The oil and gas industry future is bright in WV

HUNTINGTON — Oil and natural gas industry advocates are hopeful as the field continues to grow throughout West Virginia.

According to the U.S. Energy Information Administration, in 2017, West Virginia was the seventh-largest natural gas-producing state in the nation, with an output of about 1.6 trillion cubic feet.

In 2018, the West Virginia oil and natural gas industry paid more than $138 in severance taxes, an increase of 4.3 percent and more than $5 million than the previous year, according to a review of information provided by West Virginia Department of Tax and Revenue and the State Treasurer’s Office.

The majority of the severance – 90 percent – goes to the state, while 75 percent of the remaining balance is dispersed to gas-producing counties and the other 25 percent is distributed to all counties and municipalities throughout the state based on population. Charleston received $107,965 last year, while Huntington received $94,972.

Anne Blankenship, executive director of the West Virginia Oil & Natural Gas Association, said as the industry continues to grow, it continues to make a high impact on the state’s budget and local economies.

Blankenship said West Virginia continues to see growth in the oil and natural gas industry, which includes yearly increases in production for over a decade.

“This has equated to over $1 billion in severance taxes and $1 billion in property taxes over that same time period,” she said. “Which goes to support our state, counties and local communities, including our school systems.”

According to the West Virginia Oil and Natural Gas Association, Cabell County produced 743,130 MCF of gas in 2017 and 1,714 barrels of oil, earning $207,844 in severance tax. Putnam produced 2,865,674 MCF of gas and 1,437 barrels of oil, earning $137,225 in severance tax. Wayne County produced 3,599,280 MCF of gas and 10,685 barrels of oil, gaining $116,263.

WVONGA also reported a 434 percent increase in jobs from January 2017 to mid-2018, jumping from 1,559 to 8,332 positions.

Blankenship said pipeline infrastructure continues to be vitally important for the state and has hit roadblocks with anti-fossil fuel activists.

“Although progress has been made with the large projects, anti-fossil fuel activists have decelerated their construction, resulting in the loss of thousands of jobs and millions in economic impact,” she said. “Unfortunately, this will mean higher electricity costs and further delays in these much needed projects to get energy to folks who need it. ”

The growth is not without its problems, however.

Pittsburgh-based EQTCorp last month agreed to pay $53.5 million to settle a federal class-action lawsuit involving 9,000 plaintiffs who alleged the state’s second largest natural gas producer wrongfully deducted a variety of unacceptable charges from royalty checks.

The settlement is just the latest in a series accusing natural gas companies of making similar moves in an attempt to pocket a larger share of profits as the industry booms in West Virginia.

The United States and China are also in the midst of discussions recently over Beijing’s technology ambitions ahead of a deadline for a massive U.S. tariff hike. As part of the talks, China’s leaders have offered to narrow its trade surplus with the U.S. by purchasing more natural gas, among other things, that could help the West Virginia industry grow.

Without an agreement, a 10 percent tariff increase imposed on $200 billion of Chinese goods is due to rise to 25 percent on March 2.

Blankenship said the potential for growth remains in the future.

“Down the road, great potential remains for growth in the manufacturing industry as natural gas liquids are used as feedstock for manufacturing and we are able to produce them in large quantities and at a low price in West Virginia,” she said. “We just need a market to store them here through a storage hub, which we continue to hear is making progress.”

Original Article: Here