To remain in compliance with the newly enacted Natural Gas Horizontal Well Control Act, W. Va. Code § 22-6A-1 et seq. (2011), operators must now be aware of the law’s vast number of new requirements. These include increased permit fees, increased bond amounts, and a long list of required well plans and notices, among others. Though the West Virginia Department of Environmental Protection (WVDEP) may be somewhat flexible during this time of transition, the statute became effective as of December 14, 2011, and operators must alter their permitting activity accordingly.
On February 1, 2012, the WVDEP, through its Office of Oil and Gas (the “OO&G”), held an informal workshop for oil and gas operators to provide guidance on the new law. The OO&G plans to distribute a compilation of statutory interpretations discussed during the workshop to serve as the agency’s official policy. In addition to this informal policy making, the Act requires the agency to promulgate detailed regulations. Thus, while operators must conform to the new statutory requirements, as it stands this regulatory scheme is less than complete.
Companies operating under blanket bonds should be particularly aware of the possible forfeiture of their bonds. The blanket bond amount increased from $50,000 to $250,000, and all blanket bonds covering a horizontal well, including those bonded prior to the effective date of the Act, must be replaced with the increased blanket bond. Any operator not in compliance with this new bond requirement will be notified by the Secretary, and if the blanket bond is not replaced within 60 days of receipt of notice, the prior blanket bond will be forfeited. Individual well bonds also increased from $5,000 per well to $50,000 per well; however, individual wells that were bonded prior to the effective date of the Act are exempt from this increase.
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