WEST VIRGINIA LEGISLATURE
SENATE JOURNAL
EIGHTIETH LEGISLATURE
FOURTH EXTRAORDINARY SESSION, 2011
THIRD DAY
____________
Charleston, W. Va., Tuesday, December 13, 2011
The Senate met at 10 a.m.
(Senator Kessler, Mr. President, in the Chair.)
Prayer was offered by the Honorable David C. Nohe, a senator
from the third district.
Pending the reading of the Journal of Monday, December 12,
2011,
On motion of Senator Tucker, the Journal was approved and the
further reading thereof dispensed with.
The Senate proceeded to the fourth order of business.
Senator Edgell, from the Committee on Confirmations, submitted
the following report, which was received:
Your Committee on Confirmations has had under consideration
Senate Executive Message No. 1, dated December 11, 2011,
requesting confirmation by the Senate of the nominations mentioned
therein. The following list of names from Executive Message No. 1
is submitted:
1. For Member, West Virginia School of Osteopathic Medicine
Board of Governors, Dave Rader, Charleston, Kanawha County, for the
term ending June 30, 2015.
2. For Member, Environmental Quality Board, Dr. Charles
Somerville, Huntington, Cabell County, for the term ending June 30,
2014.
3. For Member, Environmental Quality Board, Bascombe Blake,
Jr., Morgantown, Monongalia County, for the term ending June 30,
2013.
And reports the same back with the recommendation that the
Senate do advise and consent to all of the nominations listed
above.
Respectfully submitted,
Larry J. Edgell,
Chair.
The time having arrived for the special order of business to
consider the list of nominees for public office submitted by His
Excellency, the Governor, the special order thereon was called by
the President.
Thereupon, Senator Kessler (Mr. President) laid before the
Senate the following executive message:
Senate Executive Message No. 1, dated December 11, 2011 (shown
in the Senate Journal of that day, page 8).
Senator Edgell then moved that the Senate advise and consent
to all of the executive nominations referred to in the foregoing
report from the Committee on Confirmations.
The question being on the adoption of Senator Edgell's
aforestated motion,
The roll was then taken; and
On this question, the yeas were: Barnes, Beach, Boley,
Browning, Edgell, D. Facemire, Fanning, Foster, Green, Hall,
Helmick, Jenkins, Kirkendoll, Klempa, Laird, McCabe, Miller,
Minard, Nohe, Palumbo, Plymale, Prezioso, Snyder, Stollings,
Sypolt, Tucker, Unger, Wells, Williams, Wills, Yost and Kessler
(Mr. President)--32.
The nays were: None.
Absent: Chafin and K. Facemyer--2.
So, a majority of all the members elected to the Senate having
voted in the affirmative, the President declared Senator Edgell's
motion had prevailed.
__________
Consideration of executive nominations having been concluded,
The Senate proceeded to the ninth order of business.
Com. Sub. for Senate Bill No. 4001, Regulating oil and gas
wells.
On second reading, coming up in regular order, was read a second time.
On motion of Senator Palumbo, the following amendment to the
bill was reported by the Clerk:
By striking out everything after the enacting section and
inserting in lieu thereof the following:
CHAPTER 5B. ECONOMIC DEVELOPMENT ACT OF 1985.
ARTICLE 2B. WEST VIRGINIA WORKFORCE INVESTMENT ACT.
§5B-2B-4a. Report to Legislature.
(a) The Legislature finds that:
(1) The advent and advancement of new technologies in
horizontal drilling and the production of horizontal wells defined
in article six-a, chapter twenty-two of this code has created
thousands and has the potential to create thousands of additional
drilling, production, construction, manufacturing, and related jobs
in West Virginia and in the Appalachian Basin;
(2) This economic opportunity presents new and exciting
opportunities for jobs for West Virginians; and
(3) The state needs to take all necessary steps to retain,
educate and train West Virginians to have the skills necessary to
compete for job opportunities resulting from horizontal drilling.
(b) To assist in maximizing the economic opportunities
available with horizontal drilling, the council shall make a report
to the Joint Committee on Government and Finance and the Legislative Oversight Commission on Education Accountability on or
before November 1 of each year through 2016, detailing a
comprehensive review of the direct and indirect economic impact of
employers engaged in the production of horizontal wells in the
State of West Virginia, as more specifically defined in article
six-a, chapter twenty-two of this code, which shall include:
(1) A review of the total number of jobs created;
(2) A review of total payroll of all jobs created;
(3) The average salary per job type;
(4) A review of the number of employees domiciled in the State
of West Virginia;
(5) A review of total economic impact; and
(6) The council's recommendations for the establishment of an
overall workforce investment public education agenda with goals and
benchmarks toward maximizing job creation opportunities in the
State of West Virginia.
(c) To the extent permitted by federal law, and to the extent
necessary for the council to comply with this section, the council,
Workforce West Virginia, the Division of Labor, and the Office of
the Insurance Commissioner may enter into agreements providing for
the sharing of job data and related information.
CHAPTER 22. ENVIRONMENTAL RESOURCES.
ARTICLE 6. OFFICE OF OIL AND GAS; OIL AND GAS WELLS.
§22-6-1. Definitions.
Unless the context in which used clearly requires a different
meaning, as As used in this article:
(a) "Casing" means a string or strings of pipe commonly placed
in wells drilled for natural gas or petroleum or both;
(b) "Cement" means hydraulic cement properly mixed with water;
(c) "Chair" means the chair of the West Virginia shallow gas
well review board as provided for in section four, article eight,
chapter twenty-two-c of this code;
(d) "Coal operator" means any person or persons, firm,
partnership, partnership association or corporation that proposes
to or does operate a coal mine;
(e) "Coal seam" and "workable coal bed" are interchangeable
terms and mean any seam of coal twenty inches or more in thickness,
unless a seam of less thickness is being commercially worked, or
can in the judgment of the department foreseeably be commercially
worked and will require protection if wells are drilled through it;
(f) "Director" means the director of the division Secretary of
the Department of Environmental Protection as established in
article one of this chapter or such other person to whom the
director secretary has delegated authority or duties pursuant to
sections six or eight, article one of this chapter.
(g) "Deep well" means any well other than a shallow well or coalbed methane well, drilled and completed in to a formation at or
below the top of the uppermost member of the "Onondaga Group";
(h) "Expanding cement" means any cement approved by the office
of oil and gas which expands during the hardening process,
including, but not limited to, regular oil field cements with the
proper additives;
(i) "Facility" means any facility utilized in the oil and gas
industry in this state and specifically named or referred to in
this article or in article eight or nine of this chapter, other
than a well or well site;
(j) "Gas" means all natural gas and all other fluid
hydrocarbons not defined as oil in this section;
(k) "Oil" means natural crude oil or petroleum and other
hydrocarbons, regardless of gravity, which are produced at the well
in liquid form by ordinary production methods and which are not the
result of condensation of gas after it leaves the underground
reservoirs;
(l) "Owner" when used with reference to any well, shall
include any person or persons, firm, partnership, partnership
association or corporation that owns, manages, operates, controls
or possesses such well as principal, or as lessee or contractor,
employee or agent of such principal;
(m) "Owner" when used with reference to any coal seam, shall include any person or persons who own, lease or operate such coal
seam;
(n) "Person" means any natural person, corporation, firm,
partnership, partnership association, venture, receiver, trustee,
executor, administrator, guardian, fiduciary or other
representative of any kind, and includes any government or any
political subdivision or any agency thereof;
(o) "Plat" means a map, drawing or print showing the location
of a well or wells as herein defined;
_____(p) "Pollutant" has the same meaning as provided in section
three, article eleven of this chapter;
_____(p) (q) "Review board" means the West Virginia Shallow Gas
Well Review Board as provided for in section four, article eight,
chapter twenty-two-c of this code;
(q) (r) "Safe mining through of a well" means the mining of
coal in a workable coal bed up to a well which penetrates such
workable coal bed and through such well so that the casing or plug
in the well bore where the well penetrates the workable coal bed is
severed;
(s) "Secretary" means the Secretary of the Department of
Environmental Protection as established in article one of this
chapter or other person to whom the secretary has delegated
authority or duties pursuant to sections six or eight, article one of this chapter;
_____(r) (t) "Shallow well" means any gas well, other than a
coalbed methane well, drilled and completed in a formation above
the top of the uppermost member of the "Onondaga Group" no deeper
than one hundred feet below the top of the "Onondaga Group":
Provided, That in drilling a shallow well the operator may
penetrate into the "Onondaga Group" to a reasonable depth, not in
excess of twenty feet, in order to allow for logging and completion
operations, but in no event may the "Onondaga Group" formation or
any formation below the "Onondaga Group" be otherwise produced,
perforated or stimulated in any manner;
(s) (u) "Stimulate" means any action taken by a well operator
to increase the inherent productivity of an oil or gas well,
including, but not limited to, fracturing, shooting or acidizing,
but excluding cleaning out, bailing or workover operations;
(t) (v) "Waste" means (i) physical waste, as the term is
generally understood in the oil and gas industry; (ii) the
locating, drilling, equipping, operating or producing of any oil or
gas well in a manner that causes, or tends to cause a substantial
reduction in the quantity of oil or gas ultimately recoverable from
a pool under prudent and proper operations, or that causes or tends
to cause a substantial or unnecessary or excessive surface loss of
oil or gas; or (iii) the drilling of more deep wells than are reasonably required to recover efficiently and economically the
maximum amount of oil and gas from a pool; (iv) substantially
inefficient, excessive or improper use, or the substantially
unnecessary dissipation of, reservoir energy, it being understood
that nothing in this chapter shall be construed to authorize
authorizes any agency of the state to impose mandatory spacing of
shallow wells except for the provisions of section eight, article
nine, chapter twenty-two-c of this code and the provisions of
article eight, chapter twenty-two-c of this code; (v) inefficient
storing of oil or gas: Provided, That storage in accordance with
a certificate of public convenience issued by the Federal Energy
Regulatory Commission shall be is conclusively presumed to be
efficient; and (vi) other underground or surface waste in the
production or storage of oil, gas or condensate, however caused.
Waste does not include gas vented or released from any mine areas
as defined in section two, article one, chapter twenty-two-a of
this code, or from adjacent coal seams which are the subject of a
current permit issued under article two of chapter twenty-two-a of
this code: Provided, however, That nothing in this exclusion is
intended to address ownership of the gas;
_____(w) "Waters of this state" has the same meaning as the term
"waters" as provided in section three, article eleven of this
chapter;
_____(u) (x) "Well" means any shaft or hole sunk, drilled, bored or
dug into the earth or into underground strata for the extraction or
injection or placement of any liquid or gas, or any shaft or hole
sunk or used in conjunction with such extraction or injection or
placement. The term "well" does not include any shaft or hole
sunk, drilled, bored or dug into the earth for the sole purpose of
core drilling or pumping or extracting therefrom potable, fresh or
usable water for household, domestic, industrial, agricultural or
public use;
(v) (y) "Well work" means the 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 or replugging of any well; and
_____(w) (z) "Well operator" or "operator" means any person or
persons, firm, partnership, partnership association or corporation
that proposes to or does locate, drill, operate or abandon any well
as herein defined.
(x) "Pollutant" shall have the same meaning as provided in
subsection (17), section three, article eleven, chapter twenty-two
of this code; and
(y) "Waters of this state" shall have the same meaning as the
term "waters" as provided in subsection (23), section three, article eleven, chapter twenty-two of this code.
§22-6-2. Secretary -- Powers and duties generally; department
records open to public; inspectors.
(a) The secretary shall have as his or her duty the
supervision of the execution and enforcement of matters related to
oil and gas set out in this article and in articles six-a, eight,
and nine, ten and twenty-one of this chapter.
(b) The secretary is authorized to propose rules for
legislative approval in accordance with the provisions of article
three, chapter twenty-nine-a of this code necessary to effectuate
the above stated purposes.
(c) The secretary shall have full charge of the oil and gas
matters set out in this article and in articles six-a, eight, and
nine, ten and twenty-one of this chapter. In addition to all other
powers and duties conferred upon him or her, the secretary shall
have the power and duty to:
(1) Supervise and direct the activities of the office of oil
and gas and see that the purposes set forth in subsections (a) and
(b) of this section are carried out;
(2) Employ a supervising oil and gas inspector and oil and gas
inspectors Determine the number of supervising oil and gas
inspectors and oil and gas inspectors needed to carry out the
purposes of this article and articles six-a, eight, nine, ten, and twenty-one of this chapter and appoint them as such. All
appointees must be qualified civil service employees, but no person
is eligible for appointment until he or she has served in a
probationary status for a period of six months to the satisfaction
of the secretary;
(3) Supervise and direct such oil and gas inspectors and
supervising inspectors in the performance of their duties;
(4) Suspend for good cause any oil and gas inspector or
supervising inspector without compensation for a period not
exceeding thirty days in any calendar year Make investigations or
inspections necessary to ensure compliance with and to enforce the
provisions of this article and articles six-a, eight, nine, ten,
and twenty-one of this chapter;
(5) Prepare report forms to be used by oil and gas inspectors
or the supervising inspector in making their findings, orders and
notices, upon inspections made in accordance with this article and
articles seven, six-a, eight, nine, and ten and twenty-one of this
chapter;
(6) Employ a hearing officer and such clerks, stenographers
and other employees, as may be necessary to carry out his or her
duties and the purposes of the office of oil and gas and fix their
compensation;
(7) Hear and determine applications made by owners, well operators and coal operators for the annulment or revision of
orders made by oil and gas inspectors or the supervising inspector,
and to make inspections, in accordance with the provisions of this
article and articles eight and nine of this chapter;
(8) Cause a properly indexed permanent and public record to be
kept of all inspections made by the secretary or by oil and gas
inspectors or the supervising inspector;
(9) Conduct such research and studies as the secretary shall
deem necessary to aid in protecting the health and safety of
persons employed within or at potential or existing oil or gas
production fields within this state, to improve drilling and
production methods and to provide for the more efficient protection
and preservation of oil and gas-bearing rock strata and property
used in connection therewith;
(10) Collect a permit fee of $400 for each permit application
filed other than an application for a deep well, horizontal wells
regulated pursuant to article six-a of this chapter, or a coalbed
methane well; and collect a permit fee of $650 for each permit
application filed for a deep well: Provided, That no permit
application fee shall be is required when an application is
submitted solely for the plugging or replugging of a well, or to
modify an existing application for which the operator previously
has submitted a permit fee under this section. All application fees required hereunder shall be are in lieu of and not in addition
to any fees imposed under article eleven of this chapter relating
to discharges of stormwater but shall be are in addition to any
other fees required by the provisions of this article: Provided,
however, That upon a final determination by the United States
Environmental Protection Agency regarding the scope of the
exemption under section 402(l)(2) of the federal Clean Water Act
(33 U.S.C. 1342(l)(2)), which determination requires a "national
pollutant discharge elimination system" permit for stormwater
discharges from the oil and gas operations described therein, any
permit fees for stormwater permits required under article eleven of
this chapter for such operations shall may not exceed $100.
