SENATE CONCURRENT RESOLUTION NO. 57

(By Senators Hunter, Fanning, Green, Guills, Kessler, Sprouse, Stollings and Wells)

[Originating in the Committee on Energy, Industry and Mining]


Requesting the Joint Committee on Government and Finance study the administration and enforcement of oil and gas wells relating to the rights of surface owners .

Whereas, From 1994 to 2000, an average of 842 oil and gas drilling "well work" permits were issued in West Virginia; and
Whereas, Between, 2001 to 2004, the average increased to 1,272 permits a year; and
Whereas, In 2005, the Office of Oil and Gas of the
Department of Environmental Protection issued 2,660 permits and, in 2006, the agency issued 3052 permits, a record, with the upward trend continuing to the present; and
Whereas, The review and issuance of oil and gas well drilling permits together with the enforcement of the down-hole drilling requirements for protecting groundwater and other underground resources, as well as the requirements for enforcement of the reclamation of well sites, access roads and other surface uses, is all carried out primarily by the Office of Oil and Gas of the Department of Environmental Protection; and
Whereas, The Office of Oil and Gas has only 14 inspectors to review the numerous permit applications and oversee all of this drilling activity arising from the thousands of permits, and the same inspectors are also responsible for 40,000 active oil and gas wells and 25,000 inactive oil and gas wells; and
Whereas, A very large number of wells are drilled in which the ownership of the oil and gas and the right to drill for the oil and gas are severed from the ownership of the surface by private citizens and have been for many decades; and
Whereas, Under the common law, when the severance of the oil and gas and drilling rights from the surface occurred prior to 1983, the minerals are considered the "dominant estate" and the surface is considered the "subservient estate;" and
Whereas, The law regarding the rights of the individual surface owner versus the rights of the oil and gas owner and driller are governed in the first instance by the common law "fairly necessary" general rule which can only be determined and enforced by the circuit court of the county at issue when a dispute arises; and
Whereas, Surface owners rarely have the resources or enough advance warning to take their grievances to circuit court when drillers propose to do more than is "fairly necessary" to their lands; and
Whereas, The rights of individual surface owners to compensation is governed by the West Virginia Oil and Gas Production Compensation Act which has not been revised since 1983; and
Whereas, The West Virginia statutes only give an individual surface owner the right to receive a copy of the driller's application for a permit to drill an oil and gas well 15 days before the Office of Oil and Gas issues a drilling permit, which is after the driller has already selected and surveyed the well site and access road locations, and this statute has also not been revised in that regard since 1983; and
Whereas, The surface owner can comment to the state solely on how the access road and drill site is to be constructed, but not generally with regard to where the access road and drilling site are to be constructed. Additionally, the surface owner can only make limited comments, and this statute has also not been revised in that regard since 1983; and
Whereas, Protections for the varying interests of the individual surface owner and, generally, of the environment and the public are contained in the West Virginia Erosion and Sediment Control Field Manual of the Office of Oil and Gas, which has not been revised in many years; and
Whereas, A few surface owners have a right to gas from wells on their property, and some drillers will sell surface owners retail gas from wells on their property, but many drillers will not even agree to sell surface owners gas from gas wells placed on their property; and
Whereas, Many surface owners have voiced their concerns that their interests and the interests of the public are not adequately addressed by the current state of the law and statutes or by the State's current ability to carry out its duties;
therefore, be it
Resolved by the Legislature of West Virginia:
That the Joint Committee on Government and Finance is hereby requested to study
the administration and enforcement of oil and gas wells relating to the rights of surface owners ; and, be it
Further Resolved,
That the Joint Committee on Government and Finance is hereby requested to study the existing law and regulation of oil and gas drilling by the State of West Virginia and the laws providing for compensation of surface owners, and whether the law should be updated or otherwise changed to improve protection of the public interest and the varying interests of the individual surface owners whose land is used for well sites, access roads, pipelines and other purposes; and, be it
Further Resolved,
That the Joint Committee on Government and Finance is hereby requested to study the feasibility of requiring free, wholesale or retail gas for surface owners upon whose land well sites and access roads are or have been placed; and, be it
Further Resolved,
That the Joint Committee on Government and Finance is hereby requested to study other general changes in the law regarding the exploration for, drilling for and production of oil and gas, including coal bed methane gas, in this state; and, be it
Further Resolved, That the Joint Committee on Government and Finance report to the regular session of the Legislature, 2009, on its findings, conclusions and recommendations, together with drafts of any legislation necessary to effectuate its recommendations; and, be it
Further Resolved, That the expenses necessary to conduct this study, to prepare a report and to draft necessary legislation be paid from legislative appropriations to the Joint Committee on Government and Finance.