Julie Archer of WV-SORO

From Articles by David Beard, Morgantown Dominion Post, Sunday, November 25, 2012

The state Supreme Court suggested to the Legislature that this week it take a look at surface-owner rights — in particular, possibly granting owners the right to appeal Department of Environmental Protection (DEP) gas well permits.

State code pre-dates the horizontal drilling-hydraulic fracturing boom, the court said, and may need to be updated.  Some local legislators said it’s uncertain at this point how the whole body might respond to the idea.

The Supreme Court released an answer late Wednesday in the case of a Doddridge County surface owner, Matthew L. Hamblet, who wanted to appeal a WV DEP well work permit for his property. He filed his appeal in Doddridge Circuit Court, basing his case on a 2002 Supreme Court ruling. The WV DEP and EQT moved to dismiss the appeal. The court denied the dismissal motions, but asked the Supreme Court if the 2002 case — which applied to coal seam owners — also means state code allows surface owners to appeal DEP permits.

The 19-page Supreme Court answer said “no” several times, but it added this comment: “This Court urges the Legislature to re-examine this issue and consider whether surface owners should be afforded an administrative appeal under these circumstances.”

Interim legislative session now underway

Senate President Jeff Kessler, D-Marshall, said it was “interesting to see the open invitation” from the court to revisit the law. He would want to take a closer look at the issues with his attorneys in the coming weeks before the regular session begins in 2013. Noting the court’s comments that much of the code in this area is out of date, he said the Natural Gas Horizontal Well Control Act remains a work in progress. Since the act is still young, the Legislature may want to sit back a while longer and see how things play out.

The surface-owner rights the court refers to, damage compensation and violation of lease rights, are both after-the fact measures. In its brief, West Virginia Surface Owner’s Rights Organization (WV-SORO) argued that a right to appeal is more proactive, to protect owners from “erroneous effects on their interests.” In the Hamblet case, state requirements were disregarded, and the state waived the requirements “without any apparent reasoning.”

WV-SORO spokeswoman Julie Archer spoke with The Dominion Post and drafted an email response to the decision: “This is not the outcome we had hoped for in this case. We are disappointed that the Court did not affirm that surface owners have a constitutional right to appeal the state’s decision to issue drilling permits, and that they declined to address our argument regarding surface owners’ rights to an administrative hearing before the permit is issued. However, we appreciate that the court has urged the Legislature to re-visit the issue and to consider whether surface owners should be afforded an administrative appeal. We hope the Legislature will heed the Court’s recommendation.”

WV – Oil and Natural Gas Association Executive Director Corky DeMarco said the statute clearly grants mineral owners the right to produce their minerals in a responsible manner, and association members have had to deal with conflicts with surface owners. Asked about the court’s suggestion to the Legislature, DeMarco observed there are some contentious leases out there. He said previous legislatures have debated the issue on numerous occasions and he doesn’t see any value in debating it again. DeMarco added he was pleased that the justices chose to base their decision on code as it stands and not try to rewrite the code from the bench.

WV-SORO asked for two things: The right to a hearing before the permit is issued and the right to an appeal if the WV-DEP allegedly errs in granting one. The court didn’t address the first request. The Supreme Court studied the 2002 case, called “Lovejoy,” and state code, and determined that the protections in code for coal seam owners don’t apply to surface owners. Coal seam owners can appeal WV-DEP decisions; surface owners may only file comments on the proposal within 30 days.

The court noted WV-DEP’s and EQT’s assertions that surface owners have court recourse to seek compensation for damages. The court said that much of the code was written before the Marcellus and horizontal drilling/fracking boom, and as such, is out of date. Because of that, it urged the Legislature to revisit the appeals issue.

Doddridge County Stream

NOTE:  The following article by Diane Pitcock was published this week in the Doddridge County News, West Union, WV.

