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House Committee Approves West Virginia Marcellus Bill

A bill that would increase horizontal drilling permit fees in West Virginia to $5,000 from the current $650 that all drillers pay was passed out of committee and sent to the full House Thursday afternoon.

The Natural Gas Horizontal Well Control Act (SB 424), which the House Finance Committee passed by a voice vote, is different from that originally proposed by the state's Department of Environmental Protection (DEP) (see Shale Daily, Feb. 11). In an effort to fund a larger staff and more oil and gas inspectors, DEP had proposed increasing horizontal drilling permit fees. More personnel are needed because of the growing number of horizontal well sites in the state, according to DEP Secretary Randy Huffman, who told the committee that horizontal drilling sites are "significantly larger" than conventional well sites.

"I believe in the short term we can get by" with the current number of inspectors, Huffman said. Enlarging DEP staff is "not something that could be done overnight; it's something that would have to be done over time."

DEP has also asked legislators to increase to 66 the number of oil and gas inspectors and permits handlers on its payroll from the current 32, who are tasked with covering approximately 59,000 wells -- about 750 of them active -- across the state.

SB 424 would require 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. Language that would have allowed forced pooling was previously removed from the bill.

The legislature has until Saturday, the scheduled final day of the regular 2011 session, to reconcile the House version with the Senate bill approved earlier this month (see Shale Daily, March 4).

Another bill (SB 465), which would redirect $2 million of the oil and gas severance tax revenue already collected by the state to a fund to be administered by the DEP has been moved from the House's special calendar to the regular House calendar, which may indicate that it will not be voted on by the full House this session.

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