West Virginia Oil and Natural Gas Association Story Archives

Recap Of Oil And Gas Association’s Winter Meeting And Lawmakers Talk Education, This West Virginia Morning

On this West Virginia Morning, the Oil and Gas Association of West Virginia held its winter meeting in Charleston last week. And, Senate Education Chair Sen. Amy Grady, R-Mason, and teacher Del. Jeff Stephens, R-Marshall, discuss education legislation.

On this West Virginia Morning, the Oil and Gas Association of West Virginia held its winter meeting in Charleston last week. Curtis Tate stopped by and brought us this story.

Also, in this show, dozens, if not hundreds, of bills have been introduced in the West Virginia Legislature this year that involve education. Randy Yohe spoke with Senate Education Chair Sen. Amy Grady, R-Mason, and teacher Del. Jeff Stephens, R-Marshall, about what some of those bills mean for public education in West Virginia.

West Virginia Morning is a production of West Virginia Public Broadcasting which is solely responsible for its content.

Support for our news bureaus comes from Shepherd University.

Eric Douglas produced this episode.

Listen to West Virginia Morning weekdays at 7:43 a.m. on WVPB Radio or subscribe to the podcast and never miss an episode. #WVMorning

Coronavirus And Slumping Prices Hit Ohio Valley’s Oil & Gas Sector

Energy producers, utilities and energy sector workers across the Ohio Valley are adjusting operations and bracing for continued economic impacts as the fast-moving coronavirus pandemic continues to unfold.

Efforts to limit the spread of the virus include shuttering schools and businesses and limiting travel, all of which reduce demand for energy. The federal government is moving to stabilize the economy, including a possible bailout for oil and gas producers.

Oil prices fell to their lowest level in 18 years Wednesday as travel restrictions tighten and air travel plunges. Crude was trading at $20.48 Wednesday afternoon. Natural gas prices were causing Appalachian Basin producers anxiety earlier this year while they were hovering near $2. On Wednesday that price fell to about $1.60.

Although it’s hard to nail down an exact number, the natural gas industry supports thousands of jobs across the region and contributes millions of dollars in taxes to state governments. In West Virginia, for example, drillers paid $146 million in severance taxes to the state in 2019. Projections for 2020 are $98 million, according to the state tax department.

Natural gas production in the Appalachian Basin has grown rapidly since 2012 and is projected to grow exponentially over the next few decades.

While West Virginia, Ohio, Kentucky are not major oil-producing regions, drillers in the gas-rich Appalachian Basin do produce oil and are being impacted, said Charlie Burd, executive director of the Independent Oil and Gas Association of West Virginia.

“These falling prices present a challenge for lots of small companies who are already with the low natural gas prices striving to remain viable and in existence,” he said.

Anne Blankenship, head of the West Virginia Oil and Natural Gas Association, agreed lower crude prices tighten the margins for some companies.

“But our members have continually committed to being a big part of West Virginia’s economic present and future,” she said in an email. “They are invested in this state and its communities.”

Falling oil prices are being driven both by shrinking demand due to the coronavirus and the price war between Saudi Arabia and Russia, which flooded the market with cheap crude, said Mark Agerton, an assistant professor at the University of California, Davis who studies energy and resource economics.

He said while drillers in the Marcellus and Utica shale formations will undoubtedly see an impact from lower prices, he believes as big oil-producing regions like the Permian Basin slow oil production, associated gas production there will fall too, which could benefit drillers in the Appalachian Basin.

“That’s going to maybe potentially mean that the Marcellus doesn’t have to ramp down production quite as much,” Agerton said. “The other thing is that with reduced drilling for oil, all of the oilfield services and rigs are going to become available, and those costs for services should come down, which would help cushion someplace like the Marcellus.”

In a press call Wednesday morning, Suzanne Lemieux, manager of operations security and emergency response policy for the national trade group the American Petroleum Institute said the group doesn’t see threats to the broader oil supply chain from the coronavirus outbreak. She added many producers have developed pandemic plans, especially after the 2016 Ebola outbreak.

“A lot of conditions we’re operating under or see in the future are similar to operating under a hurricane or another type of natural disaster,” she said.

Agerton said with the situation changing so rapidly it’s unlikely we yet know the full extent of how the virus will affect both the economy and energy sectors.

On Wednesday, Shell said it will temporarily suspend construction of its ethane cracker in Beaver County, Pennsylvania to prevent the spread of the coronavirus.

Smaller producers, which account for many in the Ohio Valley, may be at risk, Agerton said.

