2020 April IOGA News

The Voice of the

Independent Since 1959

NEWS

April 2020

Oil and Gas Operations Considered Essential During the COVID-19 Outbreak Editor’s Note: Due to the importance and emerging changes related to COVID-19, President Kevin Ellis’ article is starting on page one, rather than the standard page 2.

In an effort to keep you informed, here is a current sampling of guidance from government and other resources relating to COVID-19 and its impact on our employees, our industry and the economy.

West Virginia Governor Jim Justice issued Executive Order 9-20, on March 23 related to a “Stay at Home Order” that went into effect March 24, 2020. It identifies the business-

es and services deemed “essential business operations” for the benefit, safety and well-being of all West Virginia residents. The services provided by the oil and natural gas industry are classified essential in maintaining and providing energy to supply our state and nation.

As the Nation comes together to slow the spread of COVID-19, on March 16th, the President issued updated Coronavirus Guidance for America. This guidance states that: “If you work in a critical infrastructure industry, as defined by the Department of Homeland

Security, such as healthcare services and pharmaceutical and food supply, you have a special responsibility Kevin Ellis to maintain IOGAWV President your normal work schedule.”

Accordingly, this list is advisory in nature. It is not, nor should it be COVID-19 Continued on page 2

WVDEP Issues Enforcement Guidelines During COVID-19 Pandemic On Monday, March 30, 2020, The Independent Oil and Gas Association of West Virginia received notice of temporary environmental enforcement and compliance guidelines that will immediately be instituted by the WV Department of Environmental Protection (WVDEP) in conjunction with those issued on March 26 by the United States Environmental Protection Agency (USEPA) and entitled “COVID-19 Implications for EPA’s Enforcement and Compliance Assurance Program”. The USEPA guidelines are retroactive to March 13, 2020.

Working in unison with the West Virginia Manufacturers Association, please be advised that: • The WVDEP has contacted all labs and engineering firms used by permittees and have been advised that all are operating normally at this time.

• WVDEP inspectors continue with day-to-day inspections while observing social distancing and other safety measures.

• The WVDEP also plans continue with regular inspections of major source NPDES permittees.

• The agency is sensitive to

compliance issues and payment of fees related to COVID-19 and is committed to working with Robert Radabaugh individual Environmental companies Committee Chair on a caseby-case basis to determine the most appropriate path forward.

Companies are advised to conWVDEP Info Continued on page 18

INSIDE

In Memoriam / 3 Charlie Burd / 4 Mark Clark / 5 Association News / 6 Member News / 7 Hugh Byers / 8 Industry Events / 9 Chris Weikle / 10 Charlie Burd / 12 Greg Kozera / 13 Sam McKown / 14 Ergon / 14 Thomas Downs / 16 CARES Act Info / 17 Industry News / 18 License Plate Information / 22

2

COVID-19 Continued from page 1 considered to be, a federal directive or standard in and of itself.

The list in the link above specifies petroleum, natural and propane gas workers.

Other sources of COVID-19 information: • The West Virginia Chamber of Commerce has a page dedicated to COVID-19 information and guidance.

• The U.S. Small Business Administration has released a disaster relief assistance program for loan assistance. These Economic Injury Disaster Loans will provide $2 million in support to small businesses negatively impacted by the Coronavirus.

Disaster Relief Assistance Information Economic Injury Fillable Form • Governor Justice issued an executive order on March 19 to provide unemployment benefits to those affected by COVID-19, waiving the one-week waiting period for eligible residents to receive unemployment benefits.

Ways you can help others: As each of us struggle to face the

challenges of the COVID-19 virus, the needs of some of our most vulnerable citizens are coming to light in a huge way. IOGAWV has been asked by United Way agencies to see if some of our members can come to the aid of the many homeless individuals living without shelter, restrooms, shower facilities and hand sanitizer. As a company perhaps already providing these services to a wide variety of oil and gas operations and well sites, you could be in a position to lend assistance to those without a social safety net. Specifically, the cities of Charleston, Parkersburg and Morgantown are in dire need of portable shower and hand washing/ sanitation stations.

If you are able to consider this request for help, we ask that you coordinate your efforts through Stacy DeCicco, Executive Director of the United Way Alliance of the Mid-Ohio Valley and statewide coordinator for this effort. Stacy is being assisted in the effort by Mike McCown, a retired oil and gas producer and past president of both IOGAWV and WVONGA. Stacy

Remember to practice these safety measures to prevent the spread of COVID-19 to yourself and your family, coworkers, friends, neighbors and others: • Practice “social distancing” • Avoid contact with people who are sick • Wash your hands often with soap and water for at least 20 seconds (it’s longer than you think — try saying the Pledge of Allegiance twice or sing “Happy Birthday” twice, too).

• Use an alcohol-based hand sanitizer (at least 60% alcohol) if soap and water are not available • Avoid touching your eyes, nose, and mouth with unwashed hands

DeCicco can be reached at 304-9910996 or at sdecicco@uwamov.com.

Mike McCown can be reached at 304-377-0538 or mike.mccown@ outlook.com.

Unfortunately, as with any disaster, there are those seeking to scam the caring in this time of need.

Please rest assured IOGAWV will NEVER ask you for a direct contribution of cash, gift cards or other such easily spendable “currency.” If you see such a request, it’s a scam!

2019-2020 OFFICERS BOARD MEMBERS J. Kevin Ellis President Ben Sullivan Vice President/Program Chair Maribeth Anderson Secretary-Treasurer/Investment Comm. Chair Brett Loflin Immediate Past President James W. Crews Director/Commerce Comm. Co-Chair Jon Farmer Director/Producers Issues Comm. Co-chair David Haney Director/ Producers Issues Comm. Co-chair Jon Hildreth Director Jeff Isner Director/Commerce Comm. Co-Chair Bob Radabaugh Director/Evironmental Committee Chair Sarah Smith Director/Govt. Affairs Comm. Chair Todd Tetrick Director/Saefety Committee Chair Chris Weikle Director/Comm. & Educ. Comm. Chair

3

In Memoriam

IOGAWV Mourns the Passing of Carl Heinrich Carl C. Heinrich, 81, of Reno, Ohio, passed away March 18, 2020 with his family at his side.

He was born May 26, 1938 in Allegheny County, PA, the only child of late Brig. Gen. Joseph E. Heinrich and Maxine Piekarski.

On February 12, 1966 he married Judith Cole, who survives.

Carl was a founding member of Southeastern Ohio Oil & Gas Association (SOOGA) and remained on the board the until his passing.

He received the SOOGA Wildcatter Lifetime Achievement award in 2005 and was the first inductee into the SOOGA Hall of Fame in 2013. Carl was also inducted into the OOGA Hall of Fame and the Marietta College Distinguished Alumnus.

At age 17 he enlisted in the Army.

Following active duty, he continued service in several Pennsylvania and Ohio military reserve units and later served in the Ohio Defense Corps achieving the rank of Captain.

