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The New Power Brokers

He is West Virginia’s Speaker of the House — and a Lawyer for Natural Gas Companies

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Delegates give newly elected West Virginia House of Delegates Speaker Roger Hanshaw, R-Clay, a standing ovation following an August vote elevating him to the position. Photo: Chris Dorst, Charleston Gazette-Mail

State ethics rules seldom prevent lawmakers from proposing or voting on legislation that affects industries they work for.

This article was produced in partnership with the Charleston Gazette-Mail, which is a member of the ProPublica Local Reporting Network.

Toward the end of this year’s legislative session, a little-noticed bill was moving through the West Virginia House of Delegates to limit legal challenges that had slowed new natural gas-fired power plants in the state.

Delegate Roger Hanshaw, a Republican lawyer from Clay County who was serving as vice chairman of the Judiciary Committee, took to the floor to explain the legislation.

“This bill is a little inside baseball to practitioners of environmental law in West Virginia,” explained Hanshaw, a supporter of the bill.

It wasn’t the first time that Hanshaw engaged in some pretty effective legislative inside baseball on energy bills.

Last year, Hanshaw engineered passage of a bill that gave natural gas companies a broad exemption from chemical tank safety standards that West Virginia put in place after a 2014 spill that contaminated drinking water for 300,000 people.

Hanshaw was elected speaker in late August, succeeding Tim Armstead, who is now a justice on the West Virginia Supreme Court. Hanshaw is expected to be re-elected speaker in January. In the position, Hanshaw wields significant control over which bills are called up for votes and which are sent to committees to effectively die.

When he’s not in the state Capitol, Hanshaw makes his living as an attorney with the Charleston-based firm Bowles Rice, where his clients have included natural gas companies and gas industry lobby groups.

Over the last three years, he has represented the operator of a Fayette County natural gas waste disposal site in legal battles with state regulators and nearby landowners. He argued its case before the state Environmental Quality Board and the state Supreme Court. Then, he filed a brief on behalf of two industry groups when the case went to a federal appeals court.

Under the state’s ethics laws, those overlapping interests aren’t enough to keep Hanshaw from voting on matters affecting the industry, including the bill to help stop coal-funded legal challenges to power plants.

Legislative controversies over natural gas have grown in recent years as the industry’s production has greatly expanded. Hanshaw illustrates both the industry’s increasing ties to lawmakers and how West Virginia ethics laws sometimes leave state residents in the dark about such potential conflicts.

West Virginia’s ethics laws allow legislators to vote on matters that would benefit themselves, their businesses and their clients. In fact, a House policy, known as Rule 49, forces them to vote, so long as at least four others also stand to benefit.

In February, for instance, more than a dozen delegates were ordered to vote on a bill to make it easier for gas companies to assemble larger mineral tracts for drilling, despite asking to be excused because of potential conflicts. One of those lawmakers is the in-house counsel for a gas company.

A ProPublica and Charleston Gazette-Mail review found that over the past five years, the House speaker approved just 14 of 245 delegate recusal requests, a rejection rate of 94 percent.

Speaker Roger Hanshaw Photo: West Virginia Legislature

Hanshaw’s financial disclosure, filed with the state Ethics Commission, makes no mention of his connections to the natural gas industry. It lists his employer as Bowles Rice and describes his work as the “private practice of law.”

Hanshaw says he’s able to separate his legal practice from his work as a lawmaker, even when the interests overlap. In an interview in mid-November in his Capitol office, he said that the natural gas industry represents less than half of his legal practice, and that the work focuses mostly on advising clients about financial transactions or regulatory compliance rather than litigation.

“I represent whoever comes through the door.”


Hanshaw isn’t the only legislator with experience in West Virginia’s oil and gas business. He’s not even the only one at his own law firm.

Sen. Corey Palumbo, D-Kanawha, also is a partner at Bowles Rice. His practice areas include “oil and gas litigation,” according to the law firm’s website.

Palumbo has litigated against landowners on behalf of gas producers, work that drew attention two years ago when he was the co-sponsor of an unsuccessful bill to make it harder for residents to sue gas companies for damaging their property.

Palumbo said recently that he doesn’t remember a lot of the details of that legislation or exactly how he came to co-sponsor it. But he said that he represents a wide range of businesses in litigation, and that gas companies make up less than half of his practice.

“Everyone is sort of shaped by who they are and what they do,” Palumbo said. “I’m someone who represents business, and that shapes my views sometimes.”

Palumbo said he doesn’t make legislative decisions based on what would make businesses, including his clients, happy. “I just try to do what’s right,” he said.

More than a dozen lawmakers who served during the 2018 regular session listed some financial connection to the gas industry on their annual disclosure forms filed with the state Ethics Commission. Delegate Moore Capito, a Kanawha County Republican, for example, reported on his financial disclosure that he is an in-house counsel for Greylock Energy, a gas company.

So should those lawmakers be voting on gas industry legislation?

“I think the obvious answer to your question is no; legislators shouldn’t be voting on issues that affect their own business interests,” said Julie Archer, project manager for the West Virginia Citizen Action Group, which advocates for stronger government ethics standards. Archer said that West Virginia’s Ethics Act “seems pretty clear” that lawmakers should recuse themselves, but “it also gives them a lot of wiggle room” to vote anyway.

Part of the issue is that West Virginia has a citizen Legislature, like 40 other states, in which lawmakers keep their day jobs but come to Charleston for 60 days a year and a few days each month.

One major strength of such arrangements is that members with different backgrounds can use their varying areas of expertise and experiences to help educate colleagues as they go through the process of making laws.

For example, Democratic state Sen. Mike Romano, a lawyer from Harrison County, uses his past experience as an accountant in the gas industry to grill lobbyists about gas leasing and royalty bills.

Yet, Romano says he sees a clear problem with lawmakers who work in the gas industry voting on legislation that affects that industry. “That presents a clear conflict of interest,” he said.

