Charlie Burd Rebecca McPhail
Executive Director,
Independent Oil and Gas
Association of West Virginia, Inc. President,
West Virginia
Manufacturers Association
WVE: Give us an update on what has happened in
your industry over the last year.
CB: Over the past year, continued exploration and drilling
have resulted in increased natural gas production. According
to the recently released Texas Independent Producers and
Royalty Owners Association 2019 State of the Industry Report,
in 2018 West Virginia produced 1.776 trillion cubic feet of
natural gas, ranking itself ninth in the nation in natural gas
production. Comparatively, the total natural gas produced in
2009 in West Virginia was only 257 billion cubic feet.
Production isn’t the only thing that grew in 2018. A report
presented to the West Virginia Legislature’s Interim Joint
Committee on Natural Gas Development in early January
showed the total number of direct jobs associated with oil
and gas in West Virginia in 2017 at 17,617. By comparison,
the most recent numbers through the second quarter of 2018
were at 22,514, an increase of nearly 4,900 workers.
On the down side, it was extremely disappointing to watch
nearly 4,000 pipeline workers get laid off in December when
the construction of the Atlantic Coast Pipeline was brought to
a halt due to a dispute regarding permits to cross the Appala-
chian Trail and national forests. This is reported to push the
completion of this much-needed pipeline takeaway to 2021.
WVE: Tell us about how the 2019 legislative session
impacted your industry.
CB: Going into the 2019 legislative session, we had deter-
mined a need to address a couple of areas of importance that
are neatly tied together in one piece of legislation: HB 2673.
This bill would have increased the exemption on marginal,
low-producing wells and then divided the severance tax
savings between the producer of such low-volume wells and the
state through the creation of a new well-plugging fund. The
producer would then have extra income to invest in keeping
low-volume wells in service, and the West Virginia Depart-
ment of Environmental Protection (DEP) would have funds
annually to plug orphaned and abandoned wells.
WVE: What changes need to be made for our energy
and manufacturing industries to be more competitive
with surrounding states?
CB: West Virginia’s ranking as ninth in the nation for natural
gas production pales in comparison to Pennsylvania’s ranking
of second. At the onset of horizontal drilling, northeast Penn-
sylvania was readily identified as a sweet spot for the Mar-
cellus Shale. In addition, in place of a severance tax, Pennsyl-
vania has an impact fee that equates to about a 3 percent tax
burden, and its regulatory scheme on the permitting of natural
gas-fired power plants places it years ahead of West Virginia.
Companies will invest in the places where they can make the
greatest rate of return for their shareholders or owners.
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WEST VIRGINIA EXECUTIVE
WVE: Give us an update on what has happened in
your industry over the last year.
RM: West Virginia’s manufacturing sector has had an im-
pressive run over the last year. Our manufacturers employ some
48,000 people and provide an additional 200,000 indirect jobs
in supporting industries. We have seen incredible investment
in West Virginia from companies like Toyota, which recently
announced a new $111 million expansion of its West Virginia
operations that promises more than 120 jobs at the Buffalo
plant. The bottom line is that West Virginia’s business climate
is improving, and that is attracting manufacturing investment.
WVE: Tell us about how the 2019 legislative session
impacted your industry.
RM: In the 2019 legislative session, we focused on repealing
the personal property tax on inventory, machinery and equip-
ment and improving workforce education. We also faced an
unexpected issue regarding new human health criteria suggested
by the federal government. Human health criteria are devel-
oped after consideration of several factors, and changing one
of those factors changes the ultimate criterion. For example, the
calculated criteria could be higher in states where the amount
of water people drink is less than the national average the
Environmental Protection Agency (EPA) used in developing
default criteria. As our experts testified during the session,
they are not looking at body weight or water consumption but
instead are evaluating several other factors and confirming
that the cancer slope factors and relative source contributions
are consistent throughout West Virginia’s environmental pro-
grams. Senate Bill (SB) 163 included changes to 60 human
health criteria in the water quality standards. We went into
the session with an agreement with the DEP not to adopt new
human health criteria for drinking water because the EPA’s
proposed limits considered only one of eight state specific
measures. SB 163 was eventually amended to move recommen-
dation of standards to the 2021 legislative session, allowing the
West Virginia Manufacturers Association and other interested
parties to provide additional state-specific data to the DEP.
WVE: How do you think the latest calls for action
against climate change will impact your industry?
RM: Manufacturers are committed to making products
in an environmentally sustainable fashion. To do this while
remaining competitive on an international scale, we depend
on reliable power at a reasonable cost. During the legislative
session, we cooperated in the development of a bill that would
have encouraged the conversion of abandoned mine land to
solar farms to produce energy that manufacturers and other
utility customers could have chosen to purchase. While that
legislation didn’t gain traction this year, we hope it will receive
consideration next year.