Marcellus at Your Door in Doddridge County

 >>>  Standing Firm Against Intimidation

This Friday (today), the Doddridge County Commissioners will act in the capacity of an appeals board, when addressing the unresolved matter of the revoked flood plain permit previously issued to EQT to drill 12 Marcellus wells on Joye Huff’s meadow. This outcome of this appeals process should be of interest to every resident of this county.

For those unfamiliar with the current controversy involving EQT’s desire to drill in a flood plain, here is a synopsis of what appears to be a controversial and “sticky situation” for the county commission to try to resolve……

EQT holds an active mineral lease which gives them the right to drill on a tract of land which was originally leased back in 1890. It includes Joye Huff’s 640 acre farm in Groves Summers, which is only a part of the greater acreage on the original tract of land which was leased for minerals back in 1890.

EQT selected the meadow on the Huff Farm as their location of choice to put 12 Marcellus wells. It is Joye Huff’s only meadow of her entire farm and she farms it. But aside from that, the meadow is in a recorded flood plain/floodway.

Back in November, 2011, EQT went to the county flood plain coordinator, Jerry Evans, with their documents in order to obtain a county permit to drill in the meadow. EQT’s documentation provided to Evans stated that the meadow was NOT in a flood plain. Evans signed off on it and issued a permit to allow EQT to drill the meadow. The site was never visited by the county flood plain coordinator prior to signing the permit.

The residents of the Groves Summers community know that this meadow is indeed in a recorded flood plain and at least partially in a flood way. They have experienced firsthand the flooding of the meadow and resulting FEMA federal disaster assistance in past years. Realizing that it was a significant error on the county flood plain coordinator’s part to have issued EQT a permit to drill there, several neighbors and the property owner of the drill site brought this to the attention of the County Commission. This was done during a commission meeting in April, 2012.

The county commission realized that a mistake had been made in issuing the county permit to EQT to drill the meadow. The commissioners instructed Jerry Evans, County Flood Plain Coordinator, to act on the situation. Subsequently the permit to drill in the meadow was revoked by Evans.

The commission was well intended by being responsive to the residents who brought the flood plain situation to their attention. However, the commission unintentionally handled the revocation improperly. They did not provide EQT with proper notice that they intended to pull the permit in order for EQT to have “due process” and be heard, before the revocation of the permit. (Or so EQT claims. However the revocation of a permit that was invalid to begin with, should have no standing before the court. Due process does not apply to invalid actions and is being challenged.)

Nevertheless, EQT filed an injunction to demand the return of their permit to drill in the meadow. In effect, they indicated their intent to sue the County Commission, if they don’t get their permit back.

The county commission, now under the advisement of their attorney, subsequently went back to correct their “process error” they had committed when they had instructed Evans to revoke EQT’s permit without first informing EQT of their intent. This time the commission went through the proper channels and there was also a subsequent hearing addressing the injunction. During this hearing, the circuit court judge heard EQT’s argument, and that of the attorney’s intervening for the landowner, and the commissioners’ attorney as well. The case was remanded back to the County Commission to act upon it in their official capacity of a Flood Plain Permit Appeals Board, and to do so before the judge will address the injunction filed by EQT against the County Commission.

In addition, the landowner was given the opportunity to obtain the services of an independent engineering firm to review, validate, or contradict the engineering documents that were used by EQT when seeking their permit from Jerry Evans, who was our Doddridge County Flood Plain Coordinator who issued the permit to EQT back in November.

Overwhelmed yet with too many details? It’s all part of the usual “legalities” that come into play in these court situations and often cloud the issues that need to be addressed.

Bottom line is that the ball is now in the County Commission’s court, so to speak. Their “appeals court” role they will assume this Friday. This is when they must decide whether to reinstate the revoked permit for EQT, or sustain the current revocation of the permit. After that hurdle it will go back to the circuit court to continue.

It would seem as if a no-win situation for the County Commission. On the one hand, if they rule to keep the permit revoked as it currently stands, they can probably expect EQT to continue with the injunction against them and the lawsuit. They want that meadow! And if the commission yields to that kind of pressure, and gives EQT a permit to drill the meadow, the commission will have violated their own county flood plain ordinance and they can expect that they will have to answer to the residents of that community who will be placed in harm’s way if the meadow is drilled.