(11) Perform all other duties which are expressly imposed upon
the secretary by the provisions of this chapter;
(12) Perform all duties as the permit issuing authority for
the state in all matters pertaining to the exploration,
development, production, storage and recovery of this state's oil
and gas;
(13) Adopt rules with respect to the issuance, denial,
retention, suspension or revocation of permits, authorizations and
requirements of this chapter, which rules shall assure that the
rules, permits and authorizations issued by the secretary are
adequate to satisfy the purposes of this article and articles six-a, seven, eight, nine, and ten and twenty-one of this chapter
particularly with respect to the consolidation of the various state
and federal programs which place permitting requirements on the
exploration, development, production, storage and recovery of this
state's oil and gas Provided, That notwithstanding any provisions
of this article and articles seven, eight, nine and ten of this
chapter to the contrary, the Environmental Quality Board shall have
the sole authority pursuant to section three, article three,
chapter twenty-two-b to promulgate rules setting standards of water
quality applicable to waters of the state; and
(14) Perform such acts as may be necessary or appropriate to
secure to this state the benefits of federal legislation
establishing programs relating to the exploration, development,
production, storage and recovery of this state's oil and gas, which
programs are assumable by the state.
(d) The secretary shall have authority to visit and inspect
any well or well site and any other oil or gas facility in this
state and may call for the assistance of any oil and gas inspector
or inspectors or supervising inspector whenever such assistance is
necessary in the inspection of any such well or well site or any
other oil or gas facility. Similarly, all oil and gas inspectors
and the supervising inspector supervising inspectors shall have
authority to visit and inspect any well or well site and any other oil or gas facility in this state. Such inspectors shall make all
necessary inspections of oil and gas operations required by this
article and articles six-a, eight, nine, ten and twenty-one of this
chapter; administer and enforce all oil and gas laws and rules; and
perform other duties and services as may be prescribed by the
secretary. The inspectors shall note and describe all violations
of this article and articles six-a, eight, nine, ten or twenty-one
of this chapter and promptly report those violations to the
secretary in writing, furnishing at the same time a copy of the
report to the operator concerned. Any well operator, coal operator
operating coal seams beneath the tract of land, or the coal seam
owner or lessee, if any, if said owner or lessee is not yet
operating said coal seams beneath said tract of land may request
the secretary to have an immediate inspection made. The operator
or owner of every well or well site or any other oil or gas
facility shall cooperate with the secretary, all oil and gas
inspectors and the supervising inspector in making inspections or
obtaining information.
(e) Oil and gas inspectors shall devote their full time and
undivided attention to the performance of their duties, and they
shall be responsible for the inspection of all wells or well sites
or other oil or gas facilities in their respective districts as
often as may be required in the performance of their duties.
(f) (e) Subject to the provisions of article one, chapter
twenty-nine-b of this code, all records of the office shall be open
to the public.
§22-6-2a. Oil and gas inspectors qualifications and salary.
(a) No person is eligible for appointment as an oil and gas
inspector or supervising inspector unless, at the time of
probationary appointment, the person: (1) is a citizen of West
Virginia, in good health and of good character, reputation and
temperate habits; (2) has had at least two years actual relevant
experience in the oil and gas industry: Provided, That no more
than one year of the experience requirement may be satisfied by any
of following: (i) A bachelor of science degree in science or
engineering; (ii) an associate degree in petroleum technology; or
(iii) actual relevant environmental experience including, without
limitation, experience in wastewater, solid waste or reclamation,
each full year of which shall be considered as a year of actual
relevant experience in the oil and gas industry; and (3) has good
theoretical and practical knowledge of oil and gas drilling and
production methods, practices and techniques, sound safety
practices and applicable water and mining laws.
(b) In order to qualify for appointment as an oil and gas
inspector or supervising inspector by the secretary, an eligible
applicant shall submit to a written and oral examination by the Division of Personnel within the Department of Administration and
shall furnish any evidence of good health, character and other
facts establishing eligibility required by the Division of
Personnel. The Office of Oil and Gas shall determine the substance
of the examinations administered to candidates for the positions of
oil and gas inspector and supervising oil and gas inspector by the
Division of Personnel. If the Division of Personnel finds after
investigation and examination that an applicant: (1) is eligible
for appointment; and (2) has passed all written and oral
examinations, the division shall add the applicant's name and grade
to the register of qualified eligible candidates and certify its
action to the secretary. No candidate's name may remain on the
register for more than three years without requalifying.
(c) Every supervising oil and gas inspector shall be paid not
less than $40,000 per year. Every oil and gas inspector shall be
paid not less than $35,000 per year.
ARTICLE 6A. NATURAL GAS HORIZONTAL WELL CONTROL ACT.
§22-6A-1. Short title.
This article shall be known and cited as the Horizontal Well
Act.
§22-6A-2. Legislative findings; declaration of public policy.
(a) The Legislature finds that:
(1) The advent and advancement of new and existing technologies and drilling practices have created the opportunity
for the efficient development of natural gas contained in
underground shales and other geologic formations;
(2) These practices have resulted in a new type and scale of
natural gas development that utilize horizontal drilling
techniques, allow the development of multiple wells from a single
surface location, and may involve fracturing processes that use and
produce large amounts of water;
(3) In some instances these practices may require the
construction of large impoundments or pits for the storage of water
or wastewater;
(4) Existing laws and regulations developed for conventional
oil and gas operations do not adequately address these new
technologies and practices;
(5) The secretary should have broad authority to condition the
issuance of well work permits when, in the secretary's discretion,
it is necessary to protect the safety of persons, to prevent
inadequate or ineffective erosion and sediment control plans, to
prevent damage to publicly owned lands or resources, to protect
fresh water sources or supplies or to otherwise protect the
environment;
(6) Concomitant with the broad powers to condition the
issuance of well work permits, the secretary should also have broad authority to waive certain minimum requirements of this article
when, in his or her discretion, such waiver is appropriate:
Provided, That the secretary shall submit a written report of the
number of waivers granted to the Legislature commencing January 1,
2013, and each year thereafter;
(7) Practices involving reuse of water in the fracturing and
stimulating of horizontal wells should be considered and encouraged
by the department, as appropriate; and
(8) Allowing the responsible development of our state's
natural gas resources will enhance the economy of our state and the
quality of life for our citizens while assuring the long term
protection of the environment.
(b) The Legislature declares that the establishment of a new
regulatory scheme to address new and advanced natural gas
development technologies and drilling practices is in the public
interest and should be done in a manner that protects the
environment and our economy for current and future generations.
(c) The Legislature declares that in view of the urgent need
for prompt decision of matters submitted to the secretary under
this article, all actions which the secretary or oil and gas
inspectors are required to take under this article shall be taken
as rapidly as practicable, consistent with adequate consideration
of the issues involved.
§22-6A-3. Applicability; exceptions.
Notwithstanding any other provision of this code to the
contrary, the provisions of this article shall apply to any natural
gas well, other than a coalbed methane well, drilled using a
horizontal drilling method, and which disturbs three acres or more
of surface, excluding pipelines, gathering lines and roads, or
utilizes more than two hundred ten thousand gallons of water in any
thirty day period: Provided, That this article does not apply to
or affect any well work permitted for a horizontal well or orders
issued regarding horizontal wells or permit applications pending
prior to the effective date of this article.
§22-6A-3a. Karst terrain; rulemaking.
(a) Because drilling horizontal wells in naturally occurring
karst terrain may require precautions not necessary in other parts
of the state, the secretary may require additional safeguards to
protect this geological formation. When drilling horizontal wells
in naturally occurring karst terrain, such additional safeguards
may include changing proposed well locations to avoid damage to
water resources, special casing programs, and additional or special
review of drilling procedures.
(b) In order to carry out the purposes of this section, the
secretary, in consultation with the state geologist, may propose
legislative rules in accordance with the provisions of chapter twenty-nine-a of this code to establish designated geographic
regions of the state where the provisions of this section are
applicable and to establish standards for drilling horizontal wells
in naturally occurring karst terrain. For horizontal wells drilled
into naturally occurring karst terrain in such designated
geographic regions, the rules shall, at a minimum:
(1) Require operators to perform certain predrilling testing
to identify the location of caves and other voids, faults and
relevant features in the strata and the location of surface
features prevalent in naturally occurring karst terrain such as
sink holes; and
(2) Provide any other requirements deemed necessary by the
secretary to protect the unique characteristics of naturally
occurring karst terrain, which requirements may include baseline
water testing within an established distance from a drilling site.
(c) Nothing in this section allows the department to prevent
drilling in naturally occurring karst terrain.
§22-6A-4. Definitions.
(a) All definitions set forth in article six of this chapter
apply when those defined terms are used in this article, unless the
context in which the term is used clearly requires a different
meaning.
(b) Unless the context in which the term used clearly requires a different meaning, as used in this article:
(1) "Best management practices" means schedules of activities,
prohibitions of practices, maintenance procedures and other
management practices established by the department to prevent or
reduce pollution of waters of this state. For purposes of this
article, best management practices also includes those practices
and procedures set out in the Erosion and Sediment Control Manual
of the Office of Oil and Gas;
(2) "Department" means the Department of Environmental
Protection;
(3) "Flowback Recycle Pit" means a pit used for the retention
of flowback and freshwater and into which no other wastes of any
kind are placed;
(4) "Freshwater Impoundment" means an impoundment used for the
retention of fresh water and into which no wastes of any kind are
placed;
(5) "Horizontal drilling" means a method of drilling a well
for the production of natural gas that is intended to maximize the
length of wellbore that is exposed to the formation and in which
the wellbore is initially vertical but is eventually curved to
become horizontal, or nearly horizontal, to parallel a particular
geologic formation;
(6) "Horizontal well" means any well site, other than a coalbed methane well, drilled using a horizontal drilling method,
and which disturbs three acres or more of surface, excluding
pipelines, gathering lines and roads, or utilizes more than two
hundred ten thousand gallons of water in any thirty day period;
(7) "Impoundment" means a man-made excavation or diked area
for the retention of fluids;
(8) "Karst terrain" means a terrain, generally underlain by
limestone or dolomite, in which the topography is formed chiefly by
the dissolving of rock, and which may be characterized by
sinkholes, sinking streams, closed depressions, subterranean
drainage and caves;
(9) "Perennial stream" means a stream or portion of a stream
that flows year-round, is considered a permanent stream and for
which base flow is maintained by ground-water discharge to the
streambed due to the ground-water elevation adjacent to the stream
being higher than the elevation of the streambed;
(10) "Pit" means a man-made excavation or diked area that
contains or is intended to contain an accumulation of process waste
fluids, drill cuttings or any other liquid substance generated in
the development of a horizontal well and which could impact surface
or groundwater;
(11) "Secretary" means the Secretary of the Department of
Environmental Protection as established in article one of this chapter or other person to whom the secretary has delegated
authority or duties pursuant to sections six or eight, article one
of this chapter; and
(12) "Water purveyor" means any person engaged in the business
of selling water to another and who is regulated by the Bureau for
Public Health pursuant to title sixty-four, series three of the
West Virginia Code of State Rules.
§22-6A-5. Application of article six of this chapter to horizontal
wells subject to this article.
