Statewide WV

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    The Complicated Mineral Rights Issue (Mess?) in WV

    Mineral rights in West Virginia are complex, to say the least. One might even call it “a mess.” It’s good for lawyers, not so good for the rest of us. MDN has pointed out many times before that depending on where you are in WV, there’s a pretty good chance the surface rights and the below-ground mineral rights were separated long ago. Statewide there are 352,247 owners of mineral rights that have been separated from surface rights. In the southern part of the state coal companies have owned the mineral rights going back years. Further up the state, like the northern panhandle area where there’s a lot of Marcellus and Utica Shale drilling, it’s a mixed bag. Surface rights owners justifiably feel put out because they often, by law, have to give up some of their surface land for a drill pad or roadway–with very little (if any) compensation.

    It gets more complicated. Mineral rights can be split among family members or multiple companies going on for generations. A person (or company) may end up owning 1/100th of a share in the rights. Every mineral rights owner is liable to the tax man in WV, and if you don’t pay taxes on it–you can lose the rights at a tax sale. Some may lose rights they never knew they had! Add to that a relatively new wrinkle: nowadays mineral rights can apply to a particular layer of minerals (like the Marcellus). Oy vey! It’s enough to induce a migraine…
    Read More “The Complicated Mineral Rights Issue (Mess?) in WV”

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    WV Roads in Need of Repair – Fracking to Blame?

    There are a number of roadways in Marshall County and other WV counties with active Marcellus and Utica drilling in need of repair. There is no doubt frequent truck traffic related to the drilling industry is partially at fault. However, truck traffic coupled with a brutally cold winter, seems to have made it worse. Not that roads in many WV communities were pristine to begin with! Just ask any driller operating in WV–the roads in WV suck. There’s just no nice way of saying it. They were not good before drilling, so drilling is not totally to blame.

    Still, drilling truck traffic has made it worse. So the industry should pay for repairs, right? Well…they already do. It’s called a 5% severance tax paid by drillers on everything they produce. The drillers are certainly paying it. If the state is not sharing that money with local counties for much-needed road repairs–that’s not the drillers’ fault…
    Read More “WV Roads in Need of Repair – Fracking to Blame?”

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    Back to the Future (Fund) – WV Gov. Tomblin Signs New Law

    Last year a bunch of West Virginia lawmakers went on a quick vacation to North Dakota (of all places), at a cost of $25,000 to WV taxpayers, to try and convince those lawmakers to look at and adopt a “future fund” similar to ND’s “legacy fund” (see 18 WV Lawmakers Flying to ND for a $20K Overnighter on Drill Tax). The Future Fund bill, which would set aside 3% of revenue raised from WV’s oil and gas severance tax in a rainy day fund, came up for a vote a few weeks ago. It passed, but not the way hoped for (see Fate of 3 WV Laws that Impact Marcellus/Utica Drilling). The final bill was altered so that only if certain economic conditions are met would the 3% be set aside.

    However, that makes no difference when it comes to photo ops. Yesterday WV Gov. Earl Ray Tomblin signed the bill into law and the headlines today all ready that WV now has a Future Fund and the state’s politicians are almost breaking their arms patting themselves on the back–even though it’s doubtful that money will be set aside for years to come…
    Read More “Back to the Future (Fund) – WV Gov. Tomblin Signs New Law”

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    WV Drill Cuttings in Landfill Bill Passes in Record Time

    Last Thursday MDN told you legislation to codify into law a current directive by the state’s Dept. of Environment Protection to allow higher volumes of drill cuttings in WV landfills may get a second chance (see WV Drilling Cuttings in Landfill Bill May Get 2nd Life, If…). It already passed! On Friday during a special session of the legislature called by Gov. Earl Ray Tomblin, House Bill (HB) 4411 was one of ten pieces of legislation listed by the governor for consideration. The bill was voted on and passed (full copy of the bill embedded below). HB 4411 passed in record time after being dropped for consideration during the regular session. It is a certainty that Gov. Earl Ray Tomblin will sign it since he wanted it on the docket in the first place.

