More Drilling Help Is Sought

Agency doesn’t have enough money for all current inspectors

Wheeling WV  Intelligencer
4 March 2011
By Casey Junkins, Staff Writer

WHEELING - Natural gas companies drilled 58 horizontal Marcellus Shale wells in West Virginia last year, but state regulators issued permits for 433 wells in 2010.

West Virginia Sen. Orphy Klempa, D-Ohio, and Randy Huffman, state Department of Environmental Protection secretary, both know there is likely more natural gas drilling headed to the Northern Panhandle, calling for the hiring of more inspectors to oversee the well sites.

"We just have to get more people out there so that we can know what is going on," Klempa said.

Huffman said his ability to increase inspectors - or maintain the current number - in the field now hinges on adoption of two bills by the House of Delegates that were approved by the West Virginia Senate this week.

"Right now, we are $1.25 million short of even being able to fund our current staff of 32," Huffman said of all permit handlers and inspectors working in the Office of Oil and Gas, noting he hopes to increase the total staff to about 39.

Huffman said the funding shortfall is because there are significantly fewer conventional vertical gas wells being drilled than there were a few years ago, while the number of horizontal Marcellus wells has increased. Right now, drillers pay $650 to drill a well, whether it is horizontal or vertical.

Gas companies note the new horizontal technology allows them to extract the same amount of gas from one horizontal well as they would have been able to gain from several vertical wells.

"This drilling is not out of control. But we realize it is going to continue to grow, and we are trying to prepare for it," added Huffman. "All indicators are that we are going to have more drilling over time, not less."

Huffman said he needs to see both State Senate Bills 424 and 465 to become law. Both bills passed out of the Senate this week, and are now under consideration in the House.

Bill 424 is the main bill known as the "Creating Natural Gas Horizontal Well Control Act," which would increase the horizontal drilling fee from $650 per well to a rate of $5,000 for the first well on a drill pad and $1,000 for each additional well on the pad.

The bill would also establish new drilling regulations regarding water usage.

Huffman said passage of this bill should provide him about $700,000 worth of additional funding each year, far less than if the well fee would have remained at the original $10,000 per well Huffman proposed.

Klempa voted for the bill to pass it out of the Senate, but expressed frustration with not being able to keep the new permit fee at $10,000 per well.

"The gas companies fought like heck to knock down that $10,000 fee," he said. "They have millions going into a well site and are going to make millions from a well. I was really surprised how hard they fought against that $10,000 fee."

Bill 465, commonly known as the "Creating Marcellus Gas and Manufacturing Development Act," would annually direct $2 million in severance tax money to the "Marcellus Shale Permit Fund." Huffman said this money will help him run the Office of Oil and Gas.

"If all these things pass in their current forms, we should be all right," Huffman said. "I am not about to predict what the Legislature is going to do, but it looks pretty good right now."

Huffman said the horizontal wells are much larger construction projects than are the conventional vertical wells. This work includes building roads, drilling wells, adding tubing and cement to the wells, and large water withdrawals for hydraulic fracturing, or fracking.

"There are many more citizen complaints to investigate, and are just a lot more things to address with the horizontal wells," he said.

Tim Greene, owner of Land and Mineral Management of Appalachia, said the DEP probably needs more inspectors, but could also help the Northern Panhandle by directing more resources to it.

"I really think the DEP is doing the best they can," he said. "They put their efforts to inspecting active drilling sites."