(a) To the extent that horizontal wells governed by this
article are similar to conventional oil and gas wells regulated
under article six of this chapter, the following sections of
article six of this chapter are hereby incorporated by reference in
this article:
(1) The provisions of section three, article six of this
chapter relating to the findings and orders of inspectors
concerning violations, the determination of reasonable time for
abatement, extensions of time for abatement, special inspections
and notice of findings and orders;
(2) The provisions of section four, article six of this
chapter providing for the review of findings and orders by the
secretary, special inspections and applications for annulment or
revision of orders by the secretary;
(3) The provisions of section five, article six of this
chapter relating to the requirements for findings, orders and
notices, notice to the operator of findings and orders and judicial
review of final orders of the secretary;
(4) The provisions of section seven, article six of this
chapter relating to the issuance of water pollution control
permits, the powers and duties of the secretary related thereto and
penalties for violations of the same;
(5) The provisions of section eight, article six of this
chapter relating to the prohibition of permits for wells on flat
well royalty leases and requirements for permits;
(6) The provisions of section twelve, article six of this
chapter pertaining to plats prerequisite to drilling or fracturing
wells, the preparation and contents thereof, notice furnished to
coal operators, owners or lessees, the issuance of permits and
required performance bonds, with the following exceptions:
(A) Under subsection (a), section twelve, article six of this
chapter, the plat also shall identify all surface tract boundaries
within the scope of the plat proposed to be crossed by the
horizontal lateral of the horizontal well and the proposed path of
such horizontal lateral, and
(B) Under subsection (b), section twelve, article six of this
chapter, any reference to a time period shall be thirty days in lieu of fifteen days;
(7) The provisions of section thirteen, article six of this
chapter providing for notice of the operator's intention to
fracture wells, with the exception that under the third paragraph
of section thirteen, article six of this chapter, the applicable
periods shall be thirty days in lieu of fifteen days;
(8) The provisions of section fifteen, article six of this
chapter pertaining to objections to proposed deep well drilling
sites above seam or seams of coal, with the exception that the
applicable time for filing objections is within thirty days of
receipt by the secretary of the required plat and/or notice in lieu
of fifteen days;
(9) The provisions of section seventeen, article six of this
chapter pertaining to drilling of shallow gas wells, notice to be
provided to the chair of the review board, orders issued by the
review board and permits issued for such drilling, with the
exception that the applicable time for filing objections is thirty
days from the date of receipt by the secretary of the required plat
and notice in lieu of fifteen days;
(10) The provisions of section eighteen, article six of this
chapter providing for protective devices for when a well penetrates
one or more workable coal beds and when gas is found beneath or
between workable coal beds;
(11) The provisions of section nineteen, article six of this
chapter providing for protective devices during the life of the
well and for dry or abandoned wells;
(12) The provisions of section twenty, article six of this
chapter providing for protective devices when a well is drilled
through the horizon of a coalbed from which the coal has been
removed;
(13) The provisions of section twenty-one, article six of this
chapter requiring the installation of fresh water casings;
(14) The provisions of section twenty-two, article six of this
chapter relating to the filing of a well completion log and the
contents thereof, confidentiality and permitted use and the
secretary's authority to promulgate rules;
(15) The provisions of section twenty-seven, article six of
this chapter regarding a cause of action for damages caused by an
explosion;
(16) The provisions of section twenty-eight, article six of
this chapter relating to supervision by the secretary over drilling
and reclamation operations, the filing of complaints, hearings on
the same and appeals;
(17) The provisions of section twenty-nine, article six of
this chapter providing for the Operating Permit and Processing
Fund, the oil and gas reclamation fund and associated fees, with the exception that in the first paragraph of subsection (a),
section twenty-nine, article six of this chapter, the fees to be
credited to the Oil and Gas Operating Permit and Processing Fund
are the permit fees collected pursuant to section seven of this
article;
(18) The provisions of section thirty-one, article six of this
chapter providing for preventing waste of gas, plans of operation
for wasting gas in the process of producing oil and the secretary's
rejection thereof;
(19) The provisions of section thirty-two, article six of this
chapter pertaining to the right of an adjacent owner or operator to
prevent waste of gas and the recovery of costs;
(20) The provisions of section thirty-three, article six of
this chapter relating to circuit court actions to restrain waste;
(21) The provisions of section thirty-six, article six of this
chapter providing for the declaration of oil and gas notice by
owners and lessees of coal seams and setting out the form of such
notice;
(22) The provisions of section thirty-nine, article six of
this chapter relating to petitions for injunctive relief; and
(23) The provisions of section forty, article six of this
chapter relating to appeals from orders issuing or refusing to
issue a permit to drill or fracture, and the procedure therefore.
(b) Notwithstanding any other provision of this code to the
contrary, no provision of article six of this chapter shall apply
to horizontal wells subject to this article except as expressly
incorporated by reference in this article. Any conflict between
the provisions of article six and the provisions of this article
shall be resolved in favor of this article.
§22-6A-6. Secretary of Department of Environmental Protection;
powers and duties.
(a) The secretary is vested with jurisdiction over all aspects
of this article, including, but not limited to, the following
powers and duties:
(1) All powers and duties conferred upon the secretary
pursuant to article six, chapter twenty-two of this code;
(2) To control and exercise regulatory authority over all gas
operations regulated by this article;
(3) To utilize any oil and gas inspectors or other employees
of the department in the enforcement of the provisions of this
article;
(4) To propose any necessary legislative rules, in accordance
with the provisions of chapter twenty-nine-a of this code to
implement the provisions of this article;
(5) To make investigations and inspections necessary to ensure
compliance with the provisions of this article;
(b) Except for the duties and obligations conferred by statute
upon the shallow gas well review board pursuant to article eight,
chapter twenty-two-c of this code, the coalbed methane review board
pursuant to article twenty-one of this chapter, and the oil and gas
conservation commission pursuant to article nine, chapter twenty-
two-c of this code, the secretary has sole and exclusive authority
to regulate the permitting, location, spacing, drilling,
fracturing, stimulation, well completion activities, operation, any
and all other drilling and production processes, plugging and
reclamation of oil and gas wells and production operations within
the state.
(c) The secretary shall, on a monthly basis, make a written
report to the Governor disclosing, for all well work permits issued
in a particular month, the average number of days elapsed between
the date on which a complete application for a well work permit was
filed and the date on which such well work permit was issued. This
report shall be posted to the website required to be established
and maintained pursuant to section twenty-one of this article.
§22-6A-7. Horizontal well permit required; permit fee;
application; soil erosion control plan; well site safety plan;
site construction plan; water management plan; permit fee;
installation of permit number; suspension of a permit.
(a) It is unlawful for any person to commence any well work, including site preparation work which involves any disturbance of
land, for a horizontal well without first securing from the
secretary a well work permit pursuant to this article.
(b) Every permit application filed under this section shall be
on a form as may be prescribed by the secretary, shall be verified
and shall contain the following information:
(1) The names and addresses of (i) the well operator, (ii) the
agent required to be designated under subsection (h) of this
section and (iii) every person whom the applicant shall 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 names and addresses 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 subdivision (6), subsection (a),
section five of this article, 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
secretary may require;
(4) The well work for which a permit is requested;
(5) The approximate total depth to which the well is to be
drilled or deepened, or the actual depth if the well has been drilled; the proposed angle and direction of the well; the actual
depth or the approximate depth at which the well to be drilled
deviates from vertical, the angle and direction of the nonvertical
well bore until the well reaches its total target depth or its
actual final depth and the length and direction of any actual or
proposed horizontal lateral or well bore;
(6) Each formation in which the well will be completed if
applicable;
(7) A description of any means used to stimulate the well;
(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 existing well,
all information required by this section, all formations from which
production is anticipated and any plans to plug any portion of the
well;
(10) If the proposed well work is to plug or replug the well,
all information necessary to demonstrate compliance with the
legislative rules promulgated by the secretary in accordance with
section thirteen of this article;
(11) If the proposed well work is to stimulate a horizontal well, all information necessary to demonstrate compliance with the
requirements of subdivision (7), subsection (a), section five of
this article;
(12) The erosion and sediment control plan required under
subsection (c) of this section for applications for permits to
drill;
(13) A well site safety plan to address proper safety measures
to be employed for the protection of persons on the site as well as
the general public. The plan shall encompass all aspects of the
operation, including the actual well work for which the permit was
obtained, completion activities and production activities, and
shall provide an emergency point of contact for the well operator.
The well operator shall provide a copy of the well site safety plan
to the local emergency planning committee established pursuant to
section seven, article five-a, chapter fifteen of this code, for
the emergency planning district in which the well work will occur
at least seven days before commencement of well work or site
preparation work that involves any disturbance of land;
(14) A certification from the operator that (i) it has
provided the owners of the surface described in subdivisions (1),
(2) and (4), subsection (b), section ten of this article, the
information required by subsections (b) and (c), section sixteen of
this article; (ii) that the requirement was deemed satisfied as a result of giving the surface owner notice of entry to survey
pursuant to subsection (a), section ten of this article six-a; or
(iii) the notice requirements of subsection (b), section sixteen of
this article were waived in writing by the surface owner; and
(15) Any other relevant information which the secretary may
reasonably require.
(c)(1) An erosion and sediment control plan shall accompany
each application for a well work permit under this article. The
plan shall contain methods of stabilization and drainage, including
a map of the project area indicating the amount of acreage
disturbed. 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
department. The erosion and sediment control plan shall become
part of the terms and conditions of any well work permit that is
issued pursuant to this article 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
fourteen of this article.
(2) For well sites that disturb three acres or more of
surface, excluding pipelines, gathering lines and roads, the
erosion and sediment control plan submitted in accordance with this section shall be certified by a registered professional engineer.
(d) For well sites that disturb three acres or more of
surface, excluding pipelines, gathering lines and roads, the
operator shall submit a site construction plan that shall be
certified by a registered professional engineer and contains
information that the secretary may require by rule.
(e) In addition to the other requirements of this section, if
the drilling, fracturing or stimulating of the horizontal well
requires the use of water obtained by withdrawals from waters of
this state in amounts that exceed two hundred ten thousand gallons
during any thirty day period, the application for a well work
permit shall include a water management plan, which may be
submitted on an individual well basis or on a watershed basis, and
which shall include the following information:
(1) The type of water source, such as surface or groundwater,
the county of each source to be used by the operation for water
withdrawals, and the latitude and longitude of each anticipated
withdrawal location;
(2) The anticipated volume of each water withdrawal;
(3) The anticipated months when water withdrawals will be
made;
(4) The planned management and disposition of wastewater after
completion from fracturing, refracturing, stimulation and production activities;
(5) A listing of the anticipated additives that may be used in
water utilized for fracturing or stimulating the well. Upon well
completion, a listing of the additives that were actually used in
the fracturing or stimulating of the well shall be submitted as
part of the completion log or report required by subdivision (14),
subsection (a), section five of this article;
(6) For all surface water withdrawals, a water management plan
that includes the information requested in subdivisions (1) through
(5) of this subsection and the following:
(A) Identification of the current designated and existing
water uses, including any public water intakes within one mile
downstream of the withdrawal location;
(B) For surface waters, a demonstration, using methods
acceptable to the secretary, that sufficient in-stream flow will be
available immediately downstream of the point of withdrawal. A
sufficient in-stream flow is maintained when a pass-by flow that is
protective of the identified use of the stream is preserved
immediately downstream of the point of withdrawal; and
(C) Methods to be used for surface water withdrawal to
minimize adverse impact to aquatic life; and
(7) This subsection is intended to be consistent with and does
not supersede, revise, repeal or otherwise modify articles eleven, twelve or twenty-six of this chapter and does not revise, repeal or
otherwise modify the common law doctrine of riparian rights in West
Virginia law.
(f) An application may propose and a permit may approve two or
more activities defined as well work, however, a separate permit
shall be obtained for each horizontal well drilled.
(g) The application for a permit under this section shall be
accompanied by the applicable bond as required by section fifteen
of this article, the applicable plat required by subdivision (6),
subsection (a), section five of this article and a permit fee of
$10,000 for the initial horizontal well drilled at a location and
a permit fee of $5,000 for each additional horizontal well drilled
on a single well pad at the same location.
(h) The well operator named in the application shall designate
the name and address of an agent for the operator who is the
attorney-in-fact for the operator and who is 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 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 the
designation, notify the secretary of the termination and designate
a new agent.
(i) The well owner or operator shall install the permit number
as issued by the secretary and a contact telephone number for the
operator 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 secretary.
(j) The secretary may waive the requirements of this section
and sections eight, ten, eleven and twenty-four of this article in
any emergency situation, if the secretary deems the action
necessary. In such case the secretary may issue an emergency
permit which is effective for not more than thirty days, unless
reissued by the secretary.
(k) The secretary shall deny the issuance of a permit if the
secretary determines that the applicant has committed a substantial
violation of a previously issued permit for a horizontal well,
including the applicable erosion and sediment control plan
associated with the previously issued permit, or a substantial
violation of one or more of the rules promulgated under this
article, and in each instance has failed to abate or seek review of
the violation within the time prescribed by the secretary pursuant
to the provisions of subdivisions (1) and (2), subsection (a),
section five of this article and the rules promulgated hereunder,
which time may not be unreasonable.
(l) In the event the secretary finds 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 secretary
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. However, the secretary may reinstate
the permit without further notice, at which time the well work may
be continued. The secretary shall make written findings of any
such suspension and may enforce the same in the circuit courts of
this state. The operator may appeal a suspension pursuant to the
provisions of subdivision (23), subsection (a), section five of
this article. The secretary shall make a written finding of any
such determination.
§22-6A-8. Review of application; issuance of permit; performance
standards; copy of permits to county assessor.
(a) The secretary shall review each application for a well
work permit and shall determine whether or not a permit is issued.
(b) No permit may be issued less than thirty days after the
filing date of the application for any well work except plugging or
replugging; and no permit for plugging or replugging may be issued
less than five days after the filing date of the application except
a permit for plugging or replugging a dry hole: Provided, That if
the applicant certifies that all persons entitled to notice of the application under the provisions of subsection (b), section ten of
this article have been served in person or by certified mail,
return receipt requested, with a copy of the well work application,
including the erosion and sediment control plan, if required, and
the well plat, and further files written statements of no objection
by all such persons, the secretary may issue the well work permit
at any time.
(c) Prior to the issuance of any permit, the secretary shall
ascertain from the Executive Director of Workforce West Virginia
and the Insurance Commissioner whether the applicant is in default
pursuant to the provisions of section six-c, article two, chapter
twenty-one-a of this code, and in compliance with section five,
article two, chapter twenty-three of this code, with regard to any
required subscription to the Unemployment Compensation Fund or
mandatory Workers' Compensation insurance, the payment of premiums
and other charges to the fund, the timely filing of payroll reports
and the maintenance of adequate deposits. If the applicant is
delinquent or defaulted, or has been terminated by the executive
director or the Insurance Commissioner, the permit may not be
issued until the applicant returns to compliance or is restored by
the executive director or the Insurance Commissioner under a
reinstatement agreement: Provided, That in all inquiries the
Executive Director of Workforce West Virginia and the Insurance Commissioner shall make response to the Department of Environmental
Protection within fifteen calendar days; otherwise, failure to
respond timely is considered to indicate the applicant is in
compliance and the failure will not be used to preclude issuance of
the permit.
(d) The secretary may cause such inspections to be made of the
proposed well work location as necessary to assure adequate review
of the application. The permit may not be issued, or be
conditioned including conditions with respect to the location of
the well and access roads prior to issuance if the director
determines that:
(1) The proposed well work will constitute a hazard to the
safety of persons;
(2) The plan for soil erosion and sediment control is not
adequate or effective;
(3) Damage would occur to publicly owned lands or resources;
or
(4) The proposed well work fails to protect fresh water
sources or supplies.
