Lobbying bill for gas royalty legislation: More than $100,000

No one, at least publicly, disputes that $26 million of natural-gas royalties languishing in escrow accounts is a problem.

But how to release that money – and to whom – is a high-stakes policy question on which diverse interests spent well more than $100,000 this past legislative session, according to lobbyist disclosures obtained Monday by the Bristol Herald Courier.

The General Assembly passed several bills last session related to a 20-year-old controversy over the ownership of coalbed methane, which accounts for more than 80 percent of all natural gas produced in Virginia. The dispute over the gas has led the Virginia Gas and Oil Board to divert royalty payments into escrow accounts.

So far, none of the reforms have freed any of the royalties, and Virginia’s attorney general recently opined that the Gas and Oil Board does not have the authority to decide mineral ownership by reviewing individual deeds.

“I don’t know that we’ve gotten any benefit at this point,” Carroll Branham, chairman of the Buchanan County Board of Supervisors, said in a telephone interview Monday. The county, which passed a resolution in January allocating $30,000 for lobbying efforts, spent slightly more than $50,000.

“If we spent $50,000, we had a resolution to do it, I’m sure,” Branham said.

Among the players that specifically named the coalbed methane-related bills in their annual disclosures are Buchanan County, where the greatest volume of gas in the state is produced; the Virginia Oil and Gas Association, the gas industry’s lobbying arm; and Pittsburgh-based EQT Corp., the second largest producer of gas in Virginia. Combined, they spent about $113,000.

Other key industry players in the region described their lobbying efforts in more general terms, but likely paid lobbyists to work on the coalbed methane issue.

Sen. Phillip Puckett, D-Lebanon, and Delegate Bud Phillips, D-Castlewood, sponsored twin bills that declared landowners who sold only coal from their properties retained the rights to coalbed methane. The new law, which took effect in April, also calls on the state’s Auditor of Public Accounts to review the practices of the Virginia Gas and Oil Board for collecting and disbursing royalties that the board orders energy companies to pay into escrow.

Separately, the accounts are undergoing an independent audit for the first time in a decade.

Delegate Terry Kilgore, R-Gate City, carried a bill that creates a system allowing parties in dispute over coalbed methane to enter binding arbitration, adjudicated by a lawyer with expertise in mineral title examinations who is appointed by a circuit court judge. That legislation went into effect July 1.

House of Delegates Speaker Morgan Griffith, R-Salem, backed a resolution directing the Virginia Coal and Energy Commission to study issues ranging from ways to encourage production, administer the Gas and Oil Act, and, “possible amendments ... if necessary to facilitate the determination of ownership of coalbed methane and the distribution of proceeds held in escrow.”

Branham described Buchanan County’s efforts at shaping natural gas policy as a work in progress.

“We’re trying to get some money pried loose for the people if we can,” he said. “We feel like it was a benefit to us because we did get some legislation passed. It may not have been what we wanted, but it’s a step in the right direction.”

Branham’s words dovetail with those of Jerry Grantham, president of the Virginia Oil and Gas Association. In an April interview, Grantham said that the new laws helped clarify and give guidance to his members. He described the legislative efforts as “some big steps, positive steps.”

VOGA retained Benny Wampler, the former longtime chairman of the Gas and Oil Board, to lobby specifically on bills introduced by Puckett, Phillips, Kilgore and Griffith. Wampler received $17,838 in compensation, plus $3,141 in living and travel expenses, according to his disclosure report filed with the Secretary of the Commonwealth on June 17.

Another VOGA lobbyist, Richmond lawyer David Clarke, received nearly $32,000 in compensation, according to the June 25 disclosure.

EQT Manager of Government Affairs Maurice Royster reported $24,500 in compensation for lobbying on eight bills, including the four related to coalbed methane. He reported an additional $9,800 for living and travel expenses, and $7,060 for entertainment.

Most of the entertainment expenses – $6,250 – came from the Bristol Motor Speedway’s NASCAR race in March, attended by 25 people, including Delegate Bill Carrico, R-Fries, and Delegate Will Morefield, R-Tazewell.

Consol Energy, the largest producer of natural gas in Virginia that also has extensive coal operations, paid a lobbyist $16,650 to lobby on “matters related to coal and gas,” the June 23 disclosure states.

Branham said the county is thinking about hiring the same law firm – Richmond-based Christian & Barton, which also represents Media General, the Herald Courier’s corporate parent – to lobby again next year. Senator Puckett, dismayed that his reform has not propped open the jaws of the escrow accounts, is considering new legislation that would expand the authority of the Gas and Oil Board.

“Something’s got to be done,” Branham said. “People here who have $2,000 to $3,000 in escrow – they can’t hire an attorney to go get the money for them. They’d spend it all on attorneys’ fees.”

But if Buchanan County does spend more money on lobbying, supervisors hope to get some financial collaboration from other gas-producing counties whose residents would likewise be impacted. They’ve had conversations with officials in Dickenson County, and plan to reach out to other localities in the region’s gas fields.

“We shouldn’t foot the total bill,” Branham said.

dgilbert@bristolnews.com | (276) 645-2558