He graduated from Marietta College in 1964 with a dual BS degree in Petroleum Engineering and Geology. He then served as the district engineer for Quaker State in Parkersburg. In 1978, he and his wife Judy started their oil and gas production company, Heinrich Enterprises Inc., which grew and expanded into many other production entities with oil and gas wells across Southeastern Ohio and West Virginia. The family business continues today, under the name of Reno Oil and Gas, with the first employee ever hired still working with the family after 40 years.

In addition to his primary passion in the oil and gas industry, he was a Washington County deputy sheriff, firearms instructor, and training School Commander through the Ohio Peace Officer Training Academy. He trained many peace officers from all agencies throughout Southeast Ohio and he continued to maintain a position as a Constable.

What makes us different is what makes you better.

Specialists in a broad array of

oil and gas tax, assurance, accounting, revenue, and consulting services.

Arnett Carbis Toothman

actcpas.com

800.924.0729

west virginia

with confidence

llp

pennsylvania

Charleston New Castle Bridgeport Pittsburgh Buckhannon Meadville ohio Morgantown Columbus

He was known as a pioneer and leader in the oil and gas industry.

His distinguished life in his field and community is revealed by his many awards. In addition to those mentioned earlier, his honors included the Society of Petroleum Engineers’ Legion of Honor; Certificate of Recognition from the US Department of the Interior; Keeper of the Flame award from the Petroleum History Institute; 2019 Marietta Community Foundation Philanthropist of the year; and the 2020 Marietta College Linsley Community Partner Award.

He is survived by his wife of 54 years, Judith Cole Heinrich; his son Joseph Heinrich of Derry NH, grandchildren Brent, Haley and Michelle; his daughter and son-inlaw, Christyann and Brian Chavez of Marietta OH, and grandsons Bryson and Carson. He was preceded in death by his parents.

In lieu of flowers, donations can be made in his honor to the SOOGA Legacy Fund at Marietta Community Foundation, 100 Putnam St., Marietta, OH, 45750.

4

Charlie Burd Executive Director, IOGAWV

From the Burd’s Nest: Hold the Rope!

Year in and year out, a wide variety of amateur and professional sporting teams walk away with the championship trophy hoisted above their heads in celebration. A celebration that, at its roots, started weeks or months earlier with practice and strategy sessions. At the end of the season, each of these teams have one thing in common: No matter how tough it became throughout their season, they did one thing — they held the rope!

As members of IOGAWV you can be proud to know your Executive Committee, Governmental Affairs Committee, Lobbying Team and many like-minded allies, adhered to the very scenario described above.

The team started early, it cussed and discussed the legislation needed to best advance the oil and natural gas industry in West Virginia and developed the appropriate methodology and game plan to accomplish team goals. The unification of the industry as whole this year could not have come a better time and that effort will be detailed in this article. Then, in addition to simply holding the rope, they all pulled the rope in the same direction and achieved success.

Before I give a legislative briefing and breakdown on those bills of most importance to the oil and natural gas industry, allow me to give the final bill totals. As the 2020 Legislative Session concluded at midnight on Saturday, March 7, there had been 1,533 House Bills, 856 Senate Bills and another 350 or so resolutions introduced and considered. Of those, a total of 356 bills completed legislative action, which is the highest number of bills passed in over 25 years. Your IOGAWV lobbying team

ended up reviewing and assessing all 2,740.

So, here is legislation that has been signed into law by Governor Justice: • House Bill 4001: The West Virginia Impact Fund House Bill 4001 creates the West Virginia Impact Fund, the Impact Fund’s Investment Committee and the Mountaineer Impact Office to further economic development, infrastructure development and job creation in the State of West Virginia through investment of the assets of the fund. The sovereign wealth fund will allow foreign investment into the state for major economic projects that need funding, such as the Appalachian Storage Hub or natural gas cracker projects. HB-4001, which overwhelming passed both Chambers, was sent to Governor Justice on March 3 and signed into law March 12. IOGAWV closely followed this bill and is encouraged by its passage and potential future impacts to support natural gas and associated liquids production.

IOGAWV congratulates Speaker Roger Hanshaw for his intellectual crafting of the bill and his tenacity in getting it passed with bipartisan support from both Chambers.

• House Bill 4019: The Downstream Natural Gas Manufacturing Investment Tax Act Of 2020 Committee Substitute for HB4019 creates the Downstream Natural Gas Manufacturing Investment Tax Credit Act of 2020. The act sets forth investment credits determined by the qualified investment property and the number of new jobs created.

The allowable credit is taken over a

10-year period at the rate of onetenth per year. Unused credit may be carried forward for another 10 years.

Property that qualifies for another tax credit in chapter 11 of the West Virginia Code is not eligible for credit under this bill. Similarly, qualified investment property under this bill is not eligible for another credit under chapter 11 of the Code. This legislation overwhelmingly passed the House on February 25, the Senate on March 5, was sent to Governor Justice on March 19 and was signed into law on March 25.

• House Bill 4090: The Marginal Well / Plugging Legislation: House Bill 4090 reduces the severance tax on marginal oil and natural gas wells, excluding wells utilizing horizontal drilling techniques targeting shale formations, to 2.5% from 5% and provides the 2.5% severance tax paid on such wells will be dedicated to and deposited in the newly created “Oil and Gas Abandoned Well Plugging Fund” and be used to plug abandoned oil and gas wells without a responsible operator.

The vertical oil and gas wells which are affected by the severance tax reduction produce on average more than 5 Mcf natural gas or one-half barrel of oil per day and on average less than 60 Mcf of natural gas or 10 barrels of oil per day. Vertical natural gas wells producing on average less than 5 Mcf per day and oil wells producing on average less than one-half barrel per day remain exempt from state severance tax.

The new plugging fund is capped at $6 million. Should the plugging fund exceed the $6 million cap, Burd’s Nest Continued on page 16

5

Mark D. Clark Spilman Thomas & Battle, PLLC

SB 554 Oil and Gas Lease Release Legislation Charlie Burd’s article this month brings you up to speed on the significant bills that passed the Legislature and were approved by the Governor.

This article provides an overview of one bill that may adversely affect your land department. The West Virginia Legislature in its infinite wisdom voted to create some additional protections for oil and gas mineral owners and likely contribute to confusion regarding the validity of oil and gas leases. It is worth noting that the Legislature imposed this law only on oil and gas leases and not coal or other natural resource leases.

SB 554 passed the Legislature on March 2, 2020, was approved by the Governor on March 25, 2020 and will become law on May 31, 2020 (90 days after passage). The bill creates a new section of the West Virginia Code designated § 36-4-9b and titled “Release of terminated, expired or canceled oil or natural gas leases.”

The bill imposes a requirement on oil and natural gas lessees to deliver to the lessor, without cost to the lessor, “a properly executed and notarized release of such lease in recordable form” within 60 days after the termination, expiration, or cancellation of an oil or natural gas lease, unless the lease provides for a different time period for release. Of course, the bill does not address the challenges of determining a precise date for the termination, expiration or cancellation of the lease.

