Supporters and opponents of the latest bill to force unwilling land and mineral owners to allow large-scale natural gas drilling debated the issue Monday morning as a West Virginia House of Delegates committee prepares to take up the measure in the final days of the legislative session.
Industry groups got a boost from an appearance by Commerce Secretary Woody Thrasher, who spoke first during a Committee on Energy public hearing that was hastily squeezed between two other hearings held in the House chamber prior to the 11 a.m. floor session.
Thrasher said Senate Bill 576 is needed to keep drilling in the West Virginia portion of the Marcellus Shale gas fields and that state residents should be careful not to put their pride in protecting their private property ahead of the potential economic gains from expanding the gas boom.
“These gas reserves are the way we’re going to work our way out of the morass we are in,” Thrasher said. “We West Virginians are independent people ... sometimes that independence gets in the way of progress and, ultimately, prosperity.”
Opponents, though, noted that parts of the bill essentially would force drilling on landowners that have old leases that didn’t anticipate modern horizontal drilling and hydraulic fracturing, but would necessarily update leases to adequately increase royalty payments to take into account the industry’s new economics.
“This bill forces a pooling provision into everyone’s leases without the benefit of any negotiation,” said Jason Webb, a lobbyist for the West Virginia Land and Mineral Owners Association. “It’s difficult for us to understand why the government wants to force that on anyone.”
The bill, the top priority this session for the state’s natural gas industry, contains a “co-tenancy” provision that allows drilling over the objections of a co-owner of mineral rights, unless that co-owner controls at least 25 percent of the mineral rights.
In a separate section for what proponents call “joint development,” the bill allows modern horizontal drilling through older leases, written when that technology wasn’t used, unless those older leases somehow specifically prohibited the practice.
Industry technology has fueled an economic boom in the area, but it also has created problems for surface owners who worry about damage to their homeplaces and peaceful rural lifestyle. The drilling boom also has generated conflicts between gas companies and mineral owners over how the wealth created is being divided.
While Webb’s group opposes the legislation, another royalty owner group, the West Virginia Royalty Owners Association, supports it. The West Virginia Farm Bureau opposes it, as does the West Virginia Surface Owners Rights Organization.
“We want our folks to be treated fairly,” said Charles Wilfong, the Farm Bureau’s president. “This bill does not treat our people fairly, and it does not protect their property rights.”
When the bill passed the state Senate last week on a 19-14 vote, an amendment was rejected that aimed at providing due process to unwilling mineral owners by allowing them to appeal to the state Oil and Gas Conservation Commission to seek “just and reasonable consideration” for their property.
Representatives of the state’s two major oil and gas industry groups — the West Virginia Oil and Natural Gas Association and the Independent Oil and Gas Association — spoke in favor of the legislation Monday.
Anne Blankenship, executive director of WVONGA, said the existing system wrongly stops the majority of the owners of a particular natural gas reserve from drilling if even one owner of a tiny portion is opposed.
“It’s an unfair system to the majority of mineral owners,” Blankenship said.
Overall, 18 speakers were against the bill and 11 spoke for it. But because the hearing was given just an hour of time, sandwiched between two other public hearings in the House chamber, 16 other people who signed up did not get to speak before the hearing concluded.
Energy Committee Chairman Bill Anderson, R-Wood, invited anyone who didn’t get to speak to come to his office after the hearing to tell him their views on the legislation. Several people lined up to do so, and Anderson welcomed each of them into his office individually, a process that lasted more than 30 minutes.
Anderson acknowledged that there is “significant opposition” to the legislation and that he expects efforts to amend it during committee.
“We’re going to have a full and free discussion,” he said.
The Energy Committee has a meeting set for 2 p.m. Tuesday. The session ends at midnight Saturday.
Reach Ken Ward Jr. at email@example.com, 304-348-1702 or follow @kenwardjr on Twitter.