WV Forced Pooling Bill HB2688 – Good or Bad for Landowners?

bad pennyLike a bad penny that keeps turning up, a forced pooling law in West Virginia keeps returning. Every year from 2009-2014 forced pooling legislation has been introduced, and ultimately defeated, in the WV legislature. We’ve covered the issue for years. Once again a new bill has popped up. House Bill (HB) 2688 was introduced by Delegate Lynwood Ireland (Chairman of the House Energy Committee) and co-sponsored by Delegates William Anderson (Speaker Pro-Tempore) and George Ambler. All three are Republicans. The bill has already passed the House Energy Committee and currently sits with the House Judiciary Committee for review. It may move fast or it may move slowly. Proponents of the bill say, in essence, this time the bill is different. There are compromises and provisions to protect both surface and sub-surface landowners. The interesting thing to MDN is that the West Virginia Royalty Owners Association is now on board and supporting the bill. Below we tackle this thorny issue once again. We have the full text of the bill as proposed, along with reaction to it, and our own thoughts…
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Bakken Oil Train Derails in WV: Destroys House, 2 Towns Evacuated

For some time we’ve covered the issue of Bakken crude oil being transported via rail, primarily because it’s oil from shale (in North Dakota) and because the rail shipments often traverse the Marcellus/Utica region. Technically it’s not a Marcellus/Utica story–but it is related. The most recent news we highlighted is that ND regulators passed strict new rules that require Bakken drillers to separate out NGLs (natural gas liquids) from the crude before it’s loaded onto rail cars (see ND Regulators Pass Rule Making Bakken Crude by Rail Safer). The new rules go into effect in April. The presence of NGLs in the crude make it much more flammable and explosive (if it’s in an accident) than it otherwise would be. There have been a string of rail accidents involving Bakken crude. Unfortunately, another Bakken crude railroad accident happened yesterday–this time in Fayette County, WV. Some of the oil ended up in the Kanawha River, one house was destroyed and two towns were evacuated…
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PA DCNR Program Leases Under Rivers/Creeks for Marcellus Drilling

Well now THIS is just not supposed to happen. The pure-as-the-wind-driven-snow PA Gov. Tom Wolf’s Dept. of Conservation and Natural Resources (DCNR) is stepping up its program of leasing underneath rivers, creeks and mud puddles for Marcellus and Utica Shale drilling–much to the consternation of anti-drilling groups like PennFuture (whose immediate past president, Cindy Dunn, is about to become Secretary of DCNR). When DCNR collected for river and stream leases under Republican Gov. Tom Corbett, the Democrat media machine reported it as a clandestine and secretive activity (see PA’s “Secret” Deal to Lease Land Under Rivers & Streams (Gasp!)). It actually has been quite public–MDN told you about this program all the way back in 2012 when it was launched (see PA DCNR Wants Money for Drilling Under Public Streams/Rivers). Our concern was/remains that the state of Pennsylvania may be claiming money for land that belongs to private landowners–denying private landowners of lease bonuses and royalties. Below we have the lease terms dictated by DCNR, a map of the (almost innumerable) waterways PA claims they own, a list of the names for those waterways, and the criteria DCNR uses in determining whether or not a waterway is owned by the state…
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PA Dept of Revenue Still Takes Bite from Royalties, Just Smaller

Last month we shared with Pennsylvania landowners who receive royalty checks the distressing news that the PA Dept. of Revenue is attempting to deny them deductions for certain production costs (see The Tax Man Returneth — for PA Landowners with Royalties). It appeared that the DOR was ramping up an aggressive campaign to drill landowners for money, sending out semi-threatening letters. Accountants told landowners to sit tight and see how this shakes out. Turns out that was good advice. DOR is now backing down on their previous aggressive claims. Oh they still want a pound or so of flesh–they still claim not all deductions are allowed that have been taken–but they are being more reasonable…
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Marshall Co Gas-Powered Electric Plant Gets WV Green Light

A somewhat complicated plan to build a 549 megawatt electrical generating plant near Moundsville, WV (for $615 million) that will be powered by Marcellus Shale gas has been making steady progress since last year (see Plan Advances to Build $615M Gas-Powered Electric Plant in WV). Marshall County voted to approve the plan, which includes a condition that the county accept the deed to the plant once its built in an arrangement to reduce potential property taxes on the facility (see Marshall County Votes to Accept Gas-Powered Electric Plant). Good news: the West Virginia Public Service Commission has issued a final order approving the siting certificate. The next step along the road is for the plant to get its financing (investors) lined up and then begin construction…
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PA Dem Congressman “Steps Up” Frack Waste Witch Hunt

Pennsylvania Congressman Matt Cartwright, an anti-drilling Democrat from northeast PA, began a bash-shale-drilling meme late last year (see PA Dem Congressman Demands Info from DEP on Frack Waste and PA Dem Congressman Cartwright Continues to Bash DEP). Cartwright wants to violate the U.S. Constitution and remove individual states rights to regulate oil and gas drilling and instead concentrate that power in Washington, D.C. where people like the arrogant Cartwright can control it via fiat. Cartwright is at it again. He’s “stepped up” his so-called investigation into shale waste disposal. The AP recently visited with Cartwright to take dictation…
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New Report on Shale Energy Deals from Top Energy Law Firm

In July 2013 one of the country’s top energy law firms, Steptoe & Johnson, published a report detailing the biggest legal challenges faced by drillers that operate in shale plays (see New Report Details Top Legal Issues for Shale Drillers). Steptoe & Johnson have just published a follow-up report. Titled “Below the Surface 2: Digging Deep on Deals” (full copy embedded below), this new report takes a look at energy transactions and deals to find where natural gas producers are exploring for energy, their level of involvement, lessons they’ve learned, and what roadblocks they must overcome to succeed…
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