Your Association leadership and lobbying team are pleased to inform you that several important pieces of legislation are live and moving! They are described here:
Committee Substitute for HB-4090 (The Marginal Well / Plugging Bill), is a bill to reduce the severance tax on marginal oil and natural gas wells, excluding wells utilizing horizontal drilling techniques targeting shale formations, to 2.5% from 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. IOGAWV fully supports this bill that passed the House of Delegates on February 5 by a vote of 99-01. This bill now rests in Senate Finance Committee for further consideration.
Committee Substitute for HB-4217 ( HB-4311 is now bundled into the WVDEP Rules package as HB-4217) promulgates legislative rules relating to the Oil and Gas Conservation Commission’s oversight of deep well spacing. These 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. IOGA is in full support of this rule’s bill that passed the House of Delegates in February 14 and now lies on second reading in the Senate. We anticipate this rule bundle to pass without further amendment.
Committee Substitute for HB-4421 (Creating Natural Gas Liquids Economic Development Act of 2020) is a bill to encourage development, transportation and use of natural gas liquids for the benefit of natural gas projects in the state. As recently amended, certain tax credits would be related to the transportation, storage of such liquids. This bill has based both the House Energy and Finance Committees and lies on second reading in the House. Once it leaves the House, it will be communicated to the Senate for further consideration. IOGAWV supports this bill.
Committee Substitute for HB-4615 (West Virginia Critical Infrastructure Protection Act) is a bill that codifies criminal penalties for persons convicted of willfully trespassing or entering property containing a critical infrastructure facility without permission by the owner of the property; holds such persons liable for any damages to personal or real property while trespassing; prescribes criminal penalties for organizations conspiring with persons who willfully trespass and/or damage critical infrastructure sites and holds conspiring organizations responsible for any damages to personal or real property while trespassing. These “Critical Infrastructure Facilities” includes nearly all oil and natural gas facilities related to compression, transportation, processing, storage, distribution and crude oil piping. This bill passed the House of Delegates February 13 and currently rests in Senate Judiciary for further consideration.
SB-655 (Relating to the valuation of natural resources property) is the IOGAWV bill written to clarify the types of operating expenses that must be used for purposes of valuing producing oil and natural gas wells; determines the methodology that shall be used by the Tax Commissioner in calculating operating expenses; provides for confidentiality of information submitted by natural resource producers to the Tax Commissioner; provides for reports that must be submitted by the Tax Commissioner to the Joint Committee on Government and Finance; and provides for alternate appeal process of proposed valuation of natural resources property for ad valorem property tax purposes. This bill passed the Senate 27-7 on February 19 and has been single referenced to House Finance for further consideration and possible passage.
Committee Substitute for SB-802 (Relating to public utilities) would present producers an opportunity to provide direct natural gas service to large volume users when the natural gas used is produced in West Virginia. This IOGAWV legislation would apply only to new users of natural gas with an annual consumption of 100,000 Mcf or greater; provides for advance notice to the public utility; and must comply with natural gas pipeline safety requirements pursuant to Chapter 24B of the Code of West Virginia. This bill has passed the Senate Government Organization Committee and is currently up for passage in the Senate. From there it would be communicated to the House of Delegates for further consideration.
If you have any questions, feel free to contact Charlie Burd @ 304-344-9867.