Then, if the lessee fails to provide a release on a timely basis, the lessor may serve notice of lessee’s failure to provide such release. The notice must be made in good faith and contain a statement that: (i) the lease

is terminated, expired, or canceled according to its terms, including the date of such termination, (ii) the lessee has a duty to provide a release, and (iii) if the release, or a written dispute to the notice of termination, is not received by the lessor from the lessee within 60 days from receipt of the notice, the lessor shall have the right to file an affidavit of termination, expiration, or cancellation. The statement must also include (1) the name and address of the lessor, (2) a brief description of the land covered by the lease including, but not limited to, the state, county, tax district, tax map and parcel, watershed, historical farm name, or other identifying information, (3) the name or API number of the well, if known to the lessor, (4) if located in a unit, the name of the unit, if known to the lessor, (5) the recording information for the lease in the public records of the county or counties, along with the execution date of the lease, (6) the identity of the original lessor and lessee under the lease, and (7) a service sheet showing the names and addresses of all persons upon whom the notice has been served. The notice must be based upon a reasonable review of the public records and be sent to the lessee(s), other lessors and others who may have an interest in the lease or mineral estate.

The lessor must deliver the notice by personal delivery or by certified mail, or, if appropriate, by publication.

After receipt of the notice from lessor, the lessee has 60 days to deliver a written dispute of the contents of the notice to the lessor detailing the good-faith basis for such dispute.

If the lessee fails to timely deliver a written dispute or opposition to

the notice from lessor, a lessor may record an affidavit of termination, expiration, or cancellation of an oil or natural gas lease in the office of the county clerk in the county or counties where the lease is located.

The affidavit of termination shall contain basically the same information contained in the original notice by lessor, plus a statement that the lessor complied with the duty to serve proper notice to the lessee along with a copy of the notice served to lessee(s), other lessors and others. The bill also provides that filing of an affidavit does not constitute a modification of a lease, nor does it limit, waive, or prejudice any claim or defense of any party to the lease in law or in equity.

The effect of recording an affidavit under the new law simply confuses or clouds the status of the lease, but does not adversely affect the validity and enforceability of the lease at issue. Fortunately, the bill was amended during the legislative process because the original bill contained language stating that the affidavit created a rebuttable presumption that the lease was terminated or canceled. The removal of that language was very important to oil and gas lessees and will reduce the number of challenges operators will face over the validity of leases.

Lessees may want to take one or more proactive steps to avoid having affidavits recorded challenging the validity of leases. First and most obvious, timely respond in writing to any notices received from a lessor asserting a lease is terminated.

Second, consider sending all lessors correspondence designating the title SB554 Continued on page 6

6

Association News

IOGAWV Supports DEP Youth Program IOGAWV has continued its work to both promote environmental stewardship and youth education by its participation with the WV Dept. of Environmental Protection (DEP) Youth Environmental Program (Program).

The 57-year-old program is open to children and students from younger than five to high school seniors.

According to Program Manager Annette Hoskins, there is no charge for groups to join the program which includes all high schools in West Virginia, plus 4-H Clubs, school clubs, churches, Boy and Girl Scout troops and home-schooled students. In the 2019-2020 school year, the program had 1,069 participating clubs serving 140,524 members. Hoskins works with six coordinators across the state.

Participants engage in environmental activities throughout the year. IOGAWV’s contribution helps sponsor awards for recycling projects. Other activities range from art projects to litter control, beautification, tree planting, trail cleaning and maintenance, forest fire prevention, environmental education, wildlife management, backyard composting, watershed protection and state parks projects.

Once a year, students submit an annual report of their work for the opportunity to win cash awards.

Annual reports can be submitted by email, online or through mailed scrapbooks.

“All the donations and contributions we receive, such as the $500 from IOGAWV, goes right back out in program awards,” Hoskins

explained. For 2020, she said 62 awards will be given, totaling $15,000. In addition, one $10,000 scholarship is given each year ($2,500/year for four years).

“This program is saving the state thousands of dollars annually if we had to pay for this work to be done,” Hoskins added.

In 2018-2019, here are the totals from projects involving recycling: • 23,564 Volunteer Hours • Aluminum 18,805 lbs.

• Steel 158,506 lbs.

• Glass 4,956.5 lbs.

• Paper 83,534.5 lbs.

• Plastic 17,141.3 lbs.

• Cardboard 9,684 lbs.

• Copper 597 lbs.

• Other Items 31,389 lbs.

• Pop Tabs 85,455 pcs.

SB554

Annette Hoskins, manager of the WV DEP Youth Environmental Program, holds IOGAWV’s $500 contribution to provide an award for the recycling activities.

• •

Plastic shopping bags 262,060 pcs.

Electronics 10,972 pcs.

Continued from page 5

and address to which any notices related to the lease must be delivered. This should help avoid having lessor notices getting lost inside the company. Last, consider periodic correspondence to lessors affirmatively stating that the lease(s) is and remains in full force and effect based upon production, payment of delay rentals, primary term not expired, other any other appropriate reason.

These proactive responses to SB 554 may help avoid future headaches when lessors start sending notices and recording affidavits.

If you have questions or comments regarding this article, please

contact Mark Clark at MClark@ Spilmanlaw.com.

7

Member News

ShalePro Energy Services Selected to Gator100 ShalePro Energy Services was named to the University of Florida’s 2020 Gator100 during a ceremony on Feb. 28 at the Exactech Arena at the Stephen C. O’Connell Center.

The Gator100 recognizes the 100 fastest-growing businesses owned or led by UF alumni. Ernst & Young calculated each company’s compound annual growth rate (CAGR) over the past three years to generate the ranking.

ShalePro Energy Services was ranked No. 7 with a CAGR of 112.1%.

ShalePro is headquartered in Houston, PA and offers a full-service suite of best-in-class oil and natural gas field services, spanning the Appalachian Basin – Marcellus/ Utica shale play, as well as basins across the U.S. They have more than 25 years of production and midstream industry experience and

currently provide full well hook-ups, operate and maintain more than 2,000 wells, hundreds of compressors and associated facilities, hundreds of miles of gathering system pipelines, and are available nationwide.

“It’s always an honor to be included on a list like this,” said ShalePro CEO and UF Alumni Bill Johnson.

“As a Gator, I’m particularly happy to win this recognition within the Gator nation and was quite surprised to be in the top 10. A big thank you to our entire team who made this possible.”

“The Gator100 honors UF alumni from across the university who are founding and growing amazing companies around the country,” said Matt Hodge, Associate Vice President for Development & Alumni Relations at University of Florida Advancement. “It’s an incredible

Bill and Carla Johnson accept the Gator 100 award on behalf of ShalePro Energy Services. Bill Johnson is CEO of the company. affirmation of the innovative and entrepreneurial spirit of the Gator Nation.”

To qualify for the Gator100, companies must have been in business for five years or more as of Oct. 15, 2019, and have had verifiable annual revenues of $250,000 or more every year since 2016.

