Just days before President Obama is set to leave office, he released new shale regulations establishing minimum royalty rates and giving the Secretary of the Interior discretion for increases.
Related: BLM: New Rules Will Ensure Accurate Royalties
The ruling is designed to protect the environment and ensure that taxpayers are fairly compensated, should shale on federal lands ever be drilling commercially.
“This approach allows the Secretary to consider all relevant factors, including geology, technology, costs, and market prices for oil and gas. Until there is a domestic commercial oil shale industry, we can only speculate about what royalty rates those factors would support. (…) These regulations also strengthen environmental protections by requiring additional environmental information and planning to be included in an oil shale development plan, including a plan to protect water resources, an airshed review, an integrated waste management plan, and an environmental protection plan.” – BLM statement
The new amendments add flexibility to the royalty rates that were set in 2008. The BLM rejected a call for a minimum 12.5 percent rate as an alternative, which is what is imposed on conventional oil and gas leases. In a statement, the agency noted there the “significant differences” between oil shale mineral deposits and conventional crude oil reservoirs. They called the effects of any uncertainty about flexible royalties small compared to the financial and technical challenges of producing fuel from shale at prices competitive with conventional oil production.
Read more at blm.gov
The West Virginia Mineral Owners Coalition is mobilizing forces to protect landowner rights.
Related: Clarity Needed for West Virginia Royalties
The 2017 legislative session in West Virginia is under way and being closely watched by mineral rights owners in the state. At the beginning of the month, the West Virginia Mineral Owners Coalition gathered its members to strategize how they would protect their rights.
“We are trying to keep the industries in this state from stealing our property rights,” said Wayne Johnson, a mineral owner in Ritchie County. “Taking from our statutorily protected royalty payments is theft.”
The coalition exists to mobilize and support property owners and they plan to lobby legislators in 2017 to maintain and continue those protections they won in 2016. Two West Virginia Supreme Court cases upheld mineral and landowner rights:
- Mountain Valley Pipeline vs. McCurdy: the Supreme Court supported a lower court’s decision that pipeline companies cannot trespass onto your land, without your permission, to survey for interstate projects that have not yet been granted eminent domain.
- Leggett vs. EQT Production Company: the court held that the state’s minimum royalty payment of 12.5 percent must be paid without the deduction of post-production costs. This decision upheld statutory protections put in place to protect the interests of mineral owners who have leased their minerals. EQT has asked the court to rehear their case on this issue.
For more information check out the Coalition’s Facebook page or contact Elise Keaton at 304-207-1150 or email email@example.com.