The ruling states that the company which has mineral rights will be able to pursue development of gas wells as it, and not the state, has mineral rights to the properties which never was given to the state. The property rights remained with the heirs of the original land owners and the company which obtained the deeds to them.
The court order, signed on June 17, 2009, by Logan Circuit Court Judge Roger Perry, states that the December 12, 2007, DEP order denying the permits is reversed and that the DEP shall grant the mineral rights owners their permits for five wells.
Ironically, there are several operating gas wells already located in Chief Logan State Park and the nearby Wildlife Management Area — six wells there are operated by Cabot Oil and Gas Corp., the petitioner in the matter.
The court document specifically states "the record is clear, that the DEP and DNR have authorized and allowed the development of minerals owned by private properties under numerous outer state parks."
Perry found the DEP did not have the authority to deny the permits as the state statute DEP cited actually refers to another agency, the Department of Natural Resources.
The judge also noted in a court order that the oil and gas rights never were transferred to the state and the deed to the property clearly stipulates that "the right to natural gas drilling and production were reserved to the Lawson heirs and their lessee, and that the state will not own those property interests nor have the ability to prohibit their use," the court finding states. It also states "an administrative agency can exert only such powers as those granted by the Legislature and if such agency exceeds its statutory authority, its action may be nullified by a court." It states "in addition, the DEP erred as a matter of law in denying the well work permit applications as such denial was not based upon its statutory authority."
In effect, the DEP erred as a matter of law in denying the well work permit applications according to state code referring to a different agency, the DNR. The court finding notes that the DEP effectively attempted to take the Lawson heirs' property rights, which would "run afoul of multiple provisions of the Constitution of West Virginia."
Perry's court order states DEP's interpretation violates the state's constitution which notes private property cannot be taken without just compensation.
The court findings state that as the DNR allows operation of other gas wells in other state parks "the court also finds that the permit denials should be reversed as a matter of equity.
According to court documents filed in Cabot Oil and Gas Corp. (petitioner) versus Randy Huffman, Cabinet Secretary, WV Department of Environmental Protection, Office of Oil and Gas (respondent) and Lawson Heirs Inc. (intervener), on Jan. 11, 2008, Cabot Oil and Gas filed a petition for judicial review of a Dec. 12, 2007 order issued by the DEP citing that they were entitled to a judicial review as they were adversely affected by the refusal of the director to grant a drilling permit. In March of 2008, the Lawson heirs intervened in the matter. By December, the petitioner (Cabot) had submitted a brief to which a response was filed by the DEP.
On May 13, 2009, the parties involved presented their oral arguments in court. Judge Roger Perry found that:
• The petitioner (Cabot) filed five well work permit applications with DEP.
• The mineral rights involved were in Chief Logan State Park and Cabot already has obtained permits for and operates several wells within the park.
• The Lawson heirs obtained the surface property and mineral rights in the 1800s. In 1960, the Lawson heirs deeded the surface and coal rights to the Logan Civic Association, which then transferred the property to the Conservation Commission of West Virginia, a predecessor to the Department of Natural Resources.
• The state never received the rights to the oil and gas properties which were reserved as mineral rights to the Lawson heirs. As the state does not own those property rights it does not have the ability to prohibit their use. The deed is dated Nov. 18, 1960 and is on file at the Logan County Clerk's office in Deed Book 276 on page 347.
• Other reservations and easements were also reserved to the Lawson heirs and to their lessees.
In the deed there are "guidelines as to how oil and gas may be drilled within the Park, " noting "no well shall be drilled, without the consent in writing of the party of the second part, its successors or assigns first had and obtained within 1000 feet of any building or structure..." or "within the view or site of any overlook that has been developed for public use..."
• In the past DEP and the DNR have authorized development of minerals owned by private parties in numerous other state parks. Ironically, in some of those other cases "DNR is the owner of the mineral rights in ...and receives rentals and royalties on gas wells in North Bend State Park."
•The Dec. 12 DEP issued order to deny Cabots permit applications was found to be "outside of the statutes administered by the DEP for permitting of oil and gas wells" by Judge Perry, as the sole ground for denial of the permits was based on a statute applicable to the DNR a different state agency.
"There is no statutory, regulatory or legal precedent which authorizes DEP to use the provisions of West Virginia Code 2--5-2 (b) (8) as a basis to deny well work permits." The court documents note "The DEP did not deny the permits for any reasons set forth in section 22-6-6 nor any of the statutes applicable to ...permitting authority."
The document also states that even if the DEP were authorized to apply the DNR statute, the language of the statute does not apply to the minerals owned by the Lawson heirs.
The statute only applies to state parks. The oil and gas properties are not part of the park but are lying underneath it.
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