April 1, 2009

Legislative Update from the WV SORO Lobby Team

We wish we could report that the Surface Owners’ Bill of Rights is moving, but the oil and gas industry has managed to influence leadership in both houses to keep the bill off committee agendas.  Today (Wednesday) is “crossover day,” the deadline for all bills to be passed out of their house of origin, so at this point we are starting to look ahead to next year. 

Unfortunately, several things contributed to our lack of progress this year, among them: 

The triple committee reference in the Senate had us changing directions in the middle of the effort.  On the House side, procedural snafus and new early deadlines for moving bills out of committees made our bill run out of time sooner than anticipated.  The precipitous fall in the fortunes of the oil and gas industry caused by the economy and other factors gave many in the legislature pause to do anything.  Although some individuals and local chapters of the Farm Bureau have been helpful, the state leadership of the Farm Bureau failed to take any action we could observe to get a bill passed, even though we worked hard to get their support. Finally, we could not get the legislative leadership lined up and energized, and the “interim bill” sapped important sponsors.

We know this news is discouraging, but it usually takes at least three years to get significant new legislation passed.  It took that long to get our current notice and damage compensation requirements, but we thought the interest shown by those of you across the state would convince lawmakers to pass the Surface Owners’ Bill of Rights this year.  We appreciate your continued support.  Although the legislature failed to act, we all must continue to fight for the rights we deserve, and make sure the legislators know that we will not give up until we succeed. 

On the bright side, we were able to kill an industry-backed bill that would have made things even more difficult for West Virginia surface owners.  Under SB 474, surface owners would potentially have to contend with even more well sites and access roads on their land. 

The bill would have eliminated the basis for WV SORO's appeal on well spacing for wells drilled to the Marcellus Shale formation and there would be no limit on how close together the wells could be placed unless there is coal under the same land and the coal owner objects. Where there is no coal owner, the “rule of capture” will apply, and everyone loses — investors, mineral owners and surface owners.

Although the bill is dead for this session, this issue will keep coming up.  What is really needed is well spacing and royalty sharing (or “pooling and unitization”) for all wells.  Spacing gas wells means that fewer wells need to be drilled (on fewer surface owners) to drain gas from the same area. In the long run, fewer wells will get more gas from the same acreage (because the natural pressure that forces the gas out is not depleted as quickly).  Drilling fewer wells to get more gas, costs less and benefits everyone — royalty owners, investors, responsible drillers and consumers. Fewer wells for the same gas also means less surface damage and less risk of groundwater pollution and other environmental problems.

If there are any important developments at the legislature between now and April 11, we will let you know.  After the session, we will resume our town hall meetings and organizing landowners around the state so we will be stronger next year. 

Thanks again for all your support.  Keep on fighting!

Julie Archer, Dave McMahon, Norm Steenstra III & Gary Zuckett
The WV SORO Lobby Team