(e) In addition to the considerations set forth in subsection
(d) of this section, in determining whether a permit should be
issued, issued with conditions, or denied, the secretary shall
determine that:
(1) The well location restrictions of section twelve of this
article have been satisfied, unless the requirements have been
waived by written consent of the surface owner or the secretary has
granted a variance to the restrictions, each in accordance with
section twelve of this article;
(2) The water management plan submitted to the secretary, if
required by subdivision (e), section seven of this article, has
been received and approved.
(f) The secretary shall promptly review all written comments
filed by persons entitled to notice pursuant to subsection (b),
section ten of this article. If after review of the application
and all written comments received from persons entitled to notice
pursuant to subsection (b), section ten of this article, the
application for a well work permit is approved, and no timely
objection has been filed with the secretary by the coal operator
operating coal seams beneath the tract of land, or the coal seam
owner or lessee, if any, if said owner or lessee is not yet
operating said coal seams, or made by the secretary under the
provisions of section ten and eleven of this article, the permit
shall be issued, with conditions, if any. This section does not
supersede the provisions of section seven or subdivisions (6)
through (9), subsection (a), section five of this article.
(g) Each permit issued by the secretary pursuant to this article shall require the operator at a minimum to:
(1) Plug all wells in accordance with the requirements of this
article and the rules promulgated pursuant thereto when the wells
become abandoned;
(2) With respect to disposal of cuttings at the well site, all
drill cuttings and associated drilling mud generated from
horizontal well sites shall be disposed of in an approved solid
waste facility or managed on-site in a manner approved by the
secretary;
(3) Grade, terrace and plant, seed or sod the area disturbed
that is not required in production of the horizontal well where
necessary to bind the soil and prevent substantial erosion and
sedimentation;
(4) Take action in accordance with industry standards to
minimize fire hazards and other conditions which constitute a
hazard to health and safety of the public;
(5) Protect the quantity and the quality of water in surface
and groundwater systems both during and after drilling operations
and during reclamation by: (A) Withdrawing water from surface
waters of the state by methods deemed appropriate by the secretary,
so as to maintain sufficient in-steam flow immediately downstream
of the withdrawal location. In no case shall an operator withdraw
water from ground or surface waters at volumes beyond which the waters can sustain; (B) Casing, sealing or otherwise managing wells
to keep returned fluids from entering ground and surface waters;
(C) Conducting oil and gas operations so as to prevent, to the
extent possible using the best management practices, additional
contributions of suspended or dissolved solids to streamflow or
runoff outside the permit area, but in no event shall the
contributions be in excess of requirements set by applicable state
or federal law; and (D) Registering all water supply wells drilled
and operated by the operator with the Office of Oil and Gas. All
drinking water wells within one thousand five hundred feet of a
water supply well shall be flow and quality tested by the operator
upon request of the drinking well owner prior to operating the
water supply well. The secretary shall propose legislative rules
to identify appropriate methods for testing water flow and quality.
(6) In addition to the other requirements of this subsection,
an operator proposing to drill any horizontal well requiring the
withdrawal of more than two hundred ten thousand gallons in a
thirty day period shall have the following requirements added to
its permit:
(A) Identification of water withdrawal locations. Within
forty-eight hours prior to the withdrawal of water, the operator
shall identify to the department the location of withdrawal by
latitude and longitude and verify that sufficient flow exists to protect designated uses of the stream. The operator shall use
methods deemed appropriate by the secretary to determine if
sufficient flow exists to protect designated uses of the stream.
(B) Signage for water withdrawal locations. All water
withdrawal locations and facilities identified in the water
management plan shall be identified with a sign that identifies
that the location is a water withdrawal point, the name and
telephone number of the operator and the permit numbers(s) for
which the water withdrawn will be utilized.
(C) Recordkeeping and reporting. For all water used for
hydraulic fracturing of horizontal wells and for flowback water
from hydraulic fracturing activities and produced water from
production activities from horizontal wells, an operator shall
comply with the following record keeping and reporting
requirements:
(i) For production activities, the following information shall
be recorded and retained by the well operator:
(I) The quantity of flowback water from hydraulic fracturing
the well;
(II) The quantity of produced water from the well; and
(III) The method of management or disposal of the flowback and
produced water.
(ii) For transportation activities, the following information shall be recorded and maintained by the operator:
(I) The quantity of water transported;
(II) The collection and delivery or disposal locations of
water; and
(III) The name of the water hauling company.
(iii) The information maintained pursuant to this subdivision
shall be available for inspection by the department along with
other required permits and records and maintained for three years
after the water withdrawal activity.
(iv) This subdivision is intended to be consistent with and
does not supersede, revise, repeal or otherwise modify articles
eleven, twelve or twenty-six of this chapter and does not revise,
repeal or otherwise modify the common law doctrine of riparian
rights in West Virginia law.
(h) The secretary shall mail a copy of the permit as issued or
a copy of the order denying a permit to any person entitled to
submit written comments pursuant to subsection (a), section eleven
of this article and who requested a copy.
(i) Upon the issuance of any permit pursuant to the provisions
of this article, the secretary shall transmit a copy of the permit
to the office of the assessor for the county in which the well is
located.
§22-6A-9. Certificate of approval required for large pits or impoundment construction; certificate of approval
and annual registration fees; application required
to obtain certificate; term of certificate;
revocation or suspension of certificates; appeals;
farm ponds.
(a) The Legislature finds that large impoundments and pits
(i.e. impoundments or pits with a capacity of two hundred ten
thousand gallons or more) not associated with a specific well work
permit must be properly regulated and controlled. It is the intent
of the Legislature by this section to provide for the regulation
and supervision of large impoundments or pits not associated with
a well work permit. This section does not apply to large pits or
impoundments authorized under a well work permit.
(b) It is unlawful for any person to place, construct,
enlarge, alter, repair, remove or abandon any freshwater
impoundment or pit with capacity of two hundred ten thousand
gallons or more used in association with any horizontal well
operation until he or she has first secured from the secretary a
certificate of approval for the same: Provided, That routine
repairs that do not affect the safety of the impoundment are not
subject to the application and approval requirements. A separate
application for a certificate of approval shall be submitted by a
person for each impoundment he or she desires to place, construct, enlarge, alter, repair, remove or abandon, but one application may
be valid for more than one impoundment that supports one or more
well pads.
(c) The application fee for placement, construction,
enlargement, alteration, repair or removal of an impoundment
pursuant to this section is $300, and the fee shall accompany the
application for certificate of approval. Operators holding
certificates of approval shall be assessed an annual registration
fee of $100, which is valid for more than one impoundment that
supports one or more well pads.
(d) Any certificate of approval required by this section shall
be issued or denied no later than sixty days from the submission of
an application containing the information required by this section.
However, if the application for a certificate of approval is
submitted with the application for a horizontal well permit, the
certificate shall be issued or denied no later than thirty days
from the submission of the permit application.
(e) The initial term of a certificate of approval issued
pursuant to this section is one year. Existing certificates of
approval shall be extended for one year upon receipt of the annual
registration fee, an inspection report, a monitoring and emergency
action plan, and a maintenance plan: Provided, That where an
approved, up-to-date inspection report, monitoring and emergency action plan, and maintenance plan are on file with the department,
and where no outstanding violation of the requirements of the
certificate of approval or any plan submitted pursuant to this
article related to the impoundment exist, then the certificate of
approval shall be extended without resubmission of the foregoing
documents upon receipt of the annual registration fee.
(f) Every application for a certificate of approval shall be
made in writing on a form prescribed by the secretary and shall be
signed and verified by the applicant. The application shall
include a monitoring and emergency action plan and a maintenance
plan, the required contents of which shall be established by the
secretary by legislative rule. The application shall contain and
provide information that may reasonably be required by the
secretary to administer the provisions of this article.
(g) Plans and specifications for the placement, construction,
erosion and sediment control, enlargement, alteration, repair or
removal and reclamation of impoundments shall be the charge of a
registered professional engineer licensed to practice in West
Virginia. Any plans or specifications submitted to the department
shall bear the seal of a registered professional engineer.
(h) Each certificate of approval issued by the secretary
pursuant to the provisions of this article may contain other terms
and conditions the secretary prescribes.
(i) The secretary may revoke or suspend any certificate of
approval whenever the secretary determines that the impoundment for
which the certificate was issued constitutes an imminent danger to
human life or property. If necessary to safeguard human life or
property, the secretary may also amend the terms and conditions of
any certificate by issuing a new certificate containing the revised
terms and conditions.
(1) Before any certificate of approval is amended, suspended
or revoked by the secretary without the consent of the operator
holding the certificate, the secretary shall hold a hearing in
accordance with the provisions of article five, chapter twenty-
nine-a of this code.
(2) Any person adversely affected by an order entered
following this hearing has the right to appeal to the Environmental
Quality Board pursuant to the provisions of article one, chapter
twenty-two-b of this code.
(j) Upon expiration of the certificate of approval, the
operator shall within six months, or upon its revocation by the
secretary, the operator shall within sixty days, fill all
impoundments that are not required or allowed by state or federal
law or rule or agreement between the operator and the surface owner
allowing the impoundment to remain open for the use and benefit of
the surface owner and reclaim the site in accordance with the approved erosion and sediment control plan.
(k) This section does not apply to:
(1) Farm ponds constructed by the operator with the written
consent of the surface owner, which will be used after completion
of the drilling activity primarily for agricultural purposes,
including without limitation livestock watering, irrigation,
retention of animal wastes and fish culture. Any impoundment that
is intended to be left permanent as a farm pond under this
subdivision shall meet the requirements set forth by the United
States Department of Agriculture's Natural Resources Conservation
Service "Conservation Practice Standard - Ponds" (Code 378).
(2) Farm ponds subject to certificates of approval under
article fourteen of this chapter.
(l) The secretary is authorized to propose rules for
legislative approval in accordance with the provisions of article
three, chapter twenty-nine-a of this code, necessary to effectuate
the provisions of this section.
§22-6A-10. Notice to property owners.
(a) Prior to filing a permit application, the operator shall
provide notice of planned entry, pursuant to the method of delivery
set forth in subsection (b) of this section, to the surface owner
and mineral owner of the tract of land underlying the designated
well pad at least seven days but no more than forty-five days prior to entering the surface tract to conduct any plat surveys required
pursuant to this article.
(b) No later than the filing date of the application, the
applicant for a permit for any well work or for a certificate of
approval for the construction of an impoundment or pit as required
by this article shall deliver, by personal service or by registered
mail or by any method of delivery that requires a receipt or
signature confirmation, copies of the application, the erosion and
sediment control plan required by section seven of this article,
and the well plat to each of the following persons:
(1) The owners of record of the surface of the tract on which
the well is or is proposed to be located;
(2) The owners of record of the surface tract or tracts
overlying the oil and gas leasehold being developed by the proposed
well work, if the surface tract is to be used for roads or other
land disturbance as described in the erosion and sediment control
plan submitted pursuant to subsection (c), section seven of this
article;
(3) The coal owner, operator or lessee, in the event the tract
of land on which the well proposed to be drilled is located is
known to be underlain by one or more coal seams;
(4) The owners of record of the surface tract or tracts
overlying the oil and gas leasehold being developed by the proposed well work, if the surface tract is to be used for the placement,
construction, enlargement, alteration, repair, removal or
abandonment of any impoundment or pit as described in section nine
of this article;
(5) Any surface owner or water purveyor who is known to the
applicant to have a water well, spring or water supply source
located within one thousand five hundred feet of the center of the
well pad which is used to provide water for consumption by humans
or domestic animals; and
(6) The operator of any natural gas storage field within which
the proposed well work activity is to take place.
(c)(1) If more than three tenants in common or other co-owners
of interests described in subsection (b) of this section hold
interests in the lands, the applicant may serve the documents
required upon the person described in the records of the sheriff
required to be maintained pursuant to section eight, article one,
chapter eleven-a of this code.
(2) Notwithstanding any provision of this article to the
contrary, notice to a lien holder is not notice to a landowner,
unless the lien holder is the landowner.
(d) With respect to surface landowners identified in
subsection (b) or water purveyors identified in subdivision (5),
subsection (b) of this section, notification shall be made on forms and in a manner prescribed by the secretary sufficient to identify,
for those persons, the rights afforded them under sections eleven
and twelve of this article, and the opportunity for testing their
water well.
(e) Semiannually, the department shall publish a Class II
legal advertisement, as described in section two, article three,
chapter fifty-nine of this code, to appear in newspapers serving,
in the aggregate, every county of the state notifying the public of
the website required to be maintained by the department pursuant to
section twenty-one of this article six-a, and that members of the
public may register to receive electronic notifications of
horizontal well permit applications, filings and notices by county
of interest.
(f) Materials served upon persons described in subsection (b)
of this section shall contain a statement of the time limits for
filing written comments, who may file written comments, the name
and address of the secretary for the purpose of filing the comments
and obtaining additional information, and a statement that the
persons may request, at the time of submitting written comments,
notice of the permit decision and a list of persons qualified to
test water.
(g) Any person entitled to submit written comments to the
secretary pursuant to subsection (a), section eleven of this article, shall also be entitled to receive from the secretary a
copy of the permit as issued or a copy of the order modifying or
denying the permit if the person requests receipt of them as a part
of the written comments submitted concerning the permit
application.
(h) The surface owners described in subdivisions (1), (2) and
(4), subsection (b) of this section, and the coal owner, operator
or lessee described in subdivision (3) of that subsection is also
entitled to receive notice within seven days but no less than two
days before commencement that well work or site preparation work
that involves any disturbance of land is expected to commence.
(i) Persons entitled to notice pursuant to subsection (b) of
this section may contact the department to ascertain the names and
locations of water testing laboratories in the subject area capable
and qualified to test water supplies in accordance with standard
accepted methods. In compiling that list of names the department
shall consult with the state Bureau for Public Health and local
health departments.
(j) (1) Prior to conducting any seismic activity for seismic
exploration for natural gas to be extracted using horizontal
drilling methods, the company or person performing the activity
shall provide notice to Miss Utility of West Virginia Inc. and to
all surface owners, coal owners and lessees, and natural gas storage field operators on whose property blasting, percussion or
other seismic-related activities will occur.
(2) The notice shall be provided at least three days prior to
commencement of the seismic activity.