Some conflicts, though, aren’t even disclosed. Lawmakers who are lawyers like Hanshaw don’t have to identify their clients, even if they represent parties that have vested interests in the outcomes of particular bills. The state Ethics Commission has never considered requiring those details, the agency’s executive director said.

Romano and Palumbo both said they believe requiring some kind of disclosure, such as general practice area or large clients, would be a good idea. “The more people know, the better choices they can make at the ballot box,” Romano said.

In written responses to questions from the Gazette-Mail and ProPublica, Hanshaw initially dismissed the idea, saying forcing lawyers to identify clients would violate legal ethics rules.

In the mid-November interview, however, Hanshaw conceded that some types of information about clients, such as when lawyers handle litigation, are a matter of public record that could be disclosed in Ethics Commissions filings. He said there are ways to let the public know what kind of law an attorney practices and generally what kinds of clients attorney-legislators have.

Hanshaw said that West Virginians have “a heightened interest” in government ethics rules this year in the wake of a spending scandal that prompted the impeachment of four state Supreme Court justices and the resignation of the fifth. (Two of the justices remain on the court.)


More than four decades ago, lawmakers in the West Virginia House of Delegates set a strong standard for themselves, aimed at preventing conflicts of interest from affecting their legislative votes.

In 1975, House members approved Rule 49, which said that any member “with a personal or private interest” in a bill was required to announce that interest and not vote.

Two years later, though, legislators watered the rule down. Instead of prohibiting members from voting on matters in which they had an interest, they would be told not to vote only if the matter affected them “directly and not as one of a class.”

In 2017, the rule was amended to define a class as five or more similarly situated people.

The way the rule has been interpreted in recent years, delegates are seldom ever excused from voting.

Take, for example, the February vote on the bill to make it easier for gas companies to force unwilling gas owners to allow drilling on their property.

More than a dozen House members said they had a conflict and asked to be excused from voting.

Judiciary Chairman John Shott, R-Mercer, was the first to ask. He said his father owned one-one hundred sixtieth of some gas reserves and he might eventually benefit from the bill when he inherits that gas.

Then-Speaker Armstead, R-Kanawha, ruled that Shott did not stand to benefit any more than anyone else and told Shott he had to vote. (Lawmakers do not have the ability to abstain from votes in West Virginia.)

A parade of other delegates followed with their own requests not to vote.

Some were like Shott. They owned some small piece of a natural gas tract that might be made more accessible to drilling if the bill passed. Some had existing gas leases they felt might become more lucrative.

Others, like Capito, worked directly for a gas company. Capito said he always asks for a Rule 49 exemption from voting on oil and gas bills “in an abundance of caution.”

Armstead made them all vote. The bill passed on a 60-40 vote. The 20-vote margin meant recusals wouldn’t have swayed things either way. Some of those who asked to be excused voted against the bill, while some voted for it.

Hanshaw was not among those who asked for a Rule 49 exemption, because he said he did not believe his legal work for the gas industry was a conflict with that bill. He voted for the bill.

As the natural gas bill illustrates, Rule 49 seldom results in members not voting on legislation where they may have a conflict of interest.

“It’s rare,” House Clerk Steve Harrison said. “One of the things about having a citizen Legislature is that there are so many bills that are going to affect the person or affect the business that there is an interest there, but it is almost always as a member of a class.”

A bill that affects only a business owned by a delegate would be an example of a conflict that qualifies for being excused from voting, Harrison said.

Angie Rosser, executive director of the West Virginia Rivers Coalition, worries that lawmakers who are employed by certain industries might “naturally take cues from those industries on policy decisions.”

She thinks the system needs to be changed.

“The issue seems magnified in West Virginia because there are so many political ties to industries now seeing profit benefits from the rollbacks of various regulations,” she said.


Just as Hanshaw is not the only West Virginia legislator with ties to the gas industry, the gas industry is not the only politically powerful sector with links to lawmakers. The chairman of the Senate Energy, Industry and Mining Committee is a coal mine manager, in charge of safety at a Mettiki Coal operation. The House Democratic whip is a United Mine Workers of America union official. Other lawmakers work in the insurance business, as teachers, or run auto parts stores or funeral homes.

But the Ethics Commission has found that being speaker of the House is different from being a rank-and-file lawmaker. While “certain conflicts of interest are inherent in part-time service” as a lawmaker, it has said, the presiding officer “has an even higher duty” to the citizens of the state. The speaker, for example, controls committee assignments and agendas, as well as the House floor agenda.

Commissioners examined the issue in 2012, when then-Speaker Rick Thompson, a Democrat, sought their approval to take a new outside job as a lawyer for the West Virginia Education Association, a powerful teachers’ union.

This arrangement was too much, as far as the commissioners were concerned. They said it presented an “inescapable conflict” for a House speaker to also work for a lobbying group. They also ruled that, because Thompson had been speaker for several years at that point, the job offer might appear to the public like the association was hiring him “because of his unique ability to influence legislation.”

Hanshaw says his situation is distinct from Thompson’s and more closely mirrors that of Armstead, his predecessor.

Armstead had been a House member since 1998 when, in 2014, the Republicans won a majority and elected him speaker. But Armstead was also an in-house lawyer for Columbia Gas Transmission, a pipeline company. He worked mostly in the company’s commercial division, and mostly on issues outside West Virginia.

Ethics commissioners said Armstead could continue to be speaker and hold his job because he had held the gas company job for more than a dozen years.

“That is me,” Hanshaw said. “I was a lawyer at our firm before I was ever elected to the House at all.”


With a doctorate in chemistry from Notre Dame, experience litigating over environmental issues and certification as a parliamentarian, Hanshaw has a leg up on many citizen legislators in navigating the lawmaking system. Like Romano’s inside knowledge of the gas business, Hanshaw said his experience can help on issues involving science or regulatory matters.

