CHARLESTON, W.Va. — The House of Delegates has passed legislation that would make it easier for natural gas drillers and mineral rights owners in West Virginia to open large pools of gas for drilling. HB 2688 passed 60-40 Wednesday following more than two hours to debate.
The bill creates a commission that can approve shallow and deep well gas drilling on large tracts of land using a procedure called “forced pooling” or “lease integration” to bring holdout rights holders into the drilling pool.
The controversial bill created an unlikely coalition of opponents including conservative Republicans and liberal Democrats who argued the bill allows for an unconstitutional taking of a person’s property.
“When you say that I’m going to take something that you own and I’m going to tell you what I’m going to pay for it and I’m going to use it whether you want me to or not, that’s a taking,” said Del. Tim Manchin (D-Marion), who voted against the bill.
Supporters, however, prevailed with the argument that the bill is a compromise that recognizes property rights, but also enables majority owners to sell their mineral rights and ensures that holdouts are properly compensated.
“You would enjoy the benefit of those resources. You would be paid a royalty and a bonus payment based on an agreement from the Oil and Gas Conservation Commission, so you’re going to be compensated for that,” said Del. Woody Ireland (R-Ritchie) who worked with interested parties to craft the bill.
Under the bill, a driller must obtain consent from at least 80 percent of the rights holders–one of the highest thresholds in the nation–and make a good faith effort to include everyone before making a request to the commission to force the minority owners into the pool.
If the commission approves the request, the holdout rights owners have three options: 1) Sell their rights to the other owners 2) Participate in the drilling 3) Sublease the rights. In each case, if the holdout owners cannot agree with the other party on the price, the commission will determine what is “just and reasonable.” The bill also says surface owners’ property above gas deposits forced into the pool cannot be disturbed.
Gas industry officials have called forced pooling the “missing link” that will allow West Virginia to maximize its vast Marcellus and Utica shale gas deposits. Additionally, it will allow rights holders who want to sell their gas, but have been held up by reluctant neighbors, to exercise their options.
The bill still has to be approved by the Senate before the end of the session March 14 and then be signed by Gov. Earl Ray Tomblin if it is to become law. At least 34 states have some form of forced pooling.