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WV Marcellus Bill Clears Panel

Tue, 12/13/2011 - 4:46am
LAWRENCE MESSINA, Associated Press

CHARLESTON, W.Va. (AP) — West Virginia's Senate Judiciary Committee amended and then endorsed new rules for the Marcellus shale field on Monday, after hearing an array of criticisms directed at the special session legislation's attempt to regulate drilling in this vast natural gas reserve.

The state senators advanced the bill to that body's Finance Committee on a voice vote, after several key players in the Marcellus debate weighed in against several of its major provisions during a nearly five-hour meeting. The House Judiciary Committee expects to field similar comments at a Monday afternoon public hearing for that chamber's version of the bill.

Several of the Senate Judiciary amendments aim to improve language addressing prior notice to surface owners and the public of drilling. One requires at least seven days' notice, up from 72 hours, before survey crews can enter property of a proposed well site. Others increase the number of wells exempted from all or some of the bill's rules.

The committee kept permit fees at $10,000 for an initial well and $5,000 for each additional well at that initial site. The Department of Environmental Protection estimated the fees would provide $2.4 million annually. That would allow the agency to erase a $311,641 deficit in its oil and gas office while providing the $1.3 million needed to hire 14 more well inspectors and office support staff, Secretary Randy Huffman told the lawmakers.

A special House-Senate committee endorsed draft Marcellus legislation in November after several months of meetings and public hearings. Gov. Earl Ray Tomblin then modified that draft before calling the special session, which began Sunday.

Representatives of the West Virginia Environmental Council and the state's Surface Owners Rights Organization told the Senate Judiciary Committee they opposed the bill, particularly several of Tomblin's changes.

The council's Don Garvin faulted Tomblin for removing language addressing air quality at well sites and other components fought hard for by his group. He also targeted the prior notice provisions as "a major failing of this bill."

"These are huge operations that affect a lot more than the surface tract that's being disturbed," Garvin said. "The public deserves the right to know what's going on, and the chance to comment on it."

Both Garvin and Dave McMahon, of the surface owners groups, slammed the bill's buffer zone provisions. Monday's bill requires 100 feet between wells and wetlands, but the draft had proposed twice that, Garvin said. The pending measure also spaces wells at least 625 feet from houses. McMahon said that's not enough to protect residents from the noise that can accompany drilling and operating wells.

"You will not be able to sleep at night," McMahon said of that distance.

McMahon said another provision overrides 1981 legislation to give more rights to mineral owners than surface property owners. That and other changes leave surface owners on unequal footing with developers armed with gas leases.

"There are no incentives for them to come and work with us," McMahon said.

Industry representatives outlined numerous concerns as well.

West Virginia Oil and Natural Gas Association Executive Director Corky DeMarco said his group has major problems with the permit fees, which without the bill are around $400, and the spacing requirements. The latter also includes 2,500 feet from dairy or poultry barns, 1,000 feet from a public water supply intake and 300 feet from a natural trout stream.

"I don't think we got anything that we feel is important in this bill," DeMarco told the committee.

Phil Reale, a lobbyist for the state's Independent Oil & Gas Association, echoed several of DeMarco's concerns. But both he and DeMarco said that passage of the bill would provide clear and consistent rules that should encourage Marcellus shale developers.

The bill would apply only to Marcellus wells drilled horizontally into the shale. Huffman said Marcellus operators also drill conventional, vertical wells. It is further limited to well sites that disturb at least three acres or consume at least 210,000 gallons of water a month.

Drillers pump huge volumes of water mixed with chemicals and sand down wells to crack the shale. This hydraulic fracturing, or fracking, has prompted concerns over economic effects on nearby water supplies, people and livestock.

The bill would exempt the 1,655 Marcellus wells already permitted by DEP. Huffman said most of these wells have already been completed. As amended Monday, it would exempt another 206 wells with pending permit applications. Its spacing requirements, meanwhile, would not apply to any additional wells drilled on these sites with approved or pending permits.

The mile-deep Marcellus shale formation stretches beneath much of West Virginia as well as parts of New York, Pennsylvania and Ohio. Federal officials estimate it contains between two and six times as much natural gas as the entire U.S. industry produced for market in 2009, making it one of the richest reserves in the world. West Virginia sits above about one-fifth of those reserves.

Follow Lawrence Messina at http://twitter.com/lmessina

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