In 2014, the year Hanshaw was elected to the House, a chemical storage tank just upstream from the regional drinking water intake in Charleston leaked into the Elk River, contaminating the supply and prompting a “do not use” order that lasted up to a week for some residents. In response, both houses of the Legislature unanimously passed a tough bill adding new safety rules for aboveground storage tanks around the state.

Starting in 2015, as the water crisis faded, various industry groups tried to have the law revisited. The state’s growing oil and gas industry complained the loudest.

House Speaker Roger Hanshaw makes a point during a Judiciary Committee meeting in 2017, when he was the lead sponsor of legislation rolling back chemical tank safety regulations for the natural gas industry. Photo: Kenny Kemp, Charleston Gazette-Mail

In 2017, Hanshaw introduced a bill to give oil and gas operations a broad exemption from the bill.

After the bill passed, Hanshaw was one of three lawmakers honored as “Champions of Industry” by the West Virginia Manufacturers Association.

In an interview, Hanshaw said he introduced the bill because three small oil and gas companies in his district raised concerns about the chemical tank regulations.

None of the companies was a client, Hanshaw said. And even if they had been, he said, he doesn’t get into discussions with clients about legislation that might help them.

“I don’t let people come in here and talk about business,” he said. “And I don’t let people come to my daytime job and talk about the Legislature.”

ProPublica news applications developer Derek Willis contributed to this report.

Kate Mishkin and Ken Ward Jr. cover the environment, workplace safety and energy, with a focus on coal and natural gas for the Charleston Gazette-Mail. Email Kate at kate.mishkin@wvgazettemail.com and follow her on Twitter at @katemishkin; email Ken at kward@wvgazettemail.com and follow him on Twitter at @kenwardjr.

The New Power Brokers

Powerless: What It Looks and Sounds Like When a Gas Driller Overruns Your Land

Mary Milkowski said the dust from passing trucks was so bad her family stopped using their porch. Photo: Raymond Thompson Jr./ProPublica

This article was produced in partnership with the Charleston Gazette-Mail, which is a member of the ProPublica Local Reporting Network.

Lee Martin loved her 104-acre farm in Wetzel County, West Virginia. The family raised chickens there and rode horses. The kids played in mud puddles. They all took walks in the woods.

Flat land is rare in Wetzel County, in the state’s northwestern region, and the place had a good barn, clean water and plenty of privacy.

Then, starting in about 2012, Martin had to begin sharing the farm with Stone Energy.

Stone built a new bridge across the creek and a new road right in front of the Martins’ house. The company told Martin it needed the road to reach the new natural gas wells it drilled on the new well pad for which it flattened an area she used to go to pray, bucolic hills forested with huge oak trees.

Soon, hundreds of trucks rumbled past her house every day, spewing exhaust. Martin had asked the company to build the bridge farther up the creek, away from her house, and the well pad away from the oaks.

But Martin didn’t have a say over any of this. While she owns the house and the surface land it sits on, she doesn’t own the natural gas underneath. And that gave Stone Energy not only the right to access her property, but also the right to tear down trees, build structures and send as much traffic as it deemed appropriate onto it.

“It took the very core out of me to watch this pristine farm get torn up like this,” Martin said. “It just hurt.”

For decades, coal from West Virginia helped power the nation. Now, natural gas has overtaken coal as an electricity source. Gas from West Virginia heats homes and fuels kitchen stoves in faraway cities. The industry’s growth has brought much-needed jobs and tax revenue to West Virginia, an economic bright spot for a state where many communities are still reeling from the downturn of coal, long the state’s most powerful and profitable industry.

Along the way, however, the gas rush has changed the look and feel of communities across West Virginia. It has shattered the quiet of rural life for people like Martin. Modern drilling and gas production bring traffic, noise and dust to communities that haven’t had to wrestle with large-scale industrialization. For some residents, gas operations aren’t down the road or up the hollow, but right on their farm, forest or driveway.

And today, the gas industry is far different in scale, scope and impact than could have been imagined possible when West Virginians signed over natural gas rights decades, or more than a century, ago.

“The disturbance is so much more vast,” said David McMahon, a lawyer who has spent his career trying to help residents in their battles with gas companies. “It’s beyond all anticipation.”

The number of permits approved for horizontal gas drilling in West Virginia jumped from about 400 in 2008 to more than 700 in 2014, according to state Department of Environmental Protection data. Natural gas production in West Virginia more than doubled between 2008 and 2012, then rose again, to nearly 1.4 trillion cubic feet in 2016, according to the U.S. Department of Energy.

Long-standing property rights law says mineral owners may do whatever is “reasonably necessary” to extract natural gas from the ground, whether they own the affected land above it or not.

But to meet production demand, the industry has expanded what is “reasonable” and “necessary,” residents and legal experts say. Gas producers use hydraulic fracturing, which pumps huge amounts of water and chemicals underground to loosen up gas reserves, and drill extensive horizontal holes to suck in gas from much wider areas. They bring in fleets of heavy trucks and install tanks and pipelines.

A time lapse of images taken by a motion-detecting camera captured a day’s worth of trucks going back and forth past Lee and Chuck Martin’s bedroom window on their way up to the gas well pad on their farm. Photo: Courtesy of Lee Martin

In a statement, the West Virginia Oil and Natural Gas Association said its member companies “are diligent and responsive in working with surface owners, mineral owners, and local communities” to address “concerns that may arise from time to time.” The group said its members “strive to be considerate and responsive.”

But gas companies often have the final say, at least in part because of an arcane legal system that governs mineral ownership. Critics say protection for landowners hasn’t kept pace with advances in gas drilling technology, and that it’s often far too easy for a powerful industry to game the system. The laws and interpretations were established before gas companies used rotary drills, let alone lateral well bores that can stretch for miles.

Long-standing disputes among surface landowners and gas producers might be coming to a head.

Two of West Virginia’s largest gas producers, in separate cases, are trying to cement their practices into the state’s case law. Residents are hoping the cases help them preserve their lifestyle, and maybe get a share of the profits gas is generating.

