Despite recent announcements of layoffs in the industry, the state is reporting severance tax incomes from oil and gas have doubled since 2013.
A review by the West Virginia Department of Tax and Revenue and the State Treasurer’s Office shows companies paid $188.3 million in severance taxes in 2014. That’s compared to the $79.2 million collected in 2013.
Ninety-percent of those dollars stay at the state level and are used to help balance the budget. A majority of the final ten percent goes to the gas producing counties. The rest of the funds are spilt between all counties and municipalities in West Virginia.
The Treasurer’s Office reports more than $13 million were paid to counties and cities during an October severance tax distribution. Four counties received more than $1 million in payment during that time, Harrison, Wetzel, Doddridge and Marshall Counties.
According to the head of the state’s oil and natural gas association, the increase in the oil and natural gas severance taxes is a direct result of increased production in the Marcellus and Utica Shale. Those rock formations are estimated to contain more than 100 trillion cubic feet of recoverable natural gas.
Antero Resources plans to lay off more than 250 contract land brokers and focus on drilling.
Regional vice president Al Schopp tells The Exponent Telegram that the layoffs won’t affect Antero’s employees.
He says prices for natural gas liquids have been affected by a drop in crude oil prices. The price decline prompted Antero to reevaluate how much capital it commits to land acquisition.
Schopp says the company wants to focus its capital on drilling.
State lawmakers were updated Monday morning on a study the Department of Environmental Protection began earlier this year. That study focuses on the level of radioactive material in drill cuttings from horizontal fracking sites.
The West Virginia DEP has tested 15 sites for levels of radioactivity in drilling waste. The test sites included Wetzel County’s landfill, an Ohio water treatment plant, and multiple drilling sites in counties in North Central West Virginia.
Mike Dorsey is the director of Emergency Response and Homeland Security for the DEP and presented the report to members of the Joint Judiciary Committee. He said while both the report and suggested rule haven’t been finalized, their test results so far are fairly consistent.
“Are these cuttings radioactive? Yes, they are at very low levels,” he told lawmakers.
Dorsey said all of the samples tested positive for radium and potassium, but at levels so low they present no harm to people or the environment.
“If you took the highest number we found and were exposed to it 24 hours a day, seven days a week, 365 days a year,” he said, “you’d still only get to a quarter of the permissible exposure.”
According to Dorsey, West Virginia’s results are similar to those Pennsylvania officials are finding as they test for radioactivity in drilling waste. That state is also studying fracking waste to regulate its disposal, but has pushed back the deadline for its final findings.
Right now, six landfills in West Virginia are accepting drilling waste: Brooke County Landfill, Wetzel County Landfill, Meadowfill Landfill in Harrison County, Northwestern Landfill in Wood County and Short Creek Landfill in Ohio County.
S&S Landfill in Harrison County was accepting the waste until August of this year.
Dorsey said the radiation detectors required for those landfills haven’t been installed yet, but the DEP is working to finish the installations along with setting the limits for the level of radiation that will be permitted.
Those limits are expected to be finalized by January.
The National Resources Defense Council is asking federal environmental officials to strip the state’s authority over underground injection wells for fracking waste.
Council attorney Matthew McFeeley made the request in a letter Thursday to the Environmental Protection Agency’s regional administrator.
The letter says injections occurring at two West Virginia wells are illegal and unauthorized, and both have expired permits.
It says the operator, Danny E. Webb Construction Inc., has a history of serious violations.
In a news release, McFeeley said neighbors near the site in Fayette County have complained for years about water odors and color changes in a nearby stream.
Danny Webb has said he has operated the well legally.
Spokeswoman Kelley Gillenwater said the state Department of Environmental Protection couldn’t comment on the specific case, since litigation is ongoing before the Environmental Quality Board..
State regulators have ordered Antero Resources to suspend operations at two drilling pads where water tanks ruptured recently.
Two water tanks ruptured at the company’s Marsden Pad in Doddridge County on April 11. On April 15, two tanks ruptured at Antero’s Varner-West Pad in Harrison County.
Department of Environmental Protection spokeswoman Kelley Gillenwater said the agency’s Office of Oil and Gas issued two imminent danger notices of violation in response to each incident.
The office also issued a pollution notice of violation regarding the Doddridge County incident.
Gillenwater said pressure buildup in the tanks caused the ruptures.
The DEP ordered Antero to suspend operations at both sites until it provides detailed information related to the cause of the pressure buildup and a plan to prevent such incidents.
State lawmakers say they’re starting to broaden their focus of the state’s water resources from not just protecting it, but also managing it.
