Committees Consider Marcellus Shale Documents

Policy, law deal with drilling, effect on roads

Morgantown Dominion Post
16 November 2010
By David Beard

CHARLESTON — Two legislative committees took their first looks at draft documents regulating Marcellus gas drilling.
A joint Judiciary subcommittee received a 98-page draft law to regulate gas well construction, horizontal drilling and fracking.
The joint Infrastructure committee received a draft Oil and Gas Roads Policy from the Division of Highways (DOH).
The drafts are intended for review, discussion and revision.

Drilling regulations


The proposed bill covers “pooling and unitization” of wells to protect property owner interests along with water and land protections to ensure “the orderly development of this new drilling activity.”

As part of the permit application, the DOH must approve well road access. No later than the application filing date, the applicant must inform all property owners of its intentions.

“Notwithstanding trade secret claims,” the bill reads, well operators must provide a complete list of the chemicals and compounds used in their fracking fluid. The operator must also maintain and report data on the volume of fluids used and returned to the surface.

David McMahon, spokesman for the Surface Owners’ Rights Organization, explained the advantages of pooling and unitization. A pool is a single natural reservoir of gas, and pooling is drilling multiple horizontal wells from a centralized well pad.

Unitization means an underground well system that covers more than one surface owner’s property. In unitization, a mineral owner could “force” his way into a drilling unit if he can show his resource would be drained by a neighboring unit. A mineral owner could also be forced into a unit if he doesn’t want to join but his property lies between units, or he wants to join but wants better terms.

“If done properly with proper protections, forced horizontal drilling can be a good thing,” McMahon said.

Delegate Mike Ross, D-Randolph, wanted to know if the proposed bill would increase the number of inspectors. Told yes, he suggested the state look at allowing current inspectors to work overtime as an alternative to hiring more.

It would save additional pension, vehicle and uniform costs, he said. Facing possible budget cuts, “these are things that the state should be looking at. Overtime is probably the cheapest money you can pay.”
   

Gas roads policy    


The DOH already has a policy on road use by the timber, oil and gas industries. State Highway Engineer Marvin Murphy reviewed proposed changes to account for Marcellus gas traffic, with the many water-hauling trucks employed.

The problem in these cases, he said, isn’t so much the weight of the vehicles but the repetition — the stress of many vehicles going back and forth each day.

For “large” wells — 5,000-plus barrels of liquid — the operator must give notice of its proposed drilling site. The DOH will meet with the operator and review the current condition of the road. They will agree on improvements to be made before, during and after the project. A bond will be required.

Smaller projects will have different rules, depending on the length — up to or more than 45 days.

Bonds will vary by road type and project duration. For a large operation, a graveled mile would be $25,000; tar and chip, $35,000; paved, $100,000. For smaller projects, the bonds would be $10,000, $15,000 and $25,000 respectively.

Corky DeMarco, representing the West Virginia Oil and Gas Association, agreed that the traffic volume, not the weight, is the issue. He said his organization has been working closely with the DOH to finetune this policy.

“We’re going to get there, and we’re going to get there with the Department of Highways,” he said, using the DOH’s old name.

Attorney Ann Bradley, representing the Independent Oil and Gas Association, listed three points still needing clarification:


Murphy noted one more point that needs work: How to determine the share of the costs if more than one company uses the road.

Both committees will revisit the proposed documents at the December interims.