The state’s two gas lobby groups — the West Virginia Oil and Natural Gas Association and the Independent Oil and Gas Association of West Virginia — argue in a joint legal brief that, if their current practices are curtailed in any way or their reading of the law is overturned, it “will effectively eliminate future oil and gas development in West Virginia.”

Joshua Fershee, a West Virginia University law professor who is following the cases, said they could have broad ramifications, but he cautioned that the industry might be taking its legal theories too far.

“The arguments basically from the companies seem to be, if they have a lease, they can do what they want,” Fershee said. “You have a right to do a lot, but it’s not unlimited. That’s why it’s called ‘reasonable’ and ‘necessary.’”

Lee Martin talks about the impact of gas extraction on her Wetzel County farm. Video: Mayeta Clark/ProPublica

Like controversies over royalty payments, in which residents argue that drillers use various schemes to trim payments to local gas owners, much of the dispute between the gas industry and surface landowners stems from the split ownership that seems to dominate West Virginia communities where coal was once king and natural gas has taken over.

Someone might own the surface land, while someone else owns the coal, oil or gas underneath. Sometimes, people own the surface, as well as the gas below. Gas is generally produced under leases, in which gas owners or their ancestors grant a production company the right to drill, produce and sell the natural gas. Often, the leases are so old that current surface owners didn’t sign them. And they can be so complicated that, even if they did sign them, they frequently don’t know what’s in them.

When the land and mineral rights were split, leases sometimes gave the mineral owner specific rights to come onto the surface to drill or mine those minerals.

But more often than not, the right to come onto the surface — to bring in a drill, set up a well and take out the gas — was something the law calls an “implied right.” Mineral ownership must include the right to get at the minerals, the state Supreme Court ruled back in 1909, because without this right, the coal or gas would be worthless.

Graphic: Lena V. Groeger/ProPublica

In that ruling, in a famous case over whether a company could build a tram road to carry fire clay to an adjacent plant, the court also said mineral owners had the right to use as much of the surface as “fairly necessary” to extract the minerals, but that they had to show “due regard for the rights of the surface owner.”

Along the way to modern times, the phrase “fairly necessary” morphed into “reasonably necessary,” but the idea of how to balance the rights of mineral owners and surface owners never really got resolved — at least not in the context of giant, modern natural gas drilling like what’s happening in the Marcellus Shale region.

Larry Barr is a retired coal miner who had hoped to live out his life in the peace and quiet of his farm near the community of Mobley, in Wetzel County.

Larry Barr. Photo: Mayeta Clark/ProPublica

A few years ago, Barr came home to find that a natural gas company had moved in next door. The company had started to build a well pad on the adjacent land and even put some of its equipment on his property by mistake. Then came the drilling and fracking, and the bright work lights pointed toward his house.

“It was really noisy,” Barr recalled. “It vibrates the whole house. We hung blankets and stretched them out over the windows to keep out the light and some of the noise.”

Five years ago, a West Virginia University study found that “problematic” noise levels occurred frequently near natural gas operations and recommended steps be taken to address the problem, such as building a fence or planting trees to block sound — or perhaps relocating roads or other infrastructure away from homes.

That was one of a series of legislatively mandated studies that urged additional protection for residents in gas producing areas of the state. Lawmakers have never acted on the recommendations, and when Gov. Jim Justice took office in January 2017, one of the DEP’s first actions was to revoke a rule aimed at giving residents some relief from excessive noise and light.

Barr says things are a little better for him, because the drilling and fracking — the most noisy and intrusive activities in gas production — have been completed, and the wells near him are producing gas. But the sprawling well pad is still right next to his farm, and the traffic continues. Barr avoids taking out the 1957 Pontiac that his son helped him restore, because he doesn’t like dodging the gas company trucks.

“I miss the peace and quiet more than anything,” Barr said.


Gas producers now say they have a right to work on someone’s property even if they aren’t trying to access the gas underneath it. They say they have the right to do so when trying to gain the gas under adjacent or neighboring properties.

That’s what happened to Beth Crowder and David Wentz. In 1975, Crowder and Wentz bought a 300-acre farm on Brush Run, in Doddridge County, just south of Wetzel. Crowder is an artist and Wentz a woodworker. They were part of the “back to the land” movement of the time, when young people moved to the hills of West Virginia to live off the land and be left alone.

“We knew we wanted to live somewhere quiet where we wouldn’t need an awful lot of money to sustain ourselves,” Crowder later testified when she and Wentz sued EQT Corp., West Virginia’s second-largest gas producer. “We didn’t know what we wanted until we saw Brush Run. We realized that is what we wanted.”

But Crowder and Wentz only bought the surface land of the farm. (They divorced in 2005 and split the surface property, where they live in separate homes.) The minerals, in this case natural gas, were owned by the heirs of a man named Joseph L. Carr and were under a gas production lease originally signed in 1901.

Crowder and Wentz were not strangers to natural gas drilling. There were several old vertical wells on the farm. But those didn’t amount to much more than small tanks and pipes sticking out of the ground.

Then, in 2012, EQT, the new owner of the lease to Carr’s gas, notified Crowder and Wentz that it was going to drill nine modern, horizontal wells on the farm. EQT’s plan was to put in a road, the wells and a well pad on the farm, but use long horizontal drilling to suck up the gas from surrounding properties where it held leases.

Crowder and Wentz warned the company not to do so. They wrote a letter saying EQT would be trespassing. EQT ignored the couple, and it began clearing land and drilling wells in February 2013.

The work took 16 months to complete.

Later, after Crowder and Wentz sued EQT, Circuit Judge Timothy Sweeney detailed the work for the 20-acre well pad: Drilling just one of the wells involved nearly 11 million gallons of water, all of which was trucked to the site. EQT used trucks to haul in 1.8 million pounds of sand to frack the wells. By comparison, vertical wells drilled in 1962, 1990, 1991 and 1995 used a total of only 305,000 pounds of sand.

