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West Virginia

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West Virginia lies over the Marcellus Shale formation, and the far western edge of the state also lies over the Devonian Shale formation.1 The Utica Shale formation lies below the Marcellus formation2 and is just beginning to be developed in West Virginia.3 The number of natural gas wells in West Virginia has continued to rise over the past few years, although more recently there has been a sharp decline in the number of drilling permits issued in the region.4 The state produced 982,669 mmcf of natural gas in 2014,5 and the industry is currently responsible for about 80,000 jobs in the state.6

Statutory and Regulatory Framework

Issues related to hydraulic fracturing are largely overseen by the West Virginia Department of Environmental Protection’s (WVDEP) Office of Oil and Gas.7

In June 2011, the West Virginia House and Senate formed a Joint Select Committee on the Marcellus Shale to study the issue and propose legislation to be considered in a special legislative session or when the legislature convened in January 2012.8 On December 14, 2011, in a special session, the legislature passed H.B. 401, the Natural Gas Horizontal Well Control Act (“Horizontal Well Act” or “Act”).9 The Act, among other things, established a permitting process for horizontal wells, required additional studies, and authorized WVDEP to adopt new rules.10
 
More specifically, the Act requires a well work permit prior to commencing any well work, including site preparation, that would disturb the land.11 The permit application must, among other things, describe the work that will be done, the depth and angle of the well, the means used to stimulate the well, and information on casing or tubing.12 The Act requires operators to furnish a bond in order to receive permits.14 It also established civil and criminal penalties,13 requires public disclosure of permit information on WVDEP’s website,15 and provides for compensation to surface owners damaged by horizontal well drilling operations.16

The West Virginia Legislature passed H.B. 107 in 2014,17 which amended Sections 22-15-8 and 22-15-11 of the Code of West Virginia to allow for the receipt of additional drilling waste at certain commercial solid waste facilities.18 Specifically, the legislation created an exception to the landfill intake restriction of 10,000 or 30,000 tons per month (depending on the landfill classification), provided that certain conditions are met.19 H.B. 107 also established an additional $1 per ton fee for the disposal of drill cuttings and drilling waste generated by horizontal well sites,20 and required WVDEP to issue an emergency rule to govern the acceptance, handling, and disposal of drill cuttings and drilling waste.21 In July 2014, the West Virginia Secretary of State approved and issued WVDEP’s emergency rule, which establishes limits for various toxins associated with drill cuttings and drilling waste and requires radiation and leachate monitoring at all facilities that receive such wastes.22 Finally, H.B. 107 also required the Secretary of WVDEP to prepare a report to the Joint Legislative Oversight Commission on Water Resources and the Legislature's Joint Committee on Government and Finance by July 2015 that would examine, among other things, the hazardous characteristics of leachate collected from solid waste facilities receiving drill cuttings and drilling waste and the potential for the collection, treatment and disposal of such leachate to negatively impact surface waters or groundwater.23 WVDEP issued its completed report in July 2015, concluding that there is “little concern” regarding leachate associated with "drill cuttings that were placed in approved and permitted landfills, once that leachate was processed through a correctly operated treatment facility."24

In 2015, the governor created a panel, called the West Virginia Commission on Oil and Natural Gas Industry Safety, to study worker safety at oil and gas sites.25 The Commission issued a report on January 13, 2016.26 While statistics indicate that the industry has a higher worker fatality rate than any other private industry, the Commission found that the rate of serious incidents and accidents in West Virginia had remained fairly constant over the past 15 years.27 The Commission recommended adding safety practices and training to existing regulations and best practices in order to improve worker safety.28 The Commission’s specific recommendations call for new legislation mandating notification for incidents, and additional best practices for first responders.29 They also recommended that the Commission continue to study these issues during 2016.30

Recent News and Developments


Drilling Below Ohio River

In December 2014, the state announced it would begin to allow companies to drill beneath the Ohio River.31 At that time, it granted initial awards allowing drilling beneath 12 miles of the river.32 Two leases were finalized in March 2015, pursuant to which the state will receive as much as $9,000 per acre and a 20-percent royalty on oil and gas produced at each well.33 The state has continued to open additional under-river mileage for bid,34 and, as of September 2016, at least two other under-river properties have been nominated for mineral development.35