A few things that should be considered by the commission and perhaps some questions they should be asking themselves and EQT……..

1. The commissioners were elected to serve and protect the citizens of this county, not serve the drilling industry. The meadow is in a recorded flood plain/flood way. What does our County Flood Plain Ordinance say about construction in a flood plain/floodway? It states only if there are no other alternative locations should construction be done in a flood plain/flood way. The Huff farm has 640 acres of “alternative location” for EQT to find another place to plop those 12 Marcellus wells. In addition, the leased track that EQT holds encompasses adjoining parcels besides the Huff farm, so even more acreage to possibly place those wells instead of locating them on the flood plain meadow. They are currently proposing to use the meadow and build up the meadow with 60,000 cubic feet of fill, with the edge of the well pad about 20 feet from the stream. Gee, where will all that diverted water go when the meadow floods as it has historically done so every few years?

2. Is the commission responsible for the safety of residents or responsible for catering to the needs of EQT for their “convenience” in drilling in the desired meadow? It is flat, with a long stretch of road frontage for easy access for their drilling equipment and trucks. An easier way for them to get to their minerals, rather than going elsewhere on that huge tract of leased land they hold that ISN’T in the flood plain.

Ms. Huff’s meadow appears to be a very desirable and coveted location for the driller. Enough so, that EQT apparently won’t back down and they have brought in their heavy hitter lawyers to fight both the landowner and the county commission.

(Guess EQT will no longer be giving out those really cool flashing L.E.D. yo-yo’s, sunscreen pens, tote bags, and cheese cubes they handed out to us as freebies at their community public relations meeting last year at the county park? No more Mr. Nice Guy to us landowners who want to preserve our property values, and our safety, as best we can? )

NOWHERE does it say that the county commission is here to serve the drillers and make it easy for them at the expense of the landowners’ property, and certainly NOT at the expense of the county residents’ safety! Remember, the commission is here to serve and protect the county citizens, NOT the drilling industry!

3. EQT, when seeking the permit for drilling in the meadow, presented their engineering study as evidence that the proposed site was not in a flood plain. An assessment done of their engineering study revealed some interesting things.

EQT’s engineering firm used older, outdated software, a BETA or experimental version. Check out the website for EQT’s chosen engineer: Navitus…. “energy support, it’s all we do.”

http://navituseng.com/ Does that suggest an UNBIASED independent engineering firm did the flood plain study for EQT? Was the software used for EQT’s study an older version using topography and input from 2003?

If so, shouldn’t this be more current? Did anyone from Navitus Engineering actually visit the site? Wouldn’t it be prudent to have information more current than those from 2003 software?

4. Did EQT fill out the application form for the county permit and Jerry Evans then sign it based on what info they told him? Was there a site visit done referring to current flood plain maps on record? Was an informed decision made, and did the company provide all the facts?

5. The Doddridge Flood Plain Ordinance states that “any developer who plans activity in a flood zone that will encompass 2 or more acres is required to delineate the floodplain.” Did EQT do this before coming to the county with their application? According to the landowner, the delineation was never done prior to the permit application. And why is this process necessary? Because the ordinance demands that NO fill will be placed inside a floodway. Thus it is important for EQT to have known just where the floodway is located. Perhaps a few thousand dollars spent at the beginning is better than wasting hundreds of thousands on improper activities?

6. The WV DEP Office of Oil and Gas states in their permit application that a driller is responsible for obtaining the necessary local permits, and identifying the actual flood plain, and obtaining any permits, variances, etc..

WV DEP OOG went ahead and issued their agency’s permits to EQT even though EQT had not yet obtained the local county permits to drill in the meadow. In the DEP’s permit application package, there is an acknowledgement section with signature requirement in which it states “the applicant acknowledges that any Office of Oil and Gas permit in no way overrides, replaces, or nullifies the need for other permits/approvals that may be necessary, and further affirms that all needed permits/approvals should be acquired from the appropriate authority before the affected activity is initiated.”

