On February 17, 2020, West Virginia Governor Jim Justice signed into law House Bill 4091, allowing for expedited oil and gas well permitting for horizontal wells. Under the bill, which amends W. Va. Code § 22-6A-7, operators may pay an additional fee to enter into an expedited permit application process for drilling certain horizontal wells. The additional expedited permit fee is $20,000 for the initial horizontal well and $10,000 for each additional well drilled on a single well pad at the same location. Within 45 days of the applicant’s submission of the permit application, the Secretary of Environmental Protection must issue or deny the permit. If there is no decision within 45 days, the Secretary is required to refund the applicant a pro-rated amount of the expedited application fee for each day with no decision, up to the 60th day, at which point the expedited fee would be fully refunded.
The bill also provides for an expedited permit modification process, allowing the operator to pay an expedited application fee of $5,000 for a modification to an existing permit. The Secretary must issue a decision on the modification within 20 days or refund the applicant a daily, pro-rated amount.
Half of the funds collected from the expedited applications will be used by the Department of Environmental Protection to cover the administrative costs of processing the applications. The remaining balance will be used for reclamation and plugging of orphaned oil and gas wells throughout the State.
The expedited permitting processes under the law do not apply to deep wells, so operators could only utilize these expedited processes for horizontal wells with target formations of the Marcellus Shale or shallower formations. The bill is effective ninety days from passage, on May 5, 2020.
The Maryland Departments of the Environment (MDE) and Natural Resources (MDNR) recently released a draft report on recommended best practices for Marcellus Shale development in Maryland, pursuant to Maryland’s Marcellus Shale Safe Drilling Initiative. The Initiative, established in accordance with Governor O’Malley’s January 2011 executive order, requires MDE and MDNR to conduct, in consultation with an Advisory Commission, a three-part study and report the findings and recommendations. The Commission is comprised of policymakers, academics, regulators, industry representatives, and environmental group representatives. The three parts of the study are: 1) findings and recommendations regarding sources of revenue and standards of liability for damages caused by gas exploration and production; 2) recommendations for best practices for natural gas exploration and production in the Marcellus Shale; and 3) findings and recommendations regarding the potential impact of Marcellus Shale drilling. (The recently-released joint agency report represents Part II.) The Part II study was based on a survey of exploration, production, and midstream practices from several states by the University of Maryland Center for Environmental Science, Appalachian Laboratory. Part III is expected to be completed in August 2014.
A unique recommendation of the Part II study is that producers would be required to have a “Comprehensive Gas Development Plan” (CGDP) as a prerequisite to a well permit application. The CGDP would need to address comprehensive planning for foreseeable gas development activities in an area including pipelines, pads, roads, and other ancillary activities, rather than considering each well individually. The CGDP would be subject to public comment and submitted to the State for approval.
MDE is accepting public comment on the draft Part II report until August 9, 2013.
As indicated in a recent press release, NiSource Midstream Services has initiated service on the Big Pine Gathering System in Southwestern Pennsylvania. The system, which spans 57 miles in total length, will transport natural gas from Marcellus Shale production to three different transmission lines.
Three transactions involving Pennsylvania’s Marcellus Shale have reportedly totaled $882 million in the first quarter of 2013, the second-most for any formation in the country. Ohio’s Utica Shale formation was the subject of two deals worth $283 million, making it the third-most popular. PwC tracked energy deals worth more than $50 million and included acquisitions, investments or partnerships allowing companies to split the costs associated with oil and gas development. The first quarter results represent a significant drop for Marcellus Shale transactions from the first quarter of 2012, where three transactions were reportedly worth about $3 billion.