CHARLESTON, W.Va. — A bill dealing with the rights of land and mineral rights owners on natural gas drilling projects passed out of the House Judiciary Committee on a party line vote Friday afternoon.
The bill on policy known as co-tenancy passed 16-9, with Republicans voting in favor and Democrats voting against.
Work has been done to cobble the bill together since before the legislative session even started.
Most of the lobbyists involved in negotiations walked out of this afternoon’s meeting seeming satisfied but wanting to go over the bill in greater detail. Some also warned that if significant changes occur to the bill as it goes through the rest of the legislative process, it could still fail.
“We’re very satisfied with this approach to co-tenancy,” said Tom Huber, president of the West Virginia Royalty Owners Association.
“Now we’ll get to work trying to get the votes to pass the floor and over to the Senate. We feel this committee substitute, especially, really addresses some of the core concerns of all the different constituencies involved.”
David McMahon, a lawyer representing the the West Virginia Surface Owners Rights Organization, said the bill is acceptable to him. He said it contains adequate safeguards for minority property owners or those who can’t be found.
He said it also includes required consent by surface owners if a company drills into a tract, whether or not it is under the surface owner.
“If that’s not in the bill, we would oppose it,” McMahon said.
People on all sides of natural gas issues spoke during a public hearing this morning.
As the public hearing began, House Judiciary Chairman John Shott said a bill that differed in some significant ways from one that originally passed out of the House Energy Committee was likely to be considered.
The changes were meant to provide increased options to minority property owners who don’t wish to allow drilling on their land.
During the public hearing, energy companies and some groups that represent royalty owners and farm owners have said those changes could upset what is already a tenuous balancing act on the bill.
Bills dealing with natural gas drilling and property rights have fallen apart many times over the years, either failing to balance the rights of the various players or being weighed down by a variety of inter-related issues.
This morning, several representatives of those groups described their position during the public hearing as favoring “the bill as it passed out of the Energy Committee.”
“It is something on which royalty owners agree and industry agrees,” said Maribeth Anderson, director of government affairs for Antero Resources, speaking at the public hearing.
“Is it a perfect bill? I worry that the plan to make a good and fair bill into a perfect bill upsets a balance.”
Lobbyist Jason Webb, representing the West Virginia Land and Mineral Owners Association, had similar comments.
“We have great faith in the process. We were engaged a variety of times through this process,” Webb said during the public hearing.
He added, “We believe the product here today has many, many protections.”
And then Webb concluded, “We support co-tenancy as it is right now.”
The Judiciary Committee was expected to take up the bill during a meeting directly after the public hearing.
There was a long delay, though, and when the committee finally gathered Shott said the committee would recess — with majority members going into a caucus.
The co-tenancy bill is meant to deal with situations in which the majority of owners of a property want to consent to natural gas drilling but others do not or can’t be located.
As the bill has been considered by the Legislature so far, 75 percent of rights owners would have to give their consent for drilling.
Non-consentors would have two options.
They could receive a production royalty equal to the highest percentage royalty paid to one of the consenting parties. Or, they could opt to share in revenue and cost of development — essentially winding up as a participant.