(3) The notice shall also include a reclamation plan in
accordance with the erosion and sediment control manual that
provides for the reclamation of any areas disturbed as a result of
the seismic activity, including filling of shotholes used for
blasting.
(4) Nothing in this subsection decides questions as to whether
seismic activity may be secured by mineral owners, surface owners
or other ownership interests.
§22-6A-10a. Method of delivery of notice.
Notwithstanding any provision of this article to the contrary,
all notices required by this article shall be delivered by the
method set forth in subsection (b), section ten of this article,
which notice shall provide that further information may be obtained
from the agency's website.
§22-6A-11. Procedure for filing written comments; procedures for
considering objections and comments; issues to be
considered; and newspaper notice.
(a) All persons described in subsection (b), section ten of
this article may file written comments with the secretary as to the location or construction of the applicant's proposed well work
within thirty days after the application is filed with the
secretary.
(b) The applicant shall tender proof of and certify to the
secretary that the notice requirements of section ten of this
article have been completed by the applicant. The certification of
notice to the person may be made by affidavit of personal service,
the return receipt card or other postal receipt for certified
mailing.
(c) (1) The secretary shall promptly review all written
comments filed by the persons entitled to notice under subsection
(b), section ten of this article. The secretary shall notify the
applicant of the character of the written comments submitted no
later than fifteen days after the close of the comment period.
(2) Any objections of the affected coal operators and coal
seam owners and lessees shall be addressed through the processes
and procedures that exist under sections fifteen, seventeen and
forty, article six of this chapter, as applicable and as
incorporated into this article by section five of this article.
The written comments filed by the parties entitled to notice under
subdivisions (1), (2), (4), (5) and (6), subsection (b), section
ten of this article shall be considered by the secretary in the
permit issuance process, but the parties are not entitled to participate in the processes and proceedings that exist under
sections fifteen, seventeen or forty, article six of this chapter,
as applicable and as incorporated into this article by section five
of this article.
(3) The secretary shall retain all applications, plats and
other documents filed with the secretary, any proposed revisions
thereto, all notices given and proof of service thereof and all
orders issued and all permits issued. Subject to the provisions of
article one, chapter twenty-nine-b of this code, the record
prepared by the secretary is open to inspection by the public.
§22-6A-12. Well location restrictions.
(a) Wells may not be drilled within two hundred fifty feet
measured horizontally from any existing water well or developed
spring used for human or domestic animal consumption. The center of
well pads may not be located within six hundred twenty-five feet of
an occupied dwelling structure, or a building two thousand five
hundred square feet or larger used to house or shelter dairy cattle
or poultry husbandry. This limitation is applicable to those
wells, developed springs, dwellings or agricultural buildings that
existed on the date a notice to the surface owner of planned entry
for surveying or staking as provided in section ten of this article
or a notice of intent to drill a horizontal well as provided in
subsection (b), section sixteen of this article was provided, whichever occurs first, and to any dwelling under construction
prior to that date. This limitation may be waived by written
consent of the surface owner transmitted to the department and
recorded in the real property records maintained by the clerk of
the county commission for the county in which such property is
located. Furthermore, the well operator may be granted a variance
by the secretary from these distance restrictions upon submission
of a plan which identifies the sufficient measures, facilities or
practices to be employed during well site construction, drilling
and operations. The variance, if granted, shall include terms and
conditions the department requires to ensure the safety and
protection of affected persons and property. The terms and
conditions may include insurance, bonding and indemnification, as
well as technical requirements.
(b) No well pad may be prepared or well drilled within one
hundred feet measured horizontally from any perennial stream,
natural or artificial lake, pond or reservoir, or a wetland, or
within three hundred feet of a naturally reproducing trout stream.
No wellpad may be located within one thousand feet of a surface or
ground water intake of a public water supply. The distance from
the public water supply as identified by the department shall be
measured as follows:
(1) For a surface water intake on a lake or reservoir, the distance shall be measured from the boundary of the lake or
reservoir.
(2) For a surface water intake on a flowing stream, the
distance shall be measured from a semicircular radius extending
upstream of the surface water intake.
(3) For a groundwater source, the distance shall be measured
from the wellhead or spring. The department may, in its
discretion, waive these distance restrictions upon submission of a
plan identifying sufficient measures, facilities or practices to be
employed during well site construction, drilling and operations to
protect the waters of the state. A waiver, if granted, shall
impose any permit conditions as the secretary considers necessary.
(c) Notwithstanding the foregoing provisions of this section,
nothing contained in this section prevents an operator from
conducting the activities permitted or authorized by a Clean Water
Act Section 404 permit or other approval from the United States
Army Corps of Engineers within any waters of the state or within
the restricted areas referenced in this section.
(d) The well location restrictions set forth in this section
shall not apply to any well on a multiple well pad if at least one
of the wells was permitted prior to the effective date of this
article.
§22-6A-13. Plugging of horizontal wells.
The secretary shall propose legislative rules for promulgation
to govern the procedures for plugging horizontal wells, including
rules relating to the methods of plugging the wells and the notices
required to be provided in connection with plugging the wells.
§22-6A-14. Reclamation requirements.
(a) The operator of a horizontal well shall reclaim the land
surface within the area disturbed in siting, drilling, completing
or producing the well in accordance with the following
requirements:
(1) Except as provided elsewhere in this article, within six
months after a horizontal well is drilled and completed on a well
pad designed for a single horizontal well, the operator shall fill
all the pits and impoundments that are not required or allowed by
state or federal law or rule or agreement between the operator and
the surface owner that allows the impoundment to remain open for
the use and benefit of the surface owner (i.e. a farm pond as
described in section nine of this article) and remove all concrete
bases, drilling supplies and drilling equipment: Provided, That
impoundments or pits for which certificates have been approved
pursuant to section nine of this article shall be reclaimed at a
time and in a manner as provided in the applicable certificate and
section nine. Within that six-month period, the operator shall
grade or terrace and plant, seed or sod the area disturbed that is not required in production of the horizontal well in accordance
with the erosion and sediment control plan. No pit may be used for
the ultimate disposal of salt water. Salt water and oil shall be
periodically drained or removed and properly disposed of from any
pit that is retained so the pit is kept reasonably free of salt
water and oil. Pits may not be left open permanently.
(2) For well pads designed to contain multiple horizontal
wells, partial reclamation shall begin upon completion of the
construction of the well pad. For purposes of this section, the
term partial reclamation means grading or terracing and planting,
or seeding the area disturbed that is not required in drilling,
completing or producing any of the horizontal wells on the well pad
in accordance with the erosion and sediment control plan. This
partial reclamation satisfies the reclamation requirements of this
section for a maximum of twenty-four months between the drilling of
horizontal wells on a well pad designed to contain multiple
horizontal wells: Provided, That the maximum aggregate period in
which partial reclamation satisfies the reclamation requirements of
this section is five years from completion of the construction of
the well pad. Within six months after the completion of the final
horizontal well on the pad or the expiration of the five-year
maximum aggregate partial reclamation period, whichever occurs
first, the operator shall complete final reclamation of the well pad as set forth in this subsection.
(3) Within six months after a horizontal well that has
produced oil or gas is plugged or after the plugging of a dry hole,
the operator shall remove all production and storage structures,
supplies and equipment and any oil, salt water and debris and fill
any remaining excavations. Within that six-month period, the
operator shall grade or terrace and plant, seed or sod the area
disturbed where necessary to bind the soil and prevent substantial
erosion and sedimentation.
(4) The operator shall reclaim the area of land disturbed in
siting, drilling, completing or producing the horizontal well in
accordance with the erosion and sediment control plans approved by
the secretary or the secretary's designee pursuant to this article.
(b) The secretary, upon written application by an operator
showing reasonable cause, may extend the period within which
reclamation must be completed, but not to exceed a further six-
month period. If the secretary refuses to approve a request for
extension, the refusal shall be by order, which may be appealed
pursuant to the provisions of subdivision twenty-three, subsection
(a), section five of this article.
§22-6A-15. Performance bonds; corporate surety or other security.
(a) No permit may be issued pursuant to this article unless a
bond as described in subsection (d) of this section which is required for a particular activity by this article is or has been
furnished as provided in this section.
(b) A separate bond as described in subsection (d) of this
section may be furnished for each horizontal well drilled. Each of
these bonds shall be in the sum of $50,000 payable to the State of
West Virginia, conditioned on full compliance with all laws, rules
relating to the drilling, redrilling, deepening, casing and
stimulating of horizontal wells and to the plugging, abandonment
and reclamation of horizontal wells and for furnishing reports and
information required by the secretary.
(c) When an operator makes or has made application for permits
to drill or stimulate a number of horizontal wells, the operator
may, in lieu of furnishing a separate bond, furnish a blanket bond
in the sum of $250,000 payable to the State of West Virginia, and
conditioned as provided in subsection (b) of this section.
(d) The form of the bond required by this article shall be
approved by the secretary and may include, at the option of the
operator, surety bonding, collateral bonding, including cash and
securities, letters of credit, establishment of an escrow account,
self-bonding or a combination of these methods. If collateral
bonding is used, the operator may elect to deposit cash, or
collateral securities or certificates as follows: Bonds of the
United States or its possessions, of the federal land bank, or of the homeowners' loan corporation; full faith and credit general
obligation bonds of the State of West Virginia or other states or
of any county, district or municipality of the State of West
Virginia or other states; or certificates of deposit in a bank in
this state, which certificates shall be in favor of the department.
The cash deposit or market value of the securities or certificates
shall be equal to or greater than the amount of the bond. The
secretary shall, upon receipt of any deposit of cash, securities or
certificates, promptly place the same with the Treasurer of the
State of West Virginia whose duty it is to receive and hold them in
the name of the state in trust for the purpose of which the deposit
is made when the permit is issued. The operator is entitled to all
interest and income earned on the collateral securities filed by
the operator. The operator making the deposit is entitled from time
to time to receive from the State Treasurer, upon the written
approval of the secretary, the whole or any portion of any cash,
securities or certificates so deposited, upon depositing with the
State Treasurer in lieu thereof, cash or other securities or
certificates of the classes herein specified having value equal to
or greater than the amount of the bond.
(e) When an operator has furnished a separate bond from a
corporate bonding or surety company to drill, fracture or stimulate
a horizontal well and the well produces oil or gas or both, its operator may deposit with the secretary cash from the sale of the
oil or gas or both until the total deposited is $50,000. When the
sum of the cash deposited is $50,000, the separate bond for the
well shall be released by the secretary. Upon receipt of that cash,
the secretary shall immediately deliver that amount to the State
Treasurer, who shall hold the cash in the name of the state in
trust for the purpose for which the bond was furnished and the
deposit was made. The operator is entitled to all interest and
income which may be earned on the cash deposited so long as the
operator is in full compliance with all laws and rules relating to
the drilling, redrilling, deepening, casing, plugging, abandonment
and reclamation of the well for which the cash was deposited and so
long as the operator has furnished all reports and information
required by the secretary. The secretary may establish procedures
under which an operator may substitute a new bond for an existing
bond or provide a new bond under certain circumstances specified in
a legislative rule promulgated in accordance with chapter twenty-
nine-a of this code.
(f) Any separate bond furnished for a particular well prior to
the effective date of this article continues to be valid for all
work on the well permitted prior to the effective date of this
article; but no permit may be issued on such a particular well
without a bond complying with the provisions of this section. Any blanket bond furnished prior to the effective date of this article
shall be replaced with a new blanket bond conforming to the
requirements of this section, at which time the prior bond is
discharged by operation of law; and if the secretary determines
that any operator has not furnished a new blanket bond, the
secretary shall notify the operator by registered mail or by any
method of delivery that requires a receipt or signature
confirmation of the requirement for a new blanket bond, and failure
to submit a new blanket bond within sixty days after receipt of the
notice from the secretary works a forfeiture under subsection (i)
of this section of the blanket bond furnished prior to the
effective date of this article.
(g) Any such bond shall remain in force until released by the
secretary, and the secretary shall release the same upon
satisfaction that the conditions thereof have been fully performed.
Upon the release of that bond, any cash or collateral securities
deposited shall be returned by the secretary to the operator who
deposited it.
(h) (1) Whenever the right to operate a well is assigned or
otherwise transferred, the assignor or transferor shall notify the
department of the name and address of the assignee or transferee by
registered mail or by any method of delivery that requires a
receipt or signature confirmation not later than thirty days after the date of the assignment or transfer. No assignment or transfer
by the owner relieves the assignor or transferor of the obligations
and liabilities unless and until the assignee or transferee files
with the department the well name and the permit number of the
subject well, the county and district in which the subject well is
located, the names and addresses of the assignor or transferor, and
assignee or transferee, a copy of the instrument of assignment or
transfer accompanied by the applicable bond, cash, collateral
security or other forms of security described in this section, and
the name and address of the assignee's or transferee's designated
agent if the assignee or transferee would be required to designate
an agent under this article if the assignee or transferee were an
applicant for a permit under this article. Every well operator
required to designate an agent under this section shall, within
five days after the termination of the designation, notify the
department of the termination and designate a new agent.
(2) Upon compliance with the requirements of this section by
the assignor or transferor and assignee or transferee, the
secretary shall release the assignor or transferor from all duties
and requirements of this article and shall give written notice of
release to the assignor or transferor of any bond and return to the
assignor or transferor any cash or collateral securities deposited
pursuant to this section.
(i) If any of the requirements of this article or rules
promulgated pursuant thereto or the orders of the secretary has not
been complied with within the time limit set by any notice of
violation issued pursuant to this article, the performance bond
shall then be forfeited.
(j) When any bond is forfeited pursuant to the provisions of
this article or rules promulgated pursuant thereto, the secretary
shall collect the forfeiture without delay.
(k) All forfeitures shall be deposited in the Treasury of the
State of West Virginia in the Oil and Gas Reclamation Fund as
defined in section twenty-nine, article six of this chapter.
§22-6A-16. Compensation of surface owners for drilling operations.
(a) The provisions of article seven of this chapter do not
apply to horizontal wells governed by this article. In lieu
thereof, the provisions of article six-b of this chapter shall
provide for the compensation of surface owners for damage caused by
drilling horizontal wells.
