Marcellus Shale Drilling Regulation

Posted on February 23, 2012 01:59 by Charles R. Bailey

The West Virginia Legislature recently passed a bill designed to regulate Marcellus Shale Drilling. The City of Wellsburg West Virginia just passed an ordinance that bans hydraulic fracturing in the City Limits. The City of Morgantown passed a similar ordinance but was struck down by a circuit court judge and the time for appeal elapsed and the Supreme Court of Appeal for West Virginia did not have the opportunity to rule on the trial court’s decision. The Wellsburg ordinance will be challenged. Meanwhile cities and counties in West Virginia and in surrounding states are leasing its properties to oil and gas developers to shore up depleting city coffers and as a means to finance public projects. Airports and County park systems are leasing undeveloped land as well. Meanwhile the plaintiffs’ bar in West Virginia, Maryland, Pennsylvania, and Ohio are having public meetings to sign up potential litigants. The lawsuits range from allegations of contaminated water, property destruction, nuisance, trespass, and personal and bodily injury. Owners of the surface have created groups and organizations to fight the ability of the producers to construct the large drilling pads on the property. The surface owners contend that when the minerals were severed from the surface there was no intent to permit large drilling pads that sometimes exceed an acre or more to be placed on the surface One of the arguments is that the technology in use today was never contemplated as being possible at the time the surface was separated from the minerals. Moreover, as drilling has increased so has the number of injuries to workers. OHSA and other regulatory agencies are investigating the conduct of the producers and their contractors. Personal injury suits are on the rise and insurers are beefing up their reserves in anticipation of the increased number of lawsuits. State environmental agencies are being pressured to step up monitoring of drilling activities and fines and penalties are being levied in record numbers.

The biggest source of controversy is the alleged water contamination to water caused by hydraulic fracturing or also known as “fracking.” Many environmental groups are filing actions to limit or all together ban “fracking” because of charges the well water and streams are being contaminated. There are even charges that “fracking” is causing earth quakes. Yet, the economic boom that the Marcellus Shale and the Utica Shale exploration has brought to rust belt areas in West Virginia, Pennsylvania, and Ohio, as well as other states has pitted public officials and local business supporters against the anti-drilling advocates. Labor unions who may benefit from the increased drilling are at odds with some of their traditional allies that support union labor. However, unions are fighting the out of state developers demanding that jobs go to local workers and not “out of state scabs.” Most of the states within the Marcellus Shale region are heavily unionized. The states mentioned above are all vying for the construction of a “Cracker” facility in their state. WV has passed specific legislation to induce the construction of a “Cracker” facility, which will create an economic boom to any area where it is built. A cracker plaint can turn the bi-products of Marcellus shale gas drilling into plastics and other industrial items. See “Pennsylvania in Running for Cracker Plant,” Pittsburg.cbslocal.com/2012/02/06, “Cracker plant tax break passes West Virginia Legislature,” http:// The register-herald.com/todaysfrontpage, “Start-up waiting on funds for plant, dailymail.com/business, February 16, 2012

Law firms are flocking to regions where the drilling activities occur. Many of these towns and municipalities would have never attracted major firms to open their doors there. Papers in Pennsylvania, West Virginia, Ohio, and Maryland are announcing the hiring of specialized energy lawyers. Courthouse record rooms are so crowded in some areas that waiting times have been established. Locals comment about the number of out of state license plates seen in the local restaurants and taverns; complaints that it is hard to find hotel rooms in the near vicinity; traffic jams are now common in towns with only one stop light, crossing the road is hazardous for the first time in years and yes rental and home values are increasing and so are property taxes. The word boomtown is being used in Appalachia and western Pennsylvania for the first time since the decline in the steel and coking industry. Go to any courthouse in the region and the legal talk is about Marcellus Shale. There is only one thing to do, I suggest we all dust off our property law textbooks and reacquaint ourselves with transfer rights.

For more information on Hydraulic Fracturing you can request a paper prepared by our firm. Send requests to cbailey@bailewyant.com.

Charles R. Bailey is a managing member of Bailey & Wyant, P.L.L.C. We have offices in Charleston and Wheeling WV. David Wyant past president of the West Virginia Defense Trial Lawyers is the managing member of the Wheeling office. Web site is www.baileywyant.com , phone 304 345 4222, fax 304 345 3133, visit our facebook page Bailey & Wyant. 

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