The West Virginia Senate unanimously passed Senate Bill 461, known as The Future Fund Bill, on February 21st. The Bill, as described in an Associated Press story published in the Charleston Gazette, would create a new fund that would be financed by 25 percent of the severance tax revenues collected from oil and gas exploration companies above a $175 million threshold. The fund would accrue interest for six years before it could be used to finance economic development projects, building infrastructure and increases in teacher salaries. As described in a Shale Energy Law Blog post from last September, the Bill was inspired by legislation passed in North Dakota that created that state’s Legacy Fund, a fund financed by extraction taxes that can be used to finance projects after 2017. The Bill must now be approved by the West Virginia House of Delegates.
As reported in the Spirit of Jefferson newspaper, Senate Bill 474, introduced in the West Virginia Senate on Monday, February 3, would amend W. Va. Code § 22-15-8 to allow commercial waste facilities to accept drill cuttings and associated hydraulic fracturing waste above and beyond their monthly tonnage waste limits without a public approval process, provided that the drilling waste is placed in a separate cell dedicated solely to the disposal of such waste. Normally, commercial waste facilities must go through an approval process, including public hearings, to accept solid waste beyond their usual monthly tonnage limits (usually 10,000 or 30,000 tons). The bill, which was drafted by the West Virginia Department of Environmental Protection, must gain approval from the Senate Government Organizations Committee and the Senate Judiciary Committee before taking affect. A public hearing was held in regard to the bill on Monday, February 17 at 5 p.m. in Charleston.
West Virginia State University has developed a new academic program designed to educate the next generation of oil and gas employees, developers, and industrialists in the Appalachian region. WVSU now offers a Concentration in Energy Management associated with its Bachelor of Science degree in Business Administration. This new concentration is designed to expose student to several industry topics which may not typically be included in Business Administration curriculum, including emphasizing communication skills, studying energy financial markets, personnel management, and accounting. This partnership between industry heavy-weights and WVSU promises to offer a fruitful collaboration benefiting both the students and the State of West Virginia.
For more information regarding the Energy Management Concentration, call (304) 766-3065.
IGS CNG Services, in conjunction with other partners and Governor Tomblin’s office, announced that the grand opening of Charleston, West Virginia’s first compressed natural gas fueling station for vehicles will be held on January 28, 2014. The fueling station is located at 10 Spring Street in Charleston.
West Virginia’s Ohio River region is one step closer to seeing construction begin on a cracker plant in the Wood County area. According to the Charleston Gazette, Appalachian Shale Cracker Enterprise, owned by Brazilian based Odebrecht, purchased the SABIC Plastics Innovations facility in Wood County for approximately $11 million. The “Ascent” complex, once it is complete, will include three polyethylene plants in addition to the ethane cracker plant and associated infrastructure. The SABIC plant is anticipated to continue operations until 2015 making the timeline for constructing and opening the ethane cracker facility unknown.
West Virginia delegates outlined their agendas for the legislative session that began last week. Among the items included in the agendas is a “future fund” that would be established with proceeds generated by the oil and gas industry in West Virginia, as reported by The Charleston Gazette. Kevin Craig, D-Cabell, indicated that the revenue from the fund should be utilized for investment in West Virginia’s future, for activities such as education, teacher salaries and infrastructure. Democratic leaders are also advocating the creation of a standing committee on energy that will be headed by Kevin Craig. The legislative session lasts for 60 days.
On a conference call following the announcement of CONSOL Energy Inc.’s $3.5 billion sale of its longwall coal mines in West Virginia to Murray Energy, CONSOL President Nick DeIuliis stated that the deal would allow CONSOL to go from a coal company with natural gas exploration and production to a natural gas exploration and production company that now has coal, reported the Charleston Daily Mail. CONSOL’s press release for the deal states that it will enable the company to extend its gas growth production targets beyond 2014, citing expected 30% annual gas production growth rates in 2015 and 2016.
Largely due to increased revenues from drilling permit fees, the West Virginia Department of Environmental Protection (DEP) has nearly doubled its staff in the last two years. Metro News reports that the DEP cites this growth as allowing them to be more responsive to both the public and the oil and gas industry. An additional change that the DEP expects to have significant impact on the industry is the implementation of an e-filing system for drilling permit applications. The e-filing system is expected to improve the efficiency of the permitting system for both the DEP and the companies seeking permits.
