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GO-WV promotes unity for industry’s future
accelerated the wheels moving toward a merger.” According to Burd, although there were many questions to answer and kinks to work out, no intractable sticking points emerged. By the end of October, the necessary documents were finalized and sent to all voting members of both associations, who had all of November to review them and cast a vote. On Dec. 3, both organizations ratified the votes, and both organizations overwhelmingly supported the merger.
by Del Torkelson
CHARLESTON — During recent years in his position as executive director of the Independent Oil and Gas Association of West Virginia, Charlie Burd says he could not help but notice the regular concurrence between that group and the West Virginia Oil and Natural Gas Association. “In recent years, IOGAWV and WVONGA found themselves moving in lockstep on all major regulatory, environmental and safety issues,” Burd he recounts. “For that reason, it became apparent it was time to consider merging two strong organizations into one much stronger organization.” Which is exactly what the two groups have done, announcing in mid-December their decision to join forces and officially launch the Gas and Oil Association of WV (GO-WV) with the start of the new year. WVONGA President Thomas Westfall, vice president of gas supply and technical services for Mountaineer Gas Co. Westfall in Charleston, recounts a surge of confidence when he first heard suggestions that the two groups become one. “My initial reaction was optimism, in terms of becoming a more unified industry,” he said. Westfall is joined as 2021 GO-WV co-president by Benjamin Sullivan, executive vice president and general counsel at Diversified Gas and Oil Corp. in Charleston. Although he was Sullivan IOGAWV president at the time merger discussions began, Sullivan recounts, previous jobs at other companies had involved him in WVONGA, which helped him realize how compatible the two groups were. “There was a lot of merit in (a merger), and I saw a lot of synergies,” he said.
Complementarity
H
aving a strong trade association can improve the communication and get everybody rowing in the same direction on community activities and in reacting to issues.”
sensible moves that are never made because the hurdles – whether logistical, relational, historical or some combination thereof – prove insurmountable. Burd, Sullivan and Westfall acknowledge the status quo often exerts an inertial pull and note that sensible skepticism about – to cite a homespun aphorism – fixing something that isn’t broken, must not be disregarded. Therefore, they say, an important step entailed thoughtful outreach to each group’s voting members. “Educating the members of both associations has been a lot of work,” Sullivan said. “Change can be hard, and we performed a lot of educational outreach, held numerous meetings and had many discussions. Most people were pretty happy. Others had hard questions and we were ready to answer them.” After all, Westfall notes, since WVONGA’s 1915 founding and IOGAWV’s 1959 debut, both groups have established long and venerable histories of successful advocacy, even if their emphases differed. “Combining two Respecting History very successful, historically Of course, the world long-running and good orabounds with examples of ganizations into something
— Thoams Westfall, WVONGA president
new was not something we took lightly,” he admits. “There were worries about changing some things that had worked very well, but I am happy we have moved in what I believe is the right direction.” Westfall observes that, historically, most of WVONGA’s members have been pipelines, larger producers and gatherers. IOGAWV, meanwhile, historically has represented the state’s numerous conventional producers. “Historically, they have had some differences,” he acknowledges. “But today’s industry has been able to get past most of those and realize all facets of the industry really need to work together.” Some differences began to blur with the onset of horizontal drilling in the Marcellus Shale play, Burd said. “Back in 2008, it was possible to see West Virginia starting to shift from being predominantly a state of conventional wells and small producers to one that was going to rely on horizontal production from very prolific wells,” he describes. “In 2019, fewer than 4,000 wells accounted for more than 94% of West Virginia’s natural gas production. The other 6% came
