Category Archives: Forced Pooling

Forced Pooling Bill is Dead (Most Likely)

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SB 576, this year’s revised version of forced pooling, is unlikely to pass.

The reason it isn’t likely to pass is that the House is running out of time to pass legislation and the House hasn’t spent any time on the forced pooling legislation.  This sounds like bad planning on the sponsor’s part, but actually the House spent a huge amount of time debating some legislation about medical marijuana–lots more than was expected.  (It looks like that is going to pass, if you’re interested.)

There’s a small possibility that someone could push for this bill on the last day or two of the session so we can’t say it’s completely dead yet.  It’s on life support, though.

We’re glad this forced pooling legislation won’t pass.  It was not really well written and it gave a lot of power to the companies.  Last year’s legislation was probably a tiny bit better, actually.  At very least it was a better written piece of legislation.

One of these years the companies are going to realize that getting forced pooling passed is really hard.

One of these years the companies are going to realize that they need to address one or two issues instead of trying to push legislation that addresses every single issue they want to address.

This year wasn’t that year.

Lease Integration and Co-Tenancy Bill Slowed Down — UPDATED:

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The West Virginia Senate postponed voting on SB 576, the Cotenancy Mineral Development Act.  It was previously SB 244, but underwent some significant changes and was given a new number.

This is great news!  After the rally at the capitol last week it seemed like the oil and gas industry was pulling out the stops to get this bill passed.

Thankfully, there are some good people at the capitol who are working hard to keep it from passing.  Their work is paying off.

Also notable in the linked article is the fact that the Farm Bureau came out in opposition to the bill.  They had previously expressed some support for it.

2017-03-30 UPDATE: The bill passed the senate yesterday evening.  Time to call the House.

2017 Legislation: Force Pooling is Back

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Forced Pooling is back, as everyone expected it to be.  However, the oil and gas companies have realized that they can’t get forced pooling to pass under the name of forced pooling here in West Virginia.  So they’re giving it two new names, “joint development” and “cotenancy”.  Both seem to be created in the same bill.

The new forced pooling bill is Senate Bill 244.  It will change Chapter 37 Article 7 Section 2 of the West Virginia code which deals with a legal concept called “waste”.

The existing paragraph is very short, and says simply that if a cotenant commits waste he’ll be liable to his other cotenants for damages.  The new section is much longer and focused precisely on oil and gas leases.

The new paragraph (b) will make it so that if a majority of the owners of a tract agree to a “lawful use” (a lease), the company will not have to enter into a lease with the other owners.  All the company will have to do is account to (pay) the other owners a proportionate share of the revenues and costs of the “lawful use”.

So when 50.01 percent of the owners agree to lease, the other 49.99 percent of owners will have no say in what kind of lease they enter in to.

Also, the only thing the company will have to do is pay royalties to the 49.99 percent.  But they can deduct post-production costs.  It won’t be more than a minute before that right gets abused.

The new paragraph (c) will give the company the right to use the surface of any tract overlying the “jointly developed leases”.  In other words, when tracts are pooled for development the company can use any of the surface without entering into a surface use agreement with the surface owner.

The stated intent of this legislation is to make it so the companies can pool both old and new existing leases which don’t have pooling language in them.  However, it does a lot more than that.

This is bad legislation for both mineral owners and surface owners.  It only benefits the companies, which will get into leases for far less money than they already do.  Don’t forget, the West Virginia Marcellus Shale is the most economic shale play (in 2013, but not much has changed relative to other plays) in the United States.  We’re already giving up our minerals for less than people in Pennsylvania and Ohio do.  Let’s not let the companies force us into even cheaper leases.

 

Legislative Update, March 1, 2016

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We may be a day early to report the death of this year’s forced pooling bill, but the rumors coming out of Charleston and the news articles we’ve read sound promising.  Good for McGeehan and everyone else who has worked to defeat this bill.  Maybe next year they’ll come up with something that makes it easier for oil and gas companies to put together drilling units, but without taking away private property rights.  Eminent domain is one of a few things the Founding Fathers got wrong.

