Projects under review represent 18,000 jobs, $61.1 million in taxes in W.Va.
By Mandee Young
For the West Virginia Press Association
CHARLESTON, W.Va. — Ask a West Virginian what the state needs in 2016 and you can be fairly sure “jobs” will be near the top of the list.
Gov. Earl Ray Tomblin this week spoke about West Virginia’s achievements in 2015 and its needs in 2016. The Governor noted the state had “… created a variety of new programs to help put West Virginians back to work and on the path toward a bright and successful future.”
West Virginia’s oil and natural gas industry officials applaud Tomblin’s efforts to re-train and develop the workforce in the state; however, they say the immediate key to creating new jobs in West Virginia is action by the federal government.
Currently, preliminary or final plans for the construction of six pipelines, much of the work in West Virginia, have been filed with the Federal Energy Regulatory Commission (FERC), the federal body responsible for oversight of interstate pipeline projects. All are awaiting approval. The pipeline projects seeking approval include Rover, Mountain Valley, WB Xpress, Leach Xpress, Mountaineer Xpress, and the Atlantic Coast and Supply Header Project.
Corky DeMarco, executive director of the West Virginia Oil and Natural Gas Association (WVONGA), said, “They should have approved some of them already. They’ve been sitting over at FERC long enough.”
In 2014, President Barack Obama nominated Norman C. Bay to chair FERC. Since Bay’s appointment, DeMarco noted, no new pipeline has been approved.
The pipelines are controversial with opposition from some local property owners, environmental groups and the U.S. Forest Service among others. Questions about need, water quality safety, proposed routes and other issues have to be considered and resolved.
What’s not as debatable, according to DeMarco, is the economic benefit and jobs related to the pipeline construction, if the plans are approved.
If the six pipelines currently under consideration were approved, the construction related impact in West Virginia would total $5.7 billion, DeMarco said, adding that the six projects combined would generate 18,035 jobs during construction. The estimated capital investment property taxes would equal $61.1 million.
While traditional positions such as welders, welders’ helpers, pipeline integrity workers and drivers to transport materials will be integral, administrative positions such as accountants and payroll clerks will be just as essential.
“We need accountants, environmental engineers and environmental scientists, all of the STEM (science, technology, engineering and math) programs, and administrative positions, payroll and insurance,” DeMarco said.
Based on the recent West Virginia Economic Outlook generated by West Virginia University, the jobs would be a welcome development in the Mountain State, which has experienced a rather bleak employment outlook for the past few years.
After consistent and healthy job growth between 2010 and mid-2012, the state has seen employment decline for much of the last three years, with a cumulative loss of nearly 8,000 jobs, the report states. After generally trending lower between 2010 and 2014, the state’s unemployment rate has surged over the first half of 2015 and stood at 7.5 percent as of July. West Virginia’s jobless rate is at its highest level in more than two years.
DeMarco said approval of any of the pipelines plans would have an immediate impact on employment in the state.
Gov. Tomblin’s efforts to develop and re-train the state’s workforce will also have a huge impact, according to WVONGA officials.
“We don’t have 18,000 people to put to work,” DeMarco said. “We can’t tell you that if all six of those projects were approved tomorrow that you could find 18,000 people. Their skills set aside, if you put everyone who wanted to work to work, you still wouldn’t fill all of the jobs.”
Finding trained workers willing to relocate is also an issue, DeMarco said.
For those who are not currently qualified to fill such roles, obtaining the necessary education and certification may be easier than they would presume.
Workforce development, Gov. Tomblin said, has been a top priority. The Governor hosted the state’s first Workforce Summit in 2015 and, in October, announced an additional $7.6 million in federal funding from the U.S. Department of Labor to help coal miners affected by layoffs and mine closures take advantage of job training and career. The grant funding provides tuition assistance – up to $5,000 – for classroom and online skills training, supports 25 on-the-job training positions and provides meal, travel and child care allowances for both miners and their families.
WVONGA, along with multiple natural gas companies, has also been working in recent years to develop specific training programs, working with universities, community colleges and vocational schools across the state. Projects included a multi-vehicle driving program at Southern West Virginia Community and Technical College in Logan and a drilling rig simulator at Pierpont Community and Technical College in Fairmont. Similar programs are supported at community colleges and vocational schools across the state.
Potential employees are not the only ones who will benefit from FERC providing certification for these projects, according to oil and natural gas industry officials.
The economic benefits for the communities that would be impacted by the construction of one of these pipeline projects range from direct spending to labor employment and tax revenue.
An example of these benefits can be seen in estimates for the proposed Mountain Valley Pipeline (MVP) project:
— The MVP will traverse approximately 300 miles across West Virginia and Virginia, including the West Virginia counties of Wetzel, Harrison, Doddridge, Lewis, Braxton, Webster, Nicholas, Greenbrier, Summers and Monroe.
— From 2015 to 2018, the MVP project owners plan to spend $712 million directly on resources (equipment, materials, labor and services) in West Virginia. This direct spending would translate into $510 million in cumulative Gross Regional Product over the four-year period.
— The MVP project would create almost 4,000 jobs at the peak of construction in 2017. Jobs directly associated with the project would total 2,500; 560 would be created along the supply-chain; and 930 would be created in the general economy. Ongoing operation and maintenance of the pipeline would support 54 jobs across the state.
— Based on the estimated pipeline investments and county property tax rates, the MVP project owners would pay up to $14.6 million in taxes annually. This amounts to 16 percent of the total 2013 combined budgets for the 10 counties, according to the MVP data.
The MVP project data also notes the pipeline would provide manufacturing investment opportunities within the state and the counties: Interviews with county leaders indicate that natural gas access can be a major factor in businesses deciding to expand and locate operations in a county, particularly energy-intensive and advanced technology manufacturing. Such businesses can provide large economic benefits to communities from an employment, wage and tax revenue perspective
Harrison County served as an example: It has a thriving aerospace services industry in which the average annual wage is $72,000. Harrison County also has an unemployment rate of only 3.5 percent.
Even without pipeline approval, the 2016 West Virginia Economic Outlook forecasts that employment in the natural gas sector will rise at a moderate pace through 2020, increasing by about 1,400 jobs between 2015 and 2020. This increase represents an average growth rate of about 3.1 percent.
“These gains will further cement the natural gas industry’s importance to West Virginia’s energy economy. We expect natural gas’s share of energy sector employment to reach 32 percent by 2020, up from 26 percent in 2014,” the Outlook stated.
Corky DeMarco, executive director of the West Virginia Oil and Natural Gas Association (WVONGA), says the six pipeline projects planned for West Virginia combined would generate 18,035 jobs during construction. The estimated capital investment property taxes would equal $61.1 million. West Virginia Press Association photo.