Additionally, a UF alumnus or alumna must have met one of the following three leadership criteria: 1. Owned 50 percent or more of the company from Jan. 1, 2016, through Oct. 15, 2019; or 2. Served as company’s chief executive from Jan. 1, 2016, through Oct. 15, 2019; or 3. Founded the company and been active as a member of the most senior management team from Jan. 1, 2016, through Oct. 15, 2019.

8

Hugh Byers Direct Energy

Nymex Natural Gas Futures Contract 12-Month Forward Strip Average Prices Through 3/10/2020

$3.80 $3.60 $3.40 $3.20 $3.00 $2.80 $2.60 $2.40 $2.20 $2.00

NG 12M

NG 24M

NG 36M

Bloomberg Finance L.P.; CME; For Informational Purposes Only

Premium Service for Your Premium Product.

Whether buying or transporting crude, Ergon Oil Purchasing’s integrated network of assets offers diversity to the market. Through Ergon’s refineries, network of terminals, barge and trucking fleets, we understand the needs of the crude oil industry.

1.800.278.3364 eopsales@ergon.com

9

Industry Events

Mark Your Calendar for These Coming Dates April 20-21, 2020 Marcellus and Manufacturing VIRTUAL Conference Info: www.wvma.com

July 14-16, 2020 Tom Dunn Academy WV Wesleyan College Buckhannon, WV Info: www.iogawv.com

May 17-19, 2020 IOGCC Annual Business Meeting Skirvin Hilton Oklahoma City, OK Info: http://iogcc.ok.gov/events

August 2-4, 2020 IOGAWV Summer Meeting The Greenbrier White Sulphur Springs, WV Info: www.iogawv.com

June 1, 2020 Ted Cranmer Memorial Golf Outing and Steak Fry Wanango Country Club Reno, PA Info: Click here

August 12-13, 2020 NAPE Global Business Conference G.R. Brown Convention Center Houston, TX Info: www.napeexpo.com

June 8-9, 2020 IOGAWV Science Teacher Workshop Embassy Suites by Hilton Charleston, WV Info: www.iogawv.com

August 20, 2020 Divot Diggers Golf Outing and Steak Fry Tam O’Shanter Golf Club Hermitage, PA Info: Click here

June 8-9, 2020 KOGA Annual Conference Embassy Suites -Lexington Green Lexington, KY Info: www.kyoilgas.org

September 15-16, 2020 10th Annual Shale Water Management Congress Marcellus & Utica Returns Marriott City Center Hotel Pittsburgh, PA Info: www.shale-water-marcellus-utica.com

June 29-July 1, 2020 IPAA 2020 Mid-Year Meeting Newport Beach, CA Info: www.ipaa.org

:=?-: Dominion Energy

:i' Craig C. Colombo

LDC Gas Supply Strategic Advisor

Dominion Energy Services, Inc. 120 Tredegar Street, Richmond. VA 23219 0: 804-787-6167 M: 804-921-2788 Tieline: 8-738-6167 F: 804-787-6483 craig.c.colombo@dominionenergy.com

®

September 16-18, 2020 2020 SPE Regional Meeting Nemacolin Woodlands Farmington, PA Info: www.speeasternregional.org/ September 18-19, 2020 IOGAWV Sports Weekend Bridgeport/WVU Info: www.iogawv.com September 22 & 23, 2020 Fall Conference and Golf & Clay Shoot Seven Springs Mountain Resort Champion, PA Info: Click here September 24, 2020 SOOGA Annual Trade Show Broughton’s Comm. Bldg.

Marietta, OH Info: www.sooga.org October 5-7, 2020 SPE Annual Technical Conference and Exhibition Colorado Convention Center Denver, CO Info: www.spe.org November 8-10, 2020 IOGCC 2020 Annual Meeting Houston, TX Info: http://iogcc.ok.gov/events May 15-18, 2021 IOGCC Annual Business Meeting Skirvin Hilton Oklahoma City, OK Info: http://iogcc.ok.gov/events

10

Chris Weikle Communications & Education Committee Chair

Sponsors Needed for 2020 June Science Teacher Workshop The Independent Oil and Gas Association of West Virginia (IOGAWV) is preparing to host its third annual Science Teacher Education Workshop in June 2020.

Earlier workshops were attended by more than 40 science teachers each year from across the state. The goal of the workshop is to help foster STEM (science, technology, engineering and math) and energy education by connecting science teachers to the energy industry.

Maureen Miller, a teacher at Hurricane Middle School, has surpassed that goal over the last two years with her eighth grade science classes.

“The IOGAWV Teacher Seminar was one of my top 10 continuing education experiences ever,” Miller said. Miller said her experience

with the IOGAWV Science Teacher Education Workshop has helped her impression of the industry become more positive. “Oil and natural gas help with efficiency, cleanliness and jobs,” she said. “Fossil fuels will be part of our energy ongoing, so how can we do it better?”

The workshop consists of seven learning stations, related curriculum and hands-on STEM activities regarding the natural gas and crude oil industry. Each teacher receives an IOGAWV material kit with supplies to conduct experiments learned during the seminar with their students in the upcoming school year.

Miller uses those materials to create a project-based learning (PBL) opportunity for her classes that involves constructing a mock pipeline

R.L. Laughlin & Co., Inc

“Providing Gas Measurement Services since 1970”

Site Automation Meter Sales Gas Analysis

 Electronic Chart Integration  Meter Installations  Calibrations & Repairs

NOW SERVING YOU IN 3 LOCATIONS: 125 State Rt. 43 Hartville, OH 44632 330-587-1230

5012 Washington St., W. Charleston, WV 25313 304-776-7740

1205 Buckhannon Pike Nutter Fort, WV 26301 304-969-0033

Homestead Communications

getting YOUR message to the right people through award-winning public relations homestead communications po box 13604 | charleston, wv 25360 304.984.0308 | homesteadcommunications@frontier.com

through Putnam County, focused in and around Hurricane. “I did a NASA Endeavor program in 2018 and this class now is part of the lesson plan I developed for NASA,” Miller explained.

“The first two workshops turned out to be wonderful events, and Maureen proves that teachers walked away with valuable tools and information for their students,” IOGAWV Communications and Education Chair Chris Weikle said.

“I’d encourage our members to get involved with this program, either as workshop panelists or sponsors.”

Dates for the 2020 IOGAWV Science Teacher Workshop are June 8-9, 2020. If you’re interested in sponsoring this outstanding program, use the form on page 11.

11

Science Teacher Workshop Sponsor Form

2020 Science Teacher Workshop Sponsor Form Embassy Suites, Charleston, WV June 8-9, 2020 ____________________________________________________________ Company Name ____________________________________________________________ Contact Name _____________________________________________________________ Address _____________________________________________________________ City State Zip ____________________________________________________________ Telephone Email

Sponsorship opportunities:

______ Diamond Event Sponsor $5,000 and up (call for availability) • Banner hung at sponsored event • Specific signage at sponsored event • Listing on Diamond Sponsor board • Logo and name listed in event PowerPoint presentation • Logo listed in event program, web site page and newsletter ______ Platinum Sponsor $3,000 • Listing on Platinum Sponsor board • Logo and name listed in event PowerPoint presentation • Logo listed in event program, web site page and newsletter ______ Gold Sponsor $2,000 • Listing on Gold Sponsor board • Logo and name listed in event PowerPoint presentation • Logo listed in event program, web site page and newsletter ______ Silver Sponsor $1,000 • Listing on Silver Sponsor board • Logo and name listed in event PowerPoint presentation • Logo listed in event program, web site page and newsletter ______ Bronze Sponsor $500 • Listing on Bronze Sponsor board • Logo and name listed in event PowerPoint presentation • Logo listed in event program, web site page and newsletter Please return this form to IOGAWV, address below, by July 13, 2020. Be sure to email a high resolution (300-dpi minimum) version of your company’s color logo and a link to your web site to lmillersmith@iogawv.com.

