Gas Industry Pushing for Forced Pooling Again -- 2016 Standoff

Legislative Session began January 13:

http://www.theintelligencer.net/page/content.detail/id/649894/

"I know there are some who are not in favor of this. But, for anything beneath the Marcellus, they can pool it right now," Evans said, noting he will likely be one of the co-sponsors of the bill upon its introduction. "I think this will be a good bill. If they skip over you, you will not get anything. This would ensure that you at least get something." -- Wrong

McGeehan, however, does not buy this argument.

"You are going to have a redistribution of wealth from West Virginia landowners to huge out-of-state oil and gas companies," he said.-- Right

My view:

The problem with the argument that forced pooling already exists for deep formations such as the Utica is that is misleading -- the current old law speaks of a "pool" of free flowing oil and gas in conventional reservoirs produced by vertical drilling; therefore, it should not apply to unconventional horizontal shale drilling that requires fracture stimulation in order to produce hydrocarbons.

See 22C-9-7:

http://www.legis.state.wv.us/wvcode/ChapterEntire.cfm?chap=22c&...

WEST VIRGINIA CODE

CHAPTER 22C. ENVIRONMENTAL RESOURCES; BOARDS, AUTHORITIES, COMMISSIONS AND COMPACTS.

ARTICLE 9. OIL AND GAS CONSERVATION.

§22C-9-2. Definitions.

(9) "Pool" means an underground accumulation of petroleum or 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 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;

My conclusion:

The currently antiquated legislation regarding forced pooling only governs a "pocket" or "pool" of petroleum or gas -- a completely different animal than fracking and horizontal drilling.  Hence, current legislation does NOT allow a company to force pool during unconventional Utica drilling. 

Even if there was a current law to force pool the deep formations, new legislation should be to eliminate that rather than allow shallow forced pooling.

Contact your Senate and House Members to let them know where you stand on this issue as a property owner and/or West Virginia resident:

Joint Standing Committee on Energy - Interim

http://www.legis.state.wv.us/Committees/Interims/committee.cfm?abb=...

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Replies to This Discussion

Permalink Reply by Rick Clark on February 25, 2016 at 1:45am

Pooling a fast one on us,

Farm Bureau Opposes HB 4639 and SB 646

West Virginia Farm Bureau strongly opposes HB 4639 and SB 646. After months of good faith negotiations, the oil and gas industry has abandoned its commitment to support legislation providing fair treatment of mineral and surface owners. HB 4639 and SB 646 strip away the ability of mineral and surface owners to negotiate a fair leasing agreement with reasonable compensation and sensible protection of their land. Further, land and mineral owners subject to forced pooling will no longer have recourse against companies that abuse the process, nor will they be paid by the oil and gas companies for their minerals. Instead, they will be forced to sue lessees within the pool for their rightful share of royalties, creating a nightmare for the West Virginia judicial system.

These bills also attempt to fool the public by changing terminology from ‘forced pooling’ to ‘co-tenancy reform,’ creating the illusion of protecting the property owners of West Virginia. Nothing could be further from the truth. Once again, land and mineral owners in the Mountain State will be left out in the cold while out-of-state corporations reap massive profits.

West Virginia Farm Bureau acknowledges the expansion of oil and gas resources are important for the future of West Virginia, but such development must be done in a way that is fair to all parties, and allows the owners of those resources to be justly compensated and protected in the process.

Take a stand, thanks Rick

Permalink Reply by Rick Clark on February 27, 2016 at 2:29am

Like to add ,

I have been treated fairly in my leases I have signed. maybe not on one, that was early in the leasing process.

forced pooling is a tool these companies have to have to drill these horizontal  wells.

you just cant stop others from developing there portion of a tract.  has to be a process to deal with  Anti drillers and to help others that want to lease reach an agreement. 

hopefully we can get a good forced pooling legislation passed  that works for the majority of the  people.

not pass bills that add to the confusion

Just my two cents.

 

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