2012 Regular Session of the West Virginia Legislature – A Summary

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[author: Michael J. Basile]

In the 2012 regular session of the West Virginia Legislature, several resolutions were passed with potential future impact on the shale gas industry. Below is a summary of those significant resolutions.

Senate Concurrent Resolution No. 52

This resolution requests the Joint Committee on Government and Finance to study the viability of increasing severance tax rates on shale gas. The idea is to take advantage of current high levels of industry activity and availability of mineral resources to fund future opportunities for West Virginians. The Committee will determine and make recommendations on the possibility of creating a Future Generations Fund with the increase in severance tax revenues, as well as lowering residents’ tax burdens through reducing real property taxes and increasing the Homestead Tax Exemption. The Committee will report back on their findings and recommendations and present draft legislation to the 2013 regular session of the West Virginia Legislature.

House Concurrent Resolution No. 53

The Joint Committee on Government and Finance is requested to authorize a study of the relationship between increases in seismic events and hydrocarbon production and exploration in the State of West Virginia. The Department of Environmental Protection, in conjunction with the Bureau for Public Health, is to ensure completion of a comprehensive study on the following:
  1. A hazard analysis of injection-induced seismic activity, which includes quantitative estimates of the likelihood of future seismic events in regions where Marcellus well drilling and waste injection occurs;
  2. A risk analysis to determine possible damage to human life, environmental stability and building structures related to injection-induced seismic activity, as well as all monetary costs resulting from such damages; and
  3. Any other considerations that the Department of Environmental Protection and the Bureau for Public health believe important.
The Committee will bring findings, conclusions, any recommendations, and any necessary legislation to the regular session of legislature in 2013.

House Concurrent Resolution No. 106

Like SCR 52 above, this House resolution requests the Joint Committee on Government and Finance to study how to best use the additional severance tax collections attributed to the production of natural gas from shale in West Virginia to plan for the future when production of shale gas begins to decline. Unlike the Senate resolution, this one does not address creation of a specific fund or any other changes to the tax code. The Committee is requested to report back on the first day of regular session in 2013.

House Concurrent Resolution No. 148

As a means of addressing concerns about the large amounts of water involved in the hydraulic fracturing process, this resolution also requests the Joint Committee on Government and Finance to authorize a study. In this case, the study would research the feasibility of encouraging utilization of “green” liquefied gas fracturing processes as an alternative to water-based extraction technologies.

Senate Resolution No. 12

Senate Resolution No. 12 aims to encourage Marcellus Shale industry corporations to offer West Virginia workers honest opportunities to find good employment and be good corporate neighbors. The resolution asks that these corporations endorse a set of “Marcellus Principles,” and sign, date and submit to the West Virginia Oil and Natural Gas Association and the Independent Oil and Gas Association.

The principles are as follows:
  1. To employ workers from the community to fill all industry jobs, including those in drilling, construction and maintenance;
  2. To be responsible stewards of the land where natural gas is extracted, processed and delivered;
  3. To maintain open lines of communications with stakeholders in order to ensure the safety and security of communities in which the industry is operating or developing operations; and
  4. To respect and apply these principles with integrity and transparency.

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