The Register-Herald, Beckley, West Virginia

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October 28, 2011

Panel to look at Marcellus regulation

CHARLESTON — A select committee striving to come to terms on a bill regulating the fledgling and promising Marcellus shale industry hopes to huddle sometime next week, ahead of November interims, but it’s unlikely any meeting will be held under the Capitol dome.

Instead, the two co-chairmen, Delegate Tim Manchin, D-Harrison, and Sen. Doug Facemire, D-Braxton, are eyeing a site in Clarksburg, or possibly Flatwoods, to accommodate the 10-member panel.

Nothing requires members to be in Charleston to handle the committee’s business, Manchin emphasized Thursday.

“I checked early in the process,” he said.

“We do not have to meet at interims, nor during a special session. Nor do we have to meet at the Capitol.”

Since members are spread across the state, from the panhandles to the southern mountains, Manchin and Facemire want a location that is convenient to all.

Just when the issue will be taken up by the full Legislature remains uncertain. Gov.-elect Earl Ray Tomblin is calling lawmakers to town Nov. 13 for the official certification of the Oct. 4 special election results, after which he will take the oath. November interims start the following day.

Four amendments are still up in the air, and the two causing the most controversy are the surface use agreement and the additional permit considerations in regard to what the Department of Environmental Protection would consider before giving its blessing to a new operation.

Manchin said property owners have long sought a mandatory sit-down with operators to spell out just where they intended to set up well sites, impoundments and roads, and secondly, to negotiate terms of compensation.

“That’s never been mandatory,” the delegate said.

“There are some states where it is mandatory. In our first proposed amendment, we made it mandatory. The amendment under consideration does not make it mandatory. It attempts to induce the operators to do so through the use of attorneys’ fees being awarded in a subsequent disagreement over compensation.”

If a surface owner prevailed in litigation, Manchin explained, under normal circumstances, they receive the fees.

“If the operator had attempted to utilize the surface owner agreement process, even if it wasn’t successful, as long as they give them notice, provided them a copy of the code section dealing with compensation, gave them some other information in that part of the process — even if they didn’t reach agreement on where it should be located, or the compensation — then, in order to get attorneys’ fees, the surface owner would have to prevail by more than 15 percent,” he said.

“In other words, they would have to get 115 percent of whatever the last best offer was by the industry.”

The amendment also requires the surface owner to provide a 30-day notice of intent to sue so the industry isn’t ambushed, allowing time to make a best offer before being taken into court.

“Quite frankly, I’m not sure the surface owner rights groups are happy with it, and I’m not sure industry is happy with it,” Manchin said.

“I’m not sure anyone really is happy with it.”

The intent is to provide an incentive for industry to come to terms, the delegate said.

Typically, he said, there isn’t enough money at stake to entice a lawyer to take such cases on a contingency fee basis, and surface owners, farmers, and others with no interest in the minerals cannot spend $200 an hour and ultimately shell out as much as $15,000 in litigation for which they may not receive compensation justifying going to court, Manchin said.

“So it’s a little bit of an equalizer in terms of economic strength to give them a little better chance at being able to afford representation,” he said.

Marcellus shale drilling has been hailed by many lawmakers as a potential economic boom for West Virginia, but environmentalists and surface owners are adamant that stringent safeguards be installed to protect public health and the rights of landowners.

Agreed to earlier was a 625-foot buffer zone separating gas drilling and occupied dwellings, but surface owners say this is inadequate and that a 1,000-foot buffer is more reasonable. The committee also agreed to require $10,000 for initial permits, and $5,000 for subsequent ones on the same operation.

“There are numerous provisions in this bill that I think will benefit the industry,” Manchin said.

“And I think the public will be much more comfortable with the industry. I don’t really believe there is anything in there that really does great harm.”

— E-mail: mannix@register-herald.com

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