Governor Tomblin calls special session of the West Virginia Legislature regarding legislation on development of shale gas.

Governor Tomblin called a Special Session of the West Virginia Legislature beginning on December 11, 2011, to consider legislation regarding development of shale gas formations using horizontal wells and hydraulic fracturing techniques.  

The proposed legislation, applicable to horizontal wells:

• Establishes a permit fee structure of $10,000 for the first well and $5,000 for subsequent wells on a well pad. 
• Requires that operators obtain an agreement with the West Virginia Division of Highways to maintain and repair roads affected by drilling.
• Sets standards designed to protect the state’s water resources, including private wells, streams, and wetland areas. New requirements for permitting horizontal wells include a water management plan, site construction plan certified by a registered professional engineer, well site safety plan, and identifying additives to be used in fracturing a well. The Department of Environmental Protection (“DEP”) must also approve large freshwater and wastewater impoundments and inspect large impoundments.
• Provides additional rights to surface owners where the drilling is expected to occur. For example, an operator must provide notice of permit applications to owners of water wells within 1,500 feet of a well site and advance notice of entry .
• Imposes additional well location restrictions, including the setback from occupied dwellings and certain barns of 625 feet and 100 feet from a perennial stream, lake, pond, reservoir or wetland, subject, however, to waiver by DEP.
• Provides for reclamation to commence within six months after a well is drilled and completed on a single-well pad or the final well is drilled on a multi-well pad, and for partial reclamation to commence immediately on multiple-well pads. There is a five-year limit for completion of all reclamation.
• Increases well bonds to $50,000 for a single well and $250,000 for statewide bonds.
• Requires a one-time reimbursement of $2,500 to surface owners of disturbed land  for real property taxes.
• Creates a presumption of liability of a gas well operator for contamination or deprivation of water supply located within 1,500 feet of a well site and provides for replacement of any such water supply.
• Mandates that gas well operators comply with road use regulations of the Division of Highways.
• Requires DEP to develop a website to make available to the public information about well permit applications;
• Requires DEP to evaluate the need for air quality and impoundment and pit safety regulations;
• Establishes minimum standards for horizontal well casing and cementing and requires DEP to develop regulations. 
• Establishes horizontal well production damage compensation for surface owners and procedures for determining such damages. 

The entire 99-page bill can be accessed here.

If you have any questions, please call Kenneth E. Tawney