Leading the way toward responsible growth
West Virginia Republicans have led the way in passing legislation that promotes responsible development of our natural gas industry, and our state is beginning to reap the benefits.
The Lord has blessed our state by placing an abundant supply of natural gas beneath our feet, and we’re only just beginning to unlock its potential.
Horizontal drilling and hydraulic fracturing brought about a boom in Marcellus Shale production in the early part of this decade, and now we’re seeing the construction of multiple pipelines to help get this gas to market.
According to Workforce West Virginia, natural gas pipeline development has created 3,600 new jobs in the state over the past year.
A recent report from the West Virginia University Bureau of Business and Economic Research said employment in our area’s natural gas industry will grow 4.5 percent annually through 2023, with roughly one out of every four jobs that will be created in the Parkersburg area in coming years to come from growth in this sector.
We in the Legislature have taken steps to ensure this industry can grow remarkably while respecting the property and mineral rights owners who live on this land. We’ve cut burdensome and unnecessary regulation and fought off efforts to raise taxes on this industry — something which would drive development to our neighboring states or reduce the amounts companies are willing to pay in royalties to land owners.
As the vice-chairman of oil and gas issue on the House of Delegates Energy Committee, I’ve fought hard to craft responsible legislation in this area.
The most significant development was passage of the Co-tenancy Modernization and Majority Protection Act this year, which opens up the possibility for significant new natural gas development in our region — particularly on large rural family farms that have been passed down through generations
Under the old law, if 100 people had an ownership interest in a tract of land that had been passed down over the years, and 99 people agreed to a natural gas lease, but that one partial owner either didn’t consent or couldn’t be found, the owners could not enter the lease to develop the land.
Under the new law, if a supermajority — 75 percent — of owners agree to develop, they can exercise their property rights to do so; the remaining owners, once they’re located, will be compensated at the best rates possible under the law.
This bill has been hailed as a win for both the natural gas industry and job creators, as well as surface owners and those interested in preserving private property rights.
However, not everyone got their way — one company in particular, EQT Corp., tried its best to hijack this process to get their pet issue into law. Called lease integration, this proposal would allow EQT to use older, existing leases to allow horizontal drilling activity, even though these leases were signed before horizontal drilling was developed. Mineral rights owners strongly oppose this concept because it would allow decades-old leases to be used for new development without allowing them to renegotiate royalty payments.
No other natural gas company has been pushing this, only EQT. They’ve created marketing fronts, such as the Shale Energy Alliance, to make it appear like the natural gas industry supports this; but it’s really only them.
Meanwhile, EQT has also gone to court to block another bill passed this year — Senate Bill 360 — that benefits lease owners. This bill effectively bans drilling companies from deducting post-production expenses, such as severance taxes and processing costs, from some owners’ royalty payments.
This is one company acting out of pure greed to overturn reasonable compromises that other companies and surface rights advocates are willing to accept.
I want to promote natural gas industry growth and create as many jobs as possible, but I will not sell my soul to companies that do not have our citizens’ best interests in mind.
We can grow our natural gas industry, and we can do so without running roughshod over individuals’ personal liberties and property rights.
We have done a tremendous amount of good work in recent years, and I hope to continue it for many years to come. We are just at the beginning of a boom that will rejuvenate our local energy, petrochemical and manufacturing industries, and generations to come will benefit from our accomplishments.
Del. John Kelly, R-Wood, is vice chairman of oil and gas issues on the House Energy Committee.