Workforce West Virginia Investment Council has released findings that cite a 20 percent jump in oil and gas industry employment last year, the West Virginia Gazette reports. During the same period, the average wage for workers in the industry has also risen by nearly $5,500. The rise in employment is focused in the regions where Marcellus Shale activity is the highest, and the growth can be seen in ancillary industries as well. Particularly, the pipeline and storage tank construction sector has experienced significant growth corresponding to the oil and gas industry.
Chem.info reports that GreenHunter Water has obtained all of the permits necessary to begin removing old structures at a former oil service site in Warwood, West Virginia. Development of the site for its frack water recycling plant could be finished as soon as February of 2014. John Jack, vice president of business development of GreenHunter Water, indicated that the site will contain 19 storage tanks, and that GreenHunter Water is expecting approximately 30 trucks per day to arrive at the site, with each truck carrying 100 barrels of fracking brine water. Eventually, GreenHunter Water would like to implement a barging aspect to the plant, which would help alleviate road traffic. GreenHunter Water hopes to hire 12 to 20 employees to work at the site.
WVU’s Health and Safety Extension Division has announced the opening of a new Oil and Gas Training and Assistance Center to provide training and credentials to WV employees working in the oil and gas field. The training center utilizes the knowledge of local experts to offer current and prospective oil and gas employees training on various safety topics. Courses anticipated to be offered by the Training Center include fall protection, transportation safety, confined space safety, and a PEC/SafeLandUSA Basic Awareness Orientation course. Once an individual completes a training course, the Training Center can then provide valuable credentials to the current and prospective employees, including registration in an online database accessible by employers. Costs of the courses vary by topic.
IGS Energy CNG Services (IGS) has opened its first compressed natural gas (CNG) fueling station in West Virginia, reports the State Journal. IGS president Scott White stated that the Bridgeport, WV station is the first of three that are planned to serve the I-79 corridor between Pittsburgh and Charleston, and is the first publically accessible station to open in West Virginia in the past twenty years. West Virginia has taken aggressive steps to promote the use of CNG as an alternative fuel for public and commercial fleet vehicles. At the grand opening of the Bridgeport CNG station, Governor Earl Ray Tomblin made the following statement: “With the opening of this station, West Virginia once again is taking a bold step and leading the way toward national energy independence. Not only are we utilizing a cleaner burning fuel, but we are putting to use one that is produced right in our own state by hard-working West Virginians.”
On September 26, 2013, in the case of Thornsbury v. Cabot Oil & Gas Corporation (2013 W. Va. LEXIS 958), the Supreme Court of Appeals of West Virginia ruled that, although an oil and gas lease to Cabot affecting surface lands owned by Thornsbury contained road provisions, a subsequent 2006 right-of-way contract controlled the design and use of the well access road on the land. The Supreme Court Opinion reversed a prior decision of the McDowell County Circuit Court granting summary judgment to Cabot, further holding that genuine issues of material fact remain as to the possible breach of the 2006 contract, and remanded the case for further proceedings.
West Virginia Senate President Jeff Kessler is leading the drive to create an oil and natural gas trust fund named the “Future Fund” that would support education, economic development or tax relief decades from now, reports the Global Post. Kessler recently led a group of West Virginia lawmakers to visit North Dakota, where 30 percent of oil and gas tax collections are placed into the state’s Legacy Fund, which cannot be spent until 2017. Kessler indicated that he would like to present the Future Fund proposal as a constitutional amendment in January 2014, stating that he believes that constitutional protections would lock down the fund from lawmakers and interest groups that would like to spend the money prematurely.
Platts.com reports that Dominion has begun talks regarding farming out 100,000 acres in West Virginia in the Marcellus Shale located near Dominion’s gas storage assets near the Ohio and Pennsylvania borders. Thomas Farrell, CEO of Dominion, indicated that this acreage has potential gas reserves of 1 trillion cubic feet and that Dominion retained the ownership of the gas rights in order to ensure that drilling in the area would not compromise its storage facilities.