(b) At least ten days prior to filing a permit application, an
operator shall, by certified mail return receipt requested or hand
delivery, give the surface owner notice of its intent to enter upon
the surface owner's land for the purpose of drilling a horizontal
well: Provided, That notice given pursuant to subsection (a),
section ten of this article satisfies the requirements of this subsection as of the date the notice was provided to the surface
owner: Provided, however, That the notice requirements of this
subsection may be waived in writing by the surface owner. The
notice, if required, shall include the name, address, telephone
number, and if available, facsimile number and electronic mail
address of the operator and the operator's authorized
representative.
(c) No later than the date for filing the permit application,
an operator shall, by certified mail return receipt requested or
hand delivery, give the surface owner whose land will be used for
the drilling of a horizontal well notice of the planned operation.
The notice required by this subsection shall include:
(1) A copy of this code section;
(2) The information required to be provided by subsection (b),
section ten of this article to a surface owner whose land will be
used in conjunction with the drilling of a horizontal well; and
(3) A proposed surface use and compensation agreement
containing an offer of compensation for damages to the surface
affected by oil and gas operations to the extent the damages are
compensable under article six-b of this chapter.
(d) The notices required by this section shall be given to the
surface owner at the address listed in the records of the sheriff
at the time of notice.
§22-6A-17. Reimbursement of property taxes of encumbered
properties.
In addition to any compensation owed by the operator to the
surface owner pursuant to the provisions of article six-b of this
chapter, the operator shall pay the surface owner a one-time
payment of $2,500 to compensate for payment of real property taxes
for surface lands and surrounding lands that are encumbered or
disturbed by construction or operation of the horizontal well pad
regardless of how many wells are drilled on a single pad or how
many permits are issued for the pad.
§22-6A-18. Civil action for contamination or deprivation of fresh
water source or supply; presumption; water rights
and replacement; waiver of replacement.
(a) Nothing in this article affects in any way the rights of
any person to enforce or protect, under applicable law, the
person's interest in water resources affected by an oil or gas
operation.
(b) Unless rebutted by one of the defenses established in
subsection (c) of this section, in any action for contamination or
deprivation of a fresh water source or supply within one thousand
five hundred feet of the center of the well pad for horizontal
well, there is a rebuttable presumption that the drilling and the
oil or gas well or either was the proximate cause of the contamination or deprivation of the fresh water source or supply.
(c) In order to rebut the presumption of liability established
in subsection (b) of this section, the operator must prove by a
preponderance of the evidence one of the following defenses:
(1) The pollution existed prior to the drilling or alteration
activity as determined by a predrilling or prealteration water well
test.
(2) The landowner or water purveyor refused to allow the
operator access to the property to conduct a predrilling or
prealteration water well test.
(3) The water supply is not within one thousand five hundred
feet of the well.
(4) The pollution occurred more than six months after
completion of drilling or alteration activities.
(5) The pollution occurred as the result of some cause other
than the drilling or alteration activity.
(d) Any operator electing to preserve its defenses under
subdivision (1), subsection (c) of this section shall retain the
services of an independent certified laboratory to conduct the
predrilling or prealteration water well test. A copy of the
results of the test shall be submitted to the department and the
surface owner or water purveyor in a manner prescribed by the
secretary.
(e) Any operator shall replace the water supply of an owner of
interest in real property who obtains all or part of that owner's
supply of water for domestic, agricultural, industrial or other
legitimate use from an underground or surface source with a
comparable water supply where the secretary determines that the
water supply has been affected by contamination, diminution or
interruption proximately caused by the oil or gas operation, unless
waived in writing by that owner.
(f) The secretary may order the operator conducting the oil or
gas operation to:
(1) Provide an emergency drinking water supply within twenty-
four hours;
(2) Provide temporary water supply within seventy-two hours;
(3) Within thirty days begin activities to establish a
permanent water supply or submit a proposal to the secretary
outlining the measures and timetables to be used in establishing a
permanent supply. The total time in providing a permanent water
supply may not exceed two years. If the operator demonstrates that
providing a permanent replacement water supply cannot be completed
within two years, the secretary may extend the time frame on case-
by-case basis; and
(4) Pay all reasonable costs incurred by the real property
owner in securing a water supply.
(g) A person as described in subsection (b) of this section
aggrieved under the provisions of subsections (b), (e) or (f) of
this section may seek relief in court.
(h) The secretary shall propose rules for legislative approval
in accordance with the provisions of article three, chapter twenty-
nine-a of this code to implement the requirements of this section.
(i) Notwithstanding the denial of the operator of
responsibility for the damage to the real property owner's water
supply or the status of any appeal on determination of liability
for the damage to the real property owner's water supply, the
operator may not discontinue providing the required water service
until authorized to do so by the secretary or a court of competent
jurisdiction.
§22-6A-19. Offenses; civil penalties.
(a) Any person or persons, firm, partnership, partnership
association or corporation who willfully violates any provision of
this article or any rule or order promulgated under this article or
any permit issued pursuant to this article is subject to a civil
penalty not exceeding $5,000. Each day a violation continues after
notice by the department constitutes a separate offense. The
penalty shall be recovered by a civil action brought by the
department, in the name of the state, before the circuit court of
the county in which the subject well or facility is located. All the civil penalties collected shall be credited to the General Fund
of the state.
(b) Notwithstanding the provisions of subsection (a) of this
section, any person or persons, firm, partnership, partnership
association or corporation who willfully disposes of waste fluids,
drill cuttings or any other liquid substance generated in the
development of a horizontal well in violation of this article or
any rule or order promulgated under this article or in violation of
any other state or federal statutes, rules or regulations, and
which disposal was found to have had a significant adverse
environmental impact on surface or groundwater by the secretary, is
subject to a civil penalty not exceeding $100,000. The penalty
shall be recovered by a civil action brought by the department, in
the name of the state, before the circuit court of the county in
which the subject well or facility is located. All the civil
penalties collected shall be credited to the General Fund of the
state.
(c) Any person who intentionally misrepresents any material
fact in an application, record, report, plan or other document
filed or required to be maintained under the provisions of this
article or any rules promulgated by the secretary under this
article shall be fined not less than $1,000 nor more than $10,000.
§22-6A-20. Division of Highways certification.
As part of the permit application for horizontal wells, the
operator shall submit a letter of certification from the Division
of Highways that the operator has, pursuant to the Division of
Highways Oil and Gas Road Policy, entered into an agreement with
the Division of Highways pertaining to the state local service
roads associated with the proposed well work set forth in the
permit application or has certified that no such agreement is
required by the Oil and Gas Road Policy and the reasons therefor.
§22-6A-21. Establishment of public website information and
electronic notification registry regarding
horizontal well permit applications.
(a) No later than ninety days after the effective date of this
article, the secretary shall establish resources on the
department's public website which will list searchable information
related to all horizontal well applications filed in this state,
including information sufficient to identify the county and
approximate location of each horizontal well for which a permit
application is filed, the referenced well application number, date
of application and name of the applicant.
(b) The secretary shall also establish a registration and e-
notification process by which individuals, corporations and
agencies may register to receive electronic notice of horizontal
well applications filings and notices, by county of interest. Once established, individuals, agencies and corporations interested who
are properly registered to receive e-notices of filings and actions
on horizontal well permits shall receive electronic notifications
of applications and notices of permits issued for horizontal
drilling in their designated county or counties of interest.
§22-6A-22. Air quality study and rulemaking.
The secretary shall, by July 1, 2013, report to the
Legislature on the need, if any, for further regulation of air
pollution occurring from well sites, including the possible health
impacts, the need for air quality inspections during drilling, the
need for inspections of compressors, pits and impoundments, and any
other potential air quality impacts that could be generated from
this type of drilling activity that could harm human health or the
environment. If he or she finds that specialized permit conditions
are necessary, the secretary shall promulgate legislative rules
establishing these new requirements.
§22-6A-23. Impoundment and pit safety study; rulemaking.
The secretary shall, by January 1, 2013, report to the
Legislature on the safety of pits and impoundments utilized
pursuant to section nine of this article including an evaluation of
whether testing and special regulatory provision is needed for
radioactivity or other toxins held in the pits and impoundments.
Upon a finding that greater monitoring, safety and design requirements or other specialized permit conditions are necessary,
the secretary shall propose for promulgation legislative rules
establishing these new requirements.
§22-6A-24. Casing and cement standards.
(a) The operator may only drill through fresh groundwater
zones in a manner that will minimize any disturbance of the zones.
Further, the operator shall construct the well and conduct casing
and cementing activities for all horizontal wells in a manner that
will provide for control of the well at all times, prevent the
migration of gas and other fluids into the fresh groundwater and
coal seams, and prevent pollution of or diminution of fresh
groundwater.
(b) The secretary shall propose legislative and emergency
rules in accordance with the provisions of article three, chapter
twenty-nine-a of this code to carry out the purposes of this
section.
(c) Rules promulgated by the secretary pursuant to this
section shall include provisions to accomplish the following:
(1) Effective control of the horizontal well by the operator;
(2) Prevention of the migration of gas or other fluids into
sources of fresh groundwater or into coal seams;
(3) Prevention of pollution of or diminution of fresh
groundwater;
(4) Prevention of blowouts, explosions, or fires; and
(5) Appropriate disposition of brines and discharges from the
drilling or operation of horizontal well.
(d) Procedures for the filing, approval, and revision of
casing program:
(1) The operator shall prepare a casing program demonstrating
how the horizontal well is to be drilled, cased, and cemented. The
program shall comply with rules promulgated by the secretary.
(2) The rules regarding the casing program shall require the
following information:
(A) The anticipated depth and thickness of any producing
formation, expected pressures, anticipated fresh groundwater zones,
and the method or information by which the depth of the deepest
fresh groundwater was determined;
(B) The diameter of the borehole;
(C) The casing type, whether the casing to be utilized is new
or used, and the depth, diameter, wall thickness, and burst
pressure rating for the casing;
(D) The cement type, yield, additives, and estimated amount of
cement to be used;
(E) The estimated location of centralizers;
(F) The proposed borehole conditioning procedures; and
(G) Any alternative methods or materials required by the secretary as a condition of the well work permit.
(3) A copy of casing program shall be kept at the well site.
(4) Supervisory oil and gas inspectors and oil and gas
inspectors may approve revisions to previously approved casing
programs when conditions encountered during the drilling process so
require: Provided, That any revisions to casing programs approved
by inspectors as aforesaid shall ensure that the revised casing
programs are at least as protective of the environment as the
casing and cementing standards required by this section. Any
revisions to the casing program made as a result of on-site
modifications shall be documented in the program by the inspector
approving the modification. The person making any revisions to the
program shall initial and date the revisions and make the revised
program available for inspection by the department.
(e) The rules promulgated by the secretary shall provide
procedures for the following:
(1) Appropriate installation and use of conductor pipe, which
shall be installed in a manner that prevents the subsurface
infiltration of surface water or fluids;
(2) Installation of the surface and coal protection casing
including remedial procedures addressing lost circulation during
surface or coal casing;
(3) Installation of intermediate production casing;
(4) Correction of defective casing and cementing, including
requirements that the operator report the defect to the secretary
within twenty-four hours of discovery by the operator;
(5) Investigation of natural gas migration, including
requirements that the operator promptly notify the secretary and
conduct an investigation of the incident; and
(6) Any other procedure or requirements considered necessary
by the secretary.
(f) Minimum casing standards.
(1) All casing installed in the well, whether new or used,
shall have a pressure rating that exceeds the anticipated maximum
pressure to which the casing will be exposed and meet appropriate
nationally recognized standards.
(2) The casing shall be of sufficient quality and condition to
withstand the effects of tension and maintain its structural
integrity during installation, cementing, and subsequent drilling
and production operations.
(3) Centralizers shall be used, with the proper spacing for
such well, during the casing installation to ensure that the casing
is centered in the hole.
(4) Casing may not be disturbed for a period of at least eight
hours after the completion of cementing operations.
(5) No gas or oil production or pressure may exist on the surface casing or the coal protection casing.
(g) Minimum cement standards.
(1) All cement used in the well must meet the appropriate
nationally recognized standards and must secure the casing to the
wellbore, isolate the wellbore from all fluids, contain all
pressures during all phases of drilling and operation of the well,
and protect the casing from corrosion and degradation.
(2) Cement used in conjunction with surface and coal
protection casing must provide zonal isolation in the casing
annulus.
(h) Notwithstanding the minimum casing and cementing standards
set forth in subsections (f) and (g) of this section, the secretary
may:
(1) Revise the casing and cementing standards applicable to
horizontal wells from time to time through the legislative
rulemaking process so long as the revised casing and cementing
standards are at least as protective of the environment; and
(2) Approve alternative casing programs submitted with
applications for well work permits so long as the secretary
determines that the casing program submitted with the application
is at least as protective of the environment as the casing and
cementing standards required by this section.
ARTICLE 6B. OIL AND GAS HORIZONTAL WELL PRODUCTION DAMAGE COMPENSATION.
§22-6B-1. Legislative findings and purpose; applicability.
(a) The Legislature finds the following:
(1) Exploration for and development of oil and gas reserves in
this state must coexist with the use, agricultural or otherwise, of
the surface of certain land.
(2) The surface owner of lands on which horizontal wells are
drilled shall be compensated for damages to the surface of the land
pursuant to the provisions of this article.
(b) The Legislature declares that the public policy of this
state shall be that the compensation and damages provided in this
article for surface owners may not be diminished by any provision
in a deed, lease or other contract of conveyance entered into after
December 31, 2011.
(c) It is the purpose of this article to provide
Constitutionally permissible protection and compensation to surface
owners of lands on which horizontal wells are drilled from the
burden resulting from drilling operations commenced after January
1, 2012. This article is to be interpreted in the light of the
legislative intent expressed herein. This article shall be
interpreted to benefit surface owners, regardless of whether the
oil and gas mineral estate was separated from the surface estate
and regardless of who executed the document which gave the oil and gas developer the right to conduct drilling operations on the land.
Section four of this article shall be interpreted to benefit all
persons.
