American Oil and Gas Reporter - April 2016 - 29

the positive changes agreed to by the
WVDEP will be lost."
Among the provisions significant to oil
and gas operators, Burd enumerates are:
* Air pollution standards of performance for new stationary sources;
* Aboveground storage tank fee assessments, financial responsibility, administrative proceedings, civil penalties
and inspection requirements; and
* Karst terrain language in the horizontal well rules, as well as water-well testing requirements, and monitoring of fracture propagation, pits and impoundments.
Could Have Been
Among several other bills supported by
IOGAWV that failed to advance, Burd reports:
* SB 396 would have enabled operators to shut in uneconomic wells, as well
as to defer "all purchase, sale and transportation obligations (related to the well)
. . . until the well can be produced economically."
* SB 508 would have amended West
Virginia statutes to prevent a person from
bringing a private nuisance claim against
industrial activity-including oil and gas-if
the activity was being conducted pursuant
to and in compliance with a permit or license granted by a municipal, state or local government. Prior to filing a private
nuisance claim, a plaintiff would have to
provide the defendant(s) an opportunity to
take remedial action and an opportunity to
participate in mediation. The bill also
would have required a plaintiff prove
physical property damage or bodily injury
prior to seeking damages.
* SB 565 would have allowed an operator to conduct well pad and road construction activities pursuant to a stormwater permit in advance of obtaining a final
drilling or well work permit.
* SB 705 would have reduced the severance tax rate on oil, gas and coal by 1
percent for fiscal 2017 and another 1 percent in fiscal 2018.
Burd mentions that the impetus behind
SB 565 was the shortened time frame for
well pad construction in certain areas because of endangered species limitations on
cutting trees and grading.
He notes that SB 705 was a latecomer, introduced Feb. 29 in the Senate Finance Committee as a coal-only bill. It was
amended March 1 on the Senate floor to
include oil and gas, but was never taken
up by the House Finance Committee after Governor Tomblin threatened a veto.
A couple other bills of interest to the
industry that Burd mentions:
* ComSub HB 4500, a check-stub bill
that required quarterly reporting of oil and

gas production, escalated any gas lease that
did not include a one-eighth metered
royalty, and stipulated a variety of other
reporting measures, died in the Senate Energy, Industry and Mining Committee
after passing the House.
* SB 291 provided for law enforcement use of unmanned aircraft. The bill
was amended to include oil and gas extraction or processing facilities in its definition of "targeted facilities" over which
drones may not be flown without property-owner consent. It died on March 12,
waiting for the House of Delegates to concur with Senate amendments.
Budget Impasse
At the March 12 conclusion of their
regular session, Burd says, West Virginia
lawmakers immediately went into an extended session to deal with a budget impasse, but that session ended a few days
later without a resolution.
"House Republicans made a commitment early on not to increase taxes this
year," he reveals.
Initially, he says, West Virginia projected a $353 million budget deficit for fiscal
2017, but he says another $92 million
shortfall was found the final week of the
regular session. Despite that, Burd says,
"Delegates defeated some bills that would
have raised taxes and helped fill the gap.
In fact, they gave some tax reductions; they
gave us our 4.7-cent severance tax back."
West Virginia's fiscal year begins July
1, and Burd says he expects Governor
Tomblin to call lawmakers back for a special budget session. "They have some real
work to do," he ventures. "It is going to be
tough."
In addition to the add-on severance tax
on natural gas, Burd says SB 419 also repealed a 56 cent-a-ton fee on coal that was
part of the 2005 workers' comp package.
He estimates altogether, SB 419 will cost
the state $260 million-$270 million that
could have been shifted to general revenue
to help cover the deficit.
Nevertheless, as of late March, Burd
said he hadn't heard talk of targeting the
state's extractive industries for additional taxes.
❒

Coming In May
The Pennsylvania Independent
Oil & Gas Association held its 2016
spring meeting April 7 at the Rivers
Casino on Pittsburgh's North Shore.
See complete convention coverage
in the May issue of The American Oil
& Gas Reporter.
APRIL 2016 29

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American Oil and Gas Reporter - April 2016

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