Delegates passed a multifaceted bill that attempts to strike a balance on the intricacies of drilling rights. SB694 came about through long negotiations by gas operators, property owners and mineral rights owners.
The bill was passed after lengthy debate today in a fairly narrow vote, 55-44. The state Senate already passed the bill but would now need to agree or reject changes made in the House.
The bill seeks to address what to do when a company wants to drill on a tract where some owners are unwilling or can’t be located.
“I wish it was an easy problem,” said Delegate Mark Zatezalo, R-Hancock.
He said the bill would benefit people who want to develop their property but who can’t because of the decisions of others. “The bill came from people who were starting to see the reality set in and decided they had better do something,” he said.
“This is a good bill to get people paid for the resource that’s under their feet and to keep their resource from being trapped and never produced.”
The bill establishes a threshold that at least 75 percent of the acreage that operators propose to drill as one unit be under their control, whether the drilling is shallow or deep. The remainder of rights owners would be subject to terms spelled out by the bill. The legislation requires operators to engage in good faith negotiations.
Another aspect of the bill adds an agriculture representative and a royalty owner to the Oil and Gas Conservation Commission, which regulates the drilling of deep wells in West Virginia. That is meant to round out representation when thorny issues arise.
Organizations such as the West Virginia Farm Bureau, the West Virginia Royalty Owners Association and the West Virginia Surface Owners’ Rights Association have spoken in favor of the bill. So have organizations like the Oil and Gas Association of West Virginia.
“We have a bill that all those organizations agreed on totally and they won,” said Delegate John Kelly,
R-Wood. “It’s a good bill. Pass this bill.”
Delegate Pat McGeehan, R-Hancock, spoke at length against the bill. “The core concept of the bill is this ability to transform — or at least deny — the ability for an individual who owns mineral rights or royalty rights to decline to sell,” McGeehan said. “They’re trying to transfer the ability for the individual to have the ultimate say on whether he’s going to consent to sell.”
McGeehan continued, “Once you’ve removed that ability, you’ve essentially taken away the largest portion of leverage, the average resident who might own a one hundred acre farm actually has over fairly large businesses, large enterprises, large corporations who have resources on an order of magnitude greater than your average guys or gal who owns one of these farms.”
Delegate Buck Jennings, R-Preston, asked rhetorically for the definition of the word “stealing.”
“To take another person’s property without permission or right and without intending to return,” Jennings read aloud.
“Looks to me like that’s what we’re doing — making someone take an offer that they can’t refuse,” he said. “I submit to each and every one of you who vote for this bill, you’re stealing and you become a thief.”
Delegate Tony Paynter, R-Wyoming, echoed that theme.
“We’re not thieves. We need to quit acting like thieves.”
Delegate Lisa Zukoff, D-Marshall, called the legislation “an anti-freedom bill,” turning a term often used by her Republican colleagues on its head.
“It is just not the American way. It’s not the West Virginia way. West Virginians are always free unless they need your mineral rights and then you’re not free any more,” she said.
TWEET @DominionPostWV
