Blankenship said West Virginia continues to operate on outdated laws that discourage investment, particularly regarding oil and natural gas development in the Utica Shale. The Utica Shale lies below the Marcellus Shale formation and is the “next frontier” in natural gas development in the state.
Deep wells (which are defined to include wells drilled in the Utica Shale) are regulated by the Oil and Gas Conservation Commission (OGCC). The statute and regulations were created decades ago for vertical wells and do not reflect the technological and geological advancements associated with horizontal well development, including multi-well pad development.
Multi-well pad development produces oil and gas more efficiently and reduces the environmental footprint of production. However, the current deep well spacing laws require 3,000 feet between each well which discourages multi well-pad development for wells drilled in the Utica Shale formation.
An operator drilling a multi-well Utica pad must seek an exception from these requirements from the OGCC, prolonging the well development process. This process is time-intensive, requires a hearing for every Utica well pad, and can cost more than $25,000 per hearing for outside legal fees and internal resources.
“Our industry looks forward to working with state policy makers to update and modernize our deep well spacing laws so that all stakeholders in West Virginia’s natural gas industry benefit,” said Blankenship. .
For additional information, visit WVONGA’s legislative priorities page, or contact Anne Blankenship at (304) 343-1609.