WVE : How do you think the new state and national leadership will affect your industry ?
AB : The results of the state and federal elections are expected to positively impact our industry . New leadership on both the state and federal levels is focused on job creation and the promotion of energy production . We have already seen changes on the federal level that have removed impediments to growth in the oil and gas industry . We expect similar changes to be made on the state level that will allow us to fully develop our oil and natural gas resources , which will create more jobs and spur economic development at a time when it is desperately needed . West Virginia needs the oil and gas industry to thrive .
WVE : What is the greatest challenge you see facing your industry right now ?
AB : While our oil and natural gas resources are abundant in West Virginia , we face challenges that prohibit us from fully developing them . We need to reform our current outdated legal framework to allow development to proceed in a way that makes sense and does not waste oil and gas . The other critical component is the approval and construction of pipeline infrastructure . We are lacking adequate pipelines to transport the volumes of gas we can produce . If we can ’ t transport the product to market , we can ’ t fully develop it . It ’ s that simple .
WVE : Tell us about the major topics that were addressed in the 2017 legislative session that will directly affect your industry .
AB : Senate Bill ( SB ) 576 included cotenancy and joint development — two solutions that would greatly benefit our industry and would update our laws to allow for efficient production in a common sense way . Although SB 576 did not pass during the legislative session , we are continuing to make progress with stakeholders and educate our legislators , and we will continue to push for changes to our laws regarding mineral efficiency .
WVE : What is the one law or one change that would have a major positive impact on your industry ?
AB : In addition to creating cotenancy and joint development laws in West Virginia , the other critical component to our industry growing is the approval and construction of pipeline infrastructure . There are a number of pipeline projects proposed to be built in and through the state . These projects represent one of the single largest private sector infrastructure investments in the state ’ s history , resulting in more than $ 5 billion in economic impact , tens of thousands of jobs and significant tax receipts for local governments and the state . However , they must first be approved by the Federal Energy Regulatory Commission before construction can begin .
Once constructed , these lines provide the incentive and opportunity for more gas development in West Virginia , which will equate to more local and state jobs and taxes . The industry needs more tools in the toolbox , like pipeline infrastructure and pro-production land policies , to make the most of the opportunity in front us .
Charlie Burd
Executive Director , Independent Oil and Gas Association of West Virginia , Inc .
WVE : Give us a brief update on your industry .
CB : Statistically , there are approximately 56,000 oil and gas wells in the state . These wells drive the employment of some 17,000 West Virginia workers . These are high-paying jobs with benefits that in 2015 provided $ 1.44 trillion in wages .
Natural gas production in 2016 was more than 1.3 trillion cubic feet . Oil production from 2015 was 8.324 billion barrels . This combined production provided $ 72.2 million in severance tax payments to West Virginia and another nearly $ 135 million in property taxes that get shared back to all 55 counties . Millions more in royalty payments can be added to that .
WVE : How do you think the new state and national leadership will affect your industry ?
CB : Nationally , newly elected President Donald Trump immediately took steps to undo the Obama administration ’ s carbonhating agenda . Trump ’ s determination to advance a platform of energy independence was more clearly defined with his recent executive order granting the permit approvals on the Dakota Access and Keystone XL pipelines . Given that West Virginia has several similar pipeline projects to provide much-needed natural gas takeaways , these actions are very encouraging for the state .
From the state perspective , the oil and natural gas industry is beginning to rebound from some very historical lows in terms of rig count and drilling activity . This increased activity will immediately create several hundred jobs across several employment sectors and provide much-needed severance tax payments to the state .
WVE : As a result of the 2016 elections , are you seeing an increase in optimism or continued uncertainty among your association members ?
CB : Without question , the level of optimism within the oil and natural gas industry at the national level is at an eightyear high . In West Virginia , given the huge budget deficit that must be addressed , there is cause for deep concern that business taxes will increase . As more West Virginia companies close their doors , there will be fewer companies to absorb the needed tax revenues . Add in the uncertainty on environmental and regulatory issues , and it is reason for many to take pause at their immediate plans regarding additional investment , job creation and general anticipated company growth .
WVE : What is the greatest challenge you see facing your industry right now ?
CB : The oil and natural gas industry ’ s greatest challenge is the timely completion of much-needed pipeline construction to markets outside West Virginia . These natural gas pipeline takeaway projects equate to billions of dollars in investment in the
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