“The construction of the road was this grinding, continuous noise, and the blasting seemed to shake everything, even from a distance away,” Crowder recalled.

“They worked 24/7,” she said. “They were continually loading and rolling and crashing pipes, which sounded just really loud, and it was the intensity and quantity that I could hear very plainly from my house.

Listen to What a Hydraulic Fracturing, or Fracking, Operation Sounds Like
David Wentz captured this audio of a fracking operation at a well pad on his farm in 2014. The drilling work went on for months.

“If you had a radio on … you’d have to turn it up really loud to be able to hear it,” Crowder said. “It was hard to talk on the phone. It was a cacophony that went on for what seemed like forever.”

Even now, with construction complete, tanker trucks to handle brine, the salty water that is a byproduct of gas operations, drive up and down the road almost every day.

All of this was aimed at helping EQT gather gas from five neighboring tracts that total nearly 3,000 acres, court recordsshow. Nearly two-thirds of the gas EQT was producing came from outside the boundary of the Crowder-Wentz property.

Economically and technologically, gas production today is all about what industry officials call “laterals.” These are the horizontal holes, or well bores, that companies drill out in all directions from the vertical hole, so they can pull in gas from many properties all at once. These laterals stretch for great distances. EQT planned an average lateral of 2.2 miles this year in Appalachia. Antero Resources said its laterals have increased 30 percent since 2014 and now average more than 2.8 miles.

In February 2016, Sweeney found that EQT didn’t have the right to do any of this — that, by coming onto the Crowder-Wentz property to drill for gas from adjacent land, the gas giant had trespassed.

After a trial in September 2017, a local jury awarded Crowder and Wentz nearly $200,000 in damages.

EQT is appealing to the West Virginia Supreme Court.

In some ways, the case could present a narrow legal issue that the court could easily dispense with. Both sides generally agree that companies with gas leases have the right to do what is “reasonably necessary” to drill for and produce that gas.

Crowder and Wentz, though, say that only applies to gas that’s under the property, not to reserves under adjoining tracts. EQT disagrees. The company says its right to produce gas from the adjoining tracts gives it the right to use the Crowder-Wentz surface to do so.

David Wentz looks out from a hill on his land. Wentz sued EQT Corp. for building natural gas wells there. Photo: Raymond Thompson Jr./ProPublica

EQT declined to discuss the case beyond its court filings. But a friend-of-the-court brief filed by lawyers for the Independent Oil and Gas Association of West Virginia urges the court to take a far broader approach to protect gas companies from cases like the one filed by Crowder and Wentz.

The ruling by Sweeney, the industry lawyers say, “creates a material and substantial impediment to oil and gas development in West Virginia.” They say the ruling was “obviously wrong” and “devastating to the oil and gas industry.”

EQT lawyers made similar warnings at trial, telling jurors during closing arguments about the positive economic impact of gas. “If you want to stop all of that today, you can, but not using common sense,” EQT lawyer Brian Swiger said.

Legally, the industry believes the law in West Virginia and throughout the country makes mineral ownership “dominant” and surface land ownership “servient,” meaning secondary.

Industry officials say that horizontal drilling, using one large pad for multiple wells pulling gas from a collection of tracts, has a smaller overall footprint on communities and the environment. The alternative, they say, would be a far larger number of vertical wells that would be drilled at many more locations, creating more widespread impact.

Advocates for surface owners and residents agree, to a point. Fewer pads, even larger, centralized ones, can certainly reduce the number of landowners who have to live with wells on their property.

But that also means concentrating the effects on the surface owners unlucky enough to have their property picked for one of those pads.

Those unlucky landowners should have to agree to have large centralized pads on their land, and they should be fairly compensated, with a share of the gas profits like gas owners get through royalties, according to the West Virginia Surface Owners’ Rights Organization, which lobbies for landowners.

“Our case really isn’t such an extreme case,” said David Grubb, a former state senator and longtime activist who, with McMahon, represented Crowder and Wentz at trial. “There is so much money to be made that there’s no reason the surface owners shouldn’t be fairly compensated.”

While EQT is appealing a courtroom loss, the other major gas case that could decide how surface owners are treated is an appeal of a victory for Antero Resources, the state’s largest producer.

A group of Harrison County residents is challenging a lower court ruling that threw out their nuisance lawsuit against Antero’s operations in the Cherry Camp area, to the east of Doddridge County.

The residents say Antero should compensate them for unbearable traffic, “constant dust” that hangs in the air and settles on homes and vehicles, disruptive heavy-equipment noise and bright lights that shine into their homes day and night.

In a written statement, Antero Vice President Al Schopp said the company works hard to “listen and collaborate” with surface owners and residents in the communities where it operates.

“As a result of that, we’ve limited truck schedules, installed sound abatement, modified lighting, and rebuilt roads so they are better and safer once our work is done,” Schopp said. He said that Antero’s policy is to try to reach agreement with surface owners on the use of their land, and that longer laterals “allow us to produce more energy from a single well, which means less surface disturbance.”

The case focuses on two-dozen wells and a compressor station built on six pads in the immediate area. Hundreds of similar cases are pending, and the Supreme Court’s decision could set a precedent for all of them.

“It’s like Grand Central Station in front of my house,” said one of the residents, Deborah Andrews. Another resident, Mary Milkowski, said the dust is so bad her family stopped using their porch.

A panel of judges who handle large-scale litigation in West Virginia ruled against the residents. They appealed.

Industry lawyers say a ruling for the residents would pose an even larger threat to natural gas operations than the Crowder-Wentz verdict.

“Any other result will devastate oil and gas owners, lessees, producers, secondary suppliers, contractors, users, royalty interest owners, and the state of West Virginia and its local communities,” a joint brief filed by the West Virginia Oil and Natural Gas Association and the Independent Oil and Gas Association said.

