CHARLESTON — In a lightening 10-minute meeting, the House Energy Committee approved a second bill to provide money — potentially millions of dollars — to cap orphan oil and gas wells.
HB 2779 provides a means for royalties due to unknown or unlocatable mineral owners to be transferred to the Oil and Gas Reclamation Fund after seven years. The fund, which has about $400,000 now, is used to cap abandoned and orphan wells.
The bill, as amended in committee, addresses two situations.
One deals with partition suits, where multiple mineral interests in a single tract are sold to a single buyer via a civil suit and the proceeds are divided among the previous owners.
For unknown and unlocatable owners in these cases, the money is held in county courts. Under the bill, the court will appoint a guardian for the funds. Funds unclaimed after seven years will go into the reclamation fund.
The other deals with situations where, after seven years of unpaid property taxes, the surface owner has the option to buy the mineral rights. In these cases, royalties accumulated and held in the court up until the time the surface owner signs the deed will go to the reclamation fund. The surface owner will receive all subsequent royalties and rights to future development.
Delegate Evan Hansen, D-Monongalia, wondered how much money might be involved. The answer was that no one knows, because all 55 counties would have to be polled. But committee chair Bill Anderson, R-Wood, said he spoke to a single receiver in Doddridge County who was guarding $3 million.
The committee had learned earlier this week, during consideration of HB 2673, that there are 4,576 orphaned wells in the state and virtually no capping is going on — about half a dozen in the past five years.
HB 2673, which the committee also approved, would provide a tax break for low-volume oil and gas wells by eliminating the 5 percent severance tax and substituting a 2.5 percent fee that would go into an Oil and Gas Abandoned Well Plugging Fund.
That fund is intended to reach $4 million, which would cap about 60 wells.
Apart from Hansen’s question, there was no further discussion on HB 2779; it passed unanimously and goes to the House floor.
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