Statoil Wants Money Back From Local West Virginia Counties

From an Article by Casey Junkins, Wheeling Intelligencer, July 17, 2016

Wheeling,WV — Norwegian shale driller Statoil wants officials in Ohio, Brooke, Wetzel and Marshall counties to refund nearly $6.5 million worth of property tax the company claims it overpaid, but local leaders believe they are under no obligation to return the money.

Marshall County commissioners already denied Statoil’s refund request of $342,000, while commissioners in Ohio County rejected the firm’s claim that it should regain $2.9 million. Commissioners in Wetzel County are still considering whether to refund $1.4 million to Statoil, while Brooke County commissioners are scheduled to hear from the company on Monday about its request for $1.8 million to be returned.

Brooke County Assessor Tom Oughton hopes commissioners deny Statoil’s request, as he said the West Virginia State Tax Department does not require any refund to the company under the circumstances.

“Statoil had plenty of chances to figure this out. They dropped the ball,” Oughton said.

Statoil began operating Marcellus Shale wells in the Northern Panhandle as a minority-interest partner with Chesapeake Energy approximately six years ago.

In Ohio County, Chesapeake owned 71 percent of each operation, with Statoil holding 29 percent. Statoil reduced its interest in local wells to 23 percent upon Chesapeake’s $5 billion sale of its assets to Southwestern Energy in late 2014.

“Statoil USA Onshore Properties filed an exoneration motion in four West Virginia counties, Brooke, Wetzel, Marshall and Ohio, to request a refund for the 2015 property taxes. We are awaiting decisions on the hearings from Brooke and Wetzel counties. Marshall County and Ohio County have denied the request for refund and we are considering our appeal rights,” company spokeswoman Lauren Shane said.

“We maintain that this was a clerical error,” Shane continued. “The clerical error stems from over-reporting of revenue data for tax year 2015.”

However, Northern Panhandle officials do not believe Statoil’s action fits the definition of an unintentional clerical error.

“Statoil sought an exoneration for reduction in tax assessment based upon their failure to properly document various values of the oil and natural gas assets,” Ohio County Solicitor Don Tennant said. “They have to prove it was a clerical error that was unintentional. The commission believes they failed to prove that.”

“It was pure neglect on their part, as far as I could see,” Ohio County Commissioner Orphy Klempa said. Tennant said because the $2.9 million overpaid is property tax money, most of the funding goes toward public education.

In Wetzel County, Statoil is only one of numerous frackers producing oil and natural gas from the Marcellus and Utica shales. However, Assessor Scott Lemley and Commissioner Larry Lemon said the Norwegian driller is the only one asking for money to be refunded.

“The State Tax Department is not changing the value they have set on their working interest in Wetzel County,” Lemley said. “We are just following the law.” “We held a hearing on this June 14. We are still deliberating,” Lemon added. “We hope to make a decision soon.”

Shane said Statoil is considering steps to appeal the unfavorable decisions at the county level. Tennant said the company could appeal to circuit court and, ultimately, to the West Virginia Supreme Court of Appeals if it chooses to do so.

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Wetzel Commission Denies Tax Break to Statoil

From an Article by Chad Turner, Wetzel Chronicle, August 3, 2016

At its Tuesday, July 26 meeting, the Wetzel County Commission denied Statoil’s request of $1,640,104.32 that it claims it overpaid the county in property tax. Wwtzel is one of four local counties that Statoil claims it overpaid.

Previously, Statoil spokeswoman Lauren Shane released the following statement: “Statoil USA Onshore Properties filed an exoneration motion in four West Virginia counties, Brooke, Wetzel, Marshall and Ohio, to request a refund for the 2015 property taxes. We are awaiting decisions on the hearings from Brooke and Wetzel counties. Marshall County and Ohio County have denied the request for refund and we are considering our appeal rights.”

“We maintain that this was a clerical error,” Shane said. “The clerical error stems from over-reporting of revenue data for tax year 2015.”

Wetzel County Assessor Scott Lemley previously stated that Statoil received notice that their values were going up on their wells. Statoil paid the 2015 tax bill but is now claiming they overstated the revenues that they received off the wells.

Lemley noted that Statoil should have realized they overstated their revenues when they received their increase notice.

All stakeholders have been given the opportunity to present witnesses, introduce exhibits, and address the county commission with their respective arguments. After careful deliberation, the commission made the following findings:

1) The taxpayer failed to meet their burden of proof that the assessment was a clerical error as the taxpayer presented testimony from only one witness who lacked personal knowledge of the manner in which the error was committed or the procedures in place to supervise employees and prevent such an error.

2) The evidence presented indicates that the taxpayer was negligent in failing to double check information, supervise employees responsible for providing the information and track and receipt notices sent to them regarding the assessment and respond to the same.

3) The tax payer had a duty to forward accurate information in order for the assessment to be made and negligently failed in the performance of the same.