from approximately 56,000 wells.” For years, Burd said, West Virginia lawmakers inquired why two associations represented the same industry. They also made less than accurate assumptions about each group. As unconventional activity took flight in the state, he notes, contrasts that deemed IOGAWV as the small producers’ representative and WVONGA as the place for large ones proved increasingly obsolete. “We determined we could become much more effective as one organization,” Burd relates. “It should pay tremendous benefits from a public perspective of who we are as an industry and, obviously, with the legislature and state government.” According to Burd, merger conversations began in March or April. “We had concluded a very successful legislative session, and much of that success was based on the fact that both organizations had been singing from the same page of the songbook,” he describes. “Then, WVONGA Executive Director Anne Blankenship took an opportunity to return to private practice with a Charleston law firm, creating a vacancy that may have
Sullivan says he, Westfall and others involved in the merger process reflected extensively on each group’s respective strengths with an eye toward maximizing them in GO-WV. “IOGAWV has had a very strong committee system with excellent member engagement and buy-in,” he said. “WVONGA has had very good public relations outreach and has been very successful at marketing and community engagement.” “We will have more opportunity and resources to be active and have a positive impact on our communities,” Westfall predicts. “Having a strong trade association can improve the communication and get everybody rowing in the same direction on community activities and in reacting to issues.” According to Burd, 2020 offered oil and gas companies a particularly vivid opportunity to demonstrate commitment to their communities — an opportunity they did not waste. “Our industry rose to the occasion and answered the call to help,” he asserts. “Our industry made so many donations to organizations in need while all of us also were facing the pandemic and a pricing and activity downturn. That speaks very boldly about how seriously these companies take community support.” Sullivan notes that GOWV will provide a stronger midstream presence than IOGAWV. “We had midstream company members — some very big ones — but they are not on the board of directors, so this will provide the synergies of having utilities and pipelines on the board,” he predicts. “We are all going to come together with different views, desires, strengths and weaknesses, but 99 times out of 100, they are going to be the same.
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FUTURE
(Continued from Page 2) “That constitutes a big difference between IOGAWV and WVONGA and, candidly, we spent a lot of time making sure both the pipelines and conventional producers could be comfortable,” Sullivan added. “It took a lot of engagement before folks were comfortable with the end product.” Oil and gas opponents’ tactic of attempting to choke off oil and gas activity by trying to stymie transportation projects such as the Keystone XL, Dakota Access and Mountain Valley pipelines also may have encouraged industrywide cooperation, Burd allows. “The different components of the exploration and production, midstream, transmission and storage all blend in with the final objective, which is downstream use,” he said. “Those different segments all have come to realize that we need each other, and we count on each other for our mutual success.” “When natural gas was $11-$14 an Mcf, there was more room to look for differences or find cliques that suited everyone’s interests,” Sullivan said. “Depressed pricing, industry consolidation and an effort by folks
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W
e are all going to come together with different views, desires, strengths and weaknesses, but 99 times out of 100, they are going to be the same.”
to stop all hydraulic fracturing demonstrates how much we are all in this together. If producers manage to accomplish their goals but cannot get their product to market, what have they really accomplished? “Lower prices refine and clarify what is really important, which is producing in a sustainable, environmentally safe and responsible manner and getting that product to market.” he says. We cannot afford to fight among ourselves about petty things. Although we will still have our occasional differences, I hope we can work them out internally.” As for other challenges, Burd said a number of intricacies have revealed themselves during the process. “There are a thousand moving pieces,” he said with a laugh. “We have to get our brains and arms around all these moving pieces. Even though the merger is effective with the start of the new year, we probably will not see everything finalized before
— Benjamin Sullivan, GO-WV co-president
well into the first quarter.”