Thank you for your continued support! www.iogawv.com

300 Summers Street | Suite 820 | Charleston, WV | 25301 P: (304) 344-9867 F: (304) 344-5836

12

Charlie Burd IOGAEV Executive Direector

Industry Customized License Plate Coming In March 2019, IOGAWV initiated discussions with the West Virginia Department of Motor Vehicles for the purpose of obtaining a customized WV State license plate dedicated to the oil and natural gas industry.

In December 2019, after months of communications and exchange of information, IOGAWV was given approval to proceed on and into the process to obtain the plate.

In early January 2020, representatives of IOGA and WVONGA, working in unison, met with the WVDMV who provided the exacting details of how securing such a customized license plate could be achieved. Within days, the WV DMV provided us with the official instructions and application (found on pages 22 and 23) which also initiated the deadline of July 24, 2020, to have the 250 applications submitted to the WV DMV. That process is very simple: 1. Solicit IOGAWV members and others to complete the official application;

2. Submit the application to IOGAW with a check to cover the first-year cost of the customized plate; 3. IOGAWV accumulates the MINIMUM of 250 license place application and checks; 4. Once 250 applications are completed and receives, IOGAWV submits the all applications and money to the WV DMV; 5. The WV DMV then assigns its graphic artist to our project, versions of the plate are drafted with a final plate design chosen and the plate goes into production.

This plate will identify you as part of the West Virginia oil and natural gas industry just as other plates identify various industries and special interest groups. Currently we have collected just under 100 applications. There are approximately 50 more applications identified as to soon being submitted. If we fail to meet the July 24 deadline with 250 applications and check, we will be restricted from reapplying for a cus-

tomized plate for two years.

We simply cannot miss this opportunity.

This special license plate is will identify you as a supporter of oil and gas Charlie Burd and will help Executive Director us promote our industry so please go to pages 20 and 21 of this issue or visit www. iogawv.com for our official “WV OIL AND NATURAL GAS LICENSE PLATE” application and instructions.

Follow the instructions on the application (Fill out name exactly as it appears on your vehicle registration card) and, once completed, mail the application with your check to:

Charlie Burd Independent Oil and Gas Association of WV 300 Summers St. Suite 820 Charleston WV, 25301

Visit the Online Buyers Guide: iogawv.com

13

Greg Kozera Learned Leadership LLC

Be Careful What You Wish For! This week, I had a phone conversation with a friend of mine, Harry, from northern New Jersey who works in New York City. Things are rough up there right now with the Corona virus. Harry said they are now worse. Starting March 1st New York state banned single use plastic bags. Some cities including New York City have previously banned single use plastic bags. Many cities and counties in the area also charge 5 cents per paper bag used.

The State is encouraging people to BYOB (Bring your own bag), typically some kind of reusable bag.

Harry told me they have now discovered the reusable bags they want people to use can carry the Corona virus. Reusable bags are now prohibited in stores. I wonder how long it took to figure that out? I talked to my daughter in Maryland today. She told me the grocery chain she uses has also banned reusable bags in their stores.

I am concerned for the people of New York, especially for my good friends who live there. New York is also one of the states that banned hydraulic fracturing. They may not understand that practically every oil and gas well requires fracturing to produce oil and natural gas. We understand that oil and natural gas are for much more than transportation or fuels to cook with or produce electricity. The general public doesn’t. Oil, natural gas and natural gas liquids are the feedstocks for petrochemicals. Petrochemicals are used to make plastics. It is time to be very clear with people that petrochemicals and plastics are products of hydraulic fracturing.

Petrochemicals are needed to

produce most of our household and consumer products. Cell phones, electric cars, solar panels, pharmaceuticals, athletic shoes, medical equipment and thousands of other products are products of petrochemicals. The public must know and understand petrochemicals are our first line of defense against the Corona virus. Personal protective equipment like masks, face shields, latex gloves, gowns doctors and nurses wear, hazmat suits and even the plastic drums contaminated clothing is put in for disposal are all products of petrochemicals.

New York is desperate for ventilators, masks, gloves and other personal protective equipment (PPE).

At one hospital nurses were wearing black trash bags (also from petrochemicals) because they couldn’t get protective clothing. All these products are made possible by petrochemicals from hydraulic fracturing, a process New York chose to ban.

The Governor needs that equipment to protect his health care workers.

It is our industry that makes them possible. Companies in our Region are very busy making plastic parts for new ventilators.

In New York the anti-frack, anti-plastic, anti-fossil fuel people got the bans they wished for, never thinking what the results could be.

Reusable shopping bags created an unforeseen public health problem.

Fortunately, the states in our Region chose not to follow New York on banning plastic bags and fracking.

West Virginia, Ohio, Pennsylvania, the rest of the USA and countries like Russia and the OPEC nations are still drilling gas and oil wells and fracturing them providing essential

feedstock for ventilators, masks, gloves, gowns and other PPE. Without feedstock from hydraulic fracturing and the plastics it makes possible, the medical equipment and PPE the New York Governor and Mayor of New York City so desperately need would never come.

Had the antis gotten what they really wanted, a national fracking ban and ban on plastics we would be defenseless against this virus and fully dependent on other countries. How many more lives would be lost?

It is important for everyone to know where things come from.

There are presidential candidates who still want to ban fracturing, a 70-year-old process. It is interesting that no one cared about fracturing until we ended our energy crisis and became a competitor instead of a customer for OPEC and Russia.

Our industry understands hydraulic fracturing and how safe it is. I live between three wells that we watched get fractured. Our air and water are fine. We raised three healthy kids.

The deer eat grass at the well sites if they aren’t eating our flowers. Our three golden retrievers played at the wells, ate and rolled in the grass.

They lived to be 16, 14 and 13 years old. This is very old for a golden retriever.

The USA doesn’t have a plastics problem. It has a problem with people not disposing of trash properly.

We can recycle plastic. 90% of the plastic in the ocean comes from 10 rivers in Asia. Asian rivers take the place of our trash collections.

