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Court suggests lawmakers revisit appeals of drilling permits

CHARLESTON, W.Va. -- The West Virginia Supreme Court is urging lawmakers to reconsider whether surface landowners in the state should have the right to appeal when oil and gas drilling permits are issued for their land.

The suggestion was included as part of a new court ruling concluding that current state law does not give appeal rights to surface property owners who don't also hold title to oil and gas reserves buried underground.

Justice Margaret Workman, writing for a unanimous court, noted that current laws on drilling permit appeals were written prior to the "extensive development of the Marcellus Shale in this state."

"This court urges the Legislature to re-examine this issue and consider whether surface owners should be afforded an administrative appeal under these circumstances," Workman said in the court's 23-page opinion.

The court ruled in a case brought by Doddridge County resident Matthew Hamblet, who was trying to challenge an EQT Production Co. gas well permit on his land.

Like many West Virginians, Hamblet owns the surface of a 443-acre parcel but does not own the rights to the oil and gas underneath the land.

When EQT obtained a lease and applied for a permit to drill on the site, Hamblet objected to parts of the company's permit application, noting damage from previous drilling and urging DEP to require changes in the company's plans. DEP's Office of Oil and Gas approved EQT's plans anyway, and Hamblet filed a lawsuit in circuit court to challenge that approval.

In his case, lawyers Cynthia Loomis and Isak Howell cited a 2002 Supreme Court opinion that said surface landowners have the right to file court appeals of DEP permit actions on oil and gas wells. But the statute cited by the court in that case doesn't actually grant that right to landowners, only to coal owners who are concerned about nearby gas drilling.

Lawyers for DEP and for EQT sought to have Hamblet's court case dismissed, arguing that the Supreme Court's 2002 ruling was wrong. Doddridge County Circuit Judge John L. Henning refused, but did agree to submit the matter to the Supreme Court for clarification.

In its ruling last week, the Supreme Court overturned its 2002 decision and said current state statutes do not give surface landowners the right to appeal drilling permits. The court also ruled against the arguments of the West Virginia Surface Owners' Rights Organization, which said surface landowners have constitutional rights to appeal drilling permits.

"EQT has a legally binding lease that grants it explicit rights of access to the oil and gas underlying Mr. Hamblet's property," the Supreme Court said. "It is this contractual obligation burdening Mr. Hamblet's surface estate that deprives him of an unrestricted right to enjoyment of his property, not the issuance of the well work permit at issue. As such, the constitutional guarantees of due process and equal protection do not apply."

The Supreme Court's ruling comes nearly a year after West Virginia lawmakers passed Gov. Earl Ray Tomblin's bill to rework state permitting rules for horizontal drilling in the state's Marcellus Shale gas fields.

In that bill, lawmakers declined to provide surface owners appeal rights, and surface owners' right advocates have complained the legislation did little -- if anything -- to address their concerns about the Marcellus drilling boom.

Randy Huffman, secretary of the state Department of Environmental Protection, said he doesn't have an official position on whether lawmakers should give surface owners permit appeal rights.

"I think that's a good debate to have, but I haven't really formed a solid opinion on that," Huffman said Monday.

Corky DeMarco, executive director of the West Virginia Oil and Natural Gas Association, said his group would not support such a change in current state statute or regulations.

"I think we've had that before the Legislature on several different occasions, and it didn't go very far," DeMarco said. "If you start to give them the right to appeal or object, you start to tear away at the mineral rights having primacy over the surface rights."

Dave McMahon, a lawyer for the West Virginia Surface Owners' Rights Organization, noted that the court declined to take up a related issue: whether surface landowners have a constitutional right to a preapproval hearing on drilling permits.

McMahon's group argues that landowners do have that right, and that issue could provide a forum for later litigation on the matter.

"Surface owners are very disappointed, but we will not give up," McMahon said. "We continue to hope that in the long run our state will not make all the mistakes with the Marcellus Shale that it did with coal, and we'll continue to work toward that goal."

Reach Ken Ward Jr. at kward@wvgazette.com or 304-348-1702.


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