The West Virginia Coal Association, the West Virginia Manufacturers Association, the Chamber of Commerce and a variety of other business groups filed their own brief, maintaining that the noise, dust, vibrations, lights, odor and traffic “are part and parcel to the normal drilling operations” that come with natural gas development.

“Simply put, activities that are required for mineral development cannot support a claim for nuisance because, by their very nature, they are reasonable and necessary to the exploration and extraction of minerals,” those parties said in their brief.

Pat McGinley, a WVU environmental law professor who has represented citizens in cases against the coal and gas industries for decades, said West Virginians have heard these kinds of arguments — that damage to communities is the inevitable cost of natural resource industry jobs — many times over the years. The same points were made by coal producers.

“These arguments are jobs extortion,” McGinley said. “They are trying to maximize profits and say the law doesn’t set any limits. That’s really the history of exploitation of natural resources in West Virginia.”

Oral arguments in the Antero case are set for Jan. 15. The EQT case hasn’t been scheduled yet. Both cases come at a time of turmoil and change at the court, in the wake of a spending scandal that prompted the impeachment of four justices and the resignation of a fifth, and amid controversy over the connections between at least two justices and natural gas companies.

The Martins on their farm near New Martinsville. Photo: Raymond Thompson Jr./ProPublica

Back in Wetzel County, Lee Martin and her second husband, Chuck, say some things got a little better when EQT took over the drilling from Stone Energy, following a sale of the company in 2017.

EQT at least tried to do a better job controlling the traffic, she said. And the company paid for the material for a large fence to help block some of the noise and dust from the road.

“When landowner concerns arise, EQT works diligently to address them,” EQT spokeswoman Linda Robertson said in an email. “EQT has addressed concerns raised by the Martins and continues to work with them to address their additional concerns.”

Robertson noted that Stone Energy had reached an agreement with the Martins on the use of their land and paid them a confidential amount, both sides said. Lee Martin said it wasn’t like there was much choice, given that the company had a lease for the gas.

“They showed us the design, and we had absolutely no say on where the bridge was going to be, where the road was going to go or where the pad site was going to go,” Martin said.

Life at the farm is just not the same. Too many trucks, still too much noise. No privacy. Martin worries about air pollution and water contamination from the gas industry. She doesn’t feel at home anymore.

The Martins put the farm up for sale. A young man who works in the gas industry is a potential buyer.

“We have to get out of here,” Lee Martin said. “I fell in love with it, but there have been too many changes.”

Tractor-trailers leave a natural gas well site in Doddridge County. Video: Chuck Burkhard/Drone Imageworks for ProPublica and Mayeta Clark/ProPublica

Ken Ward Jr. covers the environment, workplace safety and energy, with a focus on coal and natural gas, for the Charleston Gazette-Mail. Email him at kward@wvgazettemail.com and follow him on Twitter at @kenwardjr.

Lead video by Chuck Burkhard/Drone Imageworks for ProPublica, Al Shaw and Lucas Waldron/ProPublica

This article was produced in partnership with the Charleston Gazette-Mail, which is a member of the ProPublica Local Reporting Network.

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The New Power Brokers

Century-Old West Virginia Leases Yield Paltry Gas Royalties. A Suit Could Cut Others’ Payouts to a Trickle, Too.

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LindaStimmell
Linda Stimmell has many folders full of correspondence and other documents about her dealings over the years with natural gas companies. Photo: Craig Hudson/Charleston Gazette-Mail

This article was produced in partnership with the Charleston Gazette-Mail, which is a member of the ProPublica Local Reporting Network.

Linda Stimmell gets upset every time EQT Corp.’s checks arrive in the mail. The energy giant extracts natural gas from beneath the Stimmell family’s old farm in Doddridge County, West Virginia, under the terms of a lease signed when Teddy Roosevelt was president.

The royalty checks Stimmell receives from two “Bates Wells,” named for her great-great-grandfather, Andrew Jackson Bates, amount to just $9 and $3 each quarter.

The lease Bates signed more than a century ago with Carnegie Natural Gas Co. of Pittsburgh allowed legendary industrialist Andrew Carnegie’s company to drill for, produce and sell as much natural gas as Carnegie wanted. In exchange, Bates got a flat fee of $300 a year per well.

Because of that deal, Stimmell and the many other Bates descendants who have since inherited the gas — and that 112-year-old lease — have received tens of thousands of dollars less than they would have if the contract were negotiated today.

“They’ve paid pennies, compared to what they are making,” Stimmell said. “It’s ridiculous.”

It’s not clear how many West Virginians are stuck with old leases that pay residents a fraction of what they might otherwise get. Observers guess it’s in the thousands. But what is clear is that thousands more could find themselves getting far less in royalties, if at least one major gas company gets its way.

That’s because of a recent lawsuit filed by EQT — the state’s second-largest gas producer — that threatens to put far more people in Linda Stimmell’s situation, stuck with tiny monthly payments at a time when the natural gas industry is booming.

The lawsuit, filed in April, challenges a 1982 law that aimed to give gas owners a bigger share of the profits. That law applied to situations where the gas lease was an old flat-fee arrangement and the well was drilled after the law took effect. In order to get a state permit for such wells, gas companies would have to pay the gas owners at least 12.5 percent of the revenue from the gas.

EQT lawyers argue that the company invested time and money on leases, betting financially that, eventually, more modern drilling techniques would fuel skyrocketing production in West Virginia’s Marcellus Shale gas fields.

“It was entirely foreseeable that, over time and with investment, mineral extraction technology and related infrastructure would continue to improve, new technologies would develop, and the market for natural gas would grow,” the company maintained in its lawsuit, filed in U.S. District Court in Clarksburg.

EQT wants a federal judge to throw out the entire 1982 statute. The company declined to comment on the lawsuit beyond its court filings.

A victory for the company could shift millions of dollars in gas royalties from West Virginia residents and businesses to out-of-state gas producers like EQT, a politically connected company with a board member, Bray Cary, who is a top adviser to Gov. Jim Justice.