    Most media stories, stoked by anti-drillers, focus on the “limitless” aspect of the directive-now-passed-law. That is, the law lifts arbitrary small caps on the amount of drill cuttings (leftover rock and dirt from drilling) that can be hauled to a landfill. Those stories would have you imagine this new law means that any municipal landfill can willy nilly now accept mountains of “radioactive” dirt–and that consequently West Virginia will become a radioactive hot zone. Zombies everywhere. Yes, limits are lifted under this bill. But, at the same time, the law stipulates that if a landfill accepts larger amounts of cuttings (over the previous lower cap), it must build a special, separate cell where the cuttings will be stored. The landfill must also monitor leachate from the cell to ensure nothing nasty leaks out. And the landfill must install radiation detectors to monitor truckloads of cuttings coming into the landfill. In other words, this is a good bill that not only gives drillers a safe place to dispose of drill cuttings–it protects WV citizens. But you wouldn’t know that from reading most stories…
    Read More “WV Drill Cuttings in Landfill Bill Passes in Record Time”

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    WV Drilling Cuttings in Landfill Bill May Get 2nd Life, If…

    Two days ago MDN told you about the West Virginia legislature’s failure to act on House Bill 4411 that would codify into law the current directive from the Secretary of the Dept. of Environmental Protection that provides guidelines on accepting drill cuttings at landfills (see WV Legislature Fumbles the Ball on Landfill Bill, Does Nothing). It’s possible that the bill will get a second chance at legal life–if Gov. Earl Ray Tomblin calls for a special session and if the bill is on his list to consider. In WV the legislature meets for 60 calendar days at the beginning of they year, each year. They need to get their work done during those two months. After that, the Governor can call them back, but they can only take up those bills specified by the Gov.

    Here’s more detail of what went on “behind the scenes” as WV legislature grappled with HB4411 during the closing days of the regular session:
    Read More “WV Drilling Cuttings in Landfill Bill May Get 2nd Life, If…”

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    Impact of WV’s New Chemical Tank Law on Marcellus Drillers

    An important update on the new rules coming to West Virginia drillers impacting how they use above ground chemical storage tanks. As MDN previously reported, the WV legislature passed SB373 in the closing hours of the 2014 legislative session (see Fate of 3 WV Laws that Impact Marcellus/Utica Drilling). That bill was in response to a chemical leak that affected the drinking water for 300,000 WV residents. Even though the leak was not related to oil and gas drilling (it was related to coal mining), the new rules governing above ground storage tanks for chemicals affect a number of industries, including the Marcellus Shale drilling industry.

    Although the final language of the bill has yet to be set in stone and signed into law, enough of it is now known that it can be analyzed. The bright legal beagles at the energy law firm of Lewis Glasser Casey & Rollins, PLLC have done just that. Here is how the newly minted SB373, once signed into law, will impact WV’s oil and gas industry:
    Read More “Impact of WV’s New Chemical Tank Law on Marcellus Drillers”

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    WV Legislature Fumbles the Ball on Landfill Bill, Does Nothing

    Last week MDN asked the question, “Will WV Lawmakers Have Guts to Tackle Cuttings in Landfills Bill?” in the closing days of the WV legislative session. We now know that the answer is a resounding “no.” The proposed bill before lawmakers would have shored up, in law, the right of landfills to accept certain amounts of drilling cuttings from Marcellus and Utica Shale drilling (leftover rock and dirt). Landfills currently accept drill cuttings that exceed limits set elsewhere in law, based on a temporary directive by the Secretary of the WV DEP.

    The problem with not passing a bill is that the Secretary’s authority to issue the directive (essentially a stand-in regulation until a law is passed) will, sooner or later, be challenged in court by anti-drillers with big bucks. And then a judge will decide what is properly a policy issue that should be decided legislatively. That is, lawmakers shirked their responsibility and it spells uncertainty ahead for both WV landfills and drillers…
    Read More “WV Legislature Fumbles the Ball on Landfill Bill, Does Nothing”

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    Stupid Idea of the Year: Create Uniform Severance Tax in PA-OH-WV

    Socialists and hardened anti-drillers are trying a new approach. Adopt non-partisan sounding names, like the “Pennsylvania Budget and Policy Center,” “Policy Matters Ohio,” and “West Virginia Center on Budget and Public Policy,” and use those names to try and pass a high severance tax across all three states–effectively killing drilling. Those groups are some of the most partisan in existence. If Socialist politicians like OH State Rep. Robert Hagan (Democrat anti-driller) of Youngstown, OH can’t stop drilling, they want to profit from it by “spreading the wealth around” in classic socialist fashion. Tax drilling at high rates, then redistribute the money to people who will continuously vote said politicians back into office over and over. That’s how it works. Enslave people on public welfare handouts and buy their votes. It’s sick, anti-American, and corrupt.

