Industry Rep Weighs In On 2019 Legislative Goals
By Conor Griffith
January 14, 2019 - With the 2019 session of the West Virginia Legislature beginning, various wants and ambitions have been set forth by representatives of the state’s energy industries.
Last year’s major development was House Bill 4268, known as the Co-Tenancy and Majority Protection Act, which was passed and later signed into law by Gov. Jim Justice. The co-tenancy law was praised by supporters for expediting the way Marcellus Shale wells are drilled within the Mountain State.
However, Senate Energy, Industry and Mining Committee Chair, Sen. Randy Smith, R-Tucker, said this year’s session likely won’t be quite as ambitious, at least on matters of energy.
“More or less, it’s going to be business as usual,” he said. “Of course, the gas industry has got their agenda, and coal has their agenda. It’s my job to sort out what’s best for everybody, not just the industry. As far as having a set agenda, you’re probably going to see some tweaks to the mining laws.”
Smith said these tweaks include addressing laws that are duplicated at both the federal and state levels. As a coal miner, he noted that maintaining the highest standards of safety is still the goal, especially when considering that the mining industry is experiencing a shift as older workers retire and their spots are filled by a younger generation that hasn’t experienced a disaster with mass fatalities. Smith said he wants to keep it that way.
“With 30 percent new people, it’s always exciting to see them get acclimated, so it’s always a dynamic time,” said West Virginia Coal Association President Bill Raney regarding the 2019 session.
“What we really want to do are a number of things that can sustain the eastern coal market, particularly the West Virginia coal market. That, of course, involves severance taxes, some kind of incentive that will cause coal companies to invest in West Virginia as compared to other coal-producing states. It may look like a tax credit, like all the other businesses in manufacturing.”
Raney said he too supported efforts to streamline regulations to address duplication in the areas of safety and environmental protection.
“We certainly don’t want to do anything to diminish that (safety) or environmental protection,” he explained, “but there are things that are on the law books that are either no longer done or so out of date that nobody knows anything about them. We’ve got to work to clean those things up.”
Raney noted that West Virginia needs to be more competitive in any way it can since market conditions have gotten tougher with the closure of many plants across the country that once ran on coal mined in-state.
Charlie Burd, executive director of the Independent Oil and Gas Association of West Virginia (IOGA), said his organization will be on the watch for and playing defense against any effort to raise severance taxes on natural gas or add any production fees. This, he said, is something that could make West Virginia less competitive than Ohio and Pennsylvania.
“Another initiative we will likely be working with others on is to find a way to be able to drill some conventional wells in areas of the state where we haven’t seen drilling since the onslaught of all the horizontal drilling in the north central part of the state,” Burd said. “There are areas in south-central and southern West Virginia that have not seen any wells drilled for several years.”
Burd said this is no small endeavor considering the costs involved, but he said that if a way to incentivize such activity can be found, it might alleviate some of the hardship brought about the collapse of coal mining in the southern counties.
Keeping marginal wells that are currently making 5,000 cubic feet or less per day in operation is another IOGA priority. Burd said this would entail bringing smaller well operators. Again, incentives would need to be provided.
Anne Blankenship, executive director of the West Virginia Oil and Natural Gas Association (WVONGA), also said she will be watching closely for any attempts to increase natural gas severance taxes.
“It is vitally important to keep and create policies that place West Virginia at a competitive advantage with our surrounding states, including maintaining and not increasing our severance tax so that existing production companies will remain and new ones will come to West Virginia,” she said.
Blankenship said WVONGA also favors legislation that will create new educational opportunities so the industry can have a pipeline of skilled workers. She also favored updating permitting policies that take the advances of modern technology into account.