So far, the Justice administration is fighting the EQT lawsuit. Lawyers for the state have asked for it to be dismissed, citing the state’s interest in preventing the gas industry from “continuing to capitalize on older, flat-rate leases that provided unforeseen windfall profits in the modern natural gas marketplace.”

Tom Huber, president of the West Virginia Royalty Owners Association, said the company’s lawsuit shows that “EQT’s greed knows no limits.”

“They are determined to suck every bit of gas they can out of our state and pay us next to nothing for it,” Huber said. “EQT wants us to starve so they can please their Wall Street investors.”


Linda Stimmell’s natural gas story starts on Sept. 17, 1906, when her grandfather’s grandfather signed a lease that gave the rights to oil and gas under a 150-acre tract of land in Doddridge County to Carnegie Natural Gas.

The company drilled two wells there shortly afterward. A century later, both are still producing, even if just a trickle of gas in today’s market. Equitable Resources, EQT’s former name, took the wells over in 1999, when it acquired Carnegie Natural Gas. The lease lasts forever, or at least as long as the wells are active.

Stimmell inherited part of the gas rights from Bates, her great-great-grandfather on her father’s side, but she’s not sure exactly what her share is, or how many of her distant relatives, all descendants of Bates, are co-owners.

Situations like Stimmell’s aren’t that unusual in West Virginia.

Land ownership is often complex and confusing. Someone might own the surface land, while someone else owns the the coal, oil or gas underneath. Tracts such as natural gas reserves become divided among multiple owners, as land and mineral rights are passed down across generations.

In Stimmell’s case, Bates split his gas and other holdings among his five children. They split what they inherited among their children, and so on. After a couple of generations, what began as a one-half ownership turns into a one-twentieth share.

Stimmell didn’t pay attention to any of this until 1996, when her father died and she inherited part of the Bates mineral holdings. Her dad, George B. Swiger, worked more than 40 years for Hope Gas, as a maintenance man who helped residential customers with gas connections for their stoves, furnaces and hot-water tanks.

“My father retired from Hope Gas, and he always told me, don’t trust the gas companies,” Stimmell said. “I thought nothing about any of this stuff until he passed away.”

Stimmell soon learned. Her checks certainly weren’t making her rich, but her life seemed to become consumed by skirmishes with various gas companies.

Some West Virginians have gotten wealthy from the natural gas boom, the mineral rights under an old family farm turning them into “Marcellus millionaires.”

But Stimmell’s experience is just as common, and it reflects what some state residents who own land or minerals in the state’s gas-producing region go through: One company quibbled with her about the specific location for a gas line she requested to a cabin she kept on the old family property when she moved to Morgantown. Another wanted to wrestle with her over a right-of-way to build its new gas transmission pipeline.

There were periodic requests to amend her family’s leases to allow the gas company to reach more reserves. The industry says these are efforts to “modernize” leases. But those kinds of requests seldom include an offer to increase royalty payments to a more modern rate. Stimmell’s mail became an endless string of paperwork, much of it almost impossible to really understand.

And one thing is certain: As long as EQT holds her lease, and keeps producing even a little gas from it, she can’t work out a deal for some other company to drill a different well into a different gas formation — perhaps the Marcellus — and pay her larger royalties. It’s a common problem for some West Virginians in gas counties. Wells are “held by production,” allowing companies to avoid having to pay the costs to shut down and plug an old well, or just to stave off competition from some other company.

There once was hope for Stimmell, during a mid-2000s lawsuit over natural gas royalties.

Flat-rate leases are “void and unenforceable,” Roane County Circuit Judge Thomas C. Evans III had ruled, citing the legislative findings from the 1982 law.

“To enforce such a contract term under these circumstances would require this court to perpetuate oppression and injustice, in violation of the clear public policy of this state,” Evans ruled in August 2006.

But Evans didn’t offer gas owners like Stimmell any relief — no court order or statewide injunction. West Virginia lawmakers hadn’t provided any remedy, either.

Lawmakers in 1982 applied the law only to future gas wells, those that needed new permits from the state. They were trying to stay within the Contracts Clause of the U.S. Constitution, which prohibits public officials from interfering with private contracts unless there is a compelling public interest.

Lawyers representing gas owners in royalty cases have never tried to get a court to order higher royalties for pre-1982 wells. They, too, worry that the Contracts Clause would stand in their way.

Meanwhile, the 12.5 percent required by that 1982 law itself is growing outdated. As demand for natural gas increases, gas producers routinely pay as much as 16, 18 or even 20 percent royalties when they negotiate new leases for the right to drill.


Years ago, Stimmell was surfing the internet, trying to educate herself about gas leases, and she came across David McMahon, a lawyer and founder of the West Virginia Surface Owners Rights Organization.

McMahon, in a recent legal brief, cited Stimmell as an example of what might become more commonplace if EQT wins its lawsuit to throw out the 1982 law that requires royalties of 12.5 percent for newly drilled wells.

That law doesn’t help Stimmell, because her wells were drilled before 1982. But McMahon used the numbers from her well to show how paying a 12.5 percent royalty — rather than a flat fee — helps other gas owners with new wells.

If EQT had paid Stimmell and other Bates heirs 12.5 percent — one-eighth is the way the law expresses it — since 1982, McMahon wrote, they would have received $71,000 over that time. Instead, they received $22,000 from their flat-rate lease.

The difference would be far greater in situations in which EQT and other companies have drilled horizontal wells that can access far more gas. A modern well can produce about $7.1 million worth of gas a year and, with a 12.5-percent royalty rate, generate royalties worth more than $887,000 annually, McMahon wrote, citing one example.

DavidMcMahon

David McMahon, lawyer and founder of the West Virginia Surface Owners Rights Organization Photo: Kenny Kemp/Charleston Gazette-Mail

If the companies were able to revert to leases paying $300 a year, they would collect “a windfall,” McMahon wrote, “depriving landowners in this state of income vital to their fortunes and families and the state’s economy — a windfall that the state has a legitimate interest in preventing.”

