Natural gas pooling bill declared dead for session

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The natural gas industry’s controversial bill to help it force drilling on unwilling land or mineral owners was declared dead for the session late Tuesday night.

West Virginia House leaders decided not to put the Senate-passed measure on the agenda for the Committee on Energy, citing the limited time left in the session and inability to build a consensus of support for the legislation among either Republicans or Democrats.

“I would say it’s dead for this session,” said House Energy Chairman Bill Anderson, R-Wood. “It didn’t have a pathway forward.”

Earlier, Anderson had given supporters of Senate Bill 576 hope — and time to try to gather more votes — when he indicated it was possible House Speaker Tim Armstead, R-Kanawha, would opt for a late-night committee meeting Tuesday or a last-ditch meeting today to try to get the bill reported to the floor in time to be read on three consecutive days and voted on before the legislative session ends at midnight Saturday.

But when Tuesday evening’s floor session was wrapping up, and committee chairs were standing to announce meetings Tuesday night or today, Anderson remained in his chair and made no such announcement for the Energy panel. Several natural gas company lobbyists, watching from the gallery and gathered outside the Chamber, declined to comment.

The drilling 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,” or lease integration, the bill allows companies to force adjacent gas reserves into pools for 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 Marcellus Shale gas fields of West Virginia’s northern counties, but it has 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.

Supporters of Senate Bill 576 or some sort of similar bill say the legislation is needed to spur more development in the state by allowing drillers to more easily put together large gas reservoirs for their operations.

Opponents say the bill unfairly takes the mineral property of West Virginians without ensuring much-needed protection for surface landowners and modernizing — increasing — the royalty payments contained in decades-old leases to match the economics of the modern industry.

The legislation passed the Senate last week, and Anderson’s committee held a public hearing on it Monday morning, but the bill was not on the agenda for the panel’s late afternoon meeting. A herd of lobbyists on various sides of the bill still filled seats in the committee room and waited outside in the hall, making cellphone calls and gossiping about the status of the legislation.

Without mentioning the bill specifically, Anderson told committee members at the end of the afternoon meeting, “There is still discussion going on as to whether this committee will meet one more time this evening.”

Anderson said that his committee was behind schedule in taking up the natural gas bill because so much time was taken up on the House floor debating the medical marijuana legislation that was sent over after it passed the Senate.

“There are going to be several good bills probably die around here simply for lack of committee time,” Anderson said. “I don’t think it’s retribution, it is simply a fact of the rules and how we proceed. We will try to pick and choose and save the ones that we can.”

Two years ago, a bill with similar goals — it was referred to then as the “forced pooling” bill, a name supporters are trying to avoid this session — died on the last night of the session in a rare tie vote, with liberal Democrats and conservative Republicans opposing it as a violation of private property rights.

Several bills with similar goals have been tossed around this session, but using somewhat different tools and labels than the “forced pooling” bill that went down in 2015. In the Senate, Judiciary Chairman Charles Trump, R-Morgan, had tried to forge a compromise. But the bill presents especially complicated issues about property rights, royalty payments, common law and ongoing litigation, while also generating complex, confusing and often overlapping alliances and rivalries among different mineral and landowner groups, large and small drilling companies, environmentalists and a Farm Bureau lobby that is especially strong in the House.

Anderson said that he had planned in Energy Committee to strip the bill of its “joint development” or “lease integration” language and move forward with just a bill on co-tenancy.

The co-tenancy part of the bill had more broad support because many parties agree on the notion that a co-owner with a very tiny share of a mineral reserve shouldn’t get to stop the majority of owners from developing that resources.

“This House does not buy into ‘lease integration,’ ” Anderson said. “Many members made that clear to me.”

Even with a co-tenancy only bill, Anderson said he wasn’t sure he had the votes to get the legislation through his committee and onto the floor.

Reach Ken Ward Jr. at kward@wvgazettemail.com, 304-348-1702 or follow @kenwardjr on Twitter.

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