Did EQT go through FEMA, Army Corps of Engineers, DNR, US Fish and Wildlife and any other agency for necessary approvals when required and did they do so before applying with Doddridge County? Does the County Commission have evidence that they did? Hopefully the commission will verify all this was done by EQT. Wasn’t FEMA the one who initially brought all this to the attention of the commission because something may have been amiss?

7. How much of the alleged expenses that EQT is claiming as “damages” they incurred (assuming they don’t get their permit back) can actually be attributed to the actual costs they incurred as result of not getting the permit? And how much of those dollars claimed were actually monies that had to be spent by them, whether they were approved for the permit or not? Typically, those pre-permit costs incurred by companies in preparing for a permit application must be “eaten” by the companies who apply, even when they are subsequently turned down for permits. The burden of proof is on EQT to prove that those alleged monetary damages were a result of being DENIED the permit, and not stemming from expenses that must be incurred in order to apply for the permit! The commission would be prudent to look into that!

8. Does the suit by EQT claim that they already have loss of opportunity for revenue from the gas on a daily basis? If so, how can they be losing natural gas revenue already, if in fact, the pipeline infrastructure to pump that gas hasn’t even been built yet? Could this be intimidation by suggesting that they are losing money every day that the permit is denied?

Hopefully, the commissioners will be diligent in sorting out the facts from the threats and not allow themselves to be intimidated by a possible lawsuit filed by EQT if they don’t get that coveted meadow.

Bottom line is that it would seem that if the commission simply follows and applies the law as it appears in the county flood plain ordinance, and renders their decision based on being in compliance with their own flood plain ordinance, they will have little to worry about as repercussion to their action.

If there is litigation against them as result of their decision on the permit, the commission needs to realize that the burden of proof for actual damages incurred must be attributed to the denial of the permit and is the responsibility of EQT to prove rather than to suggest.

Hopefully, residents of the county will follow this case carefully as it unfolds. What has happened on Ms. Huff’s farm could very well happen to many others in the county who have old mineral leases on their lands. We should expect nothing less than to have our local and state government, their agencies ……and the drilling companies follow the rule of law. The Marcellus drilling frenzy is a whole new playing field and brings lots of challenges to our county and state. We should not allow ourselves to be targeted as a population to be taken advantage of, simply because it is assumed that we are ignorant of our rights and of laws that are in place to protect us.

>>> Diane Pitcock is the Program Administrator for the WV Host Farms Program which links WV landowners with the environmental community to study the impacts of Marcellus shale gas development.  Contact: wvhostfarms@yahoo.com, www.wvhostfarms.org   <<<

The WV-DEP says permits for horizontal gas wells are coming in faster than they’re being processed. Secretary Randy Huffman said he has a backlog of more than 250 permits, but hopes to have it under control by the end of the summer.

The DEP has gotten more money for staff, but Huffman said he’s having trouble hiring and has added only one employee to the permitting team. Huffman said one new hire quit after less than a month and another quit before the first day. Meanwhile, 20 veteran inspectors have filed grievances over the new hiring push, arguing that the DEP wrongly created two sets of pay, hiring qualifications and job requirements.

Also, EQT of Pittsburgh, PA,  is suing Doddridge County officials for revoking a flood plain permit after it spent $300,000 on the permitting process. EQT is seeking an injunction in circuit court so it can proceed with plans for 12 wells, according to  The Associated Press.

WDTV-TV reported that the permit was revoked after the county’s flood plain manager realized homes and livestock were vulnerable.EQT said the county and the state Department of Environmental Protection granted permits, and the manager had no authority to revoke them. The manager also sits on the County Commission.

Landowner Joye Huff called EQT’s actions rude, stubborn and intimidating. Huff said the Federal Emergency Management Agency pointed out the potential problems and the flood plain manager had no choice but to withdraw the permit.