2024 Energy and Natural Resources Legislative and Regulatory Update

Here’s a look at 2024’s legislative updates for the tri-state area.

Pennsylvania had no legislative updates.

West Virginia’s legislative session opened on January 10 and is scheduled to end March 9. HB4283 and SB326 were introduced on January 10. The purpose of the bills is to create the West Virginia Black Lung Program and grant entitlement for pain and suffering for occupational pneumoconiosis.  New taxes would be imposed on every person severing, extracting, reducing to possession, and producing for sale, profit or commercial use, coal, natural gas or oil. Additionally, there would be new taxes on the generation of electricity by wind or solar devices equal to 1/10 of the existing tax. The revenue generated by these taxes will be deposited into the “State Black Lung Fund,” which was created in the general revenue account to be used exclusively to offset the cost of the Black Lung Program.  

HB4662 requires all lessees of West Virginia real estate who make natural resource royalty payments to withhold West Virginia personal income tax on royalty payments to lessors who do not reside in the state. Withholding is optional for lessors who receive less than $1,000 annually.  Natural resources royalty payments include, but are not limited to, rents, delay rentals, royalty interests, working interests, lease bonus payments and overriding royalty interests. The Tax Commissioner will provide a schedule for lessees to file reports and submit the withholding to the Commission. The Tax Commissioner will also prescribe the method for providing annual withholding statements to lessors as well as annual reporting to the Commission by the lessee who reconciles the filings and payments made throughout the course of the year. If passed, this bill will be effective for all taxable years after December 31, 2024.

HB4292 and SB235 provide for a penalty of three times the market value of extracted minerals for which payment is due plus reasonable attorney’s fees and costs for payment not made within six months after the due date on conventional vertical oil, natural gas and natural gas liquids, wells only. 

HB4411 amends Article 6 §22-6-2 by adding a section to require the Office of Oil and Gas to adopt rules no later than July 1, 2025 to standardize leases, deeds or contracts relating to oil and gas. Any rules adopted will only be applicable to documents dated after July 1, 2025. HB5048 proposes to update §22-6-2 of the Code of West Virginia to remove the cap on the number of wells on which an oversight fee is due. The oversight fee is tiered based on average production.

SB532 requires new financial assurances for new and producing wells. For new wells, an operator will not be issued a permit unless the operator furnishes for each individual well either: 

1. Plugging money set aside in agreement with the State Treasurer’s Office to escrow funds with the State Treasurer’s Office as required in §22-10A-7 for this code or
2. A bond payable to the State of West Virginia conditioned on full compliance with the plugging and reclamation of wells required by this code in an amount determined by the Chief of the Office of Oil and Gas for a well with similar characteristics. The Department of Environmental Protection has rule-making authority to determine this amount.

Ohio had no legislative updates.

This update is based on legislative and regulatory information available at the time of publication and is not intended as legal, tax or accounting advice. 

About Schneider Downs Energy & Resources Services 

The Schneider Downs Energy & Resources industry group provides specialized financial advice and services to our clients in the oil and gas, mining and aggregates, forest products and alternative fuel and energy industries throughout the Columbus and Pittsburgh regions. Our extensive knowledge of industry issues enables us to provide proactive audit, tax and management consulting services.  

To learn more, visit our Energy and Resources Industry Group page.