Shale Crescent USA is working to bring several companies to our Region to use their technologies Wishes Continued on page 16

14

Sam McKown Membership Committee Chair

IOGAWV Board Approved Three New Members in March Mountain Reserves POP Mackie Christenson PO Box 338 Two Energy Lane Lumberport, WV 26386 Phone: (304) 584-4555 Cell: (703) 375-0184 Fax: (304) 584-4776 wvamackie@aol.com

Please welcome these new members approved in March: Black Rock Resources, LLC PRO Jeannie Morris 238 Molly Drive Canonsburg, PA 15317 1115 Shamrock Road Charleston, WV 25314 Phone: (724) 941-4947 Cell: (304) 380-2651 jmorris@blackrockres.com www.blackrockres.com

Stonebridge Oilfield ALL Services Eddy Biehl PO Box 60 Marietta, OH 45750 1635 Warren Chapel Road Fleming, OH 45729 Phone: (740) 373-6134 Fax: (740) 373-2404 eddy.biehl@ stonebridgeoperating.info www.stonebridgeoperating.com

Ergon

Monthly Appalachian Basin Crude Oil Prices NYMEX AVG OIL PRICE 2018 AVG Price - $64.79/bbl 2019 AVG Price - $57.02/bbl 2020 AVG Price - $54.36/bbl

$80.00 $70.00 $63.79

$60.00

$60.89 $54.86

$57.50

$56.68

$54.84

$50.00

59.84

57.08

$54.13

$57.98 $50.75

$40.00 Series1

$30.00 $20.00 $10.00 $-

Mar-19

Series1

Mar-19 $58.09

Apr-19 Apr-19 $63.79

May-19 May-19 $60.89

Jun-19 Jun-19 $54.86

Jul-19 Jul-19 $57.50

Aug-19 Aug-19 $54.84

Sep-19 Sep-19 $56.68

Oct-19 Oct-19 $54.13

Nov-19 Nov-19 57.08

Dec-19 Dec-19 59.84

Jan-20 Jan-20 $57.98

Feb-20 Feb-20 $50.75

15

Moving to a Virtual Format

Moving to a Virtual Format

16

Thomas Downs WeatherBELL Analytics

Summer Forecast Update Provided

For more information about WeatherBELL’s services and to get the hot-off-the-press forecast updates, please visit our website www.weatherbell.com or contact us at sales@weatherbell.com.

While we do expect April to turn colder at times, when the pattern finally breaks, we expect it to get warm fast.

The Southeast has seen persistently warm conditions over the last several months, and we expect that to continue into the spring and early summer months. The wet weather expected there should hold down daytime high temperatures, but the humidity will increase nighttime temperatures.

In the summer, muggy conditions are expected to continue, as rain should again be plentiful. The exception may be the southern Plains, as dry weather may develop there at some point.

Wishes Continued from page 13 and turn plastic waste into products and feed stock. We are working to bring a foreign company to our Region who plans to manufacture biodegradable plastic bags and other products. They want to come here because of our economical, abundant energy and feedstock. In many countries, plastic bags are essential.

People bring their bulk foods and meat home in plastic bags from the market. Reusable bags are unsanitary and paper doesn’t work well. Making bags biodegradable would solve a huge problem. New technology makes more sense than bans.

Most of our pharmaceuticals, healthcare PPE like masks, gloves and gowns come from China. We need to start bringing the manufacture of these critical items back to the USA and to the Shale Crescent

USA. We can certainly use the good jobs high-tech manufacturing will provide. Those that understand the importance of petrochemicals, plastic and manufacturing these critical healthcare products in the USA need to tell our political leaders and the public. Politicians need to stop listening to the “antis” and begin protecting our people. One of our tasks is to educate the public. I have been on nationally syndicated radio shows and on stations from California to New York City in the last three months. When I explain petrochemicals, and fracturing in terms of the products they need and use people understand.

Once the virus threat ends there will be a focus on bringing the manufacture of critical items back to the USA. This will require energy and

feedstocks. The World has changed.

Many US manufacturers may not realize that with automation and our economical energy and feedstocks the USA not China is now the most economical place for manufacturing. This is a message that needs to reach US manufacturers. Natural gas and our abundant NGLs are great products. It is time for the industry to do some marketing. This is a good time to come together as trade associations and a Region increase demand for our products close to the wellhead.

What have you wished for? Time with spouse and family? Time to clean the garage or office? Time to read? Maybe time to sleep in? If you are socially separating and are working less you may have the time you wished for. Use it wisely.

17

CARES Act Information

Details on CARES Act Shared; Act Now Editor’s Note: Information for this article has come from Gordon C. Lane, Sr., J.D., LL.M, CPA, is a partner with Lane & Young in Charleston, West Virginia and Barry Russell, president and CEO of the Independent Petroleum Association of America.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, recently signed into law, provides an unprecedented $2.2 Trillion in relief funds to the health care sector, individuals, businesses and others.

The Act opens a number of possible options to generate capital for oil and natural gas producers during this time of economic crisis. This is a massive benefit provided by the Act which applies to most businesses, including sole proprietorships and non-profit entities, intended to be disbursed over the next several months.

The funds provided are essentially a grant (no repayment) in the form of a forgivable loan. To be eligible for a forgivable loan, the employer must have less than 500 employees and continue to pay employees for at least eight (8) weeks after the loan request is originated (“Eligible Borrower”). Note than an exception to the 500 employee limit is provided for certain accommodation and food service businesses.

Under this new program, a loan request must be submitted to a lender approved by the SBA, or a lender approved just for these forgivable loans. The maximum amount of the forgivable loan (capped at $10,000,000) is equal to the average monthly payroll costs in the previous 12-month period, times 2.5.

A portion or all of the forgivable loan is forgiven and discharged in the total amount of payroll costs, rent, utilities and certain mortgages paid or incurred for the 8-week peri-

od beginning on the loan origination date. For example, if the loan origination date would be April 20, 2020, then the total amount of all payroll costs, rents, utilities, etc. paid or incurred from April 20, 2020 through June 15, 2020 would be forgiven, and reduce the amount owed on the forgivable loan.

The discharge of debt on a forgivable loan is not taxable for federal income tax purposes. To obtain forgiveness, an application must contain full documentation and proof of wages paid, rents, etc. pursuant to guidelines in regulations to be issued.

The original balance, less the portion forgiven, would be paid over ten (10) years at an interest rate of less than 4%.

An Eligible Borrower must certify that the present uncertainty of economic conditions makes this loan necessary to support ongoing operations. Note that the Act does not require that the Borrower demonstrate that COVID-19 caused a loss, and Act Section 1102(a)(2)(M) expressly presumes that every Eligible Borrower has been “adversely affected by COVID-19.”

In addition to forgivable loans, other benefits under the Act to these Eligible Borrowers include refundable tax credits based upon designated decreases in gross receipts in 2020, economic disaster loans which are discretionary, along with a $10,000 grant if funds are needed immediately, and other benefits.

Here are some additional details on how small businesses can apply for loans under the Paycheck Protection Program (PPP).

Currently, the Small Business Administration employee and revenue limits for our industry are: • 1,250 employees for oil production

•

1,250 employees for natural gas production • 1,000 employees for drilling operations • $41.5 million gross revenue for support activities for oil and gas extraction Sole proprietors, independent contractors, gig economy workers, and self-employed individuals are all eligible for the Paycheck Protection Program.