Landowner Issues 

In August 2015, a West Virginia county court ruled that pipeline surveyors could not use eminent domain to examine private property without the permission of the landowner; specifically, the court held that eminent domain requires public use, and since West Virginia would not have access to the gas in the pipeline (which would be used in Virginia), the public use test was not satisfied.36 Members of the state senate responded by proposing a bill that would have allowed surveying after giving property owners prior notification.37 The bill, S.B. 596, was voted down, meaning that the county court ruling still stands.38

Natural gas companies have also faced challenges from plaintiffs claiming that gas beneath their properties was pooled without their consent, and without any lease agreement.39 Lease integration legislation has been introduced in five of the past six years in West Virginia’s state legislature, including in 2016.40 However, each effort, including the 2016 proposed legislation, has stalled.41

In February 2016, the West Virginia Senate passed a bill designed to curtail certain future lawsuits. S.B. 508 was drafted with the intent to reduce nuisance lawsuits, including complaints from neighboring property owners about excessive dust, noise pollution and smells, by requiring 60-days’ notice to the defendant before filing suit.42 The legislation passed the West Virginia Senate in February 2016 and has been introduced in the House of Delegates, but has not yet come up for vote.43

Wastewater

Issues related to the disposal of wastewater associated with fracking operations have also drawn attention in the state. In 2014, a professor at Duke University reported that water testing indicated that contaminants associated with oil and gas wastewater have migrated into Wolf Creek, a tributary of the New River.44 After a hearing, the West Virginia Environmental Quality Board allowed the well operator to continue to dispose of wastewater in an underground injection well.45 In response, the Fayette County Planning Commission adopted a county ordinance targeting wastewater from unconventional drilling operations.46 

In June 2016, the federal district court for the Southern District of West Virginia permanently enjoined the enforcement of the county ordinance enacted by the Fayette County Commission, which prohibited the storage of wastewater in an underground injection well and the temporary storage, handling, treatment, or processing of wastewater unless it is at a site operating under a permit for a conventional vertically drilled well in the county.47 The Plaintiff, EQT Production Company, argued that the county ordinance effectively outlawed horizontal drilling anywhere in Fayette County by prohibiting even temporary storage at horizontally drilled wells.48 The court held that the portions of the county ordinance regulating the storage of wastewater at conventional vertical extraction sites are preempted by the West Virginia Oil and Gas Act, and the portions of the county ordinance prohibiting permanent storage of wastewater in underground injection control (“UIC”) wells are preempted by West Virginia’s UIC program, promulgated under the the federal Safe Drinking Water Act.49 The court reasoned that “the state has comprehensively regulated this area, including storage activity at drilling sites, and left no room for local control.”50 The court further noted that parts of the county ordinance that “prohibit disposal of wastewater in UIC wells conflict with and stand as obstacles to state law,” and were therefore void.51 Fayette County has appealed the decision to the U.S. Court of Appeals for the Fourth Circuit.52

Legislation Regarding Access Road Construction


In February 2016, the state Senate passed S.B. 565, which would allow oil and gas drillers to construct an access road and well pad before getting a well permit.53 As of September 2016, S.B. 565 had been introduced in the state House of Delegates, but has not yet come up for vote.54

Last updated September 2016.



See Geography: Maps: Oil and Gas Related Exploration, Resources, and Production: Shale Gas and Oil Play, Lower 48 States, U.S. ENERGY INFO. ADMIN. [“USEIA”] (June 30, 2016), https://www.eia.gov/oil_gas/rpd/shale_gas.pdf.

Id.

3 Jamison Cocklin, Utica’s Next Frontier Moving to West Virginia, Pennsylvania, NGI NATURAL GAS INTELLIGENCE (Mar. 26, 2014), http://www.naturalgasintel.com/articles/97844-uticas-next-frontier-moving-to-west-virginia-pennsylvania; Jeremiah Shelor, Antero to Drill First Utica Well in West Virginia in 2015, THE EXPONENT TELEGRAM (July 17, 2015), http://www.theet.com/news/local/antero-to-drill-first-utica-well-in-west-virginia-in/article_4eb1947e-c38c-5d98-9442-e5642a635270.html.

