Proposed Legislation

Notice that the State Preempts Counties From any Say-So in the Matter in this Proposed Legislation:

ABSTRACT
JOINT SELECT COMMITTEE ON MARCELLUS SHALE
COUNSEL: Jay Lazell/Joe Altizer
ABSTRACT
SHORT TITLE: Creating Natural Gas Horizontal Well Control
Act
CODE REFERENCE: §22-6-1, §22-6-12, §22-6-14, & §22-6-36
(Amends); §§22-6A-1 thru §22-6A-17 (New); §22C-8-2 (Amends);
§22C-9-2 (Amends);
PROPOSED LAW PRESENTED TO THE COMMITTEE:
This legislation mirrors Eng. Com. Sub. For Com. Sub. For
Senate Bill No. 424, which passed the Senate but died in the
House on the last day of the 2011 regular session.
Generally,
the legislation makes two changes with regard to gas well
regulation in the state:

1. It modifies the definitions of deep and shallow wells,

throughout the oil and gas statutes for consistency, to
allow
shallow wells to enter the Onondaga formation to a depth of
100
ft for purposes other than production instead of the current
20
ft ("rat hole" issue). It also modifies two sections in
the
current oil and gas stature (§22-6) to allow the DEP to
promulgate rules which govern methods of surveying and
information contained on plats. These sections require the
preparation of plats prior to conducting certain activities.
Finally, it modifies Section 36 in the existing gas statute
to
require notice to coal operators and owners and lessees of
coal
seams who file a declaration of their ownership interest in
the
county clerk’s office. This is in addition to the notice
requirement to owners and lessees of record.

1. It creates a new article to deal solely with natural gas

horizontal wells, excluding coalbed methane wells. A
section-bysection
analysis follows:
§22-6-1. Definitions.
Changes definition of "Shallow well" in Oil and Gas Act,
the
conventional well statute. Current law allows shallow well
to be
drilled no deeper than twenty feet into Ononaga formation.
This
change would allow a well to be drilled to a depth of 100
feet

into Ononaga formation and still retain shallow well
classification.
While allowing the shallow well to be drilled deeper, the
geologic section from which production can occur remains the
same
as is currently permitted. This change was made because the
Marcellus sits on top of the Onondaga formation where
logging and
completion operations are difficult to conduct to the base
of the
Marcellus while maintaining shallow well status. This is
commonly referred to as the "rat hole" issue. (Note: The
amendment to §22C-8-2 and §22C-9-2 makes the same change for
consistency reasons)
§22-6-12. Plats prerequisites to drilling or fracturing
wells;
preparation and contents; notice and information furnished
to coal operators, owners or lessees; issuance of permits;
performance bonds or securities in lieu thereof; bond
forfeiture.
This section in current law requires an operator to prepare
a plat of the land on which operations are conducted prior
to
drilling, fracturing or stimulating any well. The amendment
authorizes the DEP with advice from the Board of
Professional
Surveyors to promulgate rules to govern methods of surveying
and
information on plats related to oil and gas permits.
Information
would include mineral boundary lines, mineral and surface
owner
names, and named waterways and state highway and county
numbered
route numbers.
§22-6-14. Plats prerequisite to introducing liquids or waste
into wells; preparation and contents; notice and information
furnished to coal operators, owners or lessees and director;
issuance of permits; performance bonds or security in lieu
thereof.
The amendment to this section is identical to the amendment
to §22-6-12 except that it applies to plats which are
required
prior to introducing liquid pressure to recover oil or for
the
disposal of pollutants.
§22-6-36. Declaration of oil and gas notice by owners and
lesse
es of
coal
seams
This provision is amended to provide that owners and lessees
of coal seams who file a declaration of their interest in a
coal