Association Structure Westfall chuckled at the suggestion that inspiration for the GO-WV name came while someone was watching a West Virginia University Mountaineers sporting event. Though neither he, Burd nor Sullivan can recall who suggested the moniker, they are unanimous in their affinity for it. “I really like the name,” Westfall said. “Everyone seemed to like it from the moment it was suggested. Both groups’ boards contained a number of very creative folks, many of whom are really good at public relations. I can’t remember who suggested the name; I only know it was not me. He went on to express appreciation for the trust placed in him as a GO-WV co-president. “I am honored to be in this position,” he says. Sullivan echoes that sentiment, expressing his love for the predecessor organi-
zations, even as he tries to help lead the new one. “I am trying to keep one foot in the past – the history, leadership and traditions – even as I keep looking forward,” he reflected. “It is exciting to be co-president of this new association with Tom, who is a fantastic leader. I would have been equally excited simply to see the merger vote come out successfully, even if I was not going to be in the leadership. I am involved in a lot of groups and this one means the world to me.” According to Burd, GOWV’s initial board of directors incorporates all members of both bodies, which set the number of directors at 24. Along with its respective co-presidents, officers also will include a pair of co-vice presidents: Maribeth Anderson with Antero Resources and Jeff Isner with Pillar Energy. The organizational calendar will run according to a July 1-June 30 fiscal year calendar, so that GO-WV’s first months preceding that will serve as a
transitional period. In June 2022, at the end of that first fiscal year, the board then will be reduced, probably to about 15 members. Speaking in December before GO-WV had a chance to hold its first official board of directors meeting, Westfall acknowledged it was difficult to predict the group’s early priorities. However, he expressed confidence in one fundamental goal that he knew all his fellow directors would share. “I am optimistic about seeing how this new group can work to increase consumer natural gas use, which helps all parts of the industry,” he said. “There are environmental and social reasons behind declines in natural gas usage. There are a lot of things we can do together to turn that around and benefit everyone.” Moreover, Sullivan emphasized, GO-WV is focused on furthering the West Virginia industry’s tradition of good stewardship as the industry enters a new era of even greater environmental, social and governance conscientiousness. “Our association is focused on producing clean natural gas in a safe, environmentally responsible manner,” he states. “ESG is critical to the association and to me.”
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From our challenges come opportunities for growth This year has been a challenging one. The pandemic has affected all of us, and our industry, much like every sector, is adapting. While many more challenges lie ahead, we also see opportunities. One such opporCharlie tunity has come to BURD fruition with the Gas & Oil Association of West Virginia (GO-WV), the merger of the Independent Oil and Gas Association of West Virginia (IOGAWV) and the West Virginia Oil & Natural Gas Association (WVONGA). For years, I was IOGAWV’s executive director, and I’m proud of its accomplishments — from legislative victories to industry landmarks. At the same time, I watched WVONGA doing wonderful work that amplified an important voice in the Mountain State. Over time, it became clear our missions were the same – to move West Virginia forward and support its economic lifeblood, the natural gas industry. This merger affirms our industry and our state are stronger. I’m proud to be a part of this new milestone. We’re better positioned now to advocate for public policy that will help grow this vital industry. We also have a unified voice when it comes to publicizing our industry’s positive economic and environmental impact on this state,
T
he natural gas industry is the state’s toppaying sector. The American Petroleum Institute (API) estimates that the natural gas and oil industry supports more than 71,000 jobs in West Virginia.
region and nation in terms of investment, jobs and revenue generation. Similar to what our individual member companies are doing with their businesses, GO-WV will create operational efficiencies and savings at a time when commodity prices are depressed. Throughout 2020, we’ve talked about our “moment of clarity.” We’ve seen the need for a stronger manufacturing industry within the United States, and we know oil and natural gas provides critical support for that endeavor. According to the American Chemistry Council (ACC), the opportunity in the petrochemical sector alone could result in an economic expansion of $28 billion per year and result in the creation of over 100,000 jobs in the Appalachian region. The natural gas industry continues to be an economic cornerstone in West Virginia, and its potential is enormous. The Mountain State is the seventh largest U.S. natural gas producer, and we rank fourth in proven gas reserves. GO-WV will advocate for contemporary governing policies that prepare West Virginia to be ready when
