The Case against Senate Bill 576

The gas producers in this state do not want to provide the mineral owners fair payment
for their minerals nor do they want to negotiate in good faith.

They do not want to renegotiate old leases that did not contemplate the Marcellus
Shale development or fracking.

They do not want to protect the surface owners from damage or pay them what they
should if property owners lose use oftheir surface property.

The gas producers have come to the legislature and asked that the State of West
Virginia take mineral owners? property for the benefit ofthe corporate shareholders of
these large multi?national gas producing companies. They want the state to take care of
Wall Street not Main Street.

The Senate has written and is set to pass today Senate Bill 576, which would give the gas
producers what they want at the expense of West Virginia property owners.

Senate Bill 576 offers little protection for surface property owners who would be forced
to pool under ?Joint Development? provisions ofthe bill.

The state should not side with the out?of?state gas producers over the West Virginia
landowners.

Today it is property for natural gas development at stake, but tomorrow it could be
property for a casino, a mall or other private development.

Senate Bill 576 would legitimize private sector imminent domain.

Government should not take a private person?s property for the benefit of another
private entity.

If West Virginia wants to see natural gas development, legislators should tell the gas
companies to stop whining and instead negotiate with mineral owners in good faith
with reasonable offers.

America is a free and a capitalistic society. For the government to take one?s property
for private use and benefit of another would be socialism and corporate welfare for the

lazy
What do we ask?
0 The legislature should reject Senate Bill 576.
The legislature should demand that the companies start negotiating with land
and mineral owners in good faith and stop making excuses.
The legislature should protect the property rights of West Virginia land owners!

0 West Virginia is on the verge of another natural gas boom, but the pipeline capacity
must be increased, which take at least 24 months. Thus, there is no rush.

What is wrong with Senate Bill 576?

Property rights are not protected. The term of the clay is ?Joint Development? which really
means the same as forced pooling and imminent domain. The passage of Senate Bill 576 would
assign one property owner?s rights to another private person or corporation.

Senate Bill 576 basically would insert a new provision into all existing leases that would allow
these gas producers to use old leases for unintended purposes such as fracking and the joint
development of the Marcellus shale gas.

Senate Bill 576 also would do little to protect the surface owner when joint development is
used to combine multiple tracts to one unit. Old leases contemplated less than an acre for
natural gas development that, when completed, would leave an area the size of a garbage
dumpster for ongoing production. Senate Bill 576 would allow unlimited surface use with little
input from the surface owner; these new pads could be 12 acres or larger in size.

What about the co-tenancy provisions?

They are better than joint development, but without a minimum royalty, people would be hurt
and it would be a taking of property rights.

What is meant by a minimum royalty?

It is our understanding that all West Virginia state leases have a 20 percent minimum royalty
without deductions. If 20 percent is good for the state, then it should be good enough for the
citizens of this state who pay taxes and are the voters.

Can the bill be fixed?

No, it cannot be fixed this late in the session. It will take 24 to 36 months before pipeline
capacity significantly increases. The pipelines carrying gas are almost at capacity, so there is a
glut of natural gas at this time. The companies have plenty of time to negotiate in good faith.

Why do you say Senate Bill 576 is corporate welfare?

Unless government creates this loophole through Senate Bill 576, these companies would
actually have to renegotiate leases and pay a fair value for the right to exploit another person?s
property. Thus, we consider Senate Bill 576 to be freeloading and corporate welfare.