Horizontal Well Bill Dies  

as Session Ends 

by Andrew B. McCallister

Executive Editor & Senior Attorney  

 

The 2011 Regular Session of the West Virginia Legislature ended without passage of comprehensive horizontal well legislation. With ten days left in the Session, the Senate passed SB 424, a bill that would have, among other things, imposed additional notice, water management, performance standards and permitting requirements on operators drilling horizontal wells. Notably, the bill that passed out of the Senate had deleted the pooling and unitization provisions that many horizontal well operators supported. 

The House Judiciary, which had been working on its own bill for most of the Session, inserted this bill in place of the Senate's version of SB 424. The Judiciary Committee Substitute for SB 424 contained additional restrictions on well locations, shifted responsibility for setting permit fees to DEP through rulemaking and included drug-free workplace requirements that were unlike those imposed on other industries. Like the version of SB 424 that passed the Senate, the Committee Substitute did not include pooling or unitization for horizontal wells. The Committee Substitute version of SB 424 was under consideration on the last day of the Session, but was never brought up for a vote. After it became clear that SB 424 was dead, Senate and House leaders traded barbs in the press over who was responsible for the bill's failure, but it was clear that the differences between the two versions of the bill were so substantial that reaching a compromise in the short time left on Saturday would have been a herculean task.

The question for the industry now is "What happens next?" Speaker Thompson, some other legislators, environmental groups and surface owner groups are calling for a special session to take up the horizontal well bills. Governor Tomblin has rejected those calls to this point, but he has asked for additional appropriations to be directed to DEP to allow for the hiring of additional inspectors. He has also directed the DEP to work on additional rules to address some of the concerns raised about horizontal drilling during the legislative process. With an upcoming gubernatorial primary involving many of the players in this legislative drama, it is clear that the industry likely will not have certainty with respect to legislative or regulatory changes in the near future.