You can apply for the Paycheck Protection Program (PPP) at any lending institution that is approved to participate in the program through the existing U.S. Small Business Administration (SBA) 7(a) lending program and additional lenders approved by the Department of Treasury. You can call your bank or find SBA-approved lenders in your area through SBA’s online Lender Match tool.

The amount any small business is eligible to borrow is 250 percent of their average monthly payroll expenses, up to a total of $10 million.

This amount is intended to cover 8 weeks of payroll expenses and any additional amounts for making payments towards debt obligations.

This 8 week period may be applied to any time frame between February 15, 2020 and June 30, 2020. Seasonal business expenses will be measured using a 12-week period beginning February 15, 2019, or March 1, 2019, whichever the seasonal employer chooses.

Applicants are eligible to apply for the PPP loan until June 30th, 2020.

Eligible Borrowers should get loan requests prepared and submitted as soon as possible. Lenders will be overwhelmed and a large backlog will surely result.

18

Industry News

Civil rights leaders oppose swift move off natural gas

Top American civil-rights activists are opposing an abrupt move away from natural gas, putting them at odds with environmentalists and progressive Democrats who want to ban fracking. In recent interviews, Revs. Al Sharpton and Jesse Jackson and National Urban League President Marc Morial said energy costs are hitting people of color unfairly hard. These concerns, expressed before the coronavirus pandemic, are poised to expand as paychecks

WVDEP

shrink across America. “I think people are concerned about the affordability and they are concerned about being left in the cold,” Sharpton told Axios in early March. “I think natural gas is a temporary — I don’t think we ought to make it the end-all, be-all — solution, but in the interim, people in communities of color should not pay the brunt of suffering through cold winters.”

“I support the call [to ban fracking] with a proper transition,” Jackson

told Axios in February. “In the meantime, those who are down and out have to have it in the meantime.”

Fracking has unlocked vast reserves of natural gas across the country over the past decade, providing a cheap and relatively cleaner fuel for electricity, heating and manufacturing. Lower-income people spend a disproportionate amount of their paychecks on heating, electricity and transportation. This is especially so in black and Hispanic communities, where poverty rates are higher.

26, 2020. This policy makes it clear that EPA expects regulated facilities to comply with regulatory requirements, where reasonably practicable, and to return to compliance as quickly as possible. The policy also requires facilities to document decisions made to prevent or mitigate noncompliance and demonstrate how the noncompliance was caused by the COVID-19 pandemic.

The WVDEP has an obligation to protect the environment by enforcing applicable rules, regulations, and permits, as well as ensuring adherence to operating, monitoring, and record-keeping requirements.

The WVDEP also recognizes and acknowledges the potential compliance challenges the regulated community may face due to COVID-19 restrictions. These potential challenges include newly implemented remote-work requirements and reduced onsite staffing due to social distancing guidelines, supply disruptions, reduced or unavailability of consulting and/or testing firms, and other pandemic-related disruptions.

The WVDEP is committed to working cooperatively with the regulated community to ensure environmental compliance and public safety standards are properly addressed during this pandemic.

It is important to note that the WVDEP expects facilities to continue to be operated in a manner that fully protects human health and the environment. This includes, but is not limited to, continued operation and monitoring pollution control devices, record-keeping, maintenance, testing, and reporting requirements.

If compliance is not reasonably practicable due to issues related to COVID-19 pandemic, facilities with environmental compliance obligations should contact the WVDEP and follow the requirements outlined in the EPA memorandum listed here: https://www.epa.gov/enforcement/enforcement-policy-guidance-publications.

For more information about COVID-19 prevention and more, call the State’s toll-free hotline at 1800-887-4304 or visit www.Coronavirus.wv.gov.

Continued from page 1

tact the division directors with details when seeking extensions.

Additional information from the USEPA may be found at: https:// www.epa.gov/enforcement/enforcement-policy-guidance-publications Editor’s Note: This is the full text of the WVDEP news release.

In light of the COVID-19 pandemic, Gov. Jim Justice has asked West Virginia Department of Environmental Protection (WVDEP) Cabinet Secretary Austin Caperton and his staff to remain in constant communication with the U.S. Environmental Protection Agency (EPA) regarding potential compliance and enforcement issues that may arise.

As of today, all rules, regulations and permitting requirements under the jurisdiction of the WVDEP remain in full effect.

The WVDEP worked with the EPA in the development of a new temporary enforcement policy – “COVID-19 Implications for EPA’s Enforcement and Compliance Assurance Program” – outlined in a memorandum released March

19

Industry News

Judge Upholds Trump’s Frack Rule Repeal The fossil fuel industry scored a win in March when a federal judge upheld the Trump administration's rescission of an Obama-era rule governing oil and gas extraction on public lands. U.S. District Court for the District of Northern California Judge Haywood Gilliam said states and environmental groups had not shown that the repeal of the 2015 hydraulic fracturing rule had or would result in harm, since the rule had not yet gone into effect. "The

Court agrees with Federal Defendants that allegations of past injuries are not sufficient to show actual or imminent injury," Gilliam wrote.

"Although Citizen Group Plaintiffs argue that the removal of these protections increases the risk of harm to members' drinking supply, this only points to a hypothetical, future injury. The Court's task is not to decide whether the changes the Federal Defendants seek to make will result in better or worse environmental

policy," he said. "Those policy questions are the province of Congress and the administrative agencies. In other words, '[e]lections have policy consequences.'" The Independent Petroleum Association of America praised the court's decision. "Today, we are pleased to come full circle as the Trump rescission rule is upheld and independent producers will not be forced to comply with costly and duplicative rules while operating on federal lands," IPAA President and CEO Barry Russell said.

the proceeds of such expedited fees, and the daily pro rata refund of the expedited fees if the permit is not approved within specific parameters are directed to and managed by the WV Department of Environmental Protection’s Office of Oil and Gas. IOGAWV did not oppose this bill that overwhelmingly passed the House of Delegates and Senate. Governor Justice signed this legislation into law on February 17, 2020.

• House Bill 4217: Containing Revisions To The Deep Well Spacing Rule Committee Substitute for HB4217 is legislation that contains the entire bundle of rules associated with the WV Department of Environmental Protection. Inside that rules bundle is House Bill-4311 that will put into place legislative rules relating to the WVDEP’s Oil and Gas Conservation Commission’s (OGCC) oversight of deep well spacing. HB-4311 supports and enhances the drilling of horizontal wells and eliminates the current 3,000-foot surface spacing requirement in addition to other down-

hole spacing criteria which is fully endorsed by the OGCC. IOGAWV and others worked closely with the OGCC who fully supported these changes. This legislation passed the House of Delegates on February 14, passed the Senate on March 3 and was sent to Governor Justice on March 12 and was signed into law on March 25.

