Lawmakers pass Marcellus Shale bill

By Chris Dickerson | Dec 14, 2011





CHARLESTON -– Gov. Earl Ray Tomblin soon will sign legislation for new rules and fees for Marcellus Shale gas drilling in West Virginia.

On Wednesday, the state Senate sent the bill to Tomblin's office after the House of Delegates passed the measure by a vote of 92-5. The Senate vote was unanimous. Tomblin said he'd sign the bill, a compromise piece of legislation created by his office for the special session.

Tomblin hailed the bill's passage.

"For all West Virginians, the legislature and I have worked together to open the door to new job opportunities and reasonable regulations for Marcellus Shale development with the passage of the Horizontal Well Act," he said. "This landmark piece of legislation provides clear rules to the natural gas industry, protects our communities, surface owners and waterways while sending a clear message: West Virginia wants jobs and we will protect our rights and our environment.

"I want to thank the members of the legislature for taking a good bill and making it better for the future of West Virginia. As we continue to create priorities and maintain focus, we will achieve success. We will move West Virginia forward."

Although the bill technically addresses horizontal wells in general, the purpose of the legislation was to address the oncoming growth of oil and gas development in the Marcellus shale in West Virginia, according to attorney Gil White, a government affairs coordinator with Steptoe & Johnson's Charleston office.

"The bill represents a significant victory for both Gov. Earl Ray Tomblin, whose compromise legislation easily passed both the House of Delegates and the Senate with only minor amendments and will become law upon his signature, and the leadership of both houses of the Legislature, which managed to pass significant legislation in this short special session," White said in a statement.

Once signed, the new law will provide:

* Increased permit fees to fund the regulatory efforts of the West Virginia Department of Environmental Protection. It sets $10,000 permit fees for initial wells and $5,000 fees for each well added to a site;

* Increased well location restrictions to protect water resources and surface uses;

* A requirement that a road use agreement be in place prior to permit issuance;

* Increased notice provisions and a new compensation statute for surface owners;

* Increased enforcement authority for the state DEP, including increased potential civil penalties for violations of the law; and

* The codification of water use and wastewater handling regulations contained largely in the Governor's emergency rule.

White said there are also provisions for the state DEP to promulgate further legislative rules in the near term regarding air quality and cementing and casing issues.

The Legislature "has been wrestling with how to address the regulatory challenges presented by Marcellus shale" for three years," said White, a former 14-year elected member of the Legislature as well as a former political liaison to former Gov. Joe Manchin. "While it is clear neither industry nor environmental advocates are totally pleased with the passage of this bill, it is a substantial first step in the regulation of the Marcellus shale and provides some level of regulatory certainty needed for industry."

Tomblin said the Horizontal Well Act provides distinct permitting and regulatory rules so that the natural gas industry can develop job opportunities and invest in West Virginia. As well as providing the state DEP with sufficient funding and regulatory authority, ensuring the safety and protection of our communities, waterways and surface owner rights. Through provisions pertaining to the repair and maintenance of roads, notice of drilling activity to surface owners and reporting of water and frack fluid usage, the Act will generate responsible Marcellus Shale development throughout West Virginia.

"First, I would like to thank Governor Tomblin for his leadership in calling the special session to address this issue that provides enormous challenges and opportunities for the citizens of the state," state Senate President Jeff Kessler, D- Marshall, said. "I would also like to thank Speaker Thompson as well as Senator Doug Facemire (D-Braxton) and the members of the joint select committee for their tireless efforts and dedication in formulating a bill that became the framework for this historic piece of legislation we passed today."

House Speaker Rick Thompson, D-Wayne, agreed.

"I commend Governor Tomblin, President Kessler and all members of the Legislature for working diligently to develop significant, compromise legislation that puts in place much-needed guidelines for the development of this promising industry," he said. "I am very grateful to the joint committee members -- led by Senate Chairman Facemire and House Chairman Tim Manchin (D-Marion) -- who spent months gathering input and deliberating on how best to accomplish that goal.

"While there were many different ideas as to specifics within this complex bill, the Governor and legislators were in agreement that there was an urgent need for a regulatory framework to address the relationship between oil and gas extractors and surface owners and to provide environmental protections. I am very pleased with the resulting legislation."

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