory reform testified Monday that they believe compromise legislation is within reach and could be enacted in the near future.

Sen. Douglas Facemire (D-Braxton) and Del. Tim Manchin (D-Marion) -- who lead a bipartisan panel of West Virginia lawmakers, the Joint Select Committee on Marcellus Shale (JSCMS) -- also fielded questions from members of the U.S. Senate Energy and Natural Resources Committee, chaired by U.S. Sen. Joe Manchin (D-WV).

"There are some provisions in the [proposed] bill that industry is not very happy with, and there is a concern that they will exert influence to block the bill," Del. Manchin said. "But based upon my private discussions with many senators and House members, I believe we want a bill. I think our citizens have spoken loudly and clearly that they want a bill, too. I think everybody is trying to get there."

Facemire concurred, adding that whatever form a Marcellus Shale regulatory reform bill takes, it is a beginning, not an ending.

"This is not a bill where it's a one-time deal," Facemire said. "As this bill gets implemented and put into law, we will have the opportunity to come back and make any adjustments that need to be made. But the citizens have made it perfectly clear to us over the last few years that they want some regulations and rules put into place, and that's what we're going to attempt to do here."

Issues remaining for the JSCMS to work out include surface owner agreements, rules for inspectors, general language surrounding permit requirements with the state Department of Environmental Protection (DEP) and drilling issues with underground caverns (see Shale Daily, Oct. 17). The JSCMS was scheduled to meet after Monday's hearing and again on Wednesday.

Asked if the state would be able to allocate enough funding for the DEP to properly regulate oil and gas companies operating in the Marcellus, Kurt Dettinger -- general counsel for Gov. Earl Ray Tomblin -- said testimony by DEP Secretary Randy Huffman before the JSCMS was extremely helpful to the process.

"We feel comfortable that the legislature will implement appropriate drilling permit fees," Dettinger said.

One of the federal committee members, U.S. Rep. Nick Rahall (D-Beckley), said he was concerned about a proposal for oil and gas companies to reveal how many workers at their operations are from West Virginia proper and who are from other states.

"We all want to see these jobs go to West Virginians," Rahall said. "In some cases there are West Virginians who left during the bad times and now are coming back and commuting to places like North Carolina on the weekends to see their families. How will you account for that?"

Del. Manchin replied that the proposal wasn't meant to be punitive to oil and gas companies.

"We're just asking for an aggregate number of in-state residents who are employed, an aggregate number of out-of-state [workers], and the total payroll for each," Del. Manchin said. "We need some real numbers. I know there are going to be deviations. I don't expect us to have 100% West Virginians [working in the Marcellus]. If it was 80% West Virginians and 20% out-of-state, I'd be tickled to death. If it was 20% West Virginians and 80% out of state, I wouldn't be happy

"This doesn't mean we can do anything about [who gets hired], but you need some public pressure on these companies to make them know that the public is aware of it and that they want to see them do something about it. And the public wants to see them work with our community and technical training schools."

Tomblin -- U.S. Sen. Manchin's successor as governor -- issued an executive order in July directing the DEP to enforce several new safeguards and to issue an emergency rule over Marcellus regulations (see Shale Daily, Aug. 24; July 14).

Asked if West Virginia was "ahead of the curve" with its emergency rules, Jon Capacasa -- director of Philadelphia-based Water Protection Division Region 3 for the U.S. Environmental Protection Agency (EPA) -- said yes, but additional work was needed.

"One area I would encourage [West Virginia] to spend some time in is the actual siting of well pads," Capacasa said. "We're seeing some situations [in other states] where well pads and roads are in the stream bank. I think spending some time on proper siting to avoid streams would be very important. The emergency rules are a great step and I think you want to continue to enhance that."

Capacasa was then asked if there was a possibility that the EPA could issue drilling permits in the absence of any state laws governing the practice.

"Drilling activity is exempted from federal law, so you will not see EPA issuing drilling permits in the Marcellus area," Capacasa said. "I don't think there's any risk of that happening."

U.S. Sen. Manchin urged West Virginia legislators to continue to forge ahead.

"We are confronted with yet another natural resource bonanza, possessing vast potential to enrich our state and our people," U.S. he said. "I believe we ought to make every effort to not just simply live with Marcellus production, but to ensure that we thrive from it."

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

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