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Senate passes drilling bill dealing with owners’ rights

CHARLESTON, W.Va. — The state Senate today approved a natural gas drilling bill dealing with the rights of multiple owners on a single piece of property.

The bill, known as co-tenancy, passed 23-11 during a Saturday session.

The House of Delegates, which has already passed the bill once, still has to concur to small changes such as an amendment to the title of the bill.

The bill would require 75 percent of those with rights on a single tract to approve drilling. Holdouts or those who can’t be located would still have some rights under the bill.

The bill is meant to deal with situations in which property has been divided many times over generations.

The co-tenancy bill has been shepherded through the legislative process by both natural gas companies and a coalition of West Virginia land owners and mineral owners organizations.

Work has been done to cobble the bill together since before the legislative session even started, as Gov. Jim Justice gathered those on various sides of the issue to try to find some common ground.

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.

In debate on the Senate floor, Republicans argued the bill will allow a supermajority to move forward with development.

Charles Clements

“To kill this piece of legislation now is going to do irreparable harm to all these property owners who do not know who these heirs are,” said Sen. Charles Clements, R-Wetzel.

“This doesn’t put money in the hands of the gas money as much as it does the people of West Virginia.”

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.

Some Democrats argued the bill still doesn’t do enough for the rights of those minority owners.

Mike Romano

“This is about the love of money and power. This is about big out of state companies that don’t want to give people a fair shake,” said Senator Mike Romano, D-Harrison.

At one point, early this week, Governor Justice publicly stated his preference that the Senate kill the co-tenancy bill.

Justice then proposed a special session to wrap co-tenancy and another drilling policy known as joint development — which involves pooling multiple properties covered by older leases that don’t take into account modern drilling practices.

That Justice proposal also would have included raising the severance tax on natural gas and using anticipated increased revenue for teacher pay raises and health care costs.

But by Tuesday, the governor had backed off that position and said he would sign the co-tenancy bill if it moves to his desk.

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