OVERVIEW OF AGENCIES REGULATING OIL & GAS DEVELOPMENT IN WEST VIRGINIA
| Jurisdiction | United States |
(Dec 2010)
OVERVIEW OF AGENCIES REGULATING OIL & GAS DEVELOPMENT IN WEST VIRGINIA
Robinson & McElwee PLLC
Charleston, West Virginia
TIMOTHY M. MILLER is a Member with the firm of Robinson & McElwee PLLC in the Charleston, West Virginia office. He practice focuses on energy and natural resources law, and related corporate representation and civil litigation. He has tried numerous civil cases to jury trial conclusion in federal and state courts throughout West Virginia. Mr. Miller has significant experience in complex litigation and class action litigation, including cases before the West Virginia Mass Litigation Panel and the West Virginia Supreme Court of Appeals. He regularly represents natural resource companies in various matters related to title, contract, royalty, property damage and other disputes, and also represents oil and gas companies before various permitting and regulatory agencies. He is recognized in Woodward and White's publication The Best Lawyers in America® in the area of Oil and Gas Law, and has been selected as one of West Virginia's "Super Lawyers" in the area of Civil Litigation Defense by the publication Super Lawyers®. Mr. Miller received his Bachelor of Science degree in Business Administration from West Virginia University in 1977, and received his Juris Doctor degree from West Virginia University College of Law in 1980. He is a member of the Defense Research Institute, the Defense Trial Counsel of West Virginia, the American Bar Association, Section of Litigation, and the Energy & Mineral Law Foundation, serving currently as Secretary and Treasurer, Trustee-at-Large and as a member of the Executive Committee. He also serves on the Board of Directors for the United Way of Central West Virginia. For more information about Mr. Miller and his firm, go to www.ramlaw.com.
Timothy M. Miller
Robinson & McElwee PLLC
Charleston, West Virginia
700 Virginia Street, East, Suite 400
P.O. Box 1791
Charleston, WV 25326
Email: tmm@ramlaw.com
Phone: 304-347-8336
I. Introduction/Background.
A. This outline will provide a general overview of the agencies in West Virginia which regulate the permitting, spacing, pooling, unitization and general development of oil and gas production. Given that the topic for this general session is State Oil and Gas Conservation Agency Issues, this paper is not intended to cover all aspects of environmental regulation of oil and gas operations. Specific regulatory issues related to air quality, water pollution and control, underground injection wells and related issues should be considered when operating in West Virginia.
II. Regulation of Oil and Gas Exploration in West Virginia.
A. Introduction.
1. Jurisdictional Agencies. The regulation of the oil and gas industry in West Virginia is dictated by statute and generally subject to the jurisdiction of the West Virginia Department of Environmental Protection ("DEP"), Office of Oil and Gas ("OOG"). See generally, W.Va. Code §§ 22-6-1 , et seq., and regulations issued by the OOG contained in Title 35, Code of State Rules ("C.S.R."), Series 4. In West Virginia, a distinction is made between a "deep" and a "shallow" well. Generally, permitting of "shallow" wells is subject to
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the jurisdiction of the OOG, and the Shallow Gas Well Review Board ("SGWRB") created by Chapter 22, Article 8 of the West Virginia Code. The SGWRB regulates and determines the appropriate spacing of shallow wells when gas well operators and owners of coal seams fail to agree on the spacing of such wells. The Rules of Practice before the SGWRB are contained in Title 50, C.S.R., Series 1. Deep wells are regulated by the OOG, and the Oil and Gas Conservation Commission ("OGCC"), created pursuant to Chapter 22C, Article 9 of the West Virginia Code. The Rules of the OGCC are contained in Title 39, C.S.R., Series 1.
2. Marcellus and Utica Permitting. The Marcellus shale formation in West Virginia lies above the Onondaga formation and thus is generally considered as a "shallow" formation, subject to a definitional and operational quirk noted below. The Utica Shale is below the top of the Onondaga and thus is subject to the "deep" well permitting statutes and regulations. Thus, depending on the depth of the well, two different "conservation" agencies may have jurisdiction, in addition to the overall permitting and regulatory control of the DEP OOG.
B. Statutory Definitions/Deep vs. Shallow.
1. Shallow Wells. West Virginia defines a shallow well as any gas well drilled and completed in a formation above the top of the upper most member of the "Onondaga Group." W.Va. Code §§22C-8-2(21), 22C-9-2(a)(11). However, operators drilling a shallow well in West Virginia may penetrate into the
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Onondaga Group not in excess of twenty feet in order to allow for logging and completion operations.
2. Deep Wells. West Virginia defines a deep well as any well other than a shallow well, which is drilled and completed in a formation at or below the top of the upper most member of the Onondaga Group. W.Va. Code §§22C-8-2(8), 22C-9-2(a)(12).
3. Shallow Converted to Deep. A recent ruling at the trial court level in the case of Blue Eagle Land, LLC, et al. v. The West Virginia Oil & Gas Conservation Commission, et al., No. 08-CAP-171 (September 27, 2010 Order), pending in the Circuit Court of McDowell County, West Virginia, affirmed in part an order of the OGCC and held that any penetration greater than 20 feet into the top of the Onondaga, even if no completion activity is conducted below the top of the Onondaga, renders the well subject to the "deep well" jurisdiction of the OGCC and subject to the deep well permitting regulations. This decision has not been appealed, and there is no precedent from the West Virginia Supreme Court of Appeals which would suggest whether it would agree with this holding. Thus, when drilling Marcellus wells in West Virginia, the laws and regulations related to deep wells may unexpectedly apply to operators who penetrate the Onondaga more than twenty feet (intentionally or inadvertently).
C. General Permitting Procedures.
1. Permit Applications. Applications for permits for any gas well in West Virginia must be filed with the OOG and the requirements for the permit are
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set forth in W.Va. Code § 22-6-6 . See also 35 C.S.R., Series 4-5, 4-6, 4-8, 4-9, 4-10, 4-18, 4-19. In addition to issuing permits for well work, the Director of the DEP may issue a separate permit, general permit or permit consolidated with the well work permit for the discharge or...
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