A bill aimed to regulate drillers of the Marcellus shale passed the West Virginia Senate this week, but the legislation is missing several elements some say are key issues regarding the natural gas industry.

According to a document prepared for the West Virginia Surface Rights Organization (WVSRO) and the E-Council, a number of good elements in House Bill 2878 are not in Senate Bill 424. There also pieces of legislation missing from both bills, David McMahon, of WVSORO, said.

“We’re still hoping we can get a good bill out there,” McMahon said. “There are some things in neither bill, unfortunately, that we would have liked to have had. It will probably be hard to get those in.”

The House bill is currently stalled, but the Senate bill is now up for amendment and coming before delegates for a second reading Monday. The House bill was considered by many outside of the industry to be the stronger piece of legislation.

One of the items missing from the Senate bill, McMahon said, is a requirement that gas and oil leases have language requiring them to advise the signer to consult an attorney before committing to a lease.

“So many people are presented with the gas companies’ standard lease,” McMahon said. “They call it a standard lease, but really there is no such thing as a standard lease.”

He said it was important for surface owners to know that nearly all of the language in a contract is negotiable, including royalty amounts and other compensation to the landowner.  

“You sign one of these leases, and it may be in effect for a hundred years,” McMahon said. “People should have that explained to them.”

The Senate bill also lacks the strong pre-survey notice requirements included in the House version.

In the House bill, but not the Senate one, the regulation applies to all new wells, not just horizontal wells. It also required 30-days notice and a requirement to offer to meet with the surface owners and exchange contact information. It also provided for other educational material the gas companies would have to give surface owners.

“First, they kind of decide where they want a well,” McMahon said. “Then they send out a surveyor, and the surveyor creates a fancy plat, and he creates a soil erosion and sediment control plan, and then all that goes into a permit application. The first time, under current law, a surface owner finds out they are going to put a well on their land, is when they send out the permit application.”

McMahon said the investment in the development of that plan would make it unlikely that a driller will accommodate surface owners once the plan has been drawn.

The Marcellus shale bills were both heavily trimmed before making their way through the latter portion of the House and Senate. McMahon said the slimming of the bills came as a surprise after lawmakers had shown so much support before. Some of the amendments offered by lawmakers even went further to protect surface owners and the environment than what McMahon said he and other parties had proposed.

“We were surprised so much got taken out of it on the House side,” McMahon said. “During subcommittee meetings, it was rural Republicans and progressive Democrats that were both making amendments to boost surface owner rights and protect the environment.”

He said it was particularly surprising that vertical well drillers were exempt from the bills.

The Senate bill also differs from the House bill in that it has less restriction on the distance required between horizontal shallow wells and occupied dwellings, watercourses, ponds, wetlands and surface water supplies. Provisions giving the state the ability to deny or condition a permit based on impact to parks, rare habitats, historical sites or bodies of water  are also absent in the Senate bill.

Elements of the House bill that provide for the expansion of state authority on inspection methods and monitoring of fracturing fluid and flowback also failed to make their way into the Senate bill.

The Senate bill also does not codify the common law that would prevent a driller from tapping unowned mineral tracts via horizontal wells on land that is owned by the driller. Requirements for reporting to the Legislature as well as timber-management issues that are addressed by the House bill are also not found in the Senate bill.

Neither bill, McMahon pointed out, requires a publication notice of horizontal or large-volume frack permit applications. Both bills also allow the burial of pit waste on surface lands, and neither bill restricts vertical Marcellus wells.

— E-mail: tkuykendall@register-herald.com