GAS CORPORATIONS CLAIM THEY'RE THE VICTIM - Want "Fairness" Following Jury Verdict, Legislature Could Change Law

By Bob Weaver

A bill written in the wake of a $404.3 million Roane County jury verdict against NiSource Inc., Chesapeake Energy Corp. and Columbia Natural Resources has been introduced in the state Senate.

Aubrey McClendon, CEO of Chesapeake Energy, said "We're the victim. I'm not happy about being the victim. But if this is the clarion call for business people and legislative leaders in West Virginia to get together and say, enough is enough."

"It's not the Legislature that's coming to take our money...It's really, frankly, a handful of judges that appear to be willing to apply a Robin Hood style of justice against companies that have assets at risk in the state of West Virginia, and that's got to change," he said.

McClendon has put on hold the building of a multi-million dollar executive office building in Charleston, and is now threatening to quit developing production in West Virginia.

McClendon, in a continuing media blitz, has expressed no concern for the 8,000 plaintiffs who claim they were cheated, focusing on the punitive damages in the case.

A spokesperson for the plaintiffs said "Much more is at stake with this case...the future of what the oil and gas companies are allowed to do."

The corporations that were found guilty of ripping-off WV royalty owners, are following a century-long history of having the WV legislature change the law in favor of extractors.

The suit was based on the outfits deducting production costs from what the royalty owners use to receive (generally 1/8) at the well-head.

In most countries, the sale of gas and oil ownership is negotiated, and sometimes the royalty owner even receives one-half of the production.

Anne Tawney Golf, daughter of the suit's initiator, Garrison Tawney, said "West Virginia should be open for honest business," not a rip-off.

According to the state's oil and gas industry, the recently introduced bill - "Fairness in Oil and Natural Gas Production Royalty Payments Act" - is designed to "clarify" state laws that govern royalty payments.

Gov. Joe Manchin is reportedly supporting the bill.

The proposed legislation, Senate Bill No. 731, was introduced Monday by Sen. Brooks McCabe, D-Kanawha, and Sen. Billy Wayne Bailey, D-Wyoming.

The bill was referred to the Committee on Energy, Industry and Mining and then to the Committee on the Judiciary.