CHARLESTON — After eight years of false starts, a bill dealing with unitization — sometimes called forced pooling or lease integration — could finally make it through the West Virginia Legislature.

The House of Delegates passed Senate Bill 694, relating to oil and natural gas conservation, in a 55-44 vote Wednesday. The bill lost 24 Republicans, and a bipartisan group of six members of the Northern Panhandle delegation were firm no votes.

SB 694 is a bill dealing with the property rights of surface owners and farmers as it relates to drilling for natural gas and horizontal wells, which can involve multiple property owners. The narrow vote was better than a similar bill – House Bill 2688 – that died in a 49-49 tie vote in 2015.

“Senate Bill 694 as amended allows for the unitization of oil and gas interests for the purpose of horizontal well drilling,” explained House Judiciary Committee Chairman Moore Capito, R-Kanawha.

The bill sets new application requirements for the combination of the tracts for oil and natural gas drilling by operators of horizontal well units. It requires horizontal well units — consisting of two or more tracts — to get agreements from the mineral rights owners for at least 75 percent of the net acreage when it comes to interest from the royalties collected.

SB 694 caps horizontal well units at 640 acres per unit, but a unit cannot contain more than 128 net acres controlled by non-consenting royalty owners. The bill gives non-consenting royalty owners with valid leases but lack utilization provisions options for how they wish to be paid: either 25 percent of the weighted average bonuses or 80 percent of the average royalty rate percentage.

Non-consenting owners without valid leases can either sell their minerals, participate in the well subject to a 200 percent payout penalty, or elect to receive royalty payments three different ways. They could choose to receive 100 percent of the weighted average bonus received by owners inside the unit within the previous 24 months, the highest royalty rate received by the owners in the unit within 24 months, or mineral owners could be paid through a weighted average sales price or the local monthly index price.

House Energy and Manufacturing Committee Chairman Bill Anderson, R-Wood, and Vice Chairman John Kelly, R-Wood, explained that SB 694 was a good bill and the result of a compromise between the Gas and Oil Association of West Virginia, the West Virginia Royalty Owners Association, and the West Virginia Farm Bureau. The West Virginia Surface Owners Rights Organization also doesn’t oppose the bill.

“I believe today that this bill at this point in the history of our state is a way to begin to solve the problems we’re facing and allow all the citizens of this state to receive their just and fair share of the minerals through the unitization process,” Anderson said. “I see no other way, given this point in the state’s history, that we can move. I don’t think I’m authorizing thievery.”

“It’s the first bill that we’ve had that is this fair,” Kelly said. “For the first time in eight years since I’ve been here, we have a bill those organizations agree on totally and they want. It’s a good bill.”

Opposition to the bill was bipartisan, with Republican and Democratic lawmakers — many from the Northern Panhandle — concerned about property rights issues and whether mineral owners would be prevented from negotiation the best deals with natural gas companies.

“I’m telling you right now, there is going to be a lot of people if we put this in place that are going to be damaged by this,” said Del. Pat McGeehan, R-Hancock. “Right now, the law we have is working fine. That’s one thing we want to maintain; stable, fixed laws that can be tweaked every now and then … The more times we change them and the more times we add to them, I think that reflects a degeneracy in our values.”

“Right now under our forced pooling laws, if it is on your land you have to share with the rest of your pool the money that is coming in,” said Del. Lisa Zukoff, D-Marshall. “Under this new bill that we have, this is going to allow the gas company to determine how you get paid; either by the unit, by the well, or by the pool. I’m a Democrat, but I’m a capitalist as well … this takes away the free market out of this process.”

“What is bothering me about this bill is that we’re not listening to the people,” said Del. Erikka Storch, R-Ohio. “I get bothered when we talk about stakeholders. The stakeholders and the bill sponsors are all from Charleston … the majority of those impacted are not in Charleston. We’re letting Charleston dictate for the state what is best for them without sitting down and talking to them and understanding how they will be impacted.”

Del. Mark Zatezalo, R-Hancock, shares a district with McGeehan but unlike McGeehan, Zatezalo supported the bill.

“They negotiated a deal, and the deal is very good,” Zatezalo said. “In my estimation, this bill is a chance to keep people tied to the land in the game. No one is looking to buy all their rights unless they want to sell them of course. This is a good bill to get people paid for the resources under their feet and to keep their resources from being trapped and never produced.”

The state Senate voted Wednesday evening to concur with the House changes to SB 694, sending the bill to Gov. Jim Justice for his approval or veto.

Steven Allen Adams can be reached at sadams@newsandsentinel.com