Your IOGAWV Executive Committee, Governmental Affairs Committee and lobbying team are very pleased and excited to inform you that two HIGH PRIORITY pieces of legislation have passed both chambers and will be soon sent to Governor Jim Justice to become law. Here is a brief overview of these two very important bills:
HOUSE BILL 4090
THE MARGINAL WELL TAX
AND PLUGGING FUND BILL PASSES!!
Committee Substitute for HOUSE BILL-4090 reduces the severance tax on marginal oil and natural gas wells, excluding wells utilizing horizontal drilling techniques targeting shale formations, from 5% to 2.5% and to provide that the 2.5% tax paid on such wells is to be used to plug abandoned oil and gas wells without a responsible operator through the use of a new fund called the Oil and Gas Abandoned Well Plugging Fund. The vertical oil and gas wells which are affected by the severance tax reduction produce on average more than 5 Mcf natural gas or one-half barrel of oil per day and on average less than 60 Mcf of natural gas or 10 barrels of oil per day. The plugging fund is capped at $6 Million. Should the plugging fund exceed the $6 Million cap, the severance tax drops to zero. A last-minute amendment, supported by IOGA, protects the counties allotment of the severance tax collections. IOGAWV fully supported the passage of this very high priority and important legislation. HB-4090 will now be enrolled and sent to Governor Jim Justice for his further action.
HOUSE BILL 4311
THE DEEP WELL SPACING RULE PASSES!!
House Bill 4311 (bundled with other WVDEP rules bills and listed as Committee Substitute for HB-4217) promulgates a legislative rule relating to the Oil and Gas Conservation Commission’s oversight of deep well spacing. These new rules will support and enhance the drilling of horizontal wells and eliminate the current 3,000-foot surface spacing requirement in addition to other downhole spacing criteria. The rules bundle passed the House of Delegates on February 14 and th3e Senate on March 3. The new rules will become effective in 90 days from March 3. IOGA fully supported this new deep well spacing rule. It will now be enrolled and sent to Governor Justice for his further action.