Why We Need Pipelines

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Gas Pipeline Construction West Virginia

Somewhat Reasonable, the Heartland Institute’s blog, has an excellent post which shows just why the pipeline projects which are criss-crossing West Virginia right now are so important.

To sum it up, lack of pipeline capacity hurts the price of gas in the Marcellus shale region, which means lower royalty payments to owners; and lack of pipeline capacity means that more oil is being moved by rail, with more spills as a result.

We agree that pipelines are necessary.  We want pipelines.  We just want people to know what they’re getting in to when they agree to a pipeline crossing their property.  Informed property owners will make better decisions and be happier with the results than uninformed property owners.  Informed property owners may refuse a pipeline across their property.  That’s their right.  Either way, it needs to be an informed decision, not a knee-jerk reaction.

Pipelines and Compressor Stations: How to Live with the Noise

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Compressor Station

When we talk with people about pipelines we make sure to discuss noise.  Most people don’t realize that there could be a lot of noise associated with a pipeline.  The pipeline itself won’t make noise, but the associated machinery could.  The gas needs to be compressed for transportation, and if you’ve signed a pipeline agreement you may have given them the right to put a compressor on your property, too.  Compressors make a lot of noise.

As you could see in that video, a lot can be done to muffle the sound of the compressor station.  Make sure when you negotiate for pipeline or compressor station rights of way that you address the noise issue.  You’ll be sorry if you don’t.

 

Pipelines and Eminent Domain in West Virginia

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BullyIt appears that an oil and gas company is trying to push landowners around a bit, again.  The Mountain Valley Pipeline (MVP) sent workers out to survey the proposed route of the pipeline, but some landowners have turned the surveyors away.  Those landowners have gotten letters from MVP threatening legal action if they didn’t allow the surveyors onto their property.  Some of those landowners have checked with attorneys (not this one) and decided that MVP doesn’t have any basis for legal action.

The MVP cited West Virginia’s eminent domain statutes, which are located at 54-1-1 et. seq. of the West Virginia code.  The trouble is, the company seems to have misrepresented the law in its letter to landowners.

While there is apparently a lot of grey area in West Virginia’s code, and I haven’t seen a copy of the letters that were sent out, it’s still upsetting that an oil and gas company can feel like it can get away with these kinds of tactics.  This is the kind of thing that gives lawyers a bad name.  Sure, you’re supposed to represent your client zealously.  But you’re not supposed to bully, harass, and take advantage of people either.

There is a better way.  It costs more initially, but saves money in the long run.  Hire a landman who knows how to work with people.  Pay people a little money.  Ask them where they think a pipeline would best be run on their property.  Go around tracts if you need to.  It’s hard work, but it’s worth it.

Compressed Natural Gas for Your Home?

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A company called Compass Natural Gas Partners is trying to use pressurized containers to deliver natural gas to rural homes.  Instead of running pipelines to each location, a truck would deliver a tank to the location, and fill the tank up on location.  It’s exactly how propane works now, just cheaper.

This is great, as more natural gas use means more royalties for West Virginia mineral owners.  Once they have this available in Pennsylvania, maybe they’ll bring it here.

New CNG Station Opens in Washinton County, PA

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CNG StationExcellent news!  A company called Energy from US opened a new compressed natural gas station in Bentleyville, PA.  It’s open to the public, so it’s not just for fleet vehicles and the like.

We’d like to see a lot more of this kind of infrastructure being built.  Natural gas is cheaper than gasoline, cleaner that gasoline, and comes out of the ground ’round these parts.  The more people use compressed natural gas to fuel their cars, the more the price of natural gas will go up, and the more royalties we’ll get paid.

Nuisance Lawsuits in West Virginia

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Frack Truck Country Road

 

 

 

 

 

West Virginia Public Broadcasting did a short segment on what it’s like to live next to Marcellus Shale drilling and production activities.  It’s not real pretty.  While I’m all for oil and gas development here in West Virginia, I also think that the oil and gas companies should really go a little more out of their way to allow the neighbors to maintain their standard of living.  That standard of living isn’t usually extravagant, but it’s often comfortable, quiet, and chosen.  It’s Wild and Wonderful West Virginia.

