American Oil and Gas Reporter - January 2012 - 204

ConventionSection: Independent Oil and Gas Association of West Virginia
was trying to regulate something outside
of its city limits," he points out.
The court's decision is likely to deter
other West Virginia communities from
similar actions, he agrees. Several local
governing bodies passed resolutions that
sought to prohibit fracturing operations,
but there were no drilling operations
planned for those areas, and all restrictions
were rescinded within a few weeks, he
relates. Most of the state's drilling takes
place in rural areas, outside of city limits,
so such measures seem to be for political,
not environmental reasons, he calculates.
"I think most communities are happy
to see oil and gas development nearby. It
leads to full motel rooms, restaurants and
catering businesses," Malcolm says. "We
really are seeing a resurgence in the economy in the small towns along the Ohio
River that have had no economic development for many, many years. Now there
a lot of people moving through them,
and that is a good thing. I do think citizens
like to see that."
Road Use
An initiative that requires oil and gas
developers to meet bonding requirements
set by the West Virginia Department of
Highways before securing well permits
is working out for both parties, Burd reports. The WVDOH established the new
procedures in August 2010 as a result of
legislation giving it authority to require
bonds to mitigate potential road impacts

before granting access to state highways,
he says.
Under the program, operators must
inform the WVDOH of the proposed location of roads they will need to access
for new projects. The department says it
will consider possible widening and paving
improvements needed for the roads, as
well as any bridge work necessary to
meet project requirements. In exchange
for the WVDOH committing to physical
upgrades, it says operators must submit
to travel restrictions to minimize impacts
on local traffic, such as school buses.
The WVDOH also is setting minimum
compulsory bonding levels for using state
roads, WVDOH Web page says, with
amounts varying based on road type and
mileage. According to the department,
operators could pay as much as $100,000
a mile for paved roads, and $50,000 a
mile for gravel roads and tar-covered
roads. The WVDOH points out blanket
bonds covering multiple roads and projects
are an option, although not expressly
stated in its initiative.
"The program has been in force now
for almost a year, and I believe the Department of Highway would say it has
been working the way it anticipated,"
Burd says. "One of the conditions in the
new legislation for getting a well permit
is verifying the operator has an agreement
with the department on roads, so that is
now a permit condition."
The WVDOH operates through 12

district offices, and operators must work
through their local office to implement
the road use agreements, Burd says. "We
do not anticipate roads being a problem
moving forward. The WVDOH has made
it very clear it has a plan in place, and
that plan is working," he asserts.
Federal Issues
On the federal level, Burd says IOGAWV remains alert to the possibility
that Congress will again study the oil
and gas industry's tax deductions. Action
is unlikely before this fall's election, but
he warns new legislative and regulatory
intrusions are possible soon after November.
Actions by the Environmental Protection
Agency remain a concern, Burd continues,
saying industry also can expect renewed
attention from the U.S. Army Corps of
Engineers, which historically has not shown
much interest in drilling activities.
"All of a sudden, the Corps of Engineers
has made it clear it has a lot of jurisdiction,
so the association is watching that a little
more intently," he says.
Another federal agency with an increasing chance to interfere with operations
is the U.S. Fish & Wildlife Service, Burd
asserts. Its focus is moving from Western
states across the Mid-Continent to the
Appalachian Basin, he cautions. Species
under consideration for endangered status
include the Indiana bat, which is found
mainly in Indiana, but has colonies across
the eastern United States, he says.
Association Growth
IOGAWV began the new year with a
new office. Burd reports IOGAWV moved
into the BB&T Building in Charleston in
November.
"What a blessing in disguise this has
been," he says. "IOGAWV has been able
to relocate a block away from where its
old offices were. With all the activity, the
association now is involved in-including
the Just Beneath the Surface Alliance
and planning for collaborative events
such as trade shows and those kinds of
things-IOGAWV just needed more space."
One of the key features of the new location is a conference room big enough to
seat the 40 members who attend Commerce
Committee meetings, Burd praises.
The association's expanding membership ranks are another reason for the upgraded office space, Burd says. During
2011, 140 members joined IOGAWV, increasing its ranks to 650.

204 THE AMERICAN OIL & GAS REPORTER

American Oil and Gas Reporter - January 2012

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