Court: Regulations Shun Landowners

Says state statutes predate the boom, must be revisited

Morgantown Dominion Post
25 November 2012
By David Beard

The state Supreme Court suggested to the Legislature that this week it take a look at surface-owner rights — in particular, possibly granting owners the right to appeal Department of Environmental Protection (DEP) gas well permits.

A three-day interim session starts Monday.

State code pre-dates the horizontal drilling-hydraulic fracturing boom, the court said, and may need to be updated.

Some local legislators said it’s uncertain at this point how the whole body might respond to the idea.

The Supreme Court released an answer late Wednesday in the case of a Doddridge County surface owner, Matthew L. Hamblet, who wanted to appeal a DEP well work permit for his property.

He filed his appeal in Doddridge Circuit Court, basing his case on a 2002 Supreme Court ruling. The DEP and Pittsburgh-based driller EQT moved to dismiss the appeal. The court denied the dismissal motions, but asked the Supreme Court if the 2002 case — which applied to coal seam owners — also means state code allows surface owners to appeal DEP permits.

The 19-page Supreme Court answer said “no” several times, but it added this comment: “This Court urges the Legislature to re-examine this issue and consider whether surface owners should be afforded an administrative appeal under these circumstances.”

Legislators, stakeholders comment

Delegate Barbara Evans Fleischauer, D-Monongalia, was a member of the joint committee that drafted the bill Gov. Earl Ray Tomblin reworked into the Natural Gas Horizontal Well Control Act and related measures last December.

Asked about the ruling and the court’s suggestion, Fleischauer said she supports anything to give people a little more control of their lives and property. How the full Legislature might respond, though, remains to be seen.

The new House party dynamic, with the addition of 11 Republicans, could play a part. She observed that House Republicans supported protection measures during the bill crafting process, but isn’t sure how the new makeup will respond.

Senate President Jeff Kessler, D-Marshall, said it was “interesting to see the open invitation” from the court to revisit the law. He would want to take a closer look at the issues with his attorneys in the coming weeks before the session begins.

Noting the court’s comments that much of the code in this area is out of date, he said the Natural Gas Horizontal Well Control Act remains a work in progress. Since the act is still young, the Legislature may want to sit back a while longer and see how things play out.

And the Legislature will want to consider whether it wants to address gaps in the act in a Band-Aid manner, issue by issue, he said. It has tweaked other sections of code in that manner in previous years.

The surface-owner rights the court refers to — damage compensation and violation of lease rights — are both after-the fact measures. In its brief, West Virginia Surface Owner’s Rights Organization (SORO) argued that a right to appeal is more proactive, to protect owners from “erroneous effects on their interests.” In the Hamblet case, state requirements were disregarded, and the state waived the requirements “without any apparent reasoning.”

SORO spokeswoman Julie Archer spoke with The Dominion Post and drafted an email response to the decision: “This is not the outcome we had hoped for in this case. We are disappointed that the Court did not affirm that surface owners have a constitutional right to appeal the state’s decision to issue drilling permits, and that they declined to address our argument regarding surface owners’ rights to an administrative hearing before the permit is issued. However, we appreciate that the court has urged the Legislature to re-visit the issue and to consider whether surface owners should be afforded an administrative appeal. We hope the Legislature will heed the Court’s recommendation.”

Both statewide natural gas organizations — the West Virginia Oil and Natural Gas Association (WVONGA) and the Independent Oil and Gas Association (IOGA) filed friend of the court briefs supporting DEP and EQT. IOGA noted EQT’s mineral rights, and said the permit doesn’t infringe on the surface owner’s property rights — it restricts EQT’s rights.

IOGA President Dennis Xander said in an email, “IOGA-WV believes the Supreme Court came to the proper conclusion. The purpose of a drilling permit is to ensure that technical aspects of the well, such as the size and depth of casing strings and type and quantities of cement, are adequate to ensure safety and protect the environment.

“The regulations provide a voice for the surface owner,” he said, “in the form of comments, but do not provide for judicial review of the DEP’s decisions. However, this does not limit the rights of surface owners to seek remedies for surface damages. That is addressed in the existing Oil and Gas Production Damage Compensation Act, and in the surface owner’s right to file a complaint in circuit court.

“This decision did not enlarge or diminish the rights of either the surface owner or the driller,” he said. “IOGAWV is pleased that the decision did not further restrict or diminish the rights of mineral owners and their lessees.”

WVONGA Executive Director Corky DeMarco said statute clearly grants mineral owners the right to produce their minerals in a responsible manner, and association members have had to deal with conflicts with surface owners.

Asked about the court’s suggestion to the Legislature, DeMarco observed there are some contentious leases out there. He said previous legislatures have debated the issue on numerous occasions and he doesn’t see any value in debating it again.

DeMarco added he was pleased that the justices chose to base their decision on code as it stands and not try to rewrite the code from the bench.