Senate Bill No. 529
(By Senators Edgell, White, Barnes, Kessler and Wells)
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[Introduced February 10, 2010; referred to the Committee on
Energy, Industry and Mining; and then to the Committee on the
Judiciary.]
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A BILL to amend and reenact §22-6-6 of the Code of West Virginia,
1931, as amended; and to amend said code by adding thereto a
new article, designated §22-6A-1, §22-6A-2, §22-6A-3, §22-6A-
4, §22-6A-5, §22-6A-6, §22-6A-7, §22-6A-8, §22-6A-9 and §22-
6A-10, all relating to creating the Surface Owners' Rights
Recognition Act; protecting the rights of surface owners of
property where oil or gas wells are to be located; making
legislative findings; requiring oil and gas operators to give
notice of planned work and its impact upon the property before
entry is made; setting forth notice requirements; prohibiting
waivers; providing exceptions; setting forth civil penalties;
and requiring separate bonds to be posted.
Be it enacted by the Legislature of West Virginia:
That §22-6-6 of the Code of West Virginia, 1931, as amended,
be amended and reenacted; and that said code be amended by adding
thereto a new article, designated §22-6A-1, §22-6A-2, §22-6A-3,
§22-6A-4, §22-6A-5, §22-6A-6, §22-6A-7, §22-6A-8, §22-6A-9 and §22-
6A-10, all to read as follows:
ARTICLE 6. OFFICE OF OIL AND GAS; OIL AND GAS WELLS;
ADMINISTRATION; ENFORCEMENT.
§22-6-6. Permit required for well work; permit fee; application;
soil erosion control plan.
(a) It is unlawful for any person to commence any well work,
including site preparation work which involves any disturbance of
land, without first securing from the director a well work permit.
An application may propose and a permit may approve two or more
activities defined as well work.
(b) The application for a well work permit shall be
accompanied by applicable bond as prescribed by section twelve,
fourteen or twenty-three of this article, and the applicable plat
required by section twelve or fourteen of this article.
(c) Every permit application filed under this section shall be
verified and shall contain the following:
(1) The names and addresses of: (i) The well operator; (ii)
the agent required to be designated under subsection (e) of this
section; and (iii) every person whom the applicant must notify under any section of this article together with a certification and
evidence that a copy of the application and all other required
documentation has been delivered to all such persons;
(2) The name and address of every coal operator operating coal
seams under the tract of land on which the well is or may be
located, and the coal seam owner of record and lessee of record
required to be given notice by section twelve, if any, if said
owner or lessee is not yet operating said coal seams;
(3) The number of the well or such other identification as the
director may require;
(4) The type of well;
(5) The well work for which a permit is requested;
(6) The approximate depth to which the well is to be drilled
or deepened, or the actual depth if the well has been drilled;
(7) Any permit application fee required by law;
(8) If the proposed well work will require casing or tubing to
be set, the entire casing program for the well, including the size
of each string of pipe, the starting point and depth to which each
string is to be set, and the extent to which each such string is to
be cemented;
(9) If the proposed well work is to convert an oil well or a
combination well or to drill a new well for the purpose of
introducing pressure for the recovery of oil as provided in section twenty-five of this article, specifications in accordance with the
data requirements of section fourteen of this article;
(10) If the proposed well work is to plug or replug the well:
(i) Specifications in accordance with the data requirements of
section twenty-three of this article; (ii) a copy of all logs in
the operator's possession as the director may require; and (iii) a
work order showing in detail the proposed manner of plugging or
unplugging the well, in order that a representative of the director
and any interested persons may be present when the work is done.
In the event of an application to drill, redrill or deepen a well,
if the well work is unsuccessful so that the well must be plugged
and abandoned, and if the well is one on which the well work has
been continuously progressing pursuant to a permit, the operator
may proceed to plug the well as soon as the operator has obtained
the verbal permission of the director or the director's designated
representative to plug and abandon the well, except that the
operator shall make reasonable effort to notify as soon as
practicable the surface owner and the coal owner, if any, of the
land at the well location, and shall also timely file the plugging
affidavit required by section twenty-three of this article;
(11) If the proposed well work is to stimulate an oil or gas
well, specifications in accordance with the data requirements of
section thirteen of this article;
(12) The erosion and sediment control plan required under
subsection (d) of this section for applications for permits to
drill; and
(13) Any other relevant information which the director may
require by rule.
(d) An erosion and sediment control plan shall accompany each
application for a well work permit.
except for a well work permit
to plug or replug any well Such plan shall contain methods of
stabilization and drainage, including a map
or maps of the project
area indicating the amount of acreage disturbed,
including, but not
limited to, acreage disturbed for pipelines and their construction.