Gas Slump Hits America's Biggest Fracking Field, FORTUNE (Dec. 2, 2015), http://fortune.com/2015/12/02/gas-slump-hits-americas-biggest-fracking-field/

Sources and Uses: Natural Gas: Data: Summary: Natural Gas Annual Supply & Disposition by State, USEIA (Aug. 31, 2016), http://www.eia.gov/dnav/ng/ng_sum_snd_a_EPG0_FPD_Mmcf_a.htm

6 REPORT - WEST VIRGINIA COMMISSION ON OIL AND NATURAL GAS INDUSTRY SAFETY 2 (Jan. 13, 2016) [“West Virginia Commission Report”], http://www.governor.wv.gov/media/Documents/Final%20Report_Natural%20Gas%20Safety%20Commission.pdf

7 WEST VIRGINIA DEPARTMENT OF ENVIRONMENTAL PROTECTION: OFFICE OF OIL AND GAS, http://www.dep.wv.gov/oil-and-gas/Pages/default.aspx.

8 Lawrence Messina, W. Va. Lawmakers Get Do-over for Marcellus Rules, CHARLESTON GAZETTE MAIL (June 19, 2011), http://www.wvgazettemail.com/Business/201106190849.

9 Phil Kabler, Senate Quickly Passes Marcellus Legislation, CHARLESTON GAZETTE-MAIL (Dec. 14, 2011), http://www.wvgazettemail.com/News/201112130237; H.B. 401 (W. Va. 2011), http://www.legis.state.wv.us/Bill_Status/bills_text.cfm?billdoc=hb401%20enr.htm&yr=2011&sesstype=4X&i=401.

10 Dave Drennon, New State Law Governs Horizonal Drilling, W. VA. EXEC. (May 24, 2012), http://www.wvexecutive.com/a-look-at-legislation/.

11 W. VA. CODE § 22-6A-7(a).

12 Id. § 22-6A-7(b).

13 Id. § 22-6A-15.

14 Id. § 22-6A-19.

15 Id. § 22-6A-21.

16 Id. § 22-6A-16.

17 H.B. 107 (W. Va. 2014), http://www.legis.state.wv.us/Bill_Status/bills_history.cfm?year=2014&sessiontype=1X&input=107.     

18 See generally Markup of H.B. 107 (W. Va. 2014), http://www.legis.state.wv.us/Bill_Text_HTML/2014_SESSIONS/1X/bills/hb107%20intr.pdf.

19 W. VA. CODE § 22-15-8(g).

20 Id. § 22-15-11(k).

21 Id. § 22-15-8(h).

22 See generally W. Va. Series 1 Solid Waste Management Rule, 33 CSR 1, http://apps.sos.wv.gov/adlaw/csr/readfile.aspx?DocId=25932&Format=PDF.

23 W. VA. CODE §22-15-8(j).

24 See Press Release, West Virginia Department of Environmental Protection, DEP Completes Study of Impact of Drill Waste From Natural Gas Well Sites Disposed of in Landfills (July 2, 2015), http://www.dep.wv.gov/news/Pages/DEP-Completes-Study-of-Impact-of-Drill-Waste-From-Natural-Gas-Well-Sites-Disposed-of-in-Landfills.aspx.

25 See Mike Soraghan, W.Va. Governor Creates Panel to Study Drilling Worksites, E&E ENERGYWIRE (July 10, 2015), http://www.eenews.net/energywire/2015/07/10/stories/1060021541

26 West Virginia Commission Report, supra note 6.

27 Id. at 4

28 Id. at 5.

29 Id. at 6-8.

30 Id. at 8.

31 Laura Arenschield, W.Va. OKs Fracking Under Ohio River; Critics Leery, COLUMBUS DISPATCH, Dec. 8, 2014, http://www.dispatch.com/content/stories/local/2014/12/08/w-va--oks-fracking-under-river-critics-leery.html.

32 Id.

33 Sarah Tincher, West Virginia DNR Finalizes Agreements to Drill Under Ohio River, STATE J. (Charleston, WV), Mar 24, 2015 (updated Apr. 23, 2015), http://www.statejournal.com/story/28604498/west-virginia-dnr-finalizes-agreements-to-drill-under-ohio-river.