seam in the county clerk’s office are entitled to receive
notices
and plats provided for in §22-6-12 (notice & plat to coal
operators & owners & lessees of record before drilling,
fracturing or stimulating a well), §22-6-13 (Notice to coal
operators, owners or lessees of record of intention to
fracture),
§22-6-14 (notice & plat to coal operators & owners & lessees
of
record prior to introducing liquids or waste into wells),
and
§22-6-23 (Notice to coal operators & owners & lessees of
record
prior to plugging, abandoning, & reclaiming a well). If
declaration isn’t filed, then notification is made to the
owners
and lessees of coal seams of record.
§22-6A-l. Short title.
This new article is the "Horizontal Well Act."
§22-6A-2. Legislative findings and declaration of public
policy.
This section recognizes, among other things, new and
existing technologies and drilling practices, including
horizontal drilling, have created opportunity for efficient
development of natural gas in underground shales and other
geologic formations. Also recognizes these operations may
require large impoundments to store water needed for the
operations, and that current law for conventional operations
are
not adequate to address the potential environmental impact
of
these operations. Therefore, a new regulatory program is
needed
and is in the public interest to protect environment and our
economy for current and future generations.
§22-6A-3. Applicability; exceptions; karst formations.
This new article would apply to any natural gas well
operation, other than a coal bed methane well, that utilizes

horizontal drilling method. Horizontal wells permitted prior
to
the effective date of the new Act would not be subject to
its
requirements. This section also requires the Secretary of
the
DEP to review the rules applicable to oil and gas wells to
determine whether they need to be revised to address
drilling in
karst formations.
§22-6A-4. Definitions.
This section defines the following terms used in Horizontal
Well Act: Best management practices; Department; Horizontal
Drilling; Horizontal Well; Flowback Recycle Impoundment;
Freshwater Impoundment; Impoundment; and Pit

§22-6A-5. Application of article six of this chapter to
horizontal wells subject to this article.
To the extent horizontal wells are similar to conventional
wells, this section incorporates by reference the following
code
sections in the convention well statute (§22-6-1 through
§22-6-
41):
Sec. 3 - inspector findings and orders;
Sec. 4 - review of findings and orders by secretary;
Sec. 5 - requirements for findings, order and notices;
Sec. 7 - issuance of water pollution control permits;
Sec. 10 - Procedure for filing comments; certification
of notice; Increases comment period from 15 to 30 days
comment period
Sec. 12 - plat prerequisites with two changes (30 days
instead of 15 days and plats shall identify mineral
tract boundaries);
Sec. 13 - notice of fracturing with one change (30 days
instead of 15 days);
Sec. 15 - deep well objections with one change (30 days
instead of 15 days);
Sec. 17 - shallow well objections with one change (30
days instead of 15 days);
Sec. 18 - protective devices when penetrating a coal
seam;
Sec. 19 - protective devices for life of well;
Sec. 20 - protective devices when penetrating a coal
seam that has been mined through;
Sec. 21 - freshwater casings;
Sec. 22 - filing of reports;
Sec. 27 - cause of action for explosions;
Sec. 28 - supervision of secretary;
Sec. 29 - Funds with reference to permit fees contained
in this article;
Sec. 31 - prevention of waste of gas;
Sec. 32 - rights of adjacent owners to prevent waste of
gas;
Sec. 33 - circuit court actions to restrain waste;
Sec. 36 - declaration of coal seam owner and lessees
but incorporates notice only under §22-6-12 and 13;
Sec. 39 - injunctive relief;
Sec. 40 - judicial review.
§22-6A-6. Secretary of Environmental Protection; powers and
duties.
This section gives the secretary sole authority to regulate