The erosion and sediment control plan shall meet the minimum
requirements of the West Virginia erosion and sediment control
manual as adopted and from time to time amended by the division, in
consultation with the several soil conservation districts pursuant
to the control program established in this state through section
208 of the federal Water Pollution Control Act Amendments of 1972
(33 U.S.C. 1288). The erosion and sediment control plan shall
become part of the terms and conditions of a well work permit
except for a well work permit to plug or replug any well, which is
issued and the provisions of the plan shall be carried out where
applicable in the operation. The erosion and sediment control plan
shall set out the proposed method of reclamation which shall comply with the requirements of section thirty of this article.
(e) The well operator named in such application shall
designate the name and address of an agent for such operator who
shall be the attorney-in-fact for the operator and who shall be a
resident of the State of West Virginia upon whom notices, orders or
other communications issued pursuant to this article or article
eleven
of this chapter,
twenty-two, may be served, and upon whom
process may be served. Every well operator required to designate
an agent under this section shall within five days after the
termination of such designation notify the director of such
termination and designate a new agent.
(f) The well owner or operator shall install the permit number
as issued by the director in a legible and permanent manner to the
well upon completion of any permitted work. The dimensions,
specifications and manner of installation shall be in accordance
with the rules of the director.
(g) The director may waive the requirements of this section
and sections nine, ten and eleven of this article in any emergency
situation, if the director deems such action necessary. In such
case the director may issue an emergency permit which would be
effective for not more than thirty days, but which would be subject
to reissuance by the director.
(h) The director shall deny the issuance of a permit if the director determines that the applicant has committed a substantial
violation of a previously issued permit, including the erosion and
sediment control plan, or a substantial violation of one or more of
the rules promulgated
hereunder, and whether or not a finding or
order has been entered pursuant to section three or four of this
article. If a finding or order has been entered pursuant to
section three or four of this article, the permit shall not be
denied unless the applicant has failed to abate or seek review of
the violation within the time prescribed by the director pursuant
to the provisions of sections three and four of this article and
the rules promulgated hereunder, which time may not be
unreasonable:
Provided, That in the event that the director does
find that a substantial violation has occurred and that the
operator has failed to abate or seek review of the violation in the
time prescribed, the director may suspend the permit on which said
violation exists, after which suspension the operator shall
forthwith cease all well work being conducted under the permit:
Provided, however, That the director may reinstate the permit
without further notice, at which time the well work may be
continued. The director shall make written findings of any such
determination and may enforce the same in the circuit courts of
this state and the operator may appeal such suspension pursuant to
the provisions of section forty of this article. The director shall make a written finding of any such determination.
(i) Any person who violates any provision of this section
shall be guilty of a misdemeanor and, upon conviction thereof,
shall be fined not more than $5,000, or be
imprisoned in the county
jail not more than twelve months, or both fined and imprisoned
confined not more than twelve months in a correctional facility or
both fined and confined.
ARTICLE 6A. THE SURFACE OWNERS' RIGHTS RECOGNITION ACT.
§22-6A-1. Short title.
This article may be cited as the "Surface Owners' Rights
Recognition Act".
§22-6A-2. Legislative findings and intent.
(a) The Legislature finds that:
(1) Surface owners of property who do not own the minerals
have no right to the royalty or any other benefit from the
production of oil and gas after the use of the surface when
drilling a well on property;
(2) Often when the mineral and surface owners are the same, a
predecessor in title may have agreed to an operator's "standard"
lease that provides little or no protections for the use of the
surface;
(3) The construction of an oil or gas well site, the
construction of an access road to the well site, the laying of a pipeline from wells on the surface can have an enormous impact on
value, use and enjoyment by the surface owner of the property;
(4) Under the common law, unless changed by the terms of a
severance deed or a lease, the operator who intends to drill an oil
or gas well has only the right to do what is "fairly necessary" on
the surface in order to produce the oil or gas;
(5) At present when an operator plans to drill a well the only
required notice to the surface owner is a copy of the operator's
application for a permit to drill the well on the property at the
time the application for the well work permit is filed. Thus, an
operator may come onto the property, perform a survey, locate the
well site and roads without providing any notice to the surface
owner;
(6) The surface owner has fifteen days to comment on the
permit application. However, the surface owner cannot comment that
the permit application would violate the surface owner's "fairly
necessary" rights. The surface owner cannot generally comment on
where the well site and access road will be located. Instead, the
surface owner can only comment on how the proposed well site and
access road will be constructed.