    Various politicians like Hagan, flying under the banner of the groups named above, are now preening about advocating a “common sense” and “uniform” severance tax of 5% (minimum) across PA, OH and WV. Such a stupid idea would immediately tank the economic miracle happening in PA. You WANT states competing against each other for shale drilling–lowering and even eliminating taxes. Everyone wins when states compete–it keeps natural gas prices low for consumers, benefits landowners in that state, generates thousands of jobs and millions of dollars in local and state tax revenues. A high severance tax is not needed. So when you read about this so-called “fair” proposal, you know what it really is: a naked political power grab meant to empower corrupt politicians to retain their hold on power…
    Read More “Stupid Idea of the Year: Create Uniform Severance Tax in PA-OH-WV”

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    Central Environmental Oilfield Services Co Gets New “Owner”

    Central Environmental Services, an oilfield services company servicing Marcellus and Utica Shale drillers with its headquarters in Washington, WV, announced yesterday they have a new owner–or perhaps a better way of putting it, a new majority investor. Harbert Private Equity Fund III, LP (“HPEF III”) announced yesterday they have purchased a majority interest in Central for an undisclosed sum. We don’t expect anything will change re management of the company. It just means Central has a new pile of money with which to expand their operations–along with someone watching over their shoulder.

    The press release announcing the new majority investor/owner in Central Environmental Services:
    Read More “Central Environmental Oilfield Services Co Gets New “Owner””

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    Fate of 3 WV Laws that Impact Marcellus/Utica Drilling

    Each year the West Virginia legislature meets for 60 days to consider new legislation. Some bills make it to a floor vote, most do not. There are three bills of major concern to Marcellus and Utica Shale drillers before WV legislators during this session, which just wrapped up last week: chemical tank regulation; WV Future Fund; and forced pooling. One of the three passed and will almost certainly be signed into law by WV Gov. Earl Ray Tomblin. Another passed with major modifications, rendering it unrecognizable from the original. The third, to our knowledge, never made it to the floor for a vote and died in committee.

    Which was which?…
    Read More “Fate of 3 WV Laws that Impact Marcellus/Utica Drilling”

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    Chesapeake Fire Sale Continues: Marcellus/Utica Compressor Plants

    Chesapeake Energy continues to sell off bits and pieces of the company, making corporate raider (and the company’s second largest investor) Carl Icahn happy. The latest ballast to go over the side are 103 “compression units” in the Marcellus/Utica region, purchased by Access Midstream (which used to be Chesapeake Midstream before it was tossed over the side too), and 334 “compression units” scattered throughout the south, southwest and west, sold to Exterran Partners. Total proceeds for Carl Icahn, er Chesapeake? $520 million.

    Here’s the announcement from Chesapeake, followed by the announcement from Access Midstream about their “bolt-on” acquisition…
    Read More “Chesapeake Fire Sale Continues: Marcellus/Utica Compressor Plants”

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    Will WV Lawmakers Have Guts to Tackle Cuttings in Landfills Bill?

    Two weeks ago MDN told you about a House Bill (HB) 4411, actively under consideration by the West Virginia state legislature, that would codify into law the right for landfills in the state to accept Marcellus and Utica Shale drill cuttings (see WV Bill to Allow More Drill Cuttings in Landfills Faces Opposition). At the time a parade of speakers spoke against the bill with one speaker (from the Independent Oil and Gas Association of West Virginia) speaking in favor. The bill would codify into law the right for landfills to accept larger amounts of cuttings, which anti-drillers object to because it encourages more drilling.

