Cuccinelli wants clearer standards on coal gas rights

The Virginia Gas and Oil Act may need to be revised to clear up rights disputes, the attorney general says.

Attorney General Ken Cuccinelli

David Ress | 981-3253

Tuesday, June 25, 2013

The state’s approach to settling disputes over gas royalties in Southwest Virginia isn’t working, and Attorney General Ken Cuccinelli says he would act to fix it if elected governor.

Cuccinelli, while visiting Roanoke on Tuesday, said he would push for clearer standards governing rights to coal bed gas and would launch an arbitration system to speed payment to landowners.

His office has intervened to oppose federal lawsuits filed by landowners seeking royalties from energy companies, including one that has given $111,000 to his gubernatorial campaign, in order to defend the Virginia Gas and Oil Act.

But Cuccinelli said Tuesday that the act might need to be revised to set clearer standards on who has rights to gas in coal veins.

And he said arbitration of disputes would be a faster way of getting royalties to rights-holders.

“I want to get the money out of escrow and into the hands of the people it belongs to,” he said.

Currently, some $28 million in gas royalties is held in escrow accounts because landowners and gas companies disagree on who has rights to the gas.

“It’s a tangled mess,” Cuccinelli said.

Landowners filed several federal lawsuits claiming royalty payments after Cuccinelli ruled that a 2010 law saying gas rights were presumed to belong to surface landowners was invalid.

The law did not supercede other elements of the Virginia Gas and Oil Act that said such disputes had to be decided by a court or by the disputing parties’ agreement, Cuccinelli said at the time.

Cuccinelli drafted legislation the following year that said gas rights would revert to surface landowners if unused for 35 years and that also set up an arbitration program. He could not find a sponsor in the legislature.

While in Roanoke, Cuccinelli visited Precision Steel, a metal fabrication company that’s been in business for three decades and was of particular interest to him because of its work with high school vocational education students.

“Thank you for letting me exercise my inner geek,” Cuccinelli said after walking through the plant and grilling President Mike Amos and his brothers David and Jeff on the computer-controlled machine tools, metal-bending press brakes and robotic welders their employees use to make parts and chassis for heavy equipment. Cuccinelli earned a degree in mechanical engineering before going to law school.

Cuccinelli said he would work to ease regulatory and tax burdens on small businesses and would create a one-stop shop approach for people trying to start their own businesses. He said he would also push a job-oriented work force development effort headed by an official reporting directly to him.

Monday, August 12, 2013