The people that the oil and gas company contract with usually get enough to make up for the disruption in lifestyle.  It’s the neighbors who don’t have anything the company wants that get the short end of the deal.  They put up with big trucks on little roads, gigantic potholes made by those trucks, noise and light from the drilling rig, the intense rumble of gas being flared off the well when it’s first brought in, and the dust, smoke, and gas from the trucks, rigs, pipelines, and machinery necessary to process the gas.  The companies don’t usually do anything about it.  People can call and complain all they want, but it won’t usually do a lick of good.  The neighbors don’t have any way of forcing the companies to make up for the disruption to their lifestyle, and the change in their environment, other than to file suits.

The article states that over 100 people filed nuisance lawsuits in West Virginia last year against oil and gas production companies of various sorts.  50 of those suits were compiled into a mass litigation suit.  Dave McMahon of WVSORO fame noted in the article that there would probably be a lot more of these kinds of suits if there was more money involved.  It’s hard for an attorney to take on a nuisance case because there’s often not much of a payday in it.

I’d like to see the companies take more initiative to clean things up.  I’ll give them credit, they mostly do a pretty decent job of restoring their well sites to previous contours and otherwise abiding by state regulations.  It’s just not enough.  The companies are affecting peoples’ lives, making it impossible (not just hard) to live the way they did before the gas wells and pipelines came around.  It’s not fair or right that the companies can affect West Virginians’ property and lifestyle without compensating for it.

Perhaps we need a law that allows for double or triple damages in a nuisance lawsuit involving corporations.  Or perhaps we need larger setbacks for certain processing facilities and well pads.  We certainly need better regulations on trucks and roads.  Whatever we do, it should be done soon, before we drive more people out of West Virginia and before the natural gas boom dies off completely.

Magnum Hunter Sells Tyler County, WV Leases

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Dollar SignNow this is news.  Magnum Hunter will close tomorrow on a deal to sell 5,210 acres of leases in Tyler County.  Magnum says the leases are in “non-core undeveloped and unproven” parts of the county.  The sale should net Magnum $40.8 million dollars.  That’s $7,831.09 per acre, by our calculator.  For non-core, undeveloped, and unproven leases.  Oh, and the Chairman of the Board, Gary C. Evans, also pointed out that a large portion of the acreage had expirations on the horizon.  So Magnum sold leases that are expiring soon and in questionable parts of Tyler County for almost $8,000 an acre.

Just speculating, but the only company that could possibly drill on soon-to-expire leases in Tyler County is Antero Resources.  They have the rigs in place and the most infrastructure of anyone up there right now.  We could be wrong about that, of course.  JayBee, Statoil, EQT, and Noble are all working hard in that neck of the woods, too.

But that’s beside the point.  We’d like to point out that the sale was for almost $8,000 per acre for, shall we say, sub-prime leases.  West Virginians continue to sell themselves short regarding what they’ll take for lease bonuses.  Ask for more than you think you can get.  Always ask for more than you think you can get.  You might be pleasantly surprised at what happens.

Kentucky Pipeline Project Doesn’t Get Eminent Domain (for now)

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no-eminent-domainThe Bluegrass Pipeline has been trying to use eminent domain in Kentucky.  The Court of Appeals said they couldn’t.  Read about it here.

The Kentucky Supreme Court has not heard the case yet, so the final decision could be different.  However, when both the Circuit Court and the Appeals Court agree, you’re less likely to find that the Supreme Court makes a different decision.  It’s not conclusive, but it’s indicative.

West Virginians who are concerned about the Atlantic Coast Pipeline and the Mountain Valley Pipeline (and a few other projects) should take note of this decision.  Kentucky’s eminent domain laws are a little different from ours, but the language of the decision sounds like language I could see a West Virginia court drafting to explain our eminent domain laws and their interpretation.  For those of us who are not fans of how eminent domain is being abused, this is good news.

Another Pipeline Spill

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There’s another pipeline spill, this one out in California.  The picture below is not from that pipeline, of course.

Gas Pipeline Construction

While we need the pipeline projects that are planned for West Virginia, we also need to be sure that the work is done well so that we don’t end up with leaks and spills.  I don’t want to see what a 42-inch gas pipeline would do if it ruptured.  There’s going to be one going in not too far from where I live.  It’s become personal.  The dangers are real, and should be looked at closely.