(d) The provisions of this article apply to any natural gas
well, other than a coalbed methane well, drilled using a horizontal
drilling method, and which disturbs three acres or more of surface,
excluding pipelines, gathering lines and roads or uses more than
two hundred ten thousand gallons of water in any thirty-day period.
Article seven of this chapter does not apply to any damages
associated with the drilling of a horizontal well.
§22-6B-2. Definitions.
In this article:
(1) "Drilling operations" means the actual drilling or
redrilling of a horizontal well commenced subsequent to the
effective date of this article, and the related preparation of the
drilling site and access road, which requires entry, upon the
surface estate;
(2) "Horizontal drilling" means a method of drilling a well
for the production of natural gas that is intended to maximize the
length of wellbore that is exposed to the formation and in which
the wellbore is initially vertical but is eventually curved to
become horizontal, or nearly horizontal, to parallel a particular
geologic formation;
(3) "Horizontal well" means any well site, other than a
coalbed methane well, drilled using a horizontal drilling method,
and which disturbs three acres or more of surface, excluding
pipelines, gathering lines and roads, or uses more than two hundred
ten thousand gallons of water in any thirty-day period;
(4) "Oil and gas developer" means the person who secures the
drilling permit required by article six-a of this chapter;
(5) "Person" means any natural person, corporation, firm,
partnership, partnership association, venture, receiver, trustee,
executor, administrator, guardian, fiduciary or other
representative of any kind, and includes any government or any
political subdivision or agency thereof;
(6) "Surface estate" means an estate in or ownership of the
surface of a particular tract of land overlying the oil or gas
leasehold being developed; and
(7) "Surface owner" means a person who owns an estate in fee
in the surface of land, either solely or as a co-owner.
§22-6B-3. Compensation of surface owners for drilling operations.
(a) The oil and gas developer is obligated to pay the surface
owner compensation for:
(1) Lost income or expenses incurred as a result of being
unable to dedicate land actually occupied by the driller's
operation, or to which access is prevented by the drilling operation, to the uses to which it was dedicated prior to
commencement of the activity for which a permit was obtained,
measured from the date the operator enters upon the land and
commences drilling operations until the date reclamation is
completed;
(2) The market value of crops, including timber, destroyed,
damaged or prevented from reaching market;
(3) Any damage to a water supply in use prior to the
commencement of the permitted activity;
(4) The cost of repair of personal property up to the value of
replacement by personal property of like age, wear and quality; and
(5) The diminution in value, if any, of the surface lands and
other property after completion of the surface disturbance done
pursuant to the activity for which the permit was issued determined
according to the market value of the actual use made thereof by the
surface owner immediately prior to the commencement of the
permitted activity.
The amount of damages may be determined by any formula
mutually agreeable between the surface owner and the oil and gas
developer.
(b) Any reservation or assignment of the compensation provided
in this section apart from the surface estate except to a tenant of
the surface estate is prohibited.
(c) In the case of surface lands owned by more than one person
as tenants in common, joint tenants or other co-ownership, any
claim for compensation under this article shall be for the benefit
of all co-owners. The resolution of a claim for compensation
provided in this article operates as a bar to the assertion of
additional claims under this section arising out of the same
drilling operations.
§22-6B-4. Common law right of action preserved; offsets.
(a) Nothing in section three or elsewhere in this article
diminishes in any way the common law remedies, including damages,
of a surface owner or any other person against the oil and gas
developer for the unreasonable, negligent or otherwise wrongful
exercise of the contractual right, whether express or implied, to
use the surface of the land for the benefit of the developer's
mineral interest.
(b) An oil and gas developer is entitled to offset
compensation agreed to be paid or awarded to a surface owner under
section three of this article against any damages sought by or
awarded to the surface owner through the assertion of common law
remedies respecting the surface land actually occupied by the same
drilling operation.
(c) An oil and gas developer is entitled to offset damages
agreed to be paid or awarded to a surface owner through the assertion of common-law remedies against compensation sought by or
awarded to the surface owner under section three of this article
respecting the surface land actually occupied by the same drilling
operation.
§22-6B-5. Notification of claim.
Any surface owner, to receive compensation under section three
of this article, shall notify the oil and gas developer of the
damages sustained by the person within two years after the date
that the oil and gas developer files notice that final reclamation
is commencing under section fourteen, article six-a of this
chapter. The notice of reclamation shall be given to surface
owners by registered or certified mail, return receipt requested,
and is complete upon mailing. If more than three tenants in common
or other co-owners hold interests in the lands, the oil and gas
developer may give the notice to the person described in the
records of the sheriff required to be maintained pursuant to
section eight, article one, chapter eleven-a of this code or
publish in the county in which the well is located or to be located
a Class II legal advertisement as described in section two, article
three, chapter fifty-nine of this code, containing the notice and
information the secretary prescribes by rule.
§22-6B-6. Agreement; offer of settlement.
Unless the parties provide otherwise by written agreement, within sixty days after the oil and gas developer received the
notification of claim specified in section five of this article,
the oil and gas developer shall either make an offer of settlement
to the surface owner seeking compensation, or reject the claim.
The surface owner may accept or reject any offer so made:
Provided, That the oil and gas developer may make a final offer
within seventy-five days after receiving the notification of claim
specified in section five of this article.
§22-6B-7. Rejection; legal action; arbitration; fees and costs.
(a) (1) Unless the oil and gas developer has paid the surface
owner a negotiated settlement of compensation within seventy-five
days after the date the notification of claim was mailed under
section five of this article, the surface owner may, within eighty
days after the notification mail date, either (i) Bring an action
for compensation in the circuit court of the county in which the
well is located; or (ii) elect instead, by written notice delivered
by personal service or by certified mail, return receipt requested,
to the designated agent named by the oil and gas developer under
the provisions of section seven, article six-a of this chapter, to
have his, her or its compensation finally determined by binding
arbitration pursuant to article ten, chapter fifty-five of this
code.
(2) Settlement negotiations, offers and counter-offers between the surface owner and the oil and gas developer are not admissible
as evidence in any arbitration or judicial proceeding authorized
under this article, or in any proceeding resulting from the
assertion of common law remedies.
(b) The compensation to be awarded to the surface owner shall
be determined by a panel of three disinterested arbitrators. The
first arbitrator shall be chosen by the surface owner in the
party's notice of election under this section to the oil and gas
developer; the second arbitrator shall be chosen by the oil and gas
developer within ten days after receipt of the notice of election;
and the third arbitrator shall be chosen jointly by the first two
arbitrators within twenty days thereafter. If they are unable to
agree upon the third arbitrator within twenty days, then the two
arbitrators shall immediately submit the matter to the court under
the provisions of section one, article ten, chapter fifty-five of
this code, so that, among other things, the third arbitrator can be
chosen by the judge of the circuit court of the county in which the
surface estate lies.
(c) The following persons are considered interested and may
not be appointed as arbitrators: Any person who is personally
interested in the land on which horizontal drilling is being
performed or has been performed, or in any interest or right
therein, or in the compensation and any damages to be awarded therefor, or who is related by blood or marriage to any person
having such personal interest, or who stands in the relation of
guardian and ward, master and servant, principal and agent, or
partner, real estate broker, or surety to any person having such
personal interest, or who has enmity against or bias in favor of
any person who has such personal interest or who is the owner of,
or interested in, the land or the oil and gas development of the
land. A person is not considered interested or incompetent to act
as arbitrator by reason of being an inhabitant of the county,
district or municipal corporation in which the land is located, or
holding an interest in any other land therein.
(d) The panel of arbitrators shall hold hearings and take
testimony and receive exhibits necessary to determine the amount of
compensation to be paid to the surface owner. However, no award of
compensation may be made to the surface owner unless the panel of
arbitrators has first viewed the surface estate in question. A
transcript of the evidence may be made but is not required.
(e) Each party shall pay the compensation of the party's
arbitrator and one half of the compensation of the third
arbitrator, or each party's own court costs as the case may be.
§22-6B-8. Application of article.
The remedies provided by this article do not preclude any
person from seeking other remedies allowed by law.
CHAPTER 22C. ENVIRONMENTAL RESOURCES; BOARDS, AUTHORITIES,
COMMISSIONS AND COMPACTS.
ARTICLE 8. SHALLOW GAS WELL REVIEW BOARD.
§22C-8-2. Definitions.
Unless the context in which used clearly requires a different
meaning, As used in this article:
(1) "Board" means the Shallow Gas Well Review Board provided
for in section four of this article;
(2) "Chair" means the chair of the Shallow Gas Well Review
Board provided for in section four of this article;
(3) "Coal operator" means any person who proposes to or does
operate a coal mine;
(4) "Coal seam" and "workable coal bed" are interchangeable
terms and mean any seam of coal twenty inches or more in thickness,
unless a seam of less thickness is being commercially worked, or
can in the judgment of the division foreseeably be commercially
worked and will require protection if wells are drilled through it;
(5) "Commission" means the Oil and Gas Conservation Commission
provided for in section four, article nine of this chapter;
(6) "Commissioner" means the Oil and Gas Conservation
Commissioner provided for in section four, article nine of this
chapter;
(7) "Correlative rights" means the reasonable opportunity of each person entitled thereto to recover and receive without waste
the gas in and under a tract or tracts, or the equivalent thereof;
(8) "Deep well" means any well other than a shallow well or
coalbed methane well, drilled and completed in to a formation at or
below the top of the uppermost member of the "Onondaga Group";
(9) "Division" means the state Division Department of
Environmental Protection provided for in chapter twenty-two of this
code;
(10) "Director" means the Director of the Division Secretary
of the Department of Environmental Protection as established in
article one, chapter twenty-two of this code or such other person
to whom the director secretary delegates authority or duties
pursuant to sections six or eight, article one, chapter twenty-two
of this code;
(11) "Drilling unit" means the acreage on which the board
decides one well may be drilled under section ten of this article;
(12) "Gas" means all natural gas and all other fluid
hydrocarbons not defined as oil in subdivision (15) of this
section;
(13) "Gas operator" means any person who owns or has the right
to develop, operate and produce gas from a pool and to appropriate
the gas produced therefrom either for such that person or for such
that person and others. In the event that there is no gas lease in existence with respect to the tract in question, the person who
owns or has the gas rights therein shall be is considered a "gas
operator" to the extent of seven-eights of the gas in that portion
of the pool underlying the tract owned by such person, and a
"royalty owner" to the extent of one-eighth of such the gas;
(14) "Just and equitable share of production" means, as to
each person, an amount of gas in the same proportion to the total
gas production from a well as that person's acreage bears to the
total acreage in the drilling unit;
(15) "Oil" means natural crude oil or petroleum and other
hydrocarbons, regardless of gravity, which are produced at the well
in liquid form by ordinary production methods and which are not the
result of condensation of gas after it leaves the underground
reservoir;
(16) "Owner" when used with reference to any coal seam, shall
include includes any person or persons who own, lease or operate
such the coal seam;
(17) "Person" means any natural person, corporation, firm,
partnership, partnership association, venture, receiver, trustee,
executor, administrator, guardian, fiduciary or other
representative of any kind, and includes any government or any
political subdivision or any agency thereof;
(18) "Plat" means a map, drawing or print showing the location of one or more wells or a drilling unit;
(19) "Pool" means an underground accumulation of gas in a
single and separate natural reservoir (ordinarily a porous
sandstone or limestone). It is characterized by a single natural-
pressure system so that production of gas from one part of the pool
tends to or does affect the reservoir pressure throughout its
extent. A pool is bounded by geologic barriers in all directions,
such as geologic structural conditions, impermeable strata, and
water in the formation, so that it is effectively separated from
any other pools which may be present in the same district or in the
same geologic structure;
(20) "Royalty owner" means any owner of gas in place, or gas
rights, to the extent that such owner is not a gas operator as
defined in subdivision (13) of this section;
(21) "Shallow well" means any gas well other than a coalbed
methane well, drilled and completed in a formation above the top of
the uppermost member of the "Onondaga Group:" no deeper than one
hundred feet below the top of the "Onondaga Group": Provided, That
in drilling a shallow well the well operator may penetrate into the
"Onondaga Group" to a reasonable depth, not in excess of twenty
feet, in order to allow for logging and completion operations, but
in no event may the "Onondaga Group" formation or any formation
below the "Onondaga Group" be otherwise produced, perforated or stimulated in any manner;
(22) "Tracts comprising a drilling unit" means that all
separately owned tracts or portions thereof which are included
within the boundary of a drilling unit;
(23) "Well" means any shaft or hole sunk, drilled, bored or
dug into the earth or into underground strata for the extraction,
injection or placement of any liquid or gas, or any shaft or hole
sunk or used in conjunction with such the extraction, injection or
placement. The term "well" does not include any shaft or hole
sunk, drilled, bored or dug into the earth for the sole purpose of
core drilling or pumping or extracting therefrom potable, fresh or
usable water for household, domestic, industrial, agricultural or
public use; and
(24) "Well operator" means any person who proposes to or does
locate, drill, operate or abandon any well.
ARTICLE 9. OIL AND GAS CONSERVATION.
§22C-9-2. Definitions.
