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New W.Va. law may need tweaked

January 12, 2012
The Herald-Star

SOUTH CHARLESTON (AP) - State lawmakers probably have little interest in revisiting the Marcellus shale issue, after passing special session legislation that capped a months-long effort to craft regulations for the natural gas-rich reserve, top legislators said.

But a key player in the process hopes his colleagues will consider some tweaking of December's measure. Delegate Tim Manchin co-chaired the House-Senate committee that helped draft the proposal.

"Make no mistake about it: this is the industrialization of rural West Virginia," Manchin told those gathered at The Associated Press' annual Legislative Lookahead preview for member reporters and editors.

Owners of surface properties that host Marcellus wells deserve greater protections as developers armed with the rights to the underground gas seek to drill wells, the Marion County Democrat said. Too much noise and light from around-the-clock well operations remains an issue for some nearby residents, Manchin said.

The bill requires new, large-scale well operations to stay at least 625 feet from a dwelling.

"Someone can have a well pad on your back porch," Manchin said. "Well pads are big. Wells aren't on the edge of a well pad, they're in the middle."

But Manchin also said that a broad revamping of the December legislation appears unlikely for the upcoming session. Senate Finance Chairman Roman Prezioso, a fellow Marion County Democrat, and House Minority Leader Tim Armstead, R-Kanawha, agreed.

Armstead said the recent measure addressed such topics as drilling permit fees and buffer zones spacing off wells from water sources. Prezioso said lawmakers must soon review and vote on rules proposed by the Department of Environmental Protection to flesh out the new law's provisions.

"I don't think you'll see any major changes," Prezioso said. "I don't know that anybody has an appetite for that."

Lawmakers were unable during the 2011 regular session to pass a Marcellus regulatory measure. The House-Senate committee later drafted a bill after several public hearings and discussions during the legislature's monthly interim study meetings. Gov. Earl Ray Tomblin then modified the draft - environmental and surface owner advocates opposed many of his changes - before calling lawmakers into special session last month.

Industry groups offered lukewarm support of the special session measure but welcomed its final passage.

"We have asked for certainty and clarity for two years, as an industry looking at a regulatory program," said Corky DeMarco, executive director of the West Virginia Oil and Natural Gas Association. "What we have is a bill that gives the industry clarity and certainty moving forward."

DeMarco noted that the industry sought clear rules for future shale development, such as of the Utica formation. He agreed that lawmakers appear uninterested in rehashing the Marcellus debate this session.

Manchin also suggested Thursday that the state slightly increase the tax on extracted Marcellus natural gas. The extra revenues would fund road, water and sewer needs. Other lawmakers have similarly proposed a future development fund seeded by Marcellus-related revenue.

He said his version would hinge on approval of something known as forced pooling. Sought by industry, this would compel the partial owner of gas rights to sign off on drilling if the other owners agree. Manchin said this form of forced pooling would keep wells, pipelines and roads of the unwilling owner's land. It would also govern how that owner is compensated.

DeMarco said the industry already considers West Virginia's relevant taxes too high, when compared to other Marcellus states. Increasing such costs will chase of developers, he said.

"We believe that the investment will go where the highest return is first," DeMarco told the reporters and editors. "That just makes economic sense, and it's a requirement of publicly traded companies."

Tomblin Chief of Staff Rob Alsop later told Thursday's audience that the governor is not considering any tax increases.

Marshall University's South Charleston campus hosted the Legislative Lookahead, an annual event organized by AP and its members to preview the regular session.

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