Monthly Natural Gas Production 2008 - 2016

Mineral owners seek information about gas well laws

From an Article by David Beard, Morgantown Dominion Post, May 26, 2017

Mineral owners gathered Thursday evening to learn about some potential changes in gas well law that could diminish property rights, and to toss around ideas for action. Most of the talk in the meeting room at the Ramada Inn focused on a state Supreme Court Case called the Leggett Case and an industry-backed Senate bill that may rise from the dead, SB 576.

About 20 people turned out to hear from Tom Susman, representing West Virginians for Property Rights; Tom Huber, vice president of the West Virginia Royalty Owners Association; and Steve Butler, administrator of the West Virginia Farm Bureau.

Leggett Case

In the Leggett case, the Doddridge County plaintiffs sued EQT Corp., alleging it has been wrongly deducting post-production expenses from their royalty checks, amounting to 25-30 percent of their rightful income, since 2010.

Last November, the Supreme Court ruled in favor of the plaintiffs. But on Jan. 1, new Justice Beth Walker replaced Brent Benjamin and the court decided to take up the case again. Rethinking a case is rare, Huber and Susman said, and may indicate the court plans to reverse itself.

The case hinges on state code language mandating royalties be paid on gas extracted “at the wellhead.” As Huber explained, changes in the way gas is sold have clouded the issue. Instead of being sold where it exits the well, gas is now shipped to hubs and sold there. So the court seeks to resolve ambiguity in the meaning of “at the wellhead.”

Huber said that the practice of post-production deductions not only deprives the mineral owner of due income, it can and does lead to negative royalty checks where the company indicates expenses exceed the royalty. The Dominion Post previously wrote about this occurring across the country and described some of the lawsuits that ensued.

“We really feel that this is one of the biggest thefts for royalty owners in the state,” Huber said.

Lewis County mineral owner Tom Kopp further explained to The Dominion Post about his situation. His land has three vertical wells owned by three companies, just a few hundred feet apart. The same amount of gas is produced from each, which gets shipped the same distance. Two companies pay full royalties, but one stopped two years ago, claiming transportation expenses were too high.

When Kopp attempted to dispute the charges, the company threatened to start issuing negative royalties — essentially charging them to take the gas they own.

Huber said that if the court does reverse itself, then mineral owners and their supporters in the Legislature will need to make a full-court press to get some protective legislation pass-ed next session.

“We are at a disadvantage,” he said. “We don’t have the deep pockets. We don’t have the fleets of lawyers.”

WV State Senate Bill 576

SB 576 dealt with two topics. One is cotenancy — owners of a single natural gas tract. It allowed the owners of 75 percent of the royalty interest to consent to a lease, in the face of unconsenting or unlocatable cotenants. This part posed few problems for stakeholders.

The other part did. It dealt with joint development, or forced pooling as some call it. It allowed whole tracts to be pooled into a unit unless a lease specifically forbids it. This gained little support outside of the industry.

The bill passed the Senate, but died in the House. Huber said some fear it may be added to the call of the current special session, or another later this summer. Many agree it will return next January.

Opponents regard joint development as a kind of privatized eminent domain — taking land for commercial gain instead of public benefit.

On the other hand, area gas development companies have been posting Facebook advertisements touting a resurrected version of SB 576 as a way to create jobs and boost the economy.

Butler said that the bill contained no real protections for surface owners. It required compensation, but allowed the owner no say in the location of the well — which could disrupt or destroy the production of a farm.

Huber, Susman and Butlers said they aren’t opposing gas well development. They want fair treatment for royalty owners and surface owners. Susman said this was the fourth meeting they’ve held and they plan more around the state.

They plan to work on a package of bills to protect property owner rights and to develop some educational materials to inform property owners and legislators about the issues and needed legislation.

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West Virginia Top Court Reverses Ruling on Gas Royalties

From the  and WV Public Broadcasting, May 26, 2017

West Virginia’s highest court has reversed its November decision and ruled that natural gas companies can deduct post-production costs from the royalties paid to landowners for mineral rights.

The Supreme Court split 4-1 in its Friday reversal.  At stake is whether landowners or production companies will get more money. West Virginia gas production is starting to boom.

Chief Justice Allen Loughry writes that the court majority now concludes the intent of state legislators and the West Virginia Code language permits deduction “of reasonable post-production expenses actually incurred” by the gas company leasing mineral rights.

The court split 3-2 in its November ruling favoring West Virginia landowners suing EQT Production Co. of Pittsburgh.

A 1982 state law set minimum royalties of 12.5 percent of gas produced at the wellhead.

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Midland Resource Recovery chemical operations in WV

Chemical Safety Board launches probe of fatal Barbour County explosion

From an Article by Ken Ward, Jr., Charleston Gazette-Mail, May 25, 2017

Even as President Donald Trump tries to defund the small agency, the U.S. Chemical Safety Board announced Thursday it was sending a team of investigators to Barbour County to look into the explosion a day earlier that killed two workers and critically injured a third at an industrial tank cleaning operation outside of Philippi.

CSB officials announced the deployment, as local, state and other federal authorities continued the investigation of the fatal blast at Midland Resource Recovery’s facility.

Killed in the explosion were Jan Strmen, an owner of the Canadian-based Midland Resource Recovery, and Justin Marsh, a 19-year-old Barbour County resident, according to the U.S. Occupational Safety and Health Administration. the injured worker was also identified as a Barbour County resident, but his name was not released by local officials.

Details on the condition of the injured worker, who was flown to West Virginia University’s Ruby Memorial Hospital, were not available, but Barbour County Chief Deputy Brett Carpenter said the man was previously listed in critical condition and had “pretty substantial injuries.”