The other good thing we’ve seen is that the bill which would have allowed pipeline companies to enter private property without permission if they were surveying for a proposed pipeline easement has been killed.  The Senate voted it down by a margin of 2-1.  Those are good numbers against a bad bill.

 

2016’s Forced Pooling Bill has been Introduced

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Pat McGeehanCasey Junkins of the Wheeling-Intelligencer reports on the forced pooling bill that’s before the West Virginia legislature this year.  There are quotes from Corky DeMarco, Pat McGeehan (pictured at right), and Tim Greene.  We’re happy to note that the article quotes McGeehan as saying that there is “stern opposition” to the forced pooling bill.  Mr. McGeehan is the leader of the opposition as far as we can tell, and we wish him luck and continued success in his opposition.

Please contact your legislators about this bill.

West Virginia Forced Pooling: Woody Ireland’s Arguments in Favor

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Woody Ireleand has been interviewed again for an article in the Wheeling Intelligencer.  The Forced Pooling legislation that he is championing has improved over the years, but it’s never going to overcome the one argument that is foremost in my mind: forcing someone to sell or use their land is not right, even when it’s lawful.

Forced Pooling Legislation is Back on the Menu

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The West Virginia Legislature will consider passing forced pooling legislation during the 2016 session.  This will be the sixth time that they’ve considered it.  The legislation has been defeated five times in five years.  Each defeat has led to improvements in the legislation.  This year, backers of the legislation say that it has only changed slightly from last year’s version.  They think that the legislation from last year was pretty good and are willing to push it as is.

Opponents to forced pooling oppose it on principle.  They say that it’s not right to force a property owner to do any particular thing with their property unless they want to.  We agree.  We’re not fans of eminent domain either, for the same reason.  If the government or a company or a private citizen or a group of private citizens wants to use someone’s property, they should either work out an agreement for that property with the owner or find another piece of property to use.  We know there are counter-arguments, but we don’t think they trump the right of a property owner to control their property.

Looking forward to a fun legislative session.

Doddridge County Meeting on Forced Pooling

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There was a meeting in Doddridge County last night where residents were able to express their opinions about forced pooling to a couple of state legislators, Woody Ireland and Mike Romano.  Woody Ireland is a proponent of forced pooling in the House of Delegates, and Mike Romano is a Senator who voted against it.

The article over at WBOY.com is short, but it’s important because it shows that the forced pooling agenda is still being pushed forward.  We oppose forced pooling on principle.  It’s not right to take a landowner’s property away from them and give it to another person or a corporation.  Other provisions of the bill were good, and we would like to see them passed, but forced pooling should not be the law.

Partition Suits and Forced Pooling

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DocumentAndrew Brown of the Charleston Gazette wrote an excellent article on forced pooling and partition suits in West Virginia.  It points out the problems and advantages of both, doesn’t offer a solution, and does a pretty good job of pointing out that the current system doesn’t really work.  It’s a little long compared to what many of us read online, but it’s well worth the time.

He didn’t get into solutions.  One possible solution to some of this is a dormant minerals act similar to what Ohio already has.  Ohio is litigating the living daylights out of their dormant minerals act right now, with at least one decision expected in the next few months, so we could look to Ohio for sample language.  It wouldn’t solve all the problems, and we should dive into the subject at length sometime, but it’s certainly something that should be looked into closely by West Virginia.

Forced Pooling is not Dead in West Virginia

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The Joint Standing Committee on Energy is meeting today in the House Chamber down in Charleston.  On the agenda, “Study of unitization of interests in horizontal well drilling units.”  Also, presentations from WVONGA, WVROA, Joe Hatton who is an Agribusinessman, and a Study of Royalty Payments by Kevin Ellis from Antero Resources.  Doesn’t look like the opposition to forced pooling was invited today.

Oh, there’s also Miscellaneous Business on the agenda.

Time to start calling legislators again, it seems.

While we’re fans of development, we’re not fans of eminent domain being used to force leases onto West Virginia mineral and surface owners.  It’s just not right.