This article provided by The Charleston Gazette

March 13, 2008

Energy, Environmental Legislation Meets Mixed Fate

The 2008 session of the West Virginia Legislature was hit and miss for everyone involved in the often overlapping fields of energy development and environmental stewardship.

Story by Walt Williams

CHARLESTON -- More regulation may be in store for many of the state's streams, but not for oil and gas operators who want to access minerals on private land. And come fall, residents will have a few days to buy energy-efficient appliances without paying state sales taxes.

The 2008 session of the West Virginia Legislature was hit and miss for everyone involved in the often overlapping fields of energy development and environmental stewardship. Environmentalists could claim victory of sorts with the passage of legislation granting certain streams a measure of regulatory protection beyond what they already have, while oil and gas operators fended off a proposal intended to give surface owners more say about drilling on their land.

The biggest fight over the environment during the session was one that had been raging for nearly a decade. The West Virginia Department of Environmental Protection had proposed placing 156 streams on a Tier 2.5 list of streams of special concern, which would give them more protection from certain kinds of pollution than they have now.

However, lawmakers, environmentalists and industry representatives couldn't agree on just how many streams to designate as Tier 2.5, with industry groups weighing toward fewer streams and environmentalists weighing toward more. As a result, lawmakers did away with the Tier 2.5 designation altogether, meaning several of the streams up for designation will earn a Tier 3 designation, granting them more protection than what originally had been proposed.

"The outcome was a win for clean water in West Virginia, at least on public lands," said Gary Zuckett of the West Virginia Citizen Action Group, referring to the fact that Tier 3 streams would be on public lands.

West Virginia is required by the federal Clean Water Act to implement anti-degradation standards for its streams. The Tier 3 designation doesn't allow for any water degradation beyond a baseline point, so the state proposed Tier 2.5 as a compromise that allows for some degradation beyond that point.

The regulations apply primarily to point-source pollution -- that is, pollution coming from a pipe or some other specific point. Producers of non-point source pollution, such as farm runoff, must only use "best management practices" to minimize their impact on water quality.

While the stream bill survived, a separate proposal to give surface owners a "bill of rights" whenever oil and gas drilling is proposed on their land never made it past the committee stage. Lawmakers also shot down a resolution to study the issue between sessions.

"This is an issue that is not going to go away," said Zuckett, whose organization helped promote the bill. "It is just going to continue to be exacerbated by the increase in drilling."

Representatives for the oil and gas industry said the legislation wasn't needed because surface owners have adequate protections under current law, and they questioned whether there really was a problem because they see fights between surface owners and drillers as few and far between.

"It's an emotional issue because surface owners have property rights just as much as mineral owners, and I think if people raise their awareness of each other's rights and are cognizant of those rights, there doesn't need to be a law," said Corky DeMarco, executive director of the West Virginia Oil and Natural Gas Association.

The situation in which a person doesn't own the minerals beneath his or her property is known as split estates. West Virginia, like most other states, allows mineral owners to access their minerals through private property and spells out standards in law about how drillers can go about getting to them.

"It is very difficult to fault a producer for wanting to extract their mineral rights," said Charlie Burd, executive director of the West Virginia Independent Oil and Gas Association, said. "The state of West Virginia allowed for split estates a long time ago."

Burd doesn't deny there are conflicts either because of bad drillers or unreasonable surface owners. But he said that on the whole, the industry is willing to work with surface owners to address their needs.

"We are aware that there are complaints that need to be addressed, and has every producer addressed those complaints the same as others?" he asked. "Probably not, but as an industry we truly believe we do listen to surface owners, we do work with surface owners, and the complaints that you hear are more the exception than the rule."

One bill that zipped through the legislative process with no controversy at all was legislation creating a sales tax holiday for the purchase of certain noncommercial Energy Star appliances. The proposal by Gov. Joe Manchin actually would create three holidays in which state sales taxes were eliminated. The first is scheduled for Sept. 1-7, 2008, and would apply to Energy Star appliances not exceeding $2,500, with the other two following in the preceding years.

Another bill winning legislative approval was a DEP proposal to raise the special reclamation tax on clean coal from seven cents per ton to 14.4 cents per ton. The money will be used to shore up the state's special reclamation fund and establish a separate fund for water cleanup.

At the same time, lawmakers rejected an effort to eliminate the state's timber severance tax, which was seen by supporters as a way to boost the sagging timber operations.