West Virginia governor signs minimum royalty bill
Thursday, March 22, 2018
West Virginia Governor Jim Justice recently signed a bill that guarantees mineral rights owners a minimum royalty of 12.5 percent regardless of the post-production deductions an oil and natural gas company makes, according to Marcellus Drilling News.
Senate Bill 360 was proposed to counter a West Virginia Supreme Court ruling from last May in Leggett v. EQT Production Company. The court reversed its decision from a few months earlier in its decision, allowing EQT to deduct post-production expenses from royalty payments.
Marcellus Drilling News believes this decision suggests there’s no reason why the Pennsylvania version of the new bill can’t be passed too.
Learn more: Marcellus Drilling News > WV Gov Justice Signs Bill to Guarantee 12.5% Minimum Royalty
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Shale FAQ
What is fracking?
Fracking is a slang term for hydraulic fracturing. Fracturing is a process by which highly pressurized fluid is pumped thousands of feet into the ground to fracture rock formations. The goal is to release the natural gas that’s locked inside the rock.
Is it safe?
What most concerns people about fracturing is ground water contamination. The worry is that fractures underground, caused by the process, will extending upwards and into aquifers, releasing gas and chemicals into the ground water supply. There’s been no confirmed reports of such a thing happening. Though surface spills and drill site blowouts can lead to localized environmental concerns.
Will my water catch on fire?
Flammable water is caused by the release of methane gas into a drinking water supply. Methane gas occurs naturally and can be released by any kind of drilling, including water wells. In Pennsylvania officials fined Chesapeake Energy $1 million for contaminating ground water with methane. It was determined that the company had not properly cemented it’s boreholes and gas migrated up the well, between rock and into aquifers.