It’s unclear if and what type of measures the federal government could take to help the oil and gas industry. In a letter, the head of the trade group the American Exploration & Production Council encouraged lawmakers to ease requirements under the Jones Act, a federal maritime law that requires goods shipped between U.S. ports to be transported on ships that are American-made, owned, and operated. The administration is also considering purchasing oil for the U.S. Strategic Petroleum Reserve.

Agerton said direct aid to the industry would be purely a political move.

“As far as bailing out the energy sector, I mean, I’m not sure why other than the political advantage,” he said.

Burd, with IOGA WV, said some companies may also benefit from low-interest loans offered by the Small Business Administration, but he’s largely optimistic, at this time, that the industry will be OK.

“We are a resilient industry and we believe everyone will try to maintain all the production wells and I don’t think that’s going to be an issue,” he added.

Utilities Suspend Shutoffs

Across the Ohio Valley, companies that generate and distribute electricity to homes and businesses are also adjusting. Many utilities have announced they will not disconnect customers who cannot pay their bills during the coronavirus crisis.

The Public Utilities Commission of Ohio last week ordered all electric, natural gas, water, wastewater and landline telephone companies to suspend disconnection policies. The Kentucky Public Service Commission issued a similar order Monday, which includes an order to suspend late payment fees for at least 30 days. Regulators in West Virginia are urging utilities to temporarily suspend shutoffs.

Utilities are also taking steps to protect workers. Aaron Ruegg, a spokesman for FirstEnergy Corp. said some travel is being reconsidered including for workers who were set to help during a planned outage at the Harrison Power Station, located in Haywood, West Virginia.

He said that lineworkers and service technicians have been instructed on measures such as social distancing.

At this time, Ruegg said no measures are being considered to sequester workers at power stations to maintain operations.

That is something Appalachian Power is looking at, said Communications Director Jeri Matheney. She said decisions are being made on a plant-by-plant basis, but no final decisions have been made.

Q&A: Rolling Stone Reporter Examines The Risks Of Radioactive Drilling Waste

Across the Ohio Valley, natural gas drilling waste is trucked from the well pad to disposal sites. The waste contains naturally occurring radioactive elements.

Freelance science journalist Justin Nobel spent nearly two years reporting on this topic. He interviewed hundreds of scientists, environmentalists, state regulators and industry workers and uncovered never-before-released early reports from the oil and gas industry that highlight the radioactivity problem and its risks to workers and the public.

Energy and Environment Reporter Brittany Patterson spoke with Nobel via Skype about his investigation titled “America’s Radioactive Secret” that was published last month in Rolling Stone.

***Editor’s Note: The following has been lightly edited for clarity.

Patterson: You use a character, a pseudonym of a character, named Peter. Tell us where we meet him and tell us a little bit about him and his concerns.

Nobel: Peter does a job that has become quite common across northern West Virginia, southwestern Pennsylvania, eastern Ohio, the heart of the Marcellus and also Utica shale areas, and that job is the job of brine hauler, or driving a truck that looks a bit like a septic truck, but is actually filled with this oil and gas waste product. The industry often refers to this product as brine, or produced water, but what my reporting revealed is that this is very misleading. Brine, especially in the Marcellus, can have a very complicated mix of different chemicals and there’s a lot of toxic heavy metals. There’s what’s known as volatile organics; these are known human carcinogens like benzene, and then there’s also radioactive elements such as radium. Drivers like Peter are told often that they’re hauling water or that they’re hauling saltwater, and yet they’re not. They’re hauling this really complicated brew of chemicals that also has radioactivity in it.

Patterson: What is the federal and state oversight of this activity?

Nobel: So, oil and gas waste has a stunning exemption that goes back to the late 1970s. The United States at that time knew there’s a lot of industry and that industry regularly produces hazardous waste, and under a law called the Resource Conservation and Recovery Act, the United States determined that it’s going to appropriately label waste that is hazardous as hazardous. That means that waste can only go in certain types of trucks that are designed to carry hazardous waste. It can only go on certain routes that are appropriate for hazardous waste to be hauled on. Drivers will have to be appropriately trained, and the hazardous waste will have to end up in landfills that are appropriately designed to hold hazardous waste.

And it was a good way, a cradle to grave way, of dealing with hazardous waste. Except oil and gas waste, all of these different waste streams produced at an oil and gas well, such as brine, such as drill cuttings, such as other materials like scales and sludges, these wastes all received an exemption. And what’s just so striking is that the EPA actually looked at that exemption in 1988, and they determined that even though there are hazardous materials in oil and gas waste, there’s uranium, there’s toxic heavy metals, to label that waste as hazardous would cause a severe economic burden on the industry. There literally would not be enough landfills to deal with it. It would overwhelm regulators and so EPA sticks with this determination of non-hazardous and everything we see happening today — in regards to these trucks in the Marcellus, why are they not labeled, why are these drivers not being told what’s in them — it goes back to that exemption.

