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Gas Drilling Companies: W.Va.’s New Road-Repair Rules Too Expensive

Fri September 10, 2010 - Northeast Edition

MORGANTOWN, W.Va. (AP) Transportation Secretary Paul Mattox wants natural gas drilling companies to anticipate and pay for the wear and tear they’re causing West Virginia’s country roads, many of which have “more or less evolved from a mere wagon trail.”

But at least one industry official complains the new rules — issued in an Aug. 4 memo — are vague, unreasonable and potentially too expensive for some to bear.

“These go well above and beyond what is necessary to safeguard roadways in the state, and we are assessing our response,” said Charlie Burd, executive director of the Independent Oil and Gas Association of West Virginia.

Gas companies have no choice but to rely on rural roads as they rush to tap the rich Marcellus shale reserves. But residents are frustrated by both the volume of traffic and damage, Mattox wrote, and so are county road crews whose budgets are geared toward regular maintenance, not major repairs and construction.

His memo requires gas project planners to meet with local highway supervisors and agree on various obligations for widening, paving and drainage — before, during and after a drilling job.

Companies would have to post road-repair bonds ranging from $50,000 to $100,000 per mile, depending on whether the road is topped with gravel, tar and chip, or pavement. Those amounts could increase if bridges are in the agreed-upon truck routes.

“`Let’s say you were 10 miles off the main highway to a well site. That’s a million-dollar bond. The bond’s more than three times as much as the well,” Burd said.“This has the potential of being catastrophic in nature to conventional wells, and it could be very harmful to Marcellus wells.”

Burd also complained the rules are unclear about things such as who must purchase right of way, who’s responsible for the physical completion of the work and whether that work must comply with state purchasing laws if it’s done by the gas companies.

Marcellus shale underlies Ohio, West Virginia, Pennsylvania and New York, and drilling is in high gear in both Pennsylvania and northern West Virginia. The gas is locked in tightly compacted rock a mile underground, and freeing it requires unconventional horizontal drilling technologies and vast amounts of water.

That means traffic in the form of trucks carrying large equipment and water on roads not built to withstand the weight or damage.

The Pennsylvania Department of Transportation also is considering whether to increase bond limits for its roads.

The current requirements — $6,000 per mile for an unpaved road, $12,500 per mile for a hard-surface road — do not protect taxpayers, given the far-higher cost of repairing roads today, said Elam Herr, the assistant executive director of the Pennsylvania State Association of Township Supervisors.

Despite the many reports of damaged roads, Herr said many municipal officials say gas companies are generally working diligently to ensure roads are fixed and passable.

When drilling first started in remote Wetzel County, retiree Ray Renaud put a time-lapse camera in his window and counted as many as 50 trucks an hour passing his home near New Martinsville. Chesapeake Energy has responded well to complaints, he said, providing warning trucks and repairing one damaged road last fall. By spring, however, traffic had again destroyed the road.

“I moved here for the serenity of the country. Fifty trucks an hour and living in an industrial zone is not serenity,” said Renaud, an emergency medical technician who also worries about safety and accidents.

In 2003, lawmakers approved legislation that allowed overweight coal trucks to travel on designated routes in southern West Virginia. Hauling companies were required to buy permits, with the money used to maintain the roads and bridges along the routes.

The Department of Transportation realized it needed a similar system to address the growing needs of the gas industry, said spokesman Brent Walker.

Many drilling companies are fine, responsible operators, he said, and the new rules are a response to “a few irresponsible companies kind of making it harder on the rest of the industry.”

Corky DeMarco, executive director of the West Virginia Oil and Gas Association, acknowledged his industry must address the concerns of both citizens and state officials.

Although gas industry leaders had been attending informal talks about roads in meetings hosted by a handful of state legislators, DeMarco said they did not sit down with Mattox or the DOT to craft the rules they were given.

Though many details have to be worked out, he said companies are “generally open and receptive” to Mattox’s requirements. Bonding, for example, could become “an accounting nightmare” for some companies.

The upside of the DOT plan, however, is that everyone will understand what’s expected before a project begins.

“This is like the old Fram oil filter commercial: You either pay me now or pay me later,” DeMarco said. “We’re going to be paying one way or another. What’s going to cost us less in the long run? I think working with the highways department and doing the plan beforehand.”

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