American Oil and Gas Reporter - March 2016 - 93

ConventionCoverage: Independent Oil and Gas Association of West Virginia
must file spill prevention and response
plans, although Malcolm pointed out that
one of the SB 423 amendments allows
operators to certify alternate plans such
as U.S. Environmental Protection Agency
Spill Prevention, Control and Countermeasure plans.
Level 1 tanks must be inspected every
three years by a professional engineer,
qualified person working directly under
a professional engineer, or a certified
tank inspector, Malcolm went on, while
level 2 tanks must be inspected every
five years. In addition, operators must
perform visual inspections of tanks, secondary containment and leak detection
systems every 14 days for level 1 tanks
and every month for level 2 tanks.
Meanwhile, Malcolm said IOGAWV
and a member company had filed an appeal with the state's Environmental Quality Board, questioning-among other
things-DEP's methodology for determining zones of critical and peripheral
concern. He added that at least a dozen
other companies had filed individual appeals.
Executive Director Charlie Burd later
explained that DEP created ZCCs by
using a 1,000-foot buffer zone around
surface water intakes. But that buffer
zone did not allow for topographical variations, he says, commenting, "We believe
there are some ASTs within that buffer
zone that are not within that 1,000-foot
radius."
Similarly, Malcolm said DEP employed
a free-flowing calculation in the model it
used to calculate five-hour flowing time
to a water intake. This model ignored the
presence of dams or impoundments that
would slow water flow, he said.
"(DEP officials) readily admit that,
but claim they didn't have the time or
money to do the full analysis that would
be required to consider dams and impoundments," he advised. "That is one
of the big points in our appeal."
The EQB held its first evidentiary
hearing Jan. 14-15, Malcolm reported,
opining: "I thought we put on a very
good case."
He said IOGAWV hoped for a ruling
from EQB "in two to three months." In
the meantime, he allowed, "The rule is
law. As responsible tank owners, we
have to comply. IOGAWV will continue
to work with DEP to figure out how best
to comply with all the rules, and will
provide that information to our members."

Updating members on IOGAWV's advocacy efforts during the association's winter meeting, Feb. 2-3 in Charleston, W.V., were, from left, past-President Jim McKinney, Environmental and Safety Committee Chairman Doug Malcolm, IOGAWV Vice President Scott
Freshwater, and Producer Issues Committee co-Chairman Jeff Isner.

Pipeline Negotiations
IOGAWV Vice President Scott Freshwater reviewed the Producer Issues Committee's ongoing negotiations on natural
gas gathering and processing fees with a
number of midstream providers.
He noted that the association's collective gathering agreements with Southwestern Energy and Chesapeake Energy
both expired Dec. 31. "The message we
are trying to make clear to both," Freshwater told members, "is that with gas
prices as they are, we simply can't take
any more."
The message is the same to MarkWest
Energy, which he said began sending
two-year termination notices in December
to producers on agreements due to expire
Dec. 31, 2017. "Again, we are trying to
stress that we simply can't make any
more rate concessions," Freshwater assured.
One check mark Freshwater said IOGAWV was able to place on the "completed" side of the ledger is an agreement
with Columbia Pipeline Group on responsibility for lost and unaccounted for
(LAUF) gas on six low-pressure systems
CPG operates in Pennsylvania and West
Virginia. Even though some CPG customers wanted 100 percent of LAUF gas
transferred to producers, or the lines
abandoned entirely, the IOGAWV offer
that CPG accepted, Freshwater said, was
for producers to accept 3.5 percent of
LAUF, increasing 0.5 percent a year to
2024, with a cap of 7.0 percent.
As part of the agreement, Freshwater

went on, CPG agreed to stop shutting in
producers with high water content until
they had installed individual desiccant or
dehydration systems, and instead provide
centralized dehydration services "for some
type of nominal fee."
Looking further out, Freshwater said
IOGAWV was exploring some type of
pipeline cooperative entity to take over
operation of gathering systems CPG was
considering selling or abandoning. "Hopefully, we will have more to report on
this," he expressed. "One thing our Producer Issues Committee really is looking
at is how to get pipelines (that owners)
want to divest into the hands of the producers that are affected by them."
Freshwater said IOGAWV also negotiated new gathering and processing rates
with Dominion that became effective Jan.
1. Under the agreement, he said, gathering
and retainage decreases from 10.50 percent
to 9.34 percent, but processing increases
from 0.50 to 3.51 percent, resulting in a
cumulative 1.85 percent increase for producers.
"As a side note," he added, "everybody
should know that Dominion has spun off
its gathering facilities into an entity known
as Dominion Gathering and Processing,
which is a pipeline operating company
not subject to Federal Energy Regulatory
Commission jurisdiction."
Jurisdiction also is an issue on Dominion's Gateway system, where, Freshwater pointed out, "IOGAWV does not
have the contract. Because of that, we
don't have good standing."
Nevertheless, he said IOGAWV apMARCH 2016 93

American Oil and Gas Reporter - March 2016

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