Surface owners have no right to appeal well drilling permits, court rules

 

CHARLESTON – According to a certified question answered by the Supreme Court of Appeals of West Virginia, a “surface owner” of a parcel of property included within a leasehold has no right to appeal the grant of a well drilling permit issued to the lessee of the valid oil and gas lease.

In an opinion written by Justice Margaret Workman and issued Nov. 21, the court said "no" to the question:

"Does the West Virginia Supreme Court of Appeal’s opinion in State ex rel. Lovejoy v. Callaghan interpret the relevant statutes, when read in para materia, to permit a surface owner to seek judicial review of the West Virginia Department of Environmental Protection, Office of Oil and Gas’s issuance of a well work permit for a horizontal Marcellus well?"

According to background information in the case, Michael L. Hamblet is the surface owner of a 442.6 acre parcel of land that is included within a 2,654 acre mineral estate leased by EQT Production Company in DoddridgeCounty. 

In March 2010, EQT filed a well drilling permit application with the Office of Oil and Gas of the West Virginia Department of Environmental Protection. As part of the permit application, EQT certified that the surface owners, including Hamblet, were sent notice of the application, court records state. 

Hamblet submitted comments to the DEP regarding his concerns about potential damage to his property from the new well.  He had already had several wells permitted on his property and according to Hamblet, the resulting damage and disturbance to his property was substantial. 

DEP then conducted an inspection of the property and finding that all the application requirements were satisfied, issued the permit to EQT.

On May 21, 2010, Hamblet filed a “Petition for Appeal of Issuance of a Well Permit” in the Circuit Court of Doddridge County. The court denied motions to dismiss the petition by both EQT and DEP in July of 2011, concluding that Hamblet had a right to appeal under the West Virginia Supreme Court of Appeals decision in State ex rel. Lovejoy v. Callaghan. 

In response to the circuit court’s decision, both DEP and EQT asked the court to submit the ruling to the Supreme Court via certified question and the court complied, entering an order of certification on Aug.10, 2011. 

“The DEP and EQT argued below and now in this Court that the relevant statutes governing the issuance of well work permits do not extend the right of appeal to surface owners and, therefore, to the extent that Lovejoy indicated otherwise, it was a misstatement of the law,” Workman wrote.

The petitioners also argued that surface owners were entitled to file comments with the DEP upon notice of a permit and “that no additional statute provides a mechanism for surface owners to object to a well work permit, request a hearing on a well work permit or seek judicial review thereof,” the record states. 

The Court, upon analysis of the various statutes involved, found that the right of judicial review with regard to the issuance of refusal of a well work permit “does not extend to owners of the surface rights of the property upon which the proposed well is to be drilled," the opinion states.

"To the extent that Lovejoy indicates otherwise, it is overruled.”

Hamblet also raised constitutional questions regarding “due process and equal protection” that were “beyond the scope of the certified question presented to this Court.”  

The Court addressed the constitutional issues anyway, because, as Workman wrote, “It is clear that in order to fully resolve this issue, Mr. Hamblet’s constitutional arguments should be addressed.

"Mr. Hamblet’s constitutional arguments are premised upon the notion that surface owners have an unrestricted right to enjoyment in their property. A surface owner’s rights, however, are subject to the mineral owner’s rights.

"The permit issued by the DEP does not authorize EQT to interfere with Mr. Hamblet’s property rights; rather, the permit merely allows EQT to exercise its existing rights and controls the manner in which does so. As such, the permitting process arguably encroaches upon EQT’s rights, but does not infringe upon Mr. Hamblet’s property rights. Thus, there is no merit to Mr. Hamblet’s constitutional arguments. 

"In summary, an examination of the relevant statutes governing the issuance of well work permits establishes that surface owners have no statutorily defined right to seek judicial review with respect to the issuance of a well work permit by the DEP.  Given this fact, this Court has no basis to find that Mr. Hamblet has a right to appeal the well work permit issued by the DEP.”