The West Virginia Record reports that a lawsuit has been filed against Reserve Oil & Gas, Inc. claiming an alleged trespass. The plaintiffs, Sandra Bishop, Kathy Fannin, Connie McDaniel, Steve Fannin, Donna Lilly and Debra O’Dell, filed a complaint on December 10, 2012 in Kanawha Circuit Court at case number 12-C-2426, alleging that Reserve installed a pipeline on their property without permission. As a result of the alleged actions, the plaintiffs are seeking punitive damages on top of compensatory damages. Read more about the lawsuit here.
The West Virginia State Journal recently observed that the effect of the Natural Gas Horizontal Well Control Act, passed by the West Virginia Legislature in December 2011, remains unclear. The Act provided a statutory and regulatory framework for natural gas producers, but significant questions remain regarding the true impact of the Act in West Virginia. Although natural gas production and midstream services job opportunities have grown in West Virginia, some question whether West Virginians are filling newly created jobs. The Supreme Court of Appeals of West Virginia has been critical of the Act’s treatment of damages to surface owners, as seen in Martin v. Hamblet (November 2012). Consequently, it is likely that the West Virginia State Legislature will be forced to face further oil and gas issues in the 2013 sessions.
Two recent gas pipeline accidents in West Virginia have brought greater attention to pipeline safety issues in that state. On December 11, 2012, a natural gas transmission line near Sissonville ruptured, causing a fire that burned a portion of an interstate highway and damaged several homes. Preliminary reports from the National Transportation Safety Board, the federal agency leading the accident investigation, indicate that the ruptured portion of the line had external corrosion, that no alarms sounded in the pipeline control room at the time of the explosion, and that the pipeline operator was not able to stop the flow of gas to the line for more than an hour. On December 18, 2012, a pipeline construction worker was killed in a separate accident in Bethany. According to preliminary reports in the Charleston Gazette, the worker was struck in his vehicle with a section of pipe that was being moved with heavy machinery just prior to its installation.
Marathon Petroleum Corporation and Harvest Pipeline Company on Tuesday announced a letter of intent between the companies to jointly develop infrastructure on the Ohio River to allow transport of hydrocarbon liquids produced from the Utica Shale. The project is anticipated to include a truck unloading facility and a barge loading terminal in Wellsville, WV, that will enable liquid hydrocarbons produced in the region to be shipped to Marathon’s refinery in Catlettsburg, KY. The improvements are expected to be finished in late 2013. Marathon also recently completed an expansion of its unloading facilities at its Canton, OH, refinery. The State Journal has more.
On October 4, 2012, the U.S. Geological Survey (“USGS”) released the first assessment of shale gas resources in the Utica. The assessment covered areas in Maryland, New York, Ohio, Pennsylvania, Virginia, and West Virginia. The estimate of undiscovered oil ranges from 590 million barrels to 1.39 billion barrels, natural gas ranges from 21 to 61 trillion cubic feet, and the estimate of natural gas liquids ranges from 4 to 16 million barrels (95 percent to 5 percent probability, respectively).
Read more ›
On September 25, 2012, the West Virginia Supreme Court heard oral arguments for the case of Martin, et al. v. Hamblet, Docket No. 11-1157. The issue in this case is whether a surface owner is vested with the right to an administrative hearing on and subsequent appeal of a drilling permit for a shallow horizontal well. Currently, the West Virginia statutes provide such rights to coal owners, coal lessees and coal operators only. Under West Virginia law, surface owners may submit written comments in the drilling permit application process in regards to shallow wells and may recover for certain damages to the surface estate. Under current case law, they only have a right to an administrative hearing on and subsequent appeal of a drilling permit for a deep well subject to statutory pooling.
The Hamblet surface owner’s arguments rely on the due process and equal protection clauses of the West Virginia and United States Constitutions and a controversial West Virginia Supreme Court precedent, while the OOG and gas operator are arguing for the court to apply the plain meaning interpretation of the existing statutes.
A Supreme Court decision in favor of the Hamblet surface owner may blur the distinction between shallow and deep wells and exponentially increase a surface owner’s role in the permitting process.