    What we didn’t know at the time is why the WV Dept. of Environmental Protection is supporting the bill: because it will codify into law the protections they drafted as a temporary measure (now in place). Yes, protections, like separating the cuttings into their own cell within a landfill, the use of special liners, and lechate monitoring. The DEP is keeping a close eye on this issue and believes the proper place to have the debate about it, along with a resolution to the debate, is in the state legislature–if they have the intestinal fortitude to address it…
    Read More “Will WV Lawmakers Have Guts to Tackle Cuttings in Landfills Bill?”

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    WV Ethane Cracker – Cautious Optimism in the Mountain State

    The editors at the Charleston Gazette have penned an editorial about their “cautious hope” that the ethane cracker plant announced by Odebrecht for Parkersburg, WV will become a reality. As they note, coal is descending in the state, and natural gas is ascending. If the cracker plant is built–complete with environmental safeguards–it will be a huge economic bonanza for the state. Although the editors are a tad skeptical about the “drill drill drill” attitude from Gov. Earl Ray Tomblin and his administration (a Democrat, which is noteworthy), they’re willing to suspend the usual knee-jerk reaction against such projects and allow hope to bloom on the editorial page. A good sign!

    From the Gazette:
    Read More “WV Ethane Cracker – Cautious Optimism in the Mountain State”

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    Chesapeake 2013 & Beyond: Lack of Pipelines Still a Big Problem

    Yesterday Chesapeake Energy issued their fourth quarter and full year 2013 operational and financial results. Chessy’s CEO, Doug “the ax” Lawler is all proud of himself for having fired over 1,200 employees, saving the company all that money (money that goes into Carl Icahn’s bank account). Whatever. For all of our disgust with what Chesapeake has become because of Icahn and his corporate raiding practices, it’s still a very important driller in the Marcellus and Utica (as well as other plays), and will continue to be so. When they issue an update, we need to pay attention, because as Chessy goes, so goes the Marcellus and Utica, in some senses.

    What does yesterday’s update show? Chessy has drilled a lot of wells in the Utica–425 so far, more than half of the 747 Utica wells drilled to date in Ohio. Of those 425, 230 are online and producing, but a huge 195 wells are still waiting to be hooked up to pipelines. Lack of infrastructure is still a big issue in the Utica and in the Marcellus. In the northern Marcellus area (northeast PA) Chesapeake has 112 wells waiting to be connected to pipelines. They’ve scaled back their drilling in NEPA somewhat over the past year. In the southern Marcellus (SWPA and WV) Chesapeake has 47 wells waiting to be connected to pipelines or otherwise completed. Here’s the operations update for both the Utica and Marcellus from Chessy’s announcement yesterday:
    Read More “Chesapeake 2013 & Beyond: Lack of Pipelines Still a Big Problem”

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    Economist Releases Report on WV Cracker Plant’s Economic Impact

    West Virginia’s coming ethane cracker plant continues to generate positive economic news. Yesterday the former director of West Virginia University’s Bureau of Business and Economic Research and professor emeritus at WVU, Tom Witt, released a study he conducted on behalf of Braskem America (i.e. Odebrecht, the company building the cracker). The new study details specifics for how many jobs and how much money the proposed cracker and associated petrochemical plants will generate. And it’s truly astonishing.

    Here’s an overview of the economic miracle about to hit WV (and beyond)…
    Read More “Economist Releases Report on WV Cracker Plant’s Economic Impact”

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    CONSOL Feeling Heat over Ethane Exports to Europe, CEO Defends

    it's okCONSOL Energy’s CEO Brett Harvey must be getting some heat over the company’s recent announcement that they have signed an agreement to export ethane from the Marcellus to Europe (see CONSOL to Begin Ethane Shipments Next Year–to Europe?!). Why would we say CONSOL is getting blowback? Because Harvey penned an op-ed that appears in The Intelligencer/Wheeling News-Register giving a spirited defense of their decision. The gist of Harvey’s points, if we might summarize, is this: CONSOL has deep roots and is committed to WV; there’s plenty of ethane to go around, including for exports (and exports bring money into WV); CONSOL is also going to sell ethane to the Odebrecht ethane cracker when/if it gets built; in the meantime, selling ethane to Europe means CONSOL will have more money to invest in WV.

    Here’s Harvey’s “it’s OK” op-ed:
    Read More “CONSOL Feeling Heat over Ethane Exports to Europe, CEO Defends”