CHARLESTON, W.Va. — Those who attended a meeting among natural gas executives, land and royalty owner groups, legislative leaders and the Justice administration say they made progress but have not hammered out any deals ahead of the legislative session that starts next week.
Following today’s meeting at the Governor’s Office, which lasted for almost three hours, those who represent land and mineral owners said it was relatively unusual but a welcome development to be asked to find common ground prior to the legislative session.
The Governor’s Office led meetings with natural gas groups two days straight — starting with land and mineral rights owners on Wednesday and adding in executives from EQT, Antero and Southwestern Energy today.
Some observers asked whether the meeting would include businessman Bray Cary, who has been serving as a volunteer in the Governor’s Office while also being a board member for EQT. Cary was at the Capitol today but did not participate in the meeting.
The annual legislative session kicks off next week, with the governor setting the tone during his State of the State address on Wednesday evening.
Those who were in today’s meeting, which actually took place in two different rooms in the Governor’s Office, said it resulted in a broad discussion rather than detailed negotiation.
They said the finer points of longstanding issues like co-tenancy or integrated leasing will likely take shape through the legislative process.
“Any time you continue the discussions about the manner in which we can incentivize the development of our natural resources in West Virginia, I think it’s a good thing to bring all interested parties to the table,” said Senate President Mitch Carmichael, R-Jackson, one of those who attended.
“The governor is very good at that. He likes to bring all the entities in and make sure they have a fair and free and vigorous debate about the issue.”
Co-tenancy means a majority of rights owners can vote to accept a lease for drilling — addressing possible situations where multiple rights owners are listed for a property and some may be difficult to track down.
Lease integration refers to instances where the driller already owns the leases on all adjoining properties and wants to combine into a single drilling unit. Under lease integration, sometimes called joint development, they can do so without signing a new lease.
A bill that combined both issues died last year in the House of Delegates committee that deals with energy issues.
Carmichael today said pursuing lease integration and co-tenancy policy would put West Virginia on par with policies in surrounding states. But, in terms of the political process, he expressed caution.
“To modernize our oil and gas statues to incorporate what other states are doing in terms of co-tenancy and lease integration is something we desperately want to pursue, but not sure you’ll get all the way there,” Carmichael said. “The governor said, and I agree with this, never to stop trying.”
One issue is not just the details of potential natural gas legislation but how it would take shape — whether as one, bundled bill or as separate bills.
The danger of the bundled bills that have been put forward in the past, observers said, is that it’s easy for lawmakers or lobbyists to object to one aspect — potentially killing the whole bill.
“I believe it probably is best to de-couple the bills and have each one debated on its own merits,” Carmichael said.
For years, legislators and groups surrounding the oil and gas industry have negotiated issues such as co-tenancy and lease integration.
Incentives to reach compromises now include the development of major pipelines, such as the Atlantic Coast and Mountain Valley, the $83.7 billion memorandum of understanding with China Energy over natural gas development and progress on the possibility of an Appalachian natural gas storage hub that could feed manufacturers.
The executives from the big oil and gas companies declined to comment after today’s meeting.
The various representatives of the property owner and mineral rights groups described a productive talk. They said they were asked to look at issues raised in the past, compile them and report back.
“The meetings went well. We greatly appreciate the governor’s involvement. We appreciate the president of the Senate and the Speaker of the House coming to the table and hearing us out and look forward to further discussions on this,” said Jason Webb, a lobbyist who represents the West Virginia Land and Mineral Owners Association.
David McMahon, a lawyer representing surface owners and mineral owners, expressed a similar view.
“It’s certainly good to have the governor as a big player in trying to get something done. There are still some sticking points, and we’re not sure we can get by those.”
The governor, who stopped to talk for a minute as he went into the meeting, said he thinks it’s important to listen to all sides.
“What I’m trying to do is bring all the parties together — bring the land owners, bring the gas companies and try to resolve and find a way that’s better for everybody — a better way for West Virginia, a better way for the private landowner and a better way for the gas company,” Justice said.
“I think there is real opportunity here that we can generate more severance tax dollars or more employment or more opportunity to West Virginia — but the gas companies themselves, they’ve got to give back.”
Justice continued, “The problem is, in many situations, the people that own the property feel like they’re getting the short end of the stick. So what I’m trying to do is bring everybody together and see if there’s a way everybody can come together.”