Newspaper Editorial — Don’t Leap into Natural Gas Pooling

by Duane Nichols on November 26, 2014

You need a computer, newspaper, coffee, bottled water and a good dog

WV — Don’t leap into pooling

EDITORIAL – Morgantown Dominion Post Newspaper, November 21, 2014

As heated issues go, most lie just below the surface — simmering — until they start spewing controversy. No one’s calling a proposal in the state Legislature on pooling mineral tracts to drill horizontal Marcellus wells an eruption, yet. But this issue will explode once the regular legislative session begins in January.

This legislation is only a proposal for now, and many of the lawmakers it was presented to this week during an interim legislative session will no longer be in office in 2015. Yet this bill will undoubtedly be on the front burner in what promises to be a turbulent session.

We’re not going to quibble over whether to call it forced pooling or fair pooling, for now. Obviously, where you stand on that detail depends on where you sit. Energy lobbyists, who had a front row seat while ironing out this bill’s specifics during talks among the state’s two major oil and gas industry groups, have gone so far as to deem this measure “fair to all parties.”

However, we are going to lock horns with this proposal on two substantive issues that bulldoze directly over the rights of mineral owners who refuse to participate in pooling projects.

The bill stipulates that the driller must have agreements with mineral owners who own 67 percent of the project’s acreage before it can apply to the state for a pooling order. That percentage is too low. Especially since it conceivably could allow just one owner of that percentage of a mineral rights tract unit to approve such projects.

It’s also conceivable that drilling projects could take a page out of politics’ playbook and gerrymander or manipulate and design project tracts to give drillers every advantage. We recommend raising that percentage to at least 75 percent for the time being, creating a tougher standard for pooling orders.

The issue of just how much is revealed to reach a market-based value vs. what is just and reasonable is also far from clear. More transparency about what other mineral rights owners are receiving and how those figures are reached is also essential to this process. Why not make the prices paid for all leases of mineral rights pubic information?

A final concern of ours is during interviews with legislative candidates this fall, some did note that the issue of pooling would come up in January. It already has and the energy lobby’s pressure on legislators will be relentless from hereon. Only a few candidates were knowledgeable about pooling, earlier. So we call on every lawmaker to do his or her homework and learn the particulars of this proposal.

But even more crucial is that the public also vent its concerns on this issue.

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