McDowell judge takes over important gas royalties case

By Steve Korris | Jan 30, 2009

WELCH – McDowell Circuit Judge Rudolph Murensky has taken charge of litigation that will sort out rights to gas royalties all over West Virginia.

On Jan. 14, Murensky yanked a royalty lawsuit away from Kanawha Circuit Judge James Stucky and consolidated it with a similar suit in his own court.

Both suits oppose drilling permits that the West Virginia Oil and Gas Commission granted to Chesapeake Appalachia, Eastern American Energy and Petroedge Resources.

The commission approved deep well permits although the companies would drill them to a depth that would normally require shallow well permits.

The commission granted special treatment because the companies would drill down to the deep zone and then drill up to the shallow zone.

Great sums depend on the distinction, because royalties from deep wells go to gas owners while royalties from shallow wells go to property owners.

The structure of regulation hinges on the distinction too, for the commission doesn't regulate shallow wells. The Shallow Well Gas Review Board does that.

Depth also matters because it determines spacing.

Last year Blue Eagle Land, eight other companies and the West Virginia Coal Association opposed the permits at the Supreme Court of Appeals.

The Justices side stepped the issue, inviting opponents to appeal the commission's action to circuit court.

In their opinion the Justices gushed over a "friend of the court" brief from the West Virginia Surface Owners' Rights Organization.

They wrote that if opponents appealed the permits to circuit court, the organization "should be given an opportunity to assert its interests and views."

In June, the Blue Eagle Land group sued the commission in McDowell County.

In July, the surface owners group sued the commission in Kanawha County.

The Blue Eagle Land group asked Murensky to transfer the Kanawha County suit to McDowell County, and the surface owners asked Stucky for the opposite.

Murensky held a hearing, Stucky didn't, and Murensky took charge.

"There is no dispute that plaintiff's petition for appeal is properly before this Court by a proper party," he wrote. "There is some dispute as to whether Organization's appeal in Kanawha County is proper."

Although the surface owners claimed the Supreme Court gave them standing to sue, he wrote, the Blue Eagle Land group disputed the interpretation.

He wrote that "issues before the courts can be more expeditiously resolved without the hassle of having to litigate the issue of standing."

Charleston lawyers represent all parties.

Nicholas Preservati represents the Blue Eagle Land group and David McMahon represents the surface owners.

Kenneth Tawney represents Petroedge Resources, Timothy Miller represents Chesapeake Appalachia, and Susan Wittemeier represents Eastern American Energy.

Attorney General Darrell McGraw represents the oil and gas commission.

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