(a) Unless the context in which used clearly requires a
different meaning, As used in this article:
(1) "Commission" means the Oil and Gas Conservation Commission
and "commissioner" means the Oil and Gas Conservation Commissioner
as provided for in section four of this article;
(2) "Director" means the Director Secretary of the Division Department of Environmental Protection and "chief" means the Chief
of the Office of Oil and Gas;
(3) "Person" means any natural person, corporation,
partnership, receiver, trustee, executor, administrator, guardian,
fiduciary or other representative of any kind, and includes any
government or any political subdivision or any agency thereof;
(4) "Operator" means any owner of the right to develop,
operate and produce oil and gas from a pool and to appropriate the
oil and gas produced therefrom, either for such that person or for
such that person and others; in the event that there is no oil and
gas lease in existence with respect to the tract in question, the
owner of the oil and gas rights therein shall be considered as is
the "operator" to the extent of seven-eighths of the oil and gas in
that portion of the pool underlying the tract owned by such owner,
and as "royalty owner' as to one-eighth interest in such oil and
gas; and in the event the oil is owned separately from the gas, the
owner of the substance being produced or sought to be produced from
the pool shall be considered as is the "operator" as to such that
pool;
(5) "Royalty owner" means any owner of oil and gas in place,
or oil and gas rights, to the extent that such the owner is not an
operator as defined in subdivision (4) of this section;
(6) "Independent producer" means a producer of crude oil or natural gas whose allowance for depletion is determined under
Section 613A of the federal Internal Revenue Code in effect on July
1, 1997;
(7) "Oil" means natural crude oil or petroleum and other
hydrocarbons, regardless of gravity, which are produced at the well
in liquid form by ordinary production methods and which are not the
result of condensation of gas after it leaves the underground
reservoir;
(8) "Gas" means all natural gas and all other fluid
hydrocarbons not defined as oil in subdivision (7) of this section;
(9) "Pool" means an underground accumulation of petroleum or
gas in a single and separate reservoir (ordinarily a porous
sandstone or limestone). It is characterized by a single natural-
pressure system so that production of petroleum or gas from one
part of the pool affects the reservoir pressure throughout its
extent. A pool is bounded by geologic barriers in all directions,
such as geologic structural conditions, impermeable strata, and
water in the formations, so that it is effectively separated from
any other pools that may be presented in the same district or on
the same geologic structure;
(10) "Well" means any shaft or hole sunk, drilled, bored or
dug into the earth or underground strata for the extraction of oil
or gas;
(11) "Shallow well" means any well other than a coalbed
methane well, drilled and completed in a formation above the top of
the uppermost member of the "Onondaga Group" no deeper than one
hundred feet below the top of the "Onondaga Group": Provided, That
in drilling a shallow well the operator may penetrate into the
"Onondaga Group" to a reasonable depth, not in excess of twenty
feet, in order to allow for logging and completion operations, but
in no event may the "Onondaga Group" formation or any formation
below the "Onondaga Group" be otherwise produced, perforated or
stimulated in any manner;
(12) "Deep well" means any well, other than a shallow well or
coalbed methane well, drilled and completed in to a formation at or
below the top of the uppermost member of the "Onondaga Group;"
(13) "Drilling unit" means the acreage on which one well may
be drilled;
(14) "Waste" means and includes:
(A) Physical waste, as that term is generally understood in
the oil and gas industry;
(B) The locating, drilling, equipping, operating or producing
of any oil or gas well in a manner that causes, or tends to cause,
a reduction in the quantity of oil or gas ultimately recoverable
from a pool under prudent and proper operations, or that causes or
tends to cause unnecessary or excessive surface loss of oil or gas; or
(C) The drilling of more deep wells than are reasonably
required to recover efficiently and economically the maximum amount
of oil and gas from a pool. Waste does not include gas vented or
released from any mine areas as defined in section two, article
one, chapter twenty-two-a of this code or from adjacent coal seams
which are the subject of a current permit issued under article two
of chapter twenty-two-a of this code: Provided, That nothing in
this exclusion is intended to does not address ownership of the
gas;
(15) "Correlative rights" means the reasonable opportunity of
each person entitled thereto to recover and receive without waste
the oil and gas in and under his tract or tracts, or the equivalent
thereof; and
(16) "Just and equitable share of production" means, as to
each person, an amount of oil or gas or both substantially equal to
the amount of recoverable oil and gas in that part of a pool
underlying such the person's tract or tracts.
(b) Unless the context clearly indicates otherwise, the use of
the word "and" and the word "or" shall be are interchangeable, as,
for example, "oil and gas" shall mean means oil or gas or both.
On motion of Senator Edgell, the following amendment to
Senator Palumbo's amendment to the bill (Com. Sub. for S. B. No. 4001) was reported by the Clerk and adopted:
On page forty-five, section ten, by striking out all of
subsection (a) and inserting in lieu thereof a new subsection (a),
to read as follows:
(a) Prior to filing a permit application, the operator shall
provide notice of planned entry on to the surface tract to conduct
any plat surveys required pursuant to this article. Such notice
shall be provided at least seven days but no more than forty-five
days prior to such entry to: (1) The surface owner of such tract;
(2) to any owner or lessee of coal seams beneath such tract that
has filed a declaration pursuant to section thirty-six, article
six, chapter twenty-two of this code; and (3) any owner of minerals
underlying such tract in the county tax records.
On motion of Senator Edgell, the following amendment to
Senator Palumbo's amendment to the bill (Com. Sub. for S. B. No.
4001) was next reported by the Clerk and adopted:
On page seventeen, section three, after the words "effective
date of this article" by changing the period to a colon and
inserting the following proviso: Provided further, That this
article shall not apply to or affect any rights bargained for in
any agreement between a surface owner and operator made prior to
the effective date of this article.
On motion of Senator Edgell, the following amendment to Senator Palumbo's amendment to the bill (Com. Sub. for S. B. No.
4001) was reported by the Clerk and adopted:
On page seventy-two, section twenty-four, subsection (f),
subdivision (5), by striking out the words "or the coal protection
casing" and inserting in lieu thereof the words "annulus or the
coal protection casing annulus"
On motion of Senator Edgell, the following amendment to
Senator Palumbo's amendment to the bill (Com. Sub. for S. B. No.
4001) was next reported by the Clerk and adopted:
On page seventy-three, section one, subsection (a),
subdivision (1), after the word "land" by inserting the words "and
that each constitutes a right equal to the other".
On motions of Senators Tucker and Unger, the following
amendment to Senator Palumbo's amendment to the bill (Com. Sub. for
S. B. No. 4001) was reported by the Clerk and adopted:
On page forty-seven, section ten, by striking out all of
subdivision (e) and inserting in lieu thereof a new subdivision
(e), to read as follows:
(e) Prior to filing an application for a permit for a
horizontal well under this article, the applicant shall publish in
the county in which the well is located or is proposed to be
located a Class II legal advertisement as described in section two,
article three, chapter fifty-nine of this code, containing notice of the public website required to be established and maintained
pursuant to section twenty-one of this article and language
indicating the ability of the public to submit written comments on
the proposed permit, with the first publication date being at least
ten days prior to the filing of the permit application. The
secretary shall consider, in the same manner required by subsection
(f), section eight of this article and subdivision one, subsection
(c), section eleven of this article, written comments submitted in
response to the legal advertisement received by the secretary
within thirty days following the last required publication date:
Provided, That such parties submitting written comments pursuant to
this subsection are not entitled to participate in the processes
and proceedings that exist under sections fifteen, seventeen or
forty, article six of this chapter, as applicable and incorporated
into this article by section five of this article.
The question now being on the adoption of Senator Palumbo's
amendment to the bill (Com. Sub. for S. B. No. 4001), as amended,
the same was put and prevailed.
The bill (Com. Sub. for S. B. No. 4001), as amended, was then
ordered to engrossment and third reading.
On motion of Senator Unger, the constitutional rule requiring
a bill to be read on three separate days was suspended by a vote of
four fifths of the members present, taken by yeas and nays.
On suspending the constitutional rule, the yeas were: Barnes,
Beach, Boley, Browning, Chafin, Edgell, D. Facemire, Fanning,
Foster, Green, Hall, Helmick, Jenkins, Kirkendoll, Klempa, Laird,
McCabe, Miller, Minard, Nohe, Palumbo, Plymale, Prezioso, Snyder,
Stollings, Sypolt, Tucker, Unger, Wells, Williams, Wills, Yost and
Kessler (Mr. President)--33.
The nays were: None.
Absent: K. Facemyer--1.
Engrossed Committee Substitute for Senate Bill No. 4001 was
then read a third time and put upon its passage.
On the passage of the bill, the yeas were: Barnes, Beach,
Boley, Browning, Chafin, Edgell, D. Facemire, Fanning, Foster,
Green, Hall, Helmick, Jenkins, Kirkendoll, Klempa, Laird, McCabe,
Miller, Minard, Nohe, Palumbo, Plymale, Prezioso, Snyder,
Stollings, Sypolt, Tucker, Unger, Wells, Williams, Wills, Yost and
Kessler (Mr. President)--33.
The nays were: None.
Absent: K. Facemyer--1.
So, a majority of all the members present and voting having
voted in the affirmative, the President declared the bill (Eng.
Com. Sub. for S. B. No. 4001) passed.
On motion of Senator Palumbo, the following amendment to the
title of the bill was reported by the Clerk and adopted:
Eng. Com. Sub. for Senate Bill No. 4001--A Bill to repeal
§22C-7-1, §22C-7-2 and §22C-7-3 of the Code of West Virginia, 1931,
as amended; to amend said code by adding thereto a new section,
designated §5B-2B-4a; to amend and reenact §22-6-1 and §22-6-2 of
said code; to amend said code by adding thereto a new section,
designated §22-6-2a; to amend said code by adding thereto a new
article, designated §22-6A-1, §22-6A-2, §22-6A-3, §22-6A-3a, §22-
6A-4, §22-6A-5, §22-6A-6, §22-6A-7, §22-6A-8, §22-6A-9, §22-6A-10,
§22-6A-10a, §22-6A-11, §22-6A-12, §22-6A-13, §22-6A-14, §22-6A-15,
§22-6A-16, §22-6A-17, §22-6A-18, §22-6A-19, §22-6A-20, §22-6A-21,
§22-6A-22, §22-6A-23 and §22-6A-24; to amend said code by adding
thereto a new article, designated §22-6B-1, §22-6B-2, §22-6B-3,
§22-6B-4, §22-6B-5, §22-6B-6, §22-6B-7 and §22-6B-8; to amend and
reenact §22C-8-2 of said code; and to amend and reenact §22C-9-2 of
said code, all relating generally to oil and gas wells; requiring
West Virginia Workforce Investment Council to complete certain
reviews and provide report to Legislature; expanding powers of
Secretary of the Department of Environmental Protection;
authorizing secretary to determine number of oil and gas inspectors
and supervisors and to make investigations or inspections to ensure
compliance with applicable law; providing for inspector
qualifications, duties and minimum salaries; creating Natural Gas
Horizontal Well Control Act; providing short title; making legislative findings and declarations of public policy; requiring
secretary to submit written report to Legislature on number of
waivers granted; providing for applicability of act and exceptions;
providing special considerations and rulemaking for karst
formations; defining terms; making horizontal wells subject to
certain provisions in article six, chapter twenty-two of the Code
of West Virginia; specifying powers and duties of secretary,
including certain rule-making power and reporting duties; requiring
permit for horizontal wells; establishing permit application
requirements and contents; requiring bond and permit fees;
providing for issuance of emergency permits; providing for denial,
suspension and reinstatement of permits in certain circumstances;
providing for application review, requirements for issuance of
permit and permit requirements; establishing performance standards;
providing for copies of permits to be furnished to county
assessors; requiring certificate of approval for large pits or
impoundment construction; requiring application for certificate;
establishing application requirements and payment of fees;
providing for modification, revocation or suspension of certificate
and hearing procedure, including an administrative appeals process;
providing exceptions for certain farm ponds; authorizing secretary
to propose legislative rules governing large pits and impoundments;
providing certain notices to certain property owners regarding certain applications and intent to enter property to survey or to
conduct seismic activity; clarifying that notice to certain
lienholders is not notice to certain landowners; requiring
applicant to file Class II ad and allowing submission of written
comments to Department of Environmental Protection website;
clarifying method of delivery of notice; establishing procedure for
filing written comments; establishing well location restrictions;
requiring promulgation of legislative rules for plugging and
abandonment of horizontal wells; exempting certain wells from
Natural Gas Horizontal Well Control Act; establishing reclamation
requirements; requiring performance bonds or other security;
providing notice of planned operation and contents of notice to
certain surface owners; providing notice to certain surface owner
and offer for compensation for certain damages to certain surface
owner; providing for reimbursement of property taxes to surface
owner; providing for civil action, rebuttable presumption and
relief for water contamination or deprivation; establishing water
rights and replacement procedure; establishing civil penalties and
offenses; requiring gas operations to submit certification from
Division of Highways that operator has entered into road
maintenance agreement pursuant to Division of Highways Oil and Gas
Road Policy; creating public website and electronic notification
registry of horizontal well permit applications and public notice of website; providing for air quality study, report to Legislature
and rulemaking; requiring secretary to report to Legislature
regarding safety of pits and impoundments; providing casing and
cement standards; authorizing secretary to promulgate legislative
and emergency rules relating to casing and cement standards;
authorizing secretary to promulgate legislative rules governing
pits and impoundments; providing secretary authority to establish,
revise and grant waivers regarding casing and cement standards and
programs; creating the Oil and Gas Horizontal Well Production
Damage Compensation Act; providing legislative findings and
purpose; defining terms; providing conditions and parameters for
compensation of surface owners for drilling operations; preserving
common law right of action and providing offset for compensation or
damages paid; requiring notice of claims by surface owners;
providing manner in which oil and gas operator must provide notice
of reclamation; providing for offers of settlement; providing
procedures for civil actions, arbitration and fees; preserving
alternate remedies; and modifying definitions of "shallow wells"
and "deep wells".
Senator Unger moved that the bill take effect from passage.
On this question, the yeas were: Barnes, Beach, Boley,
Browning, Chafin, Edgell, D. Facemire, Fanning, Foster, Green,
Hall, Helmick, Jenkins, Kirkendoll, Klempa, Laird, McCabe, Miller, Minard, Nohe, Palumbo, Plymale, Prezioso, Snyder, Stollings,
Sypolt, Tucker, Unger, Wells, Williams, Wills, Yost and Kessler
(Mr. President)--33.
The nays were: None.
Absent: K. Facemyer--1.
So, two thirds of all the members elected to the Senate having
voted in the affirmative, the President declared the bill (Eng.
Com. Sub. for S. B. No. 4001) takes effect from passage.
Ordered, That The Clerk communicate to the House of Delegates
the action of the Senate and request concurrence therein.
The Senate proceeded to the eleventh order of business and the
introduction of guests.
On motion of Senator Unger, the Senate adjourned until
tomorrow, Wednesday, December 14, 2011, at 11 a.m.
____________