The West Virginia Supreme Court issued an opinion in Andrews v. Antero Resources Corp. and Hall Drilling, LLC, No. 17-0126 (W. Va. June 10, 2019), an eagerly-awaited decision arising out of the In re: Marcellus Shale Litigation, in which hundreds of lawsuits have been filed against E&P and midstream oil and gas companies alleging that activities related to the production, compression, and transportation of natural gas represented a private nuisance.
The Property Owners in Andrews, which represented the first trial group in In re: Marcellus Shale Litigation, alleged that the fracking operations of Antero and Hall Drilling “in relation to their development of the Marcellus shale have caused Property Owners to lose the use and enjoyment of their properties due to the annoyance, inconvenience, and discomfort caused by excessive heavy equipment and truck traffic, diesel fumes and other emissions from the trucks, gas fumes and odors, vibrations, noise, lights, and dust.” They filed a complaint alleging claims for “private temporary continuing abatable nuisance and negligence” against Antero and Hall Drilling arising from their “natural gas exploration, extraction, transportation and associated activities in close proximity to [Property Owners’] properties.”
Please read more about this decision in this Alert.
As reported by the Wheeling Intelligencer, for the fifth year out of the last six, pooling legislation has been introduced in the West Virginia House of Delegates (HB 4426). A similar measure failed to pass in 2015 after a 49-49 vote on the final day of the legislative session. HB 4426 allows drillers who own or have leased 80 percent of the acreage in a proposed unit to unitize the remaining acreage if mineral owners cannot be located or refuse to sign leases. However, unlike prior versions, the current bill would forbid companies from deducting post-production expenses from royalty checks payable to such mineral owners. Opponents of “lease integration,” as it has been called in West Virginia, maintain that drillers should not be allowed to incorporate unleased oil and gas interests into planned well units because such incorporation co-opts landowners’ rights to execute oil and gas leases affecting their separate property. HB 4426 is currently under consideration by the West Virginia House Energy Committee.
A bill, HB2688, designed to allow oil and gas operators to create oil and gas production units without the express authority of all oil and gas owners within the unit boundary, is currently pending before the West Virginia House Judiciary Committee. The bill would require the owners of 80% of the interests in any given unit boundary to agree to pooling and unitization for horizontal wells before an operator could apply to the West Virginia Conservation Commission for a “horizontal well unit order.” Proponents say that the bill could reduce the administrative burdens against operations in the West Virginia Marcellus Shale region by allowing oil and gas operators to commence operations without locating unknown, un-locatable or abandoning oil and gas owners. Opponents fear that the bill, if passed, would be used to infringe individual landowners’ rights. The bill has already passed the West Virginia House Energy Committee.
As reported in The Wheeling Intelligencer, the West Virginia Legislature continues to consider H.B. 4558 and S.B. 578, which would allow oil and gas producers to create production units through “Forced Pooling.” If passed, such a law would allow natural gas producers to include un-leased acreage in their active drilling units if all of the un-leased landowner’s neighbors have been leased. Industry advocates pushing for passage of these measures argue their necessity for West Virginia production to remain competitive in the Marcellus markets, as Pennsylvania and Ohio have similar laws. Opponents of the idea fear that such a law could weaken the position of landowners when negotiating leases with oil and gas companies. The West Virginia Legislature considered similar laws in the past, without success.
The respective bills are currently in Committee in both the House and the Senate. With the current legislative session ending in early March 2014, it is unclear whether the bills will be taken up for a full vote in either house of the legislature prior to the close of the session.