Albright, Justice, concurring:
While I concur in the decision of the majority, I wish to write separately to
express certain observations concerning the classification of the administrative rule that was
challenged by the Petitioners as invalid (39 W.Va.C.S.R. § 1-4.4(a)), and the various
considerations underlying the legislative enactments, which address the issue of oil and gas
conservation, that are set forth in article 9, chapter 22C of our state code. See W.Va. Code
§§ 22C-9-1 to -16 (1994) (Repl. Vol. 2002).
Although the majority found
it unnecessary to characterize the administrative rule applied by the Oil
and Gas Commission in its decision to issue the working well permit, I wish
to briefly address the nature of the rule.
(See footnote 1) Despite the efforts of the various Respondents
and the amicus curiae to describe the rule as procedural, it is clear that
the rule qualifies as a legislative rule under both statutory definitions
and case law applying those
definitions.
In contrast, a “procedural
rule” is defined as a rule “which fixes rules of procedure, practice
or evidence for dealings with or proceedings before an agency, including forms
prescribed by the agency.” W.Va. Code § 29A-1-2(g). While I can appreciate
the efforts of counsel to find a way to keep the rule from being declared invalid
for lack of legislative approval, the rule at issue is clearly beyond the definitional
parameters of a “procedural rule.” Rather than being a rule limited
in effect to addressing procedural niceties, the rule at issue clearly rises
to the level of a “legislative rule,” which must proceed through the
legislative rule making process prior to promulgation. See W.Va. Code
§ 29A-3- 12 (1996) (Repl. Vol. 1998).
By definition, “legislative rules” are those rules which, “when effective, . . .
[are] determinative on any issue affecting private rights, privileges or interests.” W.Va. Code
§ 29A-1-2(d). It is simply beyond dispute that the rule at issue, which arguably involves
circumvention of the “consent and easement” provision found in West Virginia Code § 22C-
9-7(b)(4), affects the private rights of those people whose consent is not required under the
rule when a discovery well is drilled. See also Chico Dairy Co. v. Human Rights Comm'n,
181 W.Va. 238, 244, 382 S.E.2d 75, 81 (1989) (finding that administrative rule defining
handicapped person for purposes of the W.Va. Human Rights Act was “legislative” in nature
as “the rule confers a right not provided by law; and the rule affects private rights and
purports to regulate private conduct”). Moreover, the Legislature specifically anticipated and
provided for the proposal of rules in accordance with the Administrative Procedures Act “to
implement and make effective the provisions of this article [W.Va. Code § 22C-9-1 et seq.].”
W.Va. Code § 22C-9-5. The rule at issue was clearly formulated for the purpose of
implementing the “consent and easement” provision of West Virginia Code § 22C-9-7, and
consequently it necessarily qualifies as a “legislative rule”-- a rule which requires legislative
approval before the rule can have the force and effect of law. See State ex rel. Kincaid v.
Parsons, 191 W.Va. 608, 610, 447 S.E.2d 543, 545 (1994) (viewing express legislative
authorization of rule promulgating authority as indicative of legislative characterization of
regional jail's rule banning tobacco use).
The Legislature was clear in its enactment of article nine, chapter 22C
regarding its mutual concerns of economic development and conservation of resources:
(a) It is hereby declared to be the public policy of this
state and in the public interest to:
(1) Foster, encourage and promote exploration for and
development, production, utilization and conservation of oil and
gas resources;
(2) Prohibit waste of oil and gas resources and
unnecessary surface loss of oil and gas and their constituents;
(3) Encourage the maximum recovery of oil and gas; and
(4) Safeguard, protect and enforce the correlative rights
of operators and royalty owners in a pool of oil or gas to the end
that each such operator and royalty owner may obtain his just
and equitable share of production from such pool of oil or gas.
W.Va. Code § 22C-9-1(a).
As might be expected, the
provisions of the Oil and Gas Conservation Act reveal a clear balancing of
interests among the various entities affected by the enactment. Whereas the
Act seeks to prohibit a surface owner from preventing operation of a mineral
owner's right to search for oil and gas via a discovery or test well,
(See footnote 3) the
Legislature has, at the same time, devised a method of assuring that people
who previously went unpaid for mineral
extraction under the law of capture now will receive payment pursuant to a formula that
contemplates pooling of the rights of those holding mineral rights to contiguous properties
and a sharing of the costs of extraction and the royalties resulting from the production of oil
and gas from deep wells.
While either the surface owner or the mineral rights owner might make an
argument that the Act seeks to impair their individual rights, the Legislature had before it the
difficult task of achieving a balance of both sets of rights. In clear recognition of the public
interest to be advanced by developing a system that would seek to “encourage the maximum
recovery of oil and gas from all productive formations in this state,” the Legislature appears
to have located a middle ground which serves to both benefit production interests and the
interests of those people who might otherwise not have been justly compensated for such
mineral extraction. W.Va. Code § 22C-9-1(b).
The enactment of the Oil and
Gas Damage Compensation Act in 1983
(See footnote 4) further evidences the various considerations
and tradeoffs that were made in conjunction with these statutes. In full recognition
of the fact that “the public interest requires that the surface owner
be entitled to fair compensation for the loss of the use of surface area during
the rotary drilling operation,” the Legislature established a statutory
cause of action for surface owners to recover for loss of use
(See footnote 5) resulting from drilling operations while
expressly preserving certain common law rights of action. W.Va. Code §§
22-7-1(a)(2); 22-7-3; 22-7-4 (1994) (Repl. Vol. 2002). The creation of this
statutory cause of action evidences a specific legislative awareness of the
burdens imposed on the surface owner and provides an express remedy to address
those unique burdens.
As with all legislation that involves advancing the economic interests of the
state, burdens are borne by numerous entities. Thus, to look at just one particular entity's
interest, without considering the broad panoply of affected interests, is to deny recognition
of the vast considerations and tradeoffs underlying these legislative enactments. When
viewed with a perspective that takes into account the combined interests of all the entities
involved -- the interests of both surface owners and mineral rights owners, as well as the
public interest that is necessarily served through such economic endeavors -- the interests of
all the affected entities, on balance, appear to be properly accounted for and addressed.
In light of these considerations, I submit respectfully that a convincing case can
be made for holding the “consent and easement” provision applicable only to wells drilled
within a pool after a test or discovery well has been drilled and thereby exempting the drilling
of a test or discovery deep well from the “consent and easement” provision. See W.Va. Code
§ 22C-9-7(b)(4). Moreover, I further submit that the overall legislative scheme concerning
oil and gas conservation may be seen as constitutional notwithstanding the apparently
dichotomous treatment of initial discovery or test wells and subsequent wells within an
established pool.
Footnote: 1
(1) Lost income or expenses incurred as a result of being
unable to dedicate land actually occupied by the driller's
operation or to which access is prevented by such drilling
operation to the uses to which it was dedicated prior to
commencement of the activity for which a permit was obtained
measured from the date the operator enters upon the land until
the date reclamation is completed, (2) the market value of crops
destroyed, damaged or prevented from reaching market, (3) any
damage to a water supply in use prior to the commencement of
the permitted activity, (4) the cost of repair of personal property
up to the value of replacement by personal property of like age,
wear and quality, and (5) the diminution in value, if any, of the
surface lands and other property after completion of the surface
disturbance done pursuant to the activity for which the permit
was issued determined according to the actual use made thereof
by the surface owner immediately prior to the commencement
of the permitted activity.
W.Va. Code § 22-7-3(a)(1).