IOGAWV accumulates the

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