The Charleston Gazette recently reported that two of the West Virginia Department of Environmental Protection studies addressing natural gas drilling concerns will not be released by the deadline established in the Horizontal Well Act of 2011. DEP Secretary Randy Huffman said work on the wastewater impoundment study, scheduled to be released by January 1, 2013, is complete but there were problems with formatting and revisions. Huffman also said that the second study on noise, light and dust, scheduled to be released by December 31, 2012, is not close to being completed because there is still data to be collected. Huffman hopes to have a report completed by mid-February for the wastewater impoundment study, but offered no estimated completion date for the noise, light and dust study. A third study, examining air pollution from oil and gas operations, is not required to be released until July 1, 2013.
INNOVA Commercialization Group, a West Virginia early-stage investment program, has announced that it will provide financing to Alternative Fuel Solutions of West Virginia, LLC for the construction of a facility in Morgantown that will convert aftermarket vehicles to operate on compressed natural gas (CNG), propane, and other alternative fuels which have been made abundant by shale gas development, reports The State Journal. West Virginia’s 2011 Marcellus Gas Manufacturing and Development Act has made aftermarket conversion, which can require a substantial investment, a more attractive option: West Virginians who convert vehicles to operate on certain alternative fuels, such as CNG and propane, may qualify for state tax credits of 50% of the cost of conversion up to $7,500 for conventional vehicles, or up to $25,000 for large industrial vehicles. At current prices, fleet owners may save an average 35 percent on fuel costs after switching to CNG, before accounting for state tax credits like those available in West Virginia.
Yesterday, the U.S. Senate Committee on Commerce, Science, and Transportation held a field hearing in Charleston, West Virginia, to discuss pipeline safety issues in the wake of the December 2012 gas pipeline incident in Sissonville, West Virginia. The Committee heard testimony from Ms. Sue Bonham, a resident of Sissonville; Ms. Deborah Hersman, Chairman of the National Transportation Safety Board (the independent federal agency investigating the Sissonville incident); Ms. Cynthia Quarterman, Administrator of the Pipeline and Hazardous Materials Safety Agency (the federal agency responsible for ensuring the safety of gas and hazardous liquid pipelines); Ms. Sue Fleming, Director of Physical Infrastructure Issues for the U.S. Government Accountability Office (an independent agency that performs audits, investigations, and studies for the U.S. Congress); Mr. Jimmy Staton, a senior executive for NiSource Gas Transmission and Storage; and Rick Kessler, President of the Board of the Pipeline Safety Trust (a nonprofit group dedicated to pipeline safety). The witness’ written testimony and an archived webcast of the field hearing can be found on the Committee’s website.
In response to the natural gas pipeline explosion in Sissonville, West Virginia last month, WCHS Radio 58 and West Virginia Public Broadcasting report that U.S. Senator Jay Rockefeller will hold a field hearing on January 28th in Charleston. The hearing, which will include regulatory officials, industry experts, and those affected by the explosion, will examine current laws and their implementation, as well as a recent report from the Government Accountability Office (GAO) on improving pipeline safety.
The assessed value of property located in Marshall County, West Virginia has increased by almost half in the past two years and has doubled since 2007, reports The State Journal. Chris Kessler, Marshall County Assessor, indicated that the increase in the property values can be largely attributed to the growth in the natural gas, coal, chemical and power industries, according to a news release on January 24. Mr. Kessler specifically listed natural gas drilling, processing, and pipeline activities in Marshall County as some of the items that have impacted the property values.
West Virginia, Pennsylvania, Ohio and New York could benefit from more than $10 trillion dollars in new economic activity as a result of the full development of the Marcellus and Utica shale plays, according to an analysis from New York-based Kroll Bond Rating Agency that was reviewed by Business First. Kroll’s economic prediction is based on the sale of shale gas and indirect economic benefits, such as higher employment, increased tax revenues and improved infrastructure.
Marketwatch.com reports that most consumers living in West Virginia believe shale exploration will provide economic opportunity. Of those polled, nearly a quarter already reported seeing economic impact. The poll, conducted as Huntington Bank’s Midwest Economic Index, shows that populations with the most exploration activity, Pennsylvania, Ohio, and West Virginia had the highest expectation for economic opportunity. Huntington Bank predicts that natural gas production, particularly from the Utica and Marcellus Shale formations, will increase dramatically over the next 25 years and that job growth will continue as well. According to the report, Huntington plans to expand its commercial banking services to serve the energy sector to meet new demand in the energy sector.