34 Associated Press, Drillers Bid Millions for Oil, Gas Beneath West Virginia Public Lands, TRIBLIVE (Jan. 27, 2015, 12:01 AM), http://triblive.com/business/headlines/7644674-74/state-bid-river.

35 West Virginia: Natural Resources: Mineral Development: Properties for Lease, http://www.wvcommerce.org/resources/mineral-development/properties.aspx.

36 Bill Allowing Surveyors Private Property Access Fails in WV Senate, MARCELLUS DRILLING NEWS (Mar.2, 2016) (last visited Sept. 15, 2016), http://marcellusdrilling.com/2016/03/bill-allowing-surveyors-private-property-access-fails-in-wv-senate/.

37 Id.

38 David Gutman, Pipeline Bill Defeated as WV Senate Takes on Narrow-Focus Bills, CHARLESTON GAZETTE-MAIL, Feb. 29, 2016, http://www.wvgazettemail.com/news/20160229/pipeline-bill-defeated-as-wv-senate-takes-on-narrow-focus-bills.

39 See, e.g., Associated Press, Law: Chesapeake Seeks Dismissal of West Virginia 'Forced Pooling' Lawsuit, E&E ENERGYWIRE (June 16, 2015), http://www.eenews.net/energywire/2015/06/16/stories/1060020254.

40 Forced Pooling Bill Introduced in West Virginia House of Delegates, THE INTELLIGENCER (Wheeling, WV), Feb. 12, 2016, http://www.theintelligencer.net/news/top-headlines/2016/02/forced-pooling-bill-introduced-in-west-virginia-house-of-delegates/.

41 Forced Pooling Bill Delated Again in West Virginia Legislature, THE INTELLIGENCER (Wheeling, WV), Mar. 1, 2016, http://www.theintelligencer.net/news/top-headlines/2016/03/forced-pooling-bill-delayed-again-in-west-virginia-legislature/.

42 S.B. 508 (W. Va. 2016), http://www.legis.state.wv.us/Bill_Text_HTML/2016_SESSIONS/RS/bills/SB508%20SUB1.pdf.

43 West Virginia Legislature: Bill Status – 2016 Regular Session: Senate Bill 508, http://www.legis.state.wv.us/Bill_Status/bills_history.cfm?year=2016&sessiontype=RS&input=508.

44 Sarah Plummer, Duke Professor: Water Samples Show Fracking Contamination in Wolf Creek, THE REGISTER-HERALD (Beckley, W. Va.), Dec. 19, 2014, http://www.register-herald.com/news/duke-professor-water-samples-show-fracking-contamination-in-wolf-creek/article_a642e087-b210-5975-b040-8826298c2609.html.

45 Sarah Plummer, DEP Renews Danny Webb Construction Injection Control Permits at Lochgelly, REGISTER-HERALD (Beckley, W. Va.), Aug. 28, 2015, http://www.register-herald.com/news/dep-renews-danny-webb-construction-injection-control-permits-at-lochgelly/article_798de5d0-d217-5aaf-846b-237a59425601.html

46 Sarah Tincher, Fayette County Commission Unanimously Bans Oil and Gas Waste, STATE J. (Charleston, WV), Jan. 12, 2016 (updated Feb. 11, 2016), http://www.statejournal.com/story/30948608/fayette-county-commission-unanimously-bans-oil-and-gas-waste.

47 Memorandum Opinion and Order, EQT Prod. Co. v. Wender, No. 16-00290 (S.D. W.Va. June 10, 2016), ECF No. 

48 Id. at 15. 

49 Id. at 32. 

50 Id

51 Id. at 43. 

52 Notice of Appeal, EQT Prod. Co. v. Wender, No. 16-00290 (S.D. W. Va. Aug. 17, 2016), ECF No. 52.

53 David Gutman, WV Senate Passes Bill to Help Shield Gas Drillers from Lawsuits, CHARLESTON GAZETTE-MAIL (Feb. 23, 2016), http://www.wvgazettemail.com/news/20160223/wv-senate-passes-bill-to-help-shield-gas-drillers-from-lawsuits.

54West Virginia Legislature: Bill Status – 2016 Regular Session: Senate Bill 565, http://www.legis.state.wv.us/Bill_Status/bills_history.cfm?year=2016&sessiontype=RS&input=565

Last updated September 2016.

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