House Speaker Says Tank Legislation Comes with 'Unintended Consequences'

In part, that legislation, SB 373, requires registrations and inspections of above ground storage tanks in West Virginia. The law took effect in June.

Now, Miley said he’s hearing about the legislation’s effects on the small oil and gas operators throughout the Mountain State who have conventional wells — meaning wells that are not drawing from the Marcellus shale.

“I have heard from any number of those conventional well operators and the cost of meeting the requirements of the new legislation is fatal to some of their businesses,” Miley wrote in a letter sent to Gov. Tomblin earlier this month.

He’s asking that the state Department of Environmental Protection attempt to address the issues during the rule-making process. If that is not possible, Miley said Tomblin could delay the implementation of the part of the law dealing with small operators with an executive order or lawmakers could take up the bill again in a Special Session or during the 2015 Regular Legislative Session.

Miley said there are 40,000 above ground storage tanks for oil and gas in West Virginia that now must be registered with the state even if they are outside of the zones of critical concern and not a threat to the water supply. Those tanks must be inspected and certified by a professional engineer before Jan. 1.

Dennis Xander, one of the affected gas operators from Buckhannon, said such requirements are unrealistic. He said, if enough registered engineers could be found, “Let’s do the math. There’s roughly 250 work days in year. One inspector could, maybe, do a thousand tanks a year and now you’re asking them to do 40,000 tanks by Jan. 1.”

Operators of tanks that are not registered, as the law requires, by Oct. 1 could face a potential fine of $10,000 per tank for each day a tank remains unregistered. “Certainly, this is going to cause a lot of sleeplessness for some of West Virginia’s leading citizens,” Miley wrote.

Xander estimated the costs of the new law will add up to $300,000 more annually for his company. “I can promise you that our net income from our wells is not $300,000 a year,” Xander said on Tuesday’s MetroNews “Talkline.”

“Nobody is against protecting our water. Nobody. People sometimes ignore the fact that guys like me and our children and grandchildren drink that same water and we’re very sensitive to it. There are already things in effect (for oil and gas tanks) that protect that water.”

Early drafts of the bill did not include the tanks for those smaller operators.

“What the bill was meant to address was (A) the large tanks that contain large quantities of containments, like the Freedom spill did, and those that were in areas or zones of critical concern,” Miley said. “As of result, the language was perhaps looser or more broad than it needed to be.”