During a legislative interim meeting in Charleston, legislators considered the thoughts of scientists and industry leaders regarding waste water management in the natural gas sector.
“Fresh water is becoming more and more of an issue not just here in West Virginia and Appalachia, but throughout the country and throughout the world. It’s becoming scarcer,” said Senate Majority Leader John Unger as he began the discussion during a meeting of the Joint Legislative Oversight Commission on state Water Resources.
“I think we’ve been blessed with this water resource because we do have an abundance of it, but it’s also finite, it’s not infinite and we want to leverage it for economic development. So, we want to be able to utilize this to be able to attract companies into our state and to better manage it.”
Even though water isn’t the main attraction for industry in the state, drilling for natural gas in northern West Virginia depends on the availability of the resource.
According to recent research, each Marcellus well in West Virginia requires the injection of about 5 million gallons of water.
Water is mixed with various chemicals, pressurized, and pumped down into wells to release the gas from the Marcellus shale during the fracking process, making water a critical component.
“There will never be a well drilled in the Appalachian basin without water management,” Rick Zickefoose, vice president of operations for GreenHunter Water, told the committee.
“You’ve got to have water, you’ve got to manage the water, you’ve got to know where you’re going to get it to begin with and know what to do with it when it’s done.”
And when it is done, that’s when GreenHunter’s work begins.
The company trucks used frack water from drilling sites in West Virginia and Ohio to one of their 5 disposal wells in West Virginia, Ohio or Kentucky, or one of their holding facilities to await injection.
Zickefoose said they inject around 75,000 barrels of the waste water a week, or about 750 truck loads, but now, the company wants to diversify their waste water management methods.
Credit Ashton Marra
/
Vice President of Operations for GreenHunter Water Rick Zickefoose testifies before the commission.
“We are taking the steps to go into the water recycling arena,” Zickefoose said.
Water use data collected by the state Department of Environmental Protection reveals that of the 5 million gallons of water injected into each well, only about 8 percent returns to the surface as waste water, or flowback. New recycling practices adopted in the state are diverting about 75 percent of that waste for reuse.
Zickefoose said simply providing the service of processing waste water for reuse isn’t enough for the industry to make the full transition away from fresh water, at least not yet.
Today, oil and gas companies rely on injection wells to dispose of waste water as sanctioned by the state because of something Zickefoose referred to as “cradle to grave regulations.” Basically, the regulations make companies accountable for water from the second they collect it at the fresh water source until it is disposed of at the injection well.
But Melissa Pagen, water treatment specialist for GreenHunter, said they can offer an alternative.
“They drop off their product. We have a tank cleaning on site so they can clean the inside of the tank because that’s regulation. Then they can take water that we’ve already treated,” she said. “That’s taking one extra truck off the road that would have to take water to frack with that we’re providing for free.”
Free treated water, recycled from the used water dropped of by previous trucks. On top of that, trucks that plan to load up with the treated water get a discount on the waste water they drop off.
But Pagen said there is hesitation from the industry on mixing their water with that of other companies at the recycling site and still having the liability if something should happen.
Zickefoose said whether it’s through regulations or a shift in the industry, he still believes the recycling technology his company can offer will be utilized in the near future. So confident, in fact, GreenHunter has already bought a site in Wheeling to build a holding facility and recycling center.
Dr. Ben Stout, a professor of Biology at Wheeling Jesuit University, has been outspoken against the new site because of its location only a mile and a half upstream from the city’s drinking water intake location on the Ohio River.
Credit Ashton Marra
/
Dr. Ben Stout, professor of biology at Wheeling Jesuit University.
Stout maintained should an accident occur, it jeopardizes not only the water source for the citizens of Wheeling, but also for millions of other people in cities in West Virginia and other states downstream. He also raised concerns about the additional truck traffic brought into the residential area where the facility would be located.
Stout, however, is a proponent of the recycling program.
“The waste stream is the Achilles’ heal of the industry and so the limit to production is eventually going to be the limit to how fast you can clean up after yourself,” he said.
“So, I think GreenHunter is right on. I support them and I hope they can develop the kind of technologies and processes that would really work.”
Technologies and a process that would really work, he adds, in the proper locations.
Zickefoose said one barge could transport more then 40,000 barrels of water compared to the 100 barrels in a single truck, significantly reducing traffic, wear and tear on infrastructure and pollution.
Stout, who again said he was in favor of GreenHunter’s exploration of recycling technology, said barging is not a better option.
He said when moving the waste water from one transportation container to another; they have to be vented releasing harmful chemicals in to the atmosphere. Stout maintained transferring the liquids from the site to the barge to trucks to the injection wells means more venting and more chemicals being released into the atmosphere.