WOWKTV.com reports that IGS Energy, an Ohio-based company, will build and operate compressed natural gas fueling stations along Interstate 79 in West Virginia and Pennsylvania. IGS indicates that the $10 million network of CNG fueling stations will have locations in Bridgeport, Charleston and Jane Lew in West Virginia and in Mount Morris in southwestern Pennsylvania.
On January 16, 2013, Governor Earl Ray Tomblin (D) announced the appointment of Harrison County House of Delegate Member Sam Cann, (D), former member of the West Virginia House of Delegates, to fill the vacated Senate seat for the 12th Senatorial District. Cann has been a long time advocate of strategic development of WV natural gas assets for the Mountain State. Charleston Gazette, 2/21/2011. Cann’s ‘natural gas’ resume includes serving as a Past President for the Independent Oil and Gas Association (IOGA) and on the Regional Advisory Board for the Independent Petroleum Association of America (IPAA). Both organizations advocate the safe and efficient development of natural gas exploration and production in the United States, including the shale-rich areas of West Virginia.
NiSource Inc. has voluntarily reimbursed West Virginia state and local authorities for costs incurred by its December 11th pipeline explosion in Sissonville. Although there were no fatalities in the incident, which occurred just outside of Charleston, it damaged homes and part of Interstate 77. Most of the $231,000 given by NiSource will go to the Division of Highways. The incident remains under investigation by the National Transportation Safety Board.
The State Journal reports that average residential utility bills decreased 5.3 percent in West Virginia in 2012. According to a January 9 report from the Public Service Commission of West Virginia’s Consumer Advocate Division, a decline in natural gas utility rates was the main driver for the decrease. Consumer Advocate Division Director Byron Harris indicated that the average bill in January 2011 for electricity, gas, and telephone service was $292.81 per month, and the current average is $277.22.
Natural gas production and consumption rose nationwide according to new statistics published by the U.S. Energy Information Administration’s Natural Gas Annual and the West Virginia State Journal. Of particular note, natural gas production in West Virginia rose approximately 50 percent in 2011 over previous years, with Shale production representing 58 percent of WV’s production. Statewide the number of WV producing natural gas wells rose to 56,800 in 2011, a 4, 300 well increase from 2010’s production levels. No new estimates were given for the natural gas reserves believed to be underlying the Mountain State.
The West Virginia Department of Environmental Protection (DEP) has hired nine new oil and gas inspectors to handle increased natural gas drilling activity in the state. DEP initiated the hiring search for additional inspectors after the state legislature passed the Horizontal Well Act in December 2011. Since that time, DEP’s Office of Oil and Gas (OOG) has increased its total staff from 28 to 49. According to a DEP spokeswoman, there are still two open inspector positions, and the OOG enforcement section will expand to 30 staff when these vacancies are filled. The DEP spokeswoman said that the agency’s gas well permitting process slowed down during the hiring search, as DEP staff were temporarily diverted from the permitting process to interview prospective inspectors.
An anticipated decision by the U.S. Coast Guard will determine when oil and gas producers can start transporting “frack water” by barge through West Virginia for treatment. “Frack water” is water containing chemicals used by oil and gas production companies in the hydraulic fracturing process. According to the West Virginia State Journal, if the Coast Guard designates the “frack water” as a hazardous material, then additional regulation and safety measures will be required before barge transportation can begin. As treatment of “frack water” occurs in centrally-located facilities, oil and gas operators must ship the frack water for treatment. Barge transportation has been identified as a cost-effective method to get the frack water to treatment facilities.
The Charleston Daily Mail reports that U.S. Senator Jay Rockefeller (D-WV) will be holding a field hearing in Charleston, West Virginia, on pipeline safety. The date for the hearing entitled, “Pipeline Safety: An On-the-Ground Look at Safeguarding the Public,” is currently set for Monday, January 28th. It will focus on the recent gas pipeline accident in Sissonville, West Virginia, and the U.S. Department of Transportation’s implementation of the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, the most recent reauthorization of the nation’s pipeline safety laws. Senator Rockefeller is Chairman of the Senate Committee on Science, Commerce, and Transportation. Additional details can be found in his press release from earlier today.