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Panel discusses pros, cons of new Marcellus law

CHARLESTON, W.Va. -- Debate about whether the new Marcellus Shale drilling law the Legislature passed last week is good or bad is likely to continue.

Four people presented different views during the Charleston Rotary Club's luncheon at the Civic Center on Monday.

Doug Malcolm, an engineer and past president of the Independent Oil & Gas Association of West Virginia, said the new legislation has both good and bad sections for a growing industry in the state.

Gas companies in West Virginia, Malcolm said, could end up paying annual "severance taxes between $1.2 million and $1.5 million. In Pennsylvania, there are no severance taxes on gas."

Don Garvin, lead lobbyist for the West Virginia Environmental Council and a longtime member of Trout Unlimited, said, "This bill is full of waivers for the [Division of Environmental Protection] Secretary [Randy Huffman] to waive. ... And air pollution regulations were taken out of the bill."

Bob Hart, an engineer who worked for the gas and petroleum industries for many years, represents West Virginia property holders who own mineral rights on their land.

Hart said the new legislation "will allow us to develop much more of our state's oil and gas resources. ... It also increased drilling fees."

Hart said the legislation also gives companies who lease land for oil drilling "full control of all gas to the center of the earth. ... We will be seeking additional provisions for royalty owners."

Dave McMahon, a Charleston public interest lawyer, represents West Virginia property owners who do not own the mineral rights under their property. The value of their properties could be threatened by a Marcellus Shale drilling project near their homes.

McMahon said conventional gas drills cost $300,000 to develop, but new hydrofracking gas drills can cost between $3 million and $6 million.

McMahon also worries about environmental problems, such as chemical-polluted drilling water contaminating creeks and water sources.

"The bill the governor introduced was an industry bill. Never in my life have I been left out of the process so much."

The noise generated by hydrofracking drilling projects, McMahon said, will mean some "people can't sleep at night."

"We don't like the bill at all. It was the industry's bill. We are going to have to go to court to challenge it."

Malcolm called the new legislation a "compromise bill" that benefits all sides.

"It allows the DEP, and not the Legislature, to write the rules about the more complex aspects of drilling, which are highly scientific."

The gas drilling industry, Malcolm said, supports new safety and environmental standards included in the bill.

"The bill requires disclosure of chemicals and additives used during the fracking process."

But Malcolm criticized the bill for higher permit fees and a more complicated application process.

"Today, it costs $450 to apply for a drilling permit. Under the new bill, it will cost $10,000 for the first well and $5,000 for each additional well," Malcolm said.

"In Pennsylvania, it costs $3,500 to apply for a permit. In Ohio, it costs between $500 and $1,000."

Malcolm also criticized the new legislation for lengthening the time to process permit applications and to solicit public comments.

"In Pennsylvania, it takes seven days to get a permit. In West Virginia, it takes between 120 and 150 days, and this law will extend that."

Garvin criticized drilling companies "for spending millions to bring in out-of-state workers. You can't find a motel room in Wetzel County."

Malcolm asked, "What's wrong with out-of-sate workers? My father came here from Wyoming in the 1950s to get into the oil business."   

Reach Paul J. Nyden at pjnyden@wvgazette.com or 304-348-5164.


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