The West Virginia State Senate is set to vote on a bill (SB369) that would change the designation of horizontally drilled gas wells in the Marcellus Shale from “deep” wells to “shallow” wells. The reason? To clear up jurisdictional disputes about who regulates and monitors the wells. Deep wells are regulated by the West Virginia Oil and Gas Conservation Commission, and shallow wells are regulated by the Shallow Gas Well Review Board.
But some, including the West Virginia Surface Owners’ Rights Organization, an anti-drilling organization, say the change is the equivalent of “legalized stealing.” According to Dave McMahon, founder of the group:
Unlike wells defined as “deep,” shallow wells cannot be made subject to well spacing and royalty sharing rules, McMahon said well spacing and royalty sharing laws allow mineral owners whose natural gas is drained by wells on their neighbors to receive their share of the royalties, McMahon said.
If Marcellus wells aren’t subject to those laws, McMahon said, gas well drillers could drill on the edge of neighboring mineral owners’ land and drain gas from the mineral owners’ tracts without paying for it.*
The Independent Oil & Gas Association of West Virginia has endorsed the bill, saying the changes allow drillers to finish wells with newer technology.
Who’s right? A tough one to call. It’s certainly not fair to have the gas beneath your feet drained away by a neighbor and not be compensated for it. But will that really happen? If you have insight, or an opinion, share it in the comments.
*The Charleston Gazette (Mar 1) – Rush on gas-well drilling bill unfair, owners group says
UPDATE – March 2
Senate Bill SB369 passed the West Virginia Senate today with only a single dissenting vote (Sen. Randy White, D-Webster). Read about it here: WV Public Broadcasting