The second-largest producer of natural gas in Virginia has filed a motion to dismiss a lawsuit that accuses the company of exploiting a state law to steal natural gas belonging to Southwest Virginia landowners.
The lawsuit, filed in June in U.S. District Court against EQT Corp., seeks to represent a class of landowners whose mineral rights were involuntarily leased by a state board and who have never been compensated. A nearly identical lawsuit was filed by a different plaintiff against the region’s other dominant gas producer – Consol Energy and its subsidiary, CNX Gas Co., which, like EQT, are based in the Pittsburgh, Pa., area.
Taken together, the lawsuits seek billions of dollars for Southwest Virginia landowners in the region’s gas-producing counties, according to the projections of the plaintiffs’ lawyers.
But the battle is just beginning. On Tuesday, EQT fired back.
In a 33-page brief, lawyers for EQT argue that the landowner plaintiff is “wrong on both the facts and the law,” and asks a judge to dismiss the lawsuit.
EQT asserts that the company’s drilling activities are protected by state law, while challenging the plaintiff’s standing to sue and the sufficiency of the claims in general.
Peter Glubiak, local counsel for the plaintiffs, did not immediately return a phone call Wednesday seeking comment.
The legal battle is being waged over coalbed methane gas, which accounts for more than 80 percent of all natural gas produced in Virginia and has historically been claimed by both landowners and the companies that bought their coal.
The 1990 Virginia Gas and Oil Act allowed energy companies to produce coalbed methane in the face of conflicting claims to the gas. For the past 20 years, a state board has directed companies to pay royalties from the disputed gas into escrow accounts, which collectively held more than $26.2 million in June.
The plaintiffs in the lawsuit argue that coalbed methane ownership was decided in 2004 when the Supreme Court of Virginia ruled that landowners who sold only coal retained coalbed methane rights. They contend that EQT has continued to assert drilling rights based on its coal holdings, producing a gas to which they have no right by securing the Virginia Gas and Oil Board’s stamp of approval.
EQT disputes this by pointing out that in the specific examples cited in the lawsuit, the company had both coal and gas rights – though not 100 percent – in the area it drilled a well. The company also argues that the plaintiff did not exhaust his remedies available under the statute, such as appealing an order by the Gas and Oil Board to a circuit court.
And while the plaintiffs attack the constitutionality of the state law, EQT responds that they are going after the wrong party.
“The party to raise that with is not us,” Kevin West, managing director of external affairs for EQT said by phone Wednesday. “We just followed the statute as it was passed by the Virginia General Assembly.”
dgilbert@bristolnews.com | (276) 645-2558
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