all horizontal wells, to use oil and gas inspectors or any
employee in office of oil and gas to enforce the Horizontal
Well
Act, to promulgate rules to implement the Act, and to make
investigations and inspections to ensure compliance with
Act.
It also clarifies that except for duties set forth in
Shallow Gas Well Review Board Act (§22C-8-1 through §22C-8-
19),
Coalbed Methane Review Board Act (§22-21-1 through §22-21-
29),
and Oil and Gas Conservation Commission Act (§22C-9-1
through
§22C-9-16), the secretary has sole authority over
permitting,
location, spacing, drilling, operation and plugging of oil
and
gas wells, and production operations in the state.
§22-6A-7. Horizontal permit required; permit fee;
application;
soil and erosion control plan; well site safety plan;
site construction plan; water management plan;
installation of permit number; suspension of permit.
This section makes it unlawful to begin horizontal well
operations without a permit and requires the operator to
file an
application for a permit containing the following
information:
a. Name & address of applicant and agent and those
entitled to notice;
b. Name & address of every ongoing coal operation and
owner and lessee of record of coal seams not yet
operating beneath the tract of land on which well is or
may be located;
c. Identification of well as required by secretary and
well work for which permit is requested.
d. Approximate or actual depth of well drilled.
e. Each formation involved;
f. Entire casing program for each well, if required.
g. Information regarding conversion of existing wells;
h. With respect to stimulation of horizontal wells, all
information required to demonstrate compliance with
Section five requirements;
i. Soil and erosion control plan which addresses, among
other things, methods of stabilization and drainage,
method of reclamation in compliance with Section 12.
Operations disturbing 5 acres or more are required to
submit soil and erosion control plan certified by
registered professional engineer.
j. Operations withdrawing more than 210,000 gallons from
water of the state in any month, must include a Water
Management Plan addressing the following:
- Type & source of water, location by latitude &

longitude within 48 hours prior to withdrawal and
sign identifying location as required by section
8;
- Anticipated volume of each withdrawal;
- Anticipated months of withdrawal;
- Plan to dispose of wastewater;
- Listing of anticipated additives used in
fracturing fluid; and additives actually used
after completion of fracturing operations;
- Water Resources Protection Plan addressing
information required in Water Management Plan &
the following:
-List current designated & existing water
uses & public water intakes within one mile
of withdrawal location;
-Demonstration that sufficient in-stream flow
will be available immediately below
withdrawal point; &
-method of surface water withdrawal to
protect aquatic life.
Additionally, a separate permit is required for each well
drilled. The permit fee is $5,000 for the initial well and
$1,000
for each additional well drilled on a single well pad at
same
location. Additional provision provide for the operator
designating an agent, installing permit number, distributing
the
well site safety plan to local emergency planning committees
prior to commencing construction, waiving requirements of
this
section and sections eight and ten and five(e) and issuing
emergency permit for not more than thirty days, denying a
permit
for committing substantial violation of a previously issued
horizontal well permit or rules issued hereunder, and
suspending
a permit. Appeals would be to the appropriate circuit court.
§22-6A-8. Review of application; issuance of permit in
absence of
objections; performance standards; copy of permit to
county assessor.
This section incorporates most of current §22-6-11 with the
following additions:
a. No permit may be issued less than 30 days after filing
of application; current law is fifteen days;
b. Requires secretary to ascertain whether permit applicant
is in compliance with laws governing workers’ compensation
and unemployment compensation. If Executive Director of

Workforce WV or Insurance Commissioner does not respond to
DEP within 15 calendar days, compliance will be deemed;
c. The secretary may inspect proposed well work location to
assure adequate review of the application;
d. Identify location of withdrawal 48 hours prior to
withdrawal, install sign at location, record and retain
information regarding water used, flowback water, and
produced water maintained for three years, and subject to
inspection by DEP.
e. Finally, each operator must adopt appropriate best
management practices; plug wells as required by Act, use
impervious materials to ensure leachate does not degrade
surface water or groundwater, grade, terrace, seed, etc.,
disturbed areas not needed for production, protect off-site
areas from damage, take action pursuant to industry
standards to minimize fire hazards or conditions harmful to
public health and safety, protect quality and quantity of
surface water and groundwater, and construct roads pursuant
to standards established by rule or Act.
§22-6A-9. Certificate of approval required for large
impoundment
construction; certificate of approval and annual
registration fees; application required to obtain
certificate; term of certificate; revocation or
suspension of certificates; appeals; farm ponds;
criminal penalty.
This section makes it unlawful to construct any impoundment
greater than 210,000 gallons without a certificate of
approval
from the secretary. The fee is $300 for each impoundment
along
with an annual registration fee of $100. This fee
requirement
applies to placement, construction, enlargement, alteration,
repair, or removal. Certificates must be issued or denied
within
60 days of application and are good for one year. Plans and
specifications for impoundments must bear seal of a
registered
professional engineer. Certificates may be revoked or
suspended
if the secretary determines the impoundment constitutes an
imminent danger to human life or property.
Provisions are also made for leaving impoundments for farm
use pursuant to U. S. Department of Agriculture standards,
hearings and appeals, and the secretary is authorized to
promulgate rules to implement this section.