(7) If the permit application would violate the surface
owner's "fairly necessary" rights, a surface owner's only recourse
is to file a civil action in circuit court that may require the posting of a bond. These requirements are often beyond the
financial resources of the surface owner;
(8) At present, the short fifteen-day notice can catch surface
owners off-guard. The lack of adequate time and lack of expertise
and financial resources, all too often put the surface owner at a
significant disadvantage. As a result, many operators fail to
accommodate a surface owner's concerns and impact the property
significantly more than is necessary;
(9) While a surface owner may be entitled to compensation for
the use of the surface, there is no right to be compensated for the
diminution in the value that the drilling, access roads and
pipelines cause; and
(10) Although the gas will be produced from under the surface
owners' land, and although the gas will be produced out of a well
placed on their land and piped to market across their property,
surface owners have no right to connect to the well or gathering
pipelines for their domestic use of the gas.
(b) It is the intent of the Legislature to protect the
interests of surface owners when there are plans to commence oil
and gas operations on that property.
§22-6A-3. Definitions.
The words or terms used in this article, and any variation to
the form of those words or terms required by the context, have the meanings ascribed to them in article six of this chapter unless a
different meaning clearly appears from the context.
§22-6A-4. Notice to surface owners.
Unless this article specifically provides to the contrary, all
notices required to be given to surface owners by this article
shall be given to the same surface owners and in the manner set
forth in section nine, article six of this chapter.
§22-6A-5. Notice of entry on to surface land.
(a) Before an operator may enter onto property for any purpose
other than to enter a neighboring property or for the purposes
identified in subsection (b) of this section, the operator shall
provide notice, including the purpose of the entry, date of entry
and its expected duration, to the surface owner of the property.
This may be done by telephone, U.S. Postal Service or personal
visit to a surface owner occupying the land. If the surface owner
is not residing on the property, the notice must be received by
that owner at his or her residence. Upon agreement with the
surface owner, any required notice may be in electronic form. The
provisions of this subsection may be waived after the completion of
well work if there is a written contract setting forth the reasons
therefor. Any waiver may be withdrawn at any time by the surface
owner via a written communication to the operator.
(b) A minimum of ten day's written notice must be given to a surface owner prior to initial physical entry upon the property for
all well work. For purpose of this subsection, well work includes,
but not limited to, drilling, redrilling, deepening, stimulating,
pressuring by injection of any fluid, converting from one type of
well to another, combining or physically changing to allow the
migration of fluid from one formation to another or plugging,
replugging of any well, inspections, staking, surveys, measurements
and general evaluation of proposed sites and routes for surface
operations, including the planning for any of the aforesaid work.
The notice shall include:
(1) The names of the operator and operator's authorized
representative entering onto the land, their physical and mailing
business addresses, telephone numbers, and if available, the
facsimile numbers and electronic mail addresses;
(2) The anticipated dates, times and duration of entry onto
the property;
(3) A copy of The West Virginia Oil and Gas Production Damage
Compensation Act;
(4) A copy of this article, other code provisions concerning
a surface owner's rights relating to well work permits and rules
promulgated regarding these statutes;
(5) A copy of the soil erosion and sediment control manual of
the Office of Oil and Gas;
(6) A written document explaining a surface owner's right to
appeal the real property tax assessment after the drilling of a
well if the owner believes that the drilling has decreased the
value of the property; and
(7) An offer to meet with the surface owner either on the land
or at another mutually agreed location prior to or at the time of
the first entry.
§22-6A-6. Notice of planned use of surface land for well work;
offer of surface use and compensation agreement.
(a) An operator may plan and prepare for its proposed surface
use and compensation agreement as provided elsewhere in this
section prior to and without first entering onto the surface of the
land. In such an event the required notice of planned operations
may be made at the same time as the notice of entry onto the
property. The surface owner has five days to rescind a surface use
and compensation agreement after he or she has signed it.
(b) An operator must provide a minimum of thirty days notice
of its planned operations to the surface owner before filing its
application for a well work permit pursuant to article six of this
chapter. This notice shall include:
(1) Sufficient disclosure of the planned surface operations to
enable the surface owner to evaluate the impact of the operations
on the property;
(2) Copies of documents required to be given to the surface
owners under subsection (b), section five of this article if not
previously provided;
(3) The names, business addresses, telephone numbers and, if
available, facsimile numbers and electronic mail addresses of the
operator and the operator's authorized representative; and
(4) A proposed surface use and compensation agreement that
addresses, at a minimum, the following:
(A) Proposed location, design specifications and planned
maintenance for wells, well sites, pipelines and access roads;
(B) Terms and types of ingress and egress upon the surface of
the land for surface operations;
(C) Placement, construction and maintenance of all pits and
equipment used or planned for the surface;
(D) Use and storage of water and plans for disposition of used
water;
(E) Removal and restoration of soil and plant life;
(F) Surface waters and drainage changes;
(G) Plans to limit and control precipitation runoff and
erosion;
(H) Control and management of noise, weeds, dust, traffic,
trespass, litter and other damage to or interference with the
surface owner's use of the property;
(I) Interim and final reclamation;
(J) Plans to minimize surface damages to the property; and
(K) Compensation for the use of and damages to the surface
resulting from the surface operations.