Even paying 12.5 percent is a good deal, he said. “They get to keep the other seven eighths.”

EQT argues in its lawsuit that those old leases “apportioned the risk according to each party’s preference at the time.” Gas owners would receive a reliable payment for gas development, regardless of how much gas was eventually produced. Producing companies would have “the incentive to invest in improving natural gas extraction, production and marketing.”

“Making such investments is exactly what EQT has done,” the EQT lawsuit says. “Over the better part of a century, EQT has invested millions of dollars to improve techniques for extracting natural gas and for infrastructure to develop an integrated market for natural gas.”

EQT says it should be able to “enjoy the returns of such investments,” without state lawmakers interfering with its leases.

During previous major cases over gas royalties, the two trade associations that represent the gas industry filed friend of the court briefs on the company’s side. This time, however, industry groups have stayed out of the case. EQT has said in court documents that flat-rate leases represent “a relatively small percentage of all leases in West Virginia,” but that it believes it holds the greatest number of them.

Some of EQT’s competitors say that getting rid of the flat-rate statute isn’t a priority for them.

“It just didn’t feel like the spirit of what we were trying to do with these legacy leases in West Virginia,” said Al Schopp, a regional senior vice president and spokesman for Antero Resources, the state’s largest gas producer.

Stimmell said she worries about the day when EQT might show up and want to drill a Marcellus well on the Bates lease. If EQT wins its current lawsuit, her six grandchildren would be stuck sharing a $300 per year flat payment — not a percentage cut of the millions of dollars a modern well could generate.

“I’ve always said I’m not against drilling,” Stimmell said. “But I am for the people — the mineral owners and the surface owners — to be paid a fair price.”

Ken Ward Jr. covers the environment, workplace safety and energy, with a focus on coal and natural gas, for the Charleston Gazette-Mail. Email him at kward@wvgazettemail.com and follow him on Twitter at @kenwardjr.

This article was originally published by ProPublica

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The New Power Brokers

‘Jobs Alliance’ Backed by Coal Giant Loses Bid to Stop West Virginia Natural Gas Plant

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The gas industry’s growth has largely come at the expense of the state’s coal industry, and some coal loyalists like Murray Energy founder and CEO Robert E. Murray have spoken against the continued growth of gas. Photo: Ramin Rahimian/REUTERS

A group backed by Murray Energy has tried to block gas plants in West Virginia. The state Supreme Court rejected arguments against one plant, saying it will help the local economy.

A group funded by coal giant Murray Energy has lost its latest court battle to block construction of new natural gas power plants in West Virginia.

The state Supreme Court on Thursday affirmed the state Public Service Commission’s approval of Brooke County Power LLC’s gas plant, turning aside objections by the Ohio Valley Jobs Alliance and saying the plant’s developers had “substantially complied” with state power plant siting rules.

Separately, the jobs alliance appears to have abandoned challenges of gas plant permits issued to the Brooke County Power plant and another in Harrison County. The group’s lawyers did not file appeals of permit approvals prior to the legal deadline for doing so, developers and supporters of the plants said this week.

In September, the Charleston Gazette-Mail and ProPublica detailed how Murray Energy, one of the nation’s largest coal companies, had been quietly funding the jobs alliance’s litigation aimed at stopping the natural gas power plants proposed for Brooke and Harrison counties and another in Marshall County.

The legal battles come at a time when the state’s natural gas industry is flourishing. Developers of the gas plants say they would put the gas to work locally, generating electricity in West Virginia, rather than piping the fuel out of state. They say the plants would provided more jobs and revenues for West Virginia.

But the gas industry’s growth has largely come at the expense of the state’s coal industry, and some coal loyalists like Murray Energy founder and CEO Robert E. Murray have spoken against the continued growth of gas.

With its legal fees covered at least in part by Murray Energy, the jobs alliance — known locally as the OVJA — has challenged permits issued by the state’s Public Service Commission and the Air Quality Board for the facilities. The OVJA has cited environmental regulations that are similar to those that Robert Murray has railed against when those rules were aimed at coal.

One such legal challenge, aimed at the Moundsville Power plant proposed for Marshall County, was resolved in favor of the developers. But litigation took so long that investors got nervous and the project may not be built, supporters say.

The Brooke County Power plant case was the first to reach West Virginia’s Supreme Court. In its 15-page ruling, the court said that the Public Service Commission should have required Brooke County Power to submit a more detailed analysis of the impacts of tax breaks being given to the project. But the court also said that analysis “is but one small piece of the larger and extremely extensive application.”

“Given the current economic condition of West Virginia and Brooke County, in particular, it is apparent that the project will substantially and positively impact the state and local economies,” the court ruling said.

Drew Dorn, president of Energy Solutions Consortium, the company proposing the Brooke plant, said he was pleased with the court decision.

“We are excited to clear another important hurdle to bring this project and the huge economic benefits it will deliver to West Virginia,” Dorn said in a prepared statement.

Steve White, director of the Affiliated Construction Trades Foundation, a coalition of construction unions whose members would build the gas plants, said he wants construction to start soon.

“We hope this ends the delays caused by unwarranted appeals and that this and other projects can be built as soon as possible,” White said. “With this decision and no further appeals we see a green light to get to work on these projects.”

A lawyer for the OVJA did not respond to a request for comment. A Murray Energy spokesman declined to comment. OVJA leader Jim Thomas has previously said that other than legal fees, Murray Energy does not provide any funding to the group.

Ken Ward Jr. covers the environment, workplace safety and energy, with a focus on coal and natural gas, for the Charleston Gazette-Mail. Email him at kward@wvgazettemail.com and follow him on Twitter at @kenwardjr.

This article was published by ProPublica in partnership with the Charleston Gazette-Mail, which is a member of the ProPublica Local Reporting Network.

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