Bill would permit some natural gas pooling

WHEELING – Not ready to call the measure “forced pooling,” Corky Demarco said the bill now under consideration by the West Virginia Senate would allow some unleased land to be included in drilling units.

“This does not allow someone to force you into a unit if you refuse to sign a lease. This just allows minerals whose owners are unknown or cannot be found to be included,” said Demarco, executive director of the West Virginia Oil and Natural Gas Association.

Two years ago, Demarco and other industry leaders advocated a bill that would have permitted forced pooling, which is now illegal for Marcellus shale drilling in West Virginia. This concept would allow natural gas drillers to draw gas from land they have not leased.

For example, if all of your neighbors have signed leases with a particular drilling company but you refuse, you could be forced to allow your land to be used by gas drillers for the development of your neighbors’ gas by placing your land into the drilling unit. The pooling provision would require gas companies to pay pooled property owners royalties comparable to those paid to their neighbors, but they would not receive any lease money.

The Legislature ultimately decided against forced pooling in 2011 after many landowners voiced concerns about losing their ability to negotiate better lease deals with the gas companies.

Demarco emphasized that Senate Bill 616, introduced by Sen. Brooks McCabe, D-Charleston, is not focused on forcing unwilling landowners into drilling units. He said there are a number of mineral tracts throughout the state whose owners cannot be found.

“If I have a lease for 10 people in an area, but we can’t find the owner for one tract of minerals, it is hard to drill in that area,” Demarco said. “This is a major issue in West Virginia because some of these people cannot be found.”

Demarco said any royalties drawn from drilling on property whose owners cannot be identified would be placed into an escrow account to be held until the owner is found.

Uncertain as to how much support there may be for the bill, Demarco said he is obligated to try to help his industry proceed as much as he can.

“You can’t hit the baseball out of the ballpark unless you swing,” he added.