Opinion

OP-ED: Legislation supports natural gas development

Nicholas “Corky” DeMarco Executive Director West Virginia Oil and Natural Gas Association
Nicholas “Corky” DeMarco
Executive Director
West Virginia Oil and Natural Gas Association

West Virginia’s elected officials showed great leadership in 2011 when they made our state the first in the Appalachian Basin to pass comprehensive legislation that provided stability to companies that were considering investing in natural gas resources.

With reasonable regulations in place, West Virginia has experienced a significant boost from development of the Marcellus Shale. Employment and tax revenues are up, construction spending has skyrocketed, and game-changing downstream developments are under consideration.

The West Virginia Legislature provided certainty to help encourage investment in our state, and now we need lawmakers to take the next step and ensure sustainability for our future.

If West Virginia is to maintain its role as a leader in Marcellus Shale development, the Legislature must pass a fair pooling statute, and it must do it during the current session.

Senate Bill 578 – with sponsors that include Senate President Jeff Kessler, Judiciary Chairman Corey Palumbo and Energy Chairman Mike Green – was introduced on Feb. 14. Speaker Tim Miley is a lead sponsor on the House of Delegates version, so it’s clear that our legislative leaders understand the importance of this issue to West Virginia’s future.

As the bill notes, pooling will “Foster, encourage and promote exploration for and development, production, utilization and conservation of oil and gas resources.” It has the added benefit of protecting our environment, reducing the number of well pads necessary to allow maximum recovery of resources with minimum waste and surface impact.

It’s important to note that West Virginia already has pooling on the books for deep wells, enhanced recovery wells and coal bed methane wells, and this expansion would simply update the law to keep pace with technology. Horizontal drilling in the Marcellus and Utica Shale formations provides the United States with the opportunity to move toward energy independence, and it allows West Virginia to maintain its position as a world leader in energy production.

Pooling also helps create a more sustainable economy for our state.

Tax collections will rise at both the local and state levels, not only from direct severance and property tax increases but from related construction and consumer spending. Pooling will allow additional royalty owners to develop their minerals as they want, which means more money into local economies, more revenue for small businesses and more employment in communities.

For nearly a century, members of the West Virginia Oil & Natural Gas Association have responsibly developed our state’s natural resources, with a cumulative investment of nearly $10 billion. Our companies can continue to be a significant economic engine for another century.

Many other states already have pooling legislation and the lack of one in West Virginia puts our state at a disadvantage in attracting investment dollars. We took the right first step in creating certainty. Now it’s time to ensure sustainability and continued growth with a pooling statute.  Downstream manufacturing depends on our ability to maintain optimum production levels for years to come.  If we intend to reach our value added potential, from the extraction of natural gas, then it is imperative that we support pooling legislation.

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