(c) A surface use and compensation agreement:
(1) May not waive any state or federal environmental
requirement;
(2) May include a waiver of the surface owner's right to
comment on the operator's well work permit application except for
commenting on provisions of the permit that are inconsistent with
the surface use and compensation agreement;
(3) May include a waiver of the thirty day period from the
receipt of the notice before a permit may be issued;
(4) May not waive or agree to an amount of damages for breach
of the agreement, for pollution of water sources or supplies not
identified in the agreement, for negligence or failure to perform
tasks in a workmanlike manner or for unforeseen damages;
(5) Must be in writing or, if the surface owner so agrees, in
an electronic form; and
(6) If signed by a surface owner who states that he or she has
the authority to act on behalf of the other surface owners, it
creates a presumption that the surface use and compensation
agreement recognizes and protects the surface owner's rights and interests. This presumption that can only be rebutted by clear and
convincing evidence to the contrary or fraud.
(d) Upon receipt of the notice required by this section, the
surface owner may:
(1) Accept the proposed surface use and compensation
agreement; or
(2) Reject the proposed surface use and compensation agreement
and enter into negotiations with the operator, including, if the
parties agree, binding arbitration or mediation. If the surface
owner has not signed a surface use and compensation agreement with
the operator within thirty days of receiving the operators proposed
agreement, the operator may submit the operator's permit
application.
(e) Notice required by this section shall be deemed to have
been received on the same date as evidenced by the date on the
receipt of certified mail or of personal service. Receipt of
notice is not deemed incomplete by refusal to accept. In the event
of refusal, notice shall be deemed to have been received as
demonstrated by the date of refusal to accept certified mail.
§22-6A-7. Entry without agreement.
If, after thirty days from the surface owner's receipt of
notice pursuant to section six of this article, a surface use and
compensation agreement has not been signed by the parties the operator may apply for a well work permit pursuant to article six
of this chapter, and upon granting of the permit, enter the
property to perform the well work. The operator, when furnishing
the bond required by section twenty-six, article six of this
chapter is required to post a separate $5,000 bond. The operator
may, at a later time, place the well under the operator's blanket
bond if:
(1) The operator and the surface owner enter into an agreed
surface use and compensation agreement before reclamation has been
completed;
(2) The surface owner signs a release after reclamation has
been completed regarding compensation for damages;
(3) The operator demonstrates the surface owner has, pursuant
to article seven of this chapter, received the amount of
compensation determined by binding arbitration;
(4) The operator demonstrates that it has paid a judgement in
favor of the surface owner entered by a court of competent
jurisdiction; or
(5) Two years have elapsed after the date that the operator
files notice that reclamation has commenced under section thirty,
article six of this chapter and serves it on the surface owner
unless an action has been filed in the appropriate court or an
arbitration proceeding pursuant to article seven of this chapter has been initiated and the action or proceedings are still pending.
§22-6A-8. Emergencies.
Notwithstanding any provision of this article to the contrary,
no notice or surface use and compensation agreement is required for
actions needed to be taken to protect health, safety or the
environment if a state oil and gas inspector declares that an
emergency exists.
§22-6A-9. Waiver.
No provision of this article may be waived unless a waiver is
specifically provided in this article.
§22-6A-10. Enforcement and remedies.
(a) An operator who fails to comply with the requirements of
this article is subject to the same civil penalty and enforcement
action as provided by subsection (a), section thirty-four, article
six of this chapter. The civil penalty for subsequent violations
of this article within five years of a previous violation of this
article shall be twice the amount otherwise provided.
(b) An operator or other person who fails to comply with this
article is liable to the surface owner, for each violation, for
three times the surface owner's actual damages or $200, whichever
is greater.
(c) The remedies provided by this section do not affect or
preclude any other remedies allowed by law.
NOTE: The purpose of this bill is to create the "Surface
Owners' Rights Recognition Act." The bill protects the rights of
surface owners of property where oil or gas wells are to be
located. The bill makes legislative findings. The bill also
requires operators to give notice of planned work, its impact upon
the property before entry is made and sets forth what is required
in that notice. The bill provides exceptions, prohibits waivers,
except when specifically provided for. The bill further sets forth
civil penalties and requires the posting of bonds.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
Article 6A is new; therefore, strike-throughs and underscoring
have been omitted.
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