Carpenter said that all three men were involved in cleaning a mercaptan tank when the explosion occurred and also revealed that authorities suspect that some sort of electrical tool may have been involved in the blast.

Mercaptan is most commonly thought of as the rotten egg-smelling chemical that is added to odorless natural gas for safety purposes, so that leaks can easily be noticed. Products like mercaptan are known as odorants. Midland Resource Recovery bills itself as “the leading natural gas odorization company in North America.” The company has not responded to numerous requests for comment on the explosion.

Carpenter said that authorities are hoping to be able to talk to the injured worker at some point, but that Barbour County officials are turning the investigation over to the state Fire Marshal’s office.

The U.S. Occupational Safety and Health Administration is also investigating and has agency officials at the site.

Leni Uddyback-Fortson, an OSHA spokeswoman, said that the Midland Resource Recovery facility brings in old odorant tanks from gas companies and cleans and decommissions them. She confirmed that the owner of the facility was one of the two fatalities.

Over the years, the CSB has been praised by citizen groups and others for investigations into other fatal chemical leaks, fires and explosions in West Virginia, but has recently been criticized for the lack of regulatory recommendations and other weaknesses in its report on the January 2014 Freedom Industries chemical spill on the Elk River.

The CSB’s deployment to Barbour County also comes as President Donald Trump submitted a budget proposal to Congress that suggests doing away with the board. The Trump administration says closing down the board — with its $11 million annual budget and just 43 employees — is part of its effort “to move the nation towards fiscal responsibility and to redefine the proper role of the federal government.”

Trump’s effort to gut the eliminate the CSB follows a rocky period in which then-President Obama in March 2015 pushed out then-CSB Chairman Rafael Moure-Eraso amid industry criticism of board proposals for tougher regulation of chemical plants and Republican-led hearings that focused on complaints Moure-Eraso had created a “toxic work environment” at the CSB.

As an independent agency, the CSB’s new leadership this week submitted its own budget proposal, which asks lawmakers for a nearly 6 percent increase in funding.

“The continued funding of the CSB is an investment in the safety and security of the American people,” the CSB’s budget proposal says. “No other organizations, public or private, are able to conduct truly independent, non-regulatory investigations that can also hold federal and state regulators or other parties accountable.”

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Trump’s Federal Budget Has Everyone Confused

May 25, 2017

“Trump’s budget a mixed bag for energy sector” From an Article by James Osborne, Houston Chronicle, May 23, 2017 WASHINGTON – From selling off oil in the strategic petroleum reserve to cutting funding for renewable energy research, the Trump administration on Tuesday proposed a new course for financing the nation’s energy sector as it seeks to [...]

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Development of the Rogersville Shale in SW West Virginia is Risky Business

May 24, 2017

Be careful, Cabell and Wayne counties, about shale development in SW WV Letter to the Editor by Bill Hughes, Huntington Herald-Dispatch, April 7, 2017 The fracturing operations of the Marcellus shale gas exploration and production in West Virginia began 10 years ago in Wetzel County, in the Northwestern part of West Virginia. It remains a [...]

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Mountain Valley Pipeline Shows Disrespect for Our Landscape & Our Opinions

May 23, 2017

MVP siting process has ignored our trails, scenic views and public attitudes Commentary by Andrew Downs, Virginia Regional Director for the Appalachian Trail Conservancy, Roanoke Times, May 22, 2017 In less than seven weeks, the Federal Energy Regulatory Commission could give the nod to questionable plans Mountain Valley Pipeline has proposed. These plans have been [...]

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Governor of Virginia says “The Threat of Climate Change is Real”

May 22, 2017

McAuliffe: Virginia will regulate carbon emissions; ‘the threat of climate change is real’ From an Article by Robert Zullo, Richmond Times – Dispatch, May 16, 2017 Gov. Terry McAuliffe today directed the Virginia Department of Environmental Quality to begin assembling regulations to reduce carbon emissions from Virginia power plants, a move that was celebrated by [...]

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Wind Energy is Significant and of Growing Importance

May 21, 2017

Wind energy for America in Rational and Recommended Essay by S. Tom Bond, Resident Farmer, Lewis County, WV Wind energy is growing rapidly in many parts of America. It is the least incentivized form of energy, less than 3% of all federal energy incentives, but it is growing by leaps and bounds. A new turbine [...]

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US Industry Seeks Faster Permits, Simpler Rules

May 20, 2017

US Industry Seeks Faster Permits, Simpler Rules From an Article by Reuters News Service, May 18, 2017 U.S. industry groups have told President Donald Trump’s administration that they want two main things from his promised regulatory overhaul: a speedier permit process and simpler environmental rules. Associations representing the drilling, refining, mining, and building industries have [...]

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U.S. Bank Becomes First Major Bank to Stop Financing Pipeline Construction

May 19, 2017

U.S. Bank Becomes First Major Bank to Stop Financing Pipeline Construction From an Article by EcoWatch.com, May 17, 2017 U.S. Bank has become the first major bank in the U.S. to formally exclude gas and oil pipelines from their project financing. This groundbreaking change to their Environmental Responsibility Policy was publicly announced at the annual [...]

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The Oceans are Clogging With Billions of Plastic Bits — Arctic, Atlantic, Pacific, etc.

May 18, 2017

Pollution is now as dense in the northernmost ocean as it is in the Atlantic and Pacific. From an Article by Robinson Meyer, The Atlantic Monthly, April 20, 2017 The Arctic Ocean is small, shallow, and—most importantly—shrouded. Unlike the other large oceans of the world, it is closely hemmed in by Asia, Europe, and North [...]

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