Wetzel County Commission President Larry Lemon noted that, “essentially, the taxpayer failed to prove that the assessment was a clerical error.”

Standing Up in Tyler County, WV

From the Article by Pam Kasey, State Journal, January 25, 2013 

What can stop a natural gas boom? Probably not much. But limited space in the records room is slowing things down in Tyler County.

“People running title for oil and gas leasing companies are lining up as early as 2 a.m. to get a spot in the courthouse,” a resident wrote in a news tip to WBOY. “I know people who have gotten in line at 4 a.m. and there are 50-60 people in front of them. It’s absolutely crazy, especially with the (temperatures) we are having this week.”

County Commission President John Stender describes this situation:

“We have a limited number of spaces in our vault room. I think the fire marshal limits us to 16 spaces, and we leave two open for local attorneys and people in the county who need to do business where the records are,” Stender said.

“What’s happening is these companies have signed leases, and they’re trying to verify title so they can pay out the money to hold the leases,” he said. “I think they have 120 days to do that after signing, so the crunch is on.”

The county clerk has people sign up by the hour, but that still leaves room for other kinds of elbow-jostling.

“Some of these people are showing up and putting chairs out there, and one person last night put a can of fruit, saving spots so they can get in in the mornings,” Stender said.

“Subcontractors have advertised for people to stand in line for their people. I heard it was $15 an hour to stand in line — I’m thinking of going down there!” he joked.

The representatives of the bigger oil and gas companies work respectfully and, in at least one company’s case, tend to be locals, Stender said, but “a minority” of the employees of the subcontractors — “well, some of them aren’t very nice. They’re pushy.”

Stender emphasized the county’s understanding that the activity ultimately is in the best interests of the mineral owners and others in the county, and that it wants to make things work.

“All the people coming in to work at the courthouse eat at the restaurants, they buy gas. It’s a win for the taxpayers and the ones that get the contracts and the companies, and we want to help them,” he said. “We’re more than happy to work with anybody, if they’ll meet us and work with us.” He expects to have a solution in place within the month.

Concerned citizens showed up in force at the City Council meeting on Tuesday evening in Morgantown, WV.   About 20 people addressed the council members with concerns regarding a permitted Marcellus shale well near the Monongahela River within 3,000 feet of a public water intake that serves 100,000 people.   Many inquired about getting an injunction to stop the drilling of the wells permitted to Northeast Natural Energy, a West Virginia company.   The council responded with a letter to Randy Huffman, the Secretary of the WVDEP, supporting the permit modifications proposed by the Morgantown Utility Board.  The letter was faxed on Wednesday the 18th.  The WVDEP negotiated with Northeast and a modified permit which complies with the MUB requests is expected to be completed today.  Drilling can be expected to start as soon as the permit is issued as modified.

Wednesday morning, an estimated 120 concerned citizens assembled at the Courthouse Square in downtown Morgantown to protest the  controversial well permit.   Delegates Barbara Fleischauer and Charlene Marshall addressed the crowd to discuss their work on the issue of regulation of hydraulic fracturing.   Several citizens addressed the crowd, sharing their concerns about various aspects of hydraulic fracturing including the impact of industrialization on West Virginia, water contamination, air pollution, lack of regulation and lack of funding for the West Virginia Department of Environmental Protection.  Attorney Hiram Lewis, who represents clients with water contamination problems in Wetzel County, told that water is being contaminated with acrylonitrile, a toxic substance that is not being checked by testing.  He also observed that the concrete well casings may be incapable of withstanding the forces of fracking and may crack.  He stated that there is no proof that well casings can withstand more than 7,000 psi and that frack pressures exceed 10,000 psi.

As the protest demonstration was going on in the square outside the courthouse, inside the courthouse the County Commissioners were meeting.  Duane Nichols, representing the Mon Valley Clean Air Coalition, presented a position statement which expressed opposition to hydraulic fracturing in the Mon River Valley, noting in particular  dangerous threats to air quality.  ”The two Marcellus wells recently sited at or near the Morgantown Industrial Park are too close to the other facilities of the Industrial Park, too close to the Skyview Elementary School, too close to the Westwood Middle School, too close to the County Athletic Field between these schools, and too close to the City of Morgantown.”   Marc Glass is a certified soil remediation specialist who lives near the controversial drilling sites.  He described the Superfund site currently within the Morgantown Industrial Park where the wells are planned and the  proximity of a hazardous waste dump, both of significant concern if these come into contact with drilling fluids.  Glass also described the activities of the EPA and the Department of Energy toward developing best practices for drilling operations.

The three Commissioners agreed that that action at the state level is needed.  They agreed to draft a letter to the governor to call for a Special Session to create law for hydraulic fracking and pointing out that an untenable situation exists in West Virginia due to risks and uncertainties involved in Marcellus gas projects.