In the September 10, 2022 blog, WEST VIRGINIA: Federal Court Throws Out ‘Forced Pooling’ Lawsuit, we saw where a lawsuit seeking to stop West Virginia’s new natural gas unitization law was ruled invalid.
SB 694, passed March 9, 2022, was the result of a compromise between the Gas and Oil Association of West Virginia, the West Virginia Royalty Owners Association and the West Virginia Farm Bureau. A similar bill to SB 694, House Bill 2688, died in a 49-49 tie vote in 2015.
According to today’s September 22, 2022 story in The Intelligencer | Wheeling News Register by Steven Allen Adams, “Attorneys for Bethany residents Scott Sonda and Brian Corwin filed an amended complaint Tuesday in the U.S. District Court for the Northern District of West Virginia against the state Department of Environmental Protection, the Oil and Gas Conservation Commission and Attorney General Patrick Morrisey.”
“West Virginia Senate Bill 694…may in fact be noble in its origins; however, the language contained in SB 694 in operation is antithetical to those protections of individual property rights, and from the behaviors the Antitrust Laws were designed to protect against.J. Anthony Edmond Jr., an attorney with the Wheeling law firm Edmond and Baum
…An executory interest owner has no legal recourse or remedy with respect to the creation of and inclusion in a horizontal unit. Although a hearing may be had, within the plain language of the statute, the Commission has no ability to provide any remedy whatsoever, for the statute requires that the commission SHALL provide approval of the unit if the applicant meets all of the specifications, which the applicant itself certifies that it does indeed satisfy all requirements.”
ARTICLE 9. OIL AND GAS CONSERVATION.
§22C-9-1. Declaration of public policy; legislative findings.
(a) It is hereby declared to be the public policy of this state and in the public interest to:
(1) Foster, encourage, and promote exploration for and development, production, utilization, and conservation of oil and gas resources;
(2) Prohibit waste of oil and gas resources and unnecessary surface loss of oil and gas and their constituents;
(3) Encourage the maximum recovery of oil and gas;
(4) Safeguard, protect, and enforce the correlative rights of operators and royalty owners in a pool of oil or gas to the end that each such operator and royalty owner may obtain his or her just and equitable share of production from that pool, unit or unconventional reservoir of oil or gas; and
(5) Safeguard, protect, and enforce the property rights and interests of surface owners and the owners and agricultural users of other interests in the land.
(b) The Legislature hereby determines and finds that oil and natural gas found in West Virginia in shallow sands or strata have been produced continuously for more than 100 years; that oil and gas deposits in shallow sands or strata have geological and other characteristics different than those found in deeper formations and unconventional reservoirs; and that in order to encourage the maximum recovery of oil and gas from all productive formations in this state, it is not in the public interest, with the exception of shallow wells utilized in a secondary recovery program, to enact statutory provisions relating to the exploration for or production of oil and gas from vertical shallow wells, but that it is in the public interest to enact statutory provisions establishing regulatory procedures and principles to be applied to the exploration for or production of oil and gas from deep wells, as defined in section two and oil and gas produced from horizontal wells. Source
“Forced Pooling” is the mandatory consolidation of leased and unleased minerals to access one common underground mineral reserve. Also known as compulsory drilling, compulsory pooling, mandatory pooling & unitization or statutory drilling laws, these laws allow for oil & gas drilling in a large area even if some of the mineral owners have not consented or signed leases.
In its essence, forced pooling is the taking of private property (also known as private eminent domain) that also forces the impacts of drilling onto landowners. Pooled landowners face toxic air emissions, risks of water pollution and other environmental impacts related to drilling.
Nearly 40 states have laws – often times old, unused laws – allowing forced pooling for mineral leases over large acreages of land (usually 640 acres or more). Minerals found under land that was not leased but part of the “pool” can be extracted through fracking or similar techniques…