DEP Chief Wants To Double Oil & Gas Staff
State agency has its own proposal in the Legislature
Wheeling
WV Intelligencer
9 February 2011
By Casey Junkins, Staff Writer
WHEELING - Randy Huffman knows West Virginia is not properly equipped
to regulate the expanding Marcellus Shale natural gas rush, so he wants
to double the size of the state's Office of Oil and Gas.
Acting state Senate President Jeff Kessler, D-Marshall, and Sen. Orphy
Klempa, D-Ohio, are among the sponsors of a new piece of legislation
crafted by the West Virginia Department of Environmental Protection
designed to regulate horizontal natural gas drilling, hydraulic
fracturing and other drilling aspects.
The bill differs slightly from the "Hydraulic Fracturing and Horizontal
Drilling Gas Act," introduced to both the House and Senate last week.
The new legislation is working its way through both chambers as Senate
Bill 424 and House Bill 3042.
"We are going to compare the two bills, and draw out the best parts of
each," said Kessler, who is also a sponsor of the older bill. "Both are
going to be debated and discussed at length. We will look to both bills
to make sure we can do what we need to do to protect our air and water."
Huffman, DEP secretary, said he now has 32 oil and gas inspectors and
permit handlers. He wants to increase that amount to 66, while raising
the number of inspector positions from 17 to 34. With current
vacancies, the DEP has 12 oil and gas inspectors in the field to cover
59,000 wells in the state, according Legislature members. Several
Northern Panhandle residents have expressed concern the DEP is not
equipped to deal with the burgeoning horizontal drilling and fracking
businesses.
"There is probably some work that should be getting done now that is
not getting done," Huffman said.
Though the regulatory bills are similar, there are some key differences
because the bill took input from all interested parties in drafting the
legislation, Huffman said.
"We spent nine months drafting our bill," he said, noting he took into
account the interests of the drilling industry, property owners and
state officials in considering how to craft the bill.
One of the main differences in the bills is the fee for drilling a
single horizontal gas well. The original bill would increase the fee
from $600 to $15,000, but the DEP bill would limit the increase from
$600 to $10,000.
"We are funded through permit fees," Huffman said. "In order to
regulate horizontal drilling, we need more funding."
The original legislation would prohibit wells from being drilled within
1,000 feet of any building or water well, without permission from the
respective owners.
The DEP bill limits this requirement to 100 feet from a water well, and
does not specifically address a limit for drilling wells near
buildings. The original legislation requires a detailed erosion and
sediment control plan for stabilization and drainage. The DEP bill
mandates advance notice to surface owners of any seismic activity on or
around their property.
Both bills would require drillers to submit detailed water management
plans, including the amount of water to be used and its source, as well
as identify the types of chemicals used for fracking. Both bills
increase the charge for each civil violation from $2,500 to $10,000.
In a related matter, Klempa and Sen. Jack Yost, D-Brooke, have
introduced a separate bill to increase the severance tax on natural gas
production from 5 percent to 10 percent for gas that is transported out
of the state.
Another key difference in the bills is that the DEP's version contains
a provision to allow "forced pooling." This practice, which currently
is illegal, would be regulated by the proposed Oil and Gas Conservation
Commission. Forced pooling would allow natural gas drillers to use land
that they have not leased for drilling purposes. For example, if all
the neighbors have signed leases with a particular drilling company but
a property owner refuses, that lone property owner may be forced to
allow the land to be used by gas drillers for the development of the
neighbors' gas.
"Pooling allows for the efficient extraction of resources. It is a good
idea, unless you are the one being pooled," said Huffman.
Dave McMahon, co-founder of the West Virginia Surface Owners' Rights
Organization, said he supports the general idea of pooling to ensure
that anyone seeing their gas taken by a drilling company receives
proper compensation. However, he opposes this particular pooling
provision. He said it would allow drillers to force "new huge
horizontal well sites on surface owners," and do so without
guaranteeing the mineral owners full compensation.
Both Kessler and Klempa said forced pooling warrants more study before
making a decision on it.
"The industry says they need it, but I am also sensitive to the needs
of the landowners," Kessler said.