§22-6A-10. Notice to property owners.
This section requires the operator prior to filing a permit
application to give notice to the surface owner of at least
72
hours but not more than 45 days prior to entering to conduct
any
plat surveys required by this Act.
It also provides that the following persons must receive
copies of all applications, approvals, required by the Act
and
all plats, and erosion and sediment and control plans no
later
than the filing date of the application:
a. Surface owners of record of land proposed for well site,
roads, or impoundments;
b. Coal owner, operator or lessee of land on which well is
to be drilled;
c. Operator of any storage field within which the well work
activity is to take place.
Operator may serve required documents on three or more
tenants-in-common or other co-owners upon person of record
for
tax purposes. Persons entitled to submit comments are
entitled
to receive copy of any issued permit or a modification or
denial
of a permit if requested along with comments on a permit
application. Also, surface owners and coal owners and
operators
and lessees are entitled to receive notice within 7 days but
no
less than 2 days before commencement of work requiring any
disturbance, if requested along with comments. Also, notice
of
any seismic activity must be given three days before
commencement.
§22-6A-11. Plugging and abandonment.
This section directs the secretary to promulgate rules
regarding plugging and the method of plugging of horizontal
wells
as well as notices in connection with plugging operations.
§22-6A-12. Reclamation.
This section requires an operator to reclaim all pits and
impoundments and remove all concrete pads, drilling supplies
and
equipment within six months after completion of the drilling
process. The operator would also have to grade, seed, sod,
etc.
all disturbed areas not needed for production. Salt water
and
oil must be removed periodically and properly disposed, and
no
pit may be used for permanent disposal of salt water or left