Patterson: One of the really striking things about your story and the reporting you’ve done on this topic is how deep you’ve gone. Can you tell us a little bit about some of the documents and research that you found and how that impacts workers’ health?

Nobel: So in my reporting, I would be talking to workers working in West Virginia, Pennsylvania, Ohio, talking to community members, and hearing things that were quite concerning when it came to how this material was being handled and just what the radioactive content might be. And there is the question of well, ‘How concerning? What really are the risks? And just how worried should I be?’ And what helped answer that question was finding documents of the industry that conveyed that they had knowledge about this going back decades. And so some of the industry’s most prominent organizations and publications have actually written about this topic. And that’s significant because right now the industry still is actually denying that there’s a serious problem. And yet when you look 30 and 40 years ago, the industry themselves wrote about this problem. And I found a set of Louisiana legal cases only recently settled in 2016 that showed that oil and gas worker cancers had been linked indisputably to radioactivity exposure received on the job. That was just such a moment of alarm for me because it confirmed that if this job, and these different types of jobs, are done for long enough, a worker actually can get cancer and that cancer can kill them. So, in Louisiana workers got different types of lymphomas, different types of leukemias, colon cancer, liver cancer, kidney cancer.

Patterson: So we have the EPA that is sort of declining to regulate the disposal of this type of hazardous waste. And we have thousands of workers in this region that are working in this industry hauling brine, but also involved in other parts of natural gas drilling. And it’s an industry that’s growing. What does this mean for the people who work in this industry, for those oil and gas workers?

Nobel: There needs to be a massive health analysis done immediately. And what’s so worrisome about the Louisiana cases is we know the signature of the brine in Louisiana. The radium levels are significantly less than they are in the Marcellus, about eight to nine times less. So no one has looked at what it means for workers in the Marcellus to be handling different bines, scales, sludges, to be handling this oil and gas waste for a prolonged period of time. What’s just been so striking is that workers continue to reach out to me, and this is a difficult thing for them to do, but they’re not getting help from the regulatory agencies. They’re not getting help from their employer, certainly. And suddenly they’ve read this article which has information that connects to things that they’ve been seen and wondering about. And so, with each week, really since the story’s been published, more people have been reaching out. And many of them are workers and they help fill in a picture that’s already forming and the picture is really a concerning one.

West Virginia Public Broadcasting reached out to the trade group, the West Virginia Oil and Natural Gas Association. In a statement, executive director Anne Blankenship said the industry is highly-regulated and does not expose workers or the public to high levels of radiation. She said her association disagrees with the Rolling Stone article, calling it “purposefully misleading, biased and exaggerated.”

Property Tax Revenue from Oil, Gas Drops in West Virginia

West Virginia collected $96 million in property tax revenue from oil and natural gas production during the 2017 tax year, a decline of $38 million from the previous year.

News outlets report that a Monday news release from the West Virginia Oil and Natural Gas Association says the $96 million will go to county government for local school systems and community services.

The association’s executive director, Anne Blankenship, said property taxes fluctuate year to year based on multiple factors, including commodity prices. The tax revenue related to West Virginia’s oil and natural gas production is based on the material’s value from two years prior. From 2014 to 2015, West Virginia experienced a simultaneous growth in the amount of gas drillers pumped from wells and a collapse in prices.

State Senate Backs Change for Gas-Drilling Rights

West Virginia’s Senate has voted to authorize natural gas producers to drill when three-fourths of those with royalty rights agree and a reasonable effort has been made to negotiate with the remaining owners of a gas mineral property.

The bill, approved 19-14, is a priority of the West Virginia Oil and Natural Gas Association. The group says it updates the law to reflect current technology with horizontal drilling and the state poised for major gas development.

It’s opposed by the West Virginia Surface Owners Rights Organization, which says it enables out-of-state gas producers to effectively take mineral owners’ property for the benefit of shareholders.

Sen. Charles Trump, a Morgan County Republican who supports the legislation, says lawmakers heard from many royalty owners who’ve leased rights and want the bill passed.

After Leader's Death, Oil & Gas Lobby Taps Interim Director

After the death of its executive director, West Virginia’s top oil and natural gas lobby group is tapping an interim replacement.

The West Virginia Oil & Natural Gas Association announced Friday that Stephen G. Perdue will serve as the group’s interim director. Perdue replaces Corky DeMarco, who died of an apparent heart attack at 68 years old last month.

Perdue serves on the government affairs team for the law firm Steptoe & Johnson. He previously worked with EQT Corporation as a government relations manager and regional land director.

Perdue has held other jobs in land management with various energy companies across the region.