The Register-Herald, Beckley, West Virginia

Today's Front Page

December 14, 2011

Marcellus shale bill looks to be headed for vote

CHARLESTON — Historic regulation of the promising Marcellus shale gas industry appears headed for a final vote later this week after easily grabbing unanimous support in the Senate before being amended and passed by the House Judiciary committee Tuesday evening.

Judiciary panelists wrangled over more than 60 proposed amendments in the House, prompting hourly delays in the floor session, originally planned to begin in late afternoon. Later in the evening the House panel finally passed the measure.

House Speaker Rick Thompson, D-Wayne, planned to have the controversial measure read a second time, then advance it to the third reading, or the voting stage today, with the right to amend.

Thompson said he hoped the matter could be wrapped up by the latest on Thursday, but suggested final passage could come today, provided the two chambers can agree on the bill.

Senators amended their bill to put surface and mineral owners on equal footing and require notices of pending drilling in newspapers published in the affected areas.

The Senate also exempted wells with pending permit applications from the bill’s provisions. It also amended the measure so its buffer zones won’t apply to additional wells drilled at existing sites.

Several lawmakers have questioned the legislation’s scope. It would only apply to new horizontal wells that will disturb at least three acres or consume at least 120,000 gallons of water a month. Environmental groups argue that this approach wrongly leaves out smaller operations and those that rely on conventional, vertical wells. They also complain that some of the spacing requirements are insufficient, and disagree when the bill measures distances from the center of a well site and not the edge.

These buffer zone provisions aim to keep well sites at least: 625 feet from occupied houses as well as from dairy and poultry barns that are at least 2,500 square feet; 250 feet from a water well; 1,000 feet from a public water supply intake; and 300 feet from a natural trout stream and 100 feet from other water sources.

Marcellus drillers now pay around $400 for permits. The bill would hike that to $10,000 for an initial well and $5,000 for each additional well at that site. Huffman told lawmakers on Monday that the resulting $2.4 million in estimated annual revenue should allow his agency to hire 14 additional inspectors and office staff while fully funding its oil and gas division.

The legislation also requires an economic study of the jobs, payroll and salaries from Marcellus operations and whether those benefit West Virginia residents. The House Judiciary Committee amended that section so the study would also monitor the hiring of minorities, veterans and the previously unemployed.

Other House Judiciary changes include one allowing DEP’s secretary to propose different buffer zones for dwellings when warranted. Another would require the secretary to report all regulatory waivers to lawmakers annually.

Landowners would have to approve before drillers buried waste from frackwater holding pits, under another Tuesday change. The committee also allowed for special rules to govern Marcellus drilling around the sensitive Karst limestone, known for sinkholes, caves and pristine streams that sink underground.

Industry groups say they disagree with the new permit fees and other oversight provisions, but support passage to ensure clear rules for Marcellus operations. David McMahon of the West Virginia Surface Owners Rights Organization welcomed the Senate and House Judiciary changes, but said they still don’t provide incentives for developers to sit down with landholders before selecting, drilling and operating well sites. Environmental advocates also said Tuesday’s amendments fell short.

“We’re deeply disappointed that it doesn’t do more,” McMahon said late Tuesday. “We think they should have waited until the regular session.

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By suspending the constitutonal rule that requires a bill be read on three separate days, the Senate accelerated its 33-0 passage.

Only Sen. Karen Facemyer, R-Jackson, was absent.

“Perfect?” Senate President Jeffrey Kessler, D-Marshall, reflected after a brief floor session.

“No. But I think it’s necessary. Yes.”

Kessler saw no radical departure in Gov. Earl Ray Tomblin’s version from the original one crafted by a select committee that has worked since June on it and said lawmakers have had ample time to consider all aspects of the legislation.

A bill regulating the expansive Marcellus shelf that stretches all the way into New York cleared the Senate last winter, only to die in the House at the end of the 2011 session.

“It wasn’t a bill that was just sprung on us,” he said, telling reporters lawmakers have had ample time over the past year to explore the fledgling industry.

“Two years ago, if you walked in here and mentioned the word ‘Marcellus shale,’ someone would have wondered if he’s an outfielder for the Los Angeles Dodgers or something. Who’s Marcellus shale? Now, everybody knows exactly the opportunities, the challenges, the unique characteristics of this industry.”

While Marcellus shale drilling initially began as a new industry in his home county, along with Wetzel, the Senate leader said it is expanding and embraces a much wider turf across West Virginia.

“I think it’s important we have a uniform regulatory framework in place to not only encourage the indusry to set duties and standards but to create some predictability,” he said.

Kessler said legislation also is needed to safeguard sources of water from contamination and that landowners be given ample notice when an operation is planned.

“So folks don’t wake up in the morning and see a rig being moved on the ridge across the way,” he said.

The Senate vote came absent any floor comments and cruised swiftly in about 16 minutes, either a record or close to it.

Kessler felt it was healthy to provide as much information on the historic legislation as possible.

“I’ve never yet to see anyone die of too much information,” he said, adding most of the concerns voiced dealt with uncertainty.

“When people communicate and have information and knowledge, they usually are able to work in unison to let the surface owners have their rights protected while at the same time that the mineral or gas interests owned by someone else, they have the right to get it, too. They need to respect each other.”

If any changes are needed, he said, they can be enacted.

“I’ve said from the beginning, this will not be perfect,” he said.

“When bills get implemented, you have to look and see how they work in real life applications, as with any legislation.”

Kessler defended the 625-foot buffer zone, despite pleas from surface owners and environmentalists to enlarge it to at least 1,000.

The spacing not only covers human occupants in dwellings, but dairy cattle and poultry kept in farm shelters.

“Any number is arbitrary, whether it’s 625, or 1,500, or 100 feet, or 300 feet, or 1,000,” he said.

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