The West Virginia Senate advanced two bills Thursday to ease restrictions on the oil and gas industry, potentially at the expense of landowners.
One bill, which limits property owners' ability to file lawsuits when their property has been devalued, has potentially much farther reaching effects, although much of the discussion focused on oil and gas drilling.
The bill (SB 508) gives businesses virtual immunity from private “nuisance lawsuits” so long as the business does not violate a law, regulation or the terms of their license or permit. It is the latest in a line of legal reform bills, intended to give greater protection to businesses, that the Republican-led Legislature has championed since it took power after the 2014 elections.
Nuisance lawsuits are generally between neighbors, and occur when the actions of one neighbor affect the property of another, without any actual physical incursion into the property.
The bill passed the Senate Judiciary Committee Thursday, where debate focused on the example of a gas drilling operation built next to houses.
Gas drilling operations are noisy, often have bright lights on throughout the night and kick up lots of dust. Currently, if a neighbor can prove in court that issues like those are unreasonable and also lessen their own property value, they can recover damages.
Under the terms of the bill, the neighbors could not recover damages for things like excessive noise, light and dust. The bill would allow a nuisance suit against a driller only if the driller violated the law or the specific terms of their permit. But drilling permits do not address noise pollution, light pollution or dust, so lawsuits could not be brought on those terms, if the bill were to pass.
The state Chamber of Commerce urged the bill's passage, saying it would lead to fewer “sue and settle” lawsuits.
Corky DeMarco, director of the West Virginia Oil and Natural Gas Association, said there were several hundred lawsuits currently pending against drillers and said the bill would lead to fewer such suits.
“When they logged the hollow next to my house for two years, I wasn't a happy camper, but it was an inconvenience, I didn't feel the need to file a lawsuit,” DeMarco said.
Sen. Mike Romano, D-Harrison, said limiting lawsuits solely to violations of permits could never cover all the ways in which someone's property could be devalued. He said that courts exist specifically to judge such gray areas — what kinds of activity are simply an inconvenience and what rises to the level of a damaging “nuisance.”
“We have to ask ourselves if we really want to give up our friends, our families and our neighbors so that businesses that are making billions of dollars don't have to go out and defend themselves in a court,” Romano said.
Another bill (SB 565) advanced by the Senate would allow oil and gas drillers to begin building well pads and access roads prior to getting a well work permit approved by the state Department of Environmental Protection.
The bill, which passed the Senate energy committee unanimously, would still require a permit before work could be done, but a much less stringent permit, without the requirement for submitting detailed engineering plans.
Drillers could begin construction on roads and pads with only a stormwater permit, which is meant to ensure that dirt and runoff from construction doesn't get into rivers and streams.
They would not need a well work permit, in which the DEP inspects the engineering plans of the project.
They would still need to get that well permit to begin drilling work, but could build the well pads — often three to five acres large — without submitting engineering plans.
“There is no engineering review of the construction activity that's going to happen,” said Scott Mandirola, director of the DEP's Division of Water and Waste Management. He said that while the DEP had no official position on the bill, they were concerned about construction beginning before DEP reviewed the plans.
The rights to oil and gas below the ground are generally owned by different people than those who own the surface property above the oil an gas. Mineral owners also generally have the right to build access roads and well pads on the surface property (owned by others) to access their minerals.
The well work permit requires drillers to notify surface owners before they begin construction work on their land.
The bill was amended to require that surface owners be notified, and be allowed to comment, before construction on roads and well pads begins.
DeMarco said the bill was necessary because in much of north-central West Virginia, drilling operations can't cut down trees to build roads and well pads in the summer due to regulations concerning endangered species. He said the bill would give them more flexibility to do construction when the weather was good.
Both bills now head to the full Senate, where votes could occur early next week.
Reach David Gutman at david.gutman@wvgazettemail.com, 304-348-5119 or follow @davidlgutman on Twitter.