Across the country, the boom in oil and gas drilling is mostly regulated by state agencies, with rules and staffing levels that vary from place to place. No federal statute sets standards for the drilling process itself, though the environmental impacts do fall under several national laws.
To help monitor how well states are doing their job, the Interstate Oil and Gas Compact Commission in the 1990s conducted reviews of such programs. Those reviews were later continued by a nonprofit organization called State Review of Oil and Natural Gas Environmental Regulations, or STRONGER.
As part of their proposed legislation, some lawmakers would mandate that DEP seek a STRONGER review of West Virginia's existing program to regulate natural gas drilling. Two such reviews were done in 1993 and 2003.
The 1993 review reported that the state's oil and gas office had the equivalent of 26.5 full-time employees, including 13 inspectors and two supervisors. It reported an annual budget of $1.7 million, or about $2.5 million in 2010 dollars.
"Most field staff remain motivated in spite of being overworked," the report of that 1993 review said. "However, because of limited resources, some issues are not being dealt with adequately and there is significant reliance on operator self-inspection (i.e., the frequency of periodic inspections is not always commensurate with risk)."
A decade later, a follow-up review reported, "West Virginia has not significantly increased OOG funding to allow OOG to meet its statutory mandate."
The 2003 STRONGER report found a decrease in the number of oil and gas staff and "no significant increases in funding" since the initial report. "The review team strongly suggests that the state increase the amount of funding for OOG to assure that the OOG is able to meet its statutory mandates," the report said.
West Virginia funds the oil and gas office partly through permit fees paid by drillers. Currently, those fees are set by law at $650 for deep wells like those drilled into the Marcellus.
In January, DEP proposed legislation to increase permit fees for horizontal wells to $10,000 per well. At the time, DEP Secretary Randy Huffman said the move would give his agency enough money to double the oil and gas office's 34-person staff, including hiring 18 new inspectors. Tomblin, then the acting governor, did not endorse the proposal, but allowed DEP to seek legislative sponsors on its own.
After industry complaints, the current bill would now set permit fees at $10,000 for the first well on any drilling pad and $5,000 for each subsequent well on that pad.
Last month, the West Virginia Oil and Natural Gas Association wrote to lawmakers to complain that that the permit fee language "sends a clear message to the industry that West Virginia is an uncompetitive business environment."
But during Monday's U.S. Senate hearing, representatives of Chesapeake Energy and EQT Corp. did not publicly criticize the proposed increase in permit fees.
"It is the standard that the regulated community has to be paid to be regulated," said Chesapeake vice president Scott Rotruck. "What that amount is has to be an amount that has the agency properly staffed to regulate us. It has to be the right amount."
DEP spokeswoman Kathy Cosco said Tuesday that agency officials estimate the current legislation would generate enough funding to hire 14 additional oil and gas staffers -- fewer than half what Huffman proposed in January.
And Delegate Tim Manchin, D-Marion and co-chairman of the Legislature's Marcellus committee, told the U.S. Senate hearing that the current bill would allow DEP to hire just nine more inspectors and permit writers.
"We do not know if this is sufficient to address regulating the thousands of existing wells in the state and properly permitting and inspecting these new wells," Delegate Manchin said.
Reach Ken Ward Jr. at kw...@wvgazette.com or 304-348-1702.