permanent. Impoundments are allowed to remain if allowed by
law
or agreement between the operator and surface owner for
benefit
and use by the owner.
It also requires an operator to complete reclamation of a
well pad with multiple horizontal wells within six months
after
completion of drilling for a well, unless the operator
begins
drilling another well within the six-month period.
Within six months after a horizontal well that has produced
is plugged or after plugging a dry hole, the operator must
remove
all production and storage facilities, supplies, equipment,
and
any oil, salt water and debris and fill remaining
excavations.
Requirements regarding grading, terracing, seeding, etc.,
would
also apply in the same time period.
Finally, an operator has a duty to reclaim all disturbed
areas in accordance with the approved soil and erosion plan,
and
the secretary may grant an extension of the mandated
reclamation
time frame by up to six months. Appeal of a denial by the
secretary would have to be filed in circuit court.
§22-6A-13. Performance Bonds; corporate surety or other
surety.
This section requires an operator to furnish a $5,000 bond
to guarantee compliance with all requirements of the Act for
each
horizontal well drilled. If multiple wells are drilled or
stimulated, the operator can furnish a blanket bond of
$50,000 to
cover all wells. No bond may be released until the operator
satisfies all requirements of the Act. Provision is also
made
for assignment or transfer and bond forfeiture and
collection.
These bonding requirements mirror current law in the
conventional
gas statute (§22-6-26).
§22-6A-14. Civil Action for contamination or deprivation of
fresh water source or supply; presumption.
Establishes rebuttable presumption that contamination or
loss of fresh water source or supply within 1,000 feet of
gas
well site is caused by gas operation (§22-6-35); establishes
five
defenses to the presumption:
a. pollution existed prior to drilling or alteration
activity as established by predrilling or pre-alteration
survey;
b. landowner or water purveyor refused operator permission
to perform predrilling or pre-alteration survey;
c. water supply is not w/in 1000 feet of well;
10
d. pollution occurred more than 6 months after drilling;
e. pollution caused by something else;
§22-6A-15. Offenses; civil and criminal penalties.
This section establishes a civil penalty of up to $5000 per
day for any violation of any provision in the Act or rules
promulgated thereunder. The agency would have to file a
civil
action in the circuit court of the county in which the
operation
is located to recover any penalty. If awarded by the court,
penalties would be credited to the general fund,.
It also establishes a civil penalty of $100,000 for willful
disposal of waste fluids, drill cuttings or any other liquid
substances generated in the development of a horizontal well
which could impact surface water or groundwater in violation
of
the Act.
Three misdemeanor offenses are also created for willful
violations of the Act. Any person willfully violating the
Act
regarding the manner of drilling, casing, or plugging and
filling
any well is subject to a fine not exceeding $5,000, or
confinement in a regional jail for up to 12 months, or both.
Any intentional misrepresentation of a material fact
regarding an application, record, report, plan or other
document
filed or required in accordance with the Act is subject to a
fine
of between $1,000 and $10,000, confinement in a county or
regional jail for up to six months, or both.
Any willful violation of any horizontal well permit, any
provision in the Act, or any rule or order of the secretary
or
board is subject to fine of between $2,500 and $25,000 per
day,
confinement in a county or regional jail for up to one year,
or
both.
§22-6A-16. Local Ordinances
This provision preempts local ordinances from regulating
horizontal gas operations to the extent they attempt to
regulate
the method of gas operations. But local governments may
regulate
zoning and land development of gas activities, including
time and
place of operations to protect public health, safety &
welfare.
§22-6A-17. Division of Highways approval of well road
access.
This section requires a gas operator to enter into a road
maintenance agreement with the Division of Highways and
submit a
11
letter of certification from the Division to the DEP
indicating
compliance with this requirement. Also, this provision would
make the operator liable and responsible for the actions of
its
subcontractors and others operating under the road
maintenance
agreement.
§22C-8-2. Definitions.
Changes definition of "Shallow well" and "Deep Well" in
Shallow Gas Well Review Board Act. Current law allows
shallow
well to be drilled no deeper than twenty feet into Ononaga
formation. This change would allow drilling to a depth of
100
feet into Ononaga formation and well would retain shallow
well
classification.
(Note: As noted above, the amendment to this section and
§22C-9-2 is also made in §22-6-1 to ensure the definition of
shallow well is consistent in these three sections)
Regarding deep well, current law defines a deep well as
drilled or completed in a formation below the top of the
uppermost member of the Onondaga group. The change excludes
coal
bed methane wells from the definition.
§22C-9-2. Definitions
Changes definition of "Shallow well" and "Deep Well" in
Oil
and Gas Conservation Act. Current law allows shallow well to
be
drilled no deeper than twenty feet into Ononaga formation.
This
change would allow drilling to a depth of 100 feet into
Ononaga
formation and well would retain shallow well classification.
(See clarification regarding changing definition of shallow
well and note in §22-6-1 & §22C-8-2)
Regarding deep well, current law defines a deep well as
drilled or completed in a formation below the top of the
uppermost member of the Onondaga group. The change excludes
coal
bed methane wells from the definition.
TITLE: Ok
GOVERNMENT AGENCIES AFFECTED: DEP; Oil & Gas Conservation
Commission; Shallow Gas Well Review Board.

Mr. Hall, how can you safely "zone" i.e. "allow" a dangerous activity in one place that may ruin water at the other end of the county as well as where is is situated? The question is, of course, rhetorical to the point that no place is safe for this activity and would still encounter charges of "takings" and "interference with contract" etc for those areas not "fortunate" enough to be in those zones of drilling.

The proposed legislation is a very skilled, and very deceptive, power play. By denying the County the right to address "the method of gas operations" the proposed legislation strips us of the right to address any aspect of the Marcellus shale issue.

"Drilling" is a "method of gas operations." So we couldn't pass any ordinance which applies to when or where companies can drill. Any attempt to regulate "gas activities" must not mention what those activities are! How do you regulate something you can't describe?

Imagine how much success the County Commission would have trying to exercise its right to "regulate zoning and land development of gas activities" on a county-wide basis. And it would need to be done county-wide because of the fractured nature of our ancient bedrock. Our region is unique. Contamination from one deep well can travel many miles before showing up in a distant water source.

The gas companies have more than a dozen paid lobbyists in Charleston who 'helped' draft this legislation. It is unwise to assume that the interests of surface owners, residents or water drinkers were a high priority... -- Rich