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WV Marcellus Committee Clears Permit Fee Hurdle

Fri, 09/16/2011 - 6:02am
LAWRENCE MESSINA, Associated Press

WaterfallCHARLESTON, W.Va. (AP) — Natural gas operators would pay $10,000 to drill a well in West Virginia's share of the Marcellus shale field, and $5,000 for each additional well at the initial site, under a proposal adopted Wednesday by a special legislative committee.

The House-Senate panel also approved provisions increasing bonds posted for well projects, enhancing public notice of drilling and compensating the owners of surface land where operators drill their wells. With the committee resuming its work next month, Wednesday's changes move lawmakers closer to a regulatory bill that they hope to propose during a special session before year's end.

But the permit fee amendment has been considered a crucial hurdle in the process. Operators now pay just a few hundred dollars for a permit. The resulting revenues have helped to leave the Department of Environmental Protection's Oil and Gas office with a $1 million shortfall in its budget.

Tapping the rich Marcellus reserve can involve a horizontal drilling method that differs from the practices followed for vertical wells. Marcellus drillers also employ hydraulic fracturing, or fracking, and pump a high-volume, high-pressure mix of water, chemicals and sand into wells to release the shale's gas.

The mile-deep rock formation, stretching beneath several states in the region, is considered one of the world's largest natural gas fields. The resulting push to drill into the shale has spurred concerns about the large amounts of water needed, the potential effects of drilling and fracking on nearby drinking supplies, and what happens to the tainted frackwater afterward.

Lawmakers estimate the amended permit fees would provide DEP with $2.5 million annually, enough to cure that shortfall and allow the office to add as many as 15 additional staffers. The office would hire two field inspectors for every office worker it adds, DEP lawyer Kristen Boggs told the committee Wednesday.

"I think that this is a very good compromise," said Delegate Tim Manchin, D-Marion and the committee's House co-chair. "This is a very good step forward in terms of trying to meet the needs of the folks in the impact zone and get more feet on the ground and to restore some confidence in the people that the that the state is watching out for them."

Senate Co-Chair Doug Facemire said natural gas operators support the amendment.

"The industry made it clear to us that they wanted to try to protect the environment and the citizens," the Braxton County Democrat said, adding that "The industry did not try to fight or obstruct this. That's an important thing, also, to bring up."

The Legislature proved unable to pass a Marcellus measure during this year's regular session. Acting Gov. Earl Ray Tomblin has since ordered DEP to issue emergency regulations. Approved last month, these temporary provisions requires drillers to explain how they'll protect area land, manage the large volumes of water involved and respond to accidents, among other topics.

But environmental groups and the West Virginia Surface Owners Rights Organization argue that the emergency rule as falling short in such areas as air pollution and surface owner protections. The special committee expects to consider some of those subjects during October's interim study meetings.

Critics of the state's handling of this issue include West Virginia for a Moratorium on Marcellus. They plan to picket Thursday outside a well site at Morgantown Industrial Park. This Marcellus project spurred a Morgantown ordinance banning horizontal drilling-hydraulic fracturing operations within or near city limits. A circuit judge has since blocked that ordinance.

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