||Rory Perry's Weblog
Law, technology, and the courts
Friday, November 21, 2003
Canaries, coalbed methane, and legal feedback
Our changing ability to control the methane trapped in coal seams provides an interesting study in technological shift, and the legal feedback that follows. Once a dangerous waste product, detected by canaries in underground mines, the methane in coal seams now has serious value as a source of energy. Though estimates vary, the US may have 150 trillion cubic feet of CBM that is commercially feasible to develop. As a state with vast coal reserves, West Virginia has its share of CBM, with several hundred coalbed methane wells already drilled. Our sister state of Virginia produced over 70 billion cubic feet of CBM last year.
But if the methane is intermingled with the coal seam, who owns this gas? The coal owner or the gas owner? And what if the coal owner has leased the gas, is the CBM leased as well? Yesterday, the court where I serve as clerk issued a written opinion deciding that "in the absence of specific language to the contrary or other indicia of the parties' intent, an oil and gas lease does not give the oil and gas lessee the right to drill into the lessor's coal seams to produce coalbed methane gas." I understand that a similar issue was recently pending before the Virginia Supreme Court (maybe the SW Virginia Law Blog can illuminate me on the outcome).
This is an interesting legal issue (as property issues go), but it's also a fascinating study in the evolution of technology (from canaries to microchips) and shifts in value (from waste gas to valuable energy source and discrete type of property). As with all such shifts, there is an accompanying loop of legal changes. As the cause of several mining disasters, mine gas had an important impact on regulatory movements. At pages 12-13 of the slip opinion, the Court provided this overview of the impact of CBM, and the legal feedback loop it has created:
What we today call coalbed methane or CBM has also been called "fire damp," "coal gas," "coal seam methane," or "mine gas," and has long been regarded as one of a coal miner's greatest foes. Coalbed methane may have produced more widows and orphans than any other workplace hazard. In two single West Virginia accidents, coalbed methane killed 440 miners, leaving 362 dead in the Monongah Mine Disaster in 1907, the worst mining disaster in American History, and 78 dead in the Farmington Mine Disaster of November 20, 1968. [footnote omitted.] Literally thousands of miners have been killed by it in America and throughout the world. The danger of coalbed methane, in part, prompted the federal government to act, as this court noted:
The Federal Coal Mine Health and Safety Act of 1969, Pub.L. No. 91-173, 83 Stat. 742 (codified as amended at 30 U.S.C. §§ 801 et seq .) was enacted in response to the Farmington Mine Disaster of November 20, 1968, wherein 78 coal miners lost their lives in a coal mine explosion. The Act's main purpose is to establish safety standards for the coal mining industry. See H.R.Rep. No. 563, 91st Cong. reprinted in 1969 U.S.Code Cong. & Ad.News 2503.
Zirkle v. Zirkle , 172 W. Va. 211, 212 n.2, 304 S.E.2d 664, 665 n.2 (1983). See also, United Mine Workers of America International Union v. Parsons , 172 W. Va. 386, 393 n.3, 305 S.E.2d 343, 348-49 n.3 (1983). This disaster also prompted the passage of West Virginia's "Black Lung" compensation law, the first in the nation (now codified at W. Va. Code, § 23-4B-1, et seq .), as well as the aforementioned national Act (now codified at 30 U.S.C. § 901 et seq .).
Having acknowledged that coalbed methane is dangerous, we also recognize that it is now also considered quite valuable. Our research indicates that operators have drilled several thousand wells in Appalachia. Our neighboring state of Virginia alone produced over seventy billion cubic feet of coalbed methane in the year 2002. Operators have drilled several hundred coalbed methane wells in West Virginia. [footnote omitted.] The majority of this activity has occurred in McDowell and Wyoming Counties, although many other West Virginia counties contain substantial reserves of coalbed methane. As we have stated, we wish to take no action that would impede the safe production of coalbed methane, with the highest possible priority placed upon the safety of miners and due consideration given to our long established case law regarding mineral interests. We turn now to a consideration of the reasons the lower court provided for its decision.
And so the law continues to adjust.
P.S. Footnote 11 of the opinion notes that it was issued on the 35th anniversary of the Farmington Mine Disaster, where 78 miners persished after an explosion at the Consol No. 9 mine in Farmington, West Virginia. Although the bodies 59 of the miners were recovered, 17 of the victims were sealed in the mine after all entrances to the mine were closed to starve the fire of oxygen. Thankfully, these types of disasters have become less frequent in the past 35 years. 4:27:27 PM [Permanent Link]
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