• House Bill 4421: The Natural Gas Liquids Economic Development Act Of 2020 Committee Substitute for HB4421, known as the Natural Gas Liquids Economic Development Act of 2020, is legislation crafted to encourage the storage and transportation of natural gas liquids for the benefit of natural gas projects in the state. HB-4421 contains certain specific tax credits related to the transportation, storage of natural gas liquids. Simplistically, the amount of credit is the amount of West Virginia ad valorem property tax paid on the value of inventory and equipment during the personal income tax year and corporate net income tax year, as applicable.

Burd’s Nest Continued on page 20

Burd’s Nest Continued from page 4 the severance tax drops to zero.

IOGAWV fully supported this bill that passed the House of Delegates on February 5 by a vote of 99-01, passed the Senate on March 2 by a vote of 33-0-1.

Fulfilling a commitment to us made at our 2020 IOGAWV Winter Meeting, Governor Jim Justice signed this legislation into law on March 23, 2020. We applaud Governor Justice for recognizing the need to help owners of conventional, low-producing wells and assist the West Virginia Department of Environmental Protection’s Office of Oil and Gas in addressing the plugging of orphaned and abandoned oil and gas wells.

• House Bill 4091: The Expedited Permitting Bill A second bill already signed into law by Governor Justice is HB-4091 known at The Expedited Permitting Bill. This bill establishes the fee and process for expedited oil and gas well permitting and expedited oil and gas well permit modifications upon the payment of applicable expedited fees. The designation of

20

Burd’s Nest Continued from page 19 IOGAWV addressed this bill in committee and fully supports its becoming law. This legislation overwhelmingly passed the House on February 25, the Senate on March 5, was sent to Governor Justice on March 19 and was signed into law on March 25.

• House Bill 4615: The WV Critical Infrastructure Protection Act Committee Substitute for House Bill 4615, known as The West Virginia Critical Infrastructure Protection Act, is important legislation that codifies criminal penalties for persons convicted of willfully trespassing or entering property containing a critical infrastructure facility without permission by the owner of the property and establishes misdemeanor and felony penalties based on level of damage. Further defined, a critical infrastructure facility is one completely enclosed by a fence or other physical barrier that is obviously designed to exclude intruders, or if clearly marked with a sign or signs that are posted on the property that are reasonably likely to come to the attention of intruders and indicate that entry is forbidden without site authorization. Critical infrastructure facilities include nearly all oil and natural gas facilities related to compression, transportation, processing, storage, natural gas distribution facilities and crude oil piping. This bill passed the House of Delegates February 13, the Senate on March 7, was sent to Governor Justice on March 19 and was signed into law on March 25.

• House Bill 4661: Incentivized Drilling And Utility Cost Recovery House Bill 4661will permit a natural gas utility to make a proposal to the Public Service Commission for incentivized gas drilling where Burd’s Nest

Continued on page 21

Industry Intelligence. Focused Legal Perspective.

HIGH-YIELDING RESULTS.

Meet our attorneys at babstcalland.com.

Whether it’s a state or federal regulatory matter, local land use or zoning challenge, acquisition of title and rights to land, or jointly developing midstream assets, we help solve complex legal problems in ways that favorably impact your business and bring value to your bottom line.

CHARLESTON, WV I PITTSBURGH, PA I HOUSTON, TX I SEWELL, NJ STATE COLLEGE, PA I WASHINGTON, DC

21

Burd’s Nest Continued from page 20 dependable, lower-priced supplies of natural gas are not readily available. The bill permits a natural gas utility to recover the cost reasonably necessary to convert a customer to an alternate fuel source when gas service to that customer has been abandoned. IOGAWV did not oppose this legislation that unanimously passed both the House on February 10 and the Senate on February 27. The bill was sent to Governor Justice on March 3 and was signed into law on March 25.

• Senate Bill 802: The Direct Serve Bill Committee Substitute for Senate Bill 802 is very important legislation that presents producers an opportunity to provide direct natural gas service to large-volume users when the natural gas used is produced in West Virginia. IOGAWV worked closely with Dominion Energy and the West Virginia Public Service Commission to present legislation that applies to only new users of natural gas with an annual consumption and billing of 100,000 Mcf or greater, requires advance notice to the local public utility and must comply with all natural gas pipeline safety requirements pursuant to Chapter 24B of the Code of West Virginia. Senate Bill 802 unanimously passed both the Senate on March 3 and the House on March 7. The bill was sent to Governor Justice on March 19 and was signed into law on March 25. IOGAWV fully supported this legislation becoming law.

There was one very important piece of legislation that failed to pass both Chambers: • Senate Bill 655: Valuation Of Natural Resources Property Senate Bill 655 was legislation written to clarify the types of operating expenses that must be used for purposes of valuing producing oil

and natural gas wells, to determine the methodology that should be used by the State Tax Commissioner in calculating operating expenses, would have provided for confidentiality of information submitted by natural resource producers to the State Tax Commissioner, provided for reports that must be submitted by the State Tax Commissioner to the Joint Committee on Government and Finance, and provides for alternate appeal process of proposed valuation of natural resources property for ad valorem property tax purposes. This bill overwhelmingly passed the Senate 27-7 on February 19 but was not taken up and died while resting in House Finance for further consideration. IOGAWV fully supported this bill and shares the disappointment with others in its failure to pass.

In addition to those pieces of legislation described here, there were also several bills introduced that did not pass that would have had very negative implications for the industry. These included but not limited to bills that dealt with partitions suits, increased landfill fees, increased well bonding fees, and additional road bonding and increased maintenance fees. In other instances, we were able to open the dialogue on certain topics that will hopefully continue to get attraction in future legislative sessions.

Without question, this was a year of great success for the industry.

But that did not happen by accident. Success was achieved through demonstrated leadership, hard work, educating lawmakers, aligning goals with like-minded industry allies and then trusting in the talents of the team. In the end, this was the game plan that won a championship. In summary, here are some of the individual industry victories: • Legislation that establishes a

vehicle to attract foreign investments for natural gas and NGL usage. WIN • A redefining of what constitutes a marginal well and a corresponding severance tax reduction. WIN • Securing funds set aside to plug orphan and abandoned wells.

WIN • Acquiring the ability for a producer or to directly supply a new industrial end-user with an annual consumption of 100,000 Mcf or greater. WIN • Acquiring the ability to get expedited horizontal well drilling permits. WIN • Securing much needed changes to the deep well spacing rules.

WIN • The creation of tax credits for those that store or transport of NGL’s. WIN • The creation of investment incentives for certain energy related investment and job creation to support the natural gas industry. WIN • Providing for incentivized drilling in underserved areas. WIN • Achieving additional protection to critical infrastructure facilities that include virtually all natural gas and oil operations. WIN In closing, I want to again thank our Association leadership for its guidance and our lobbying team of Phil Reale, Jim Fealy, and Daniel Hall. They started early, worked late and executed the game plan to near perfection. While there is not a shining trophy to hoist, nor victory parade in which to partake, IOGAWV and its various allies can take great satisfaction and pride in not only just holding the rope, but pulling that rope together in the right direction and clearly first across the finish line.

22

License Plate Application Instructions

23

License Plate Application

300 Summers Street, Suite 820 Charleston, WV 25301 Phone (304) 344-9867 Fax (304) 344-5836