market conditions improve and to attract essential risk capital to help West Virginia realize the potential of the natural gas industry. The natural gas industry is the state’s top-paying sector. The American Petroleum Institute (API) estimates that the natural gas and oil industry supports more than 71,000 jobs in West Virginia, and the estimated wages associated with these jobs are more than $3.5 billion. And natural gas users — households, businesses, manufacturers — have saved $1.1 trillion since 2008 because natural gas production increased in the Appalachian Basin states of West Virginia, Ohio and Pennsylvania. Our industry is responsible for more than $4 billion in state severance and property tax revenue since 2008. That doesn’t mean we don’t face glaring challenges. Commodity prices are decreasing. Prices will remain low for the foreseeable future. The economy will struggle as we work to recover from the pandemic’s toll. That means it’s critical to embrace policies that encourage the use of natural gas in West Virgin-
ia. We must adopt policies that make West Virginia competitive with its neighboring states. We must work to encourage new facilities that will use our products within the state and boost investment and employment. Downstream investment represents a huge economic multiplier. Natural gas producers and natural gas utilities cannot succeed alone. Companies in the state’s natural gas industry have come to see the strength in shared success. This industry’s potential is enormous. We’re dedicated to reducing our carbon footprint. We’re dedicated to providing cost-effective energy to power homes and businesses. More folks should be celebrating that. West Virginia has been an energy leader for decades, and we can continue that legacy. We can take pride in being a clean energy leader as we take advantage of the opportunities right in front of us. That’s part of the reason we created GO-WV. We want a unified voice as we spread our message throughout the state and beyond. It’s truly a message of hope for the Mountain State. This is a historic moment. We celebrate and embrace this new association as we combine the strengths of two influential groups into one dynamic and powerful organization. In 2021, GO-WV will bring renewed vitality as we advance our state’s economy. Charlie Burd is executive director of GO-WV
For small companies or large, GO-WV is voice of the industry line operators, local distribution compaOur two companies differ — in nies, affiliate busisize, in approach to drilling for nesses and trade ornatural gas, in well size and in ganizations — now geographic reach. united and working But when it comes to the future together under one of our industry, we speak with name. one voice. And that’s why we’re Our mission is to Ellis thrilled to be a part of the Gas & encourage and projOil Association of West Virginia ect unity. We aim (GO-WV), which was recently born to strengthen and with the combination of the West move our industry Virginia Oil and Natural Gas Asand state forward. sociation (WVONGA) and the Inde- No matter how pendent Oil and Gas Association many wells you of West Virginia (IOGAWV). possess or how big Antero Resources is the largest those wells are, we natural gas producer in the state, face the same conIsner and most of its operations and em- cerns. ployees are right here in West VirWe need commonginia. sense, predictable regulations. We Pillar Energy is an independent need policies that encourage jobs production company headquarand investment. We need West Virtered in the Mountain State, operginians to understand our safe and ating 2,000 wells. responsible practices and the poFor decades, the two groups have tential our industry holds. had varied goals, missions and priBy combining these organizaorities. tions, both big and small operators Not anymore. The time is now to and producers can work togethgrow our industry and strengthen er cohesively — offering a new dyWest Virginia’s economy. namic, developing new ideas and GO-WV has more than 600 mem- initiatives and using their deep bers, including producers, pipeknowledge base to address issues, by Kevin Ellis and Jeff Isner
as well as seek opportunities within the industry. Iron sharpens iron. We also will continue to promote the positive economic and environmental impact our industry has on the Mountain State. We know that our industry can lift the tide of the state’s economy, and we know that we are stronger when we pull together. From large operators, to small operators, to pipeline companies, to processors, to utilities — we need everyone under the same tent with one singular voice. That synergy makes us more effective and enables our story to be told more clearly. We know that our state’s top paying sector is facing a bevy of challenges on the road ahead. Whether it be the ongoing global pandemic, low commodity prices or regulatory restrictions, we have our work cut out for us. We have a lot of work to do in a short amount of time. We need all shoulders behind the wheel, and we are proud to stand side-by-side with our colleagues in one dynamic association. The past year has taught us many things about our nation’s infrastructure, economy, health care
and everything in between. We can apply what we’ve learned to create a more prosperous economic environment, strengthening both our workforce and bringing downstream opportunities to West Virginia. One takeaway that cannot be overstated is the importance of manufacturing within the United States. Now more than ever, it is evident just how vital the oil and natural gas industry is to our manufacturing sector, not only on a state level, but on a global scale as well. As West Virginians, we’ve faced challenges our entire lives. We’re built for adversity, and we know how to persevere through tough times. We help out our fellow neighbors. West Virginia has extraordinary potential, and together — with our fellow West Virginians, with policymakers, with colleagues, with our workforce — we are going to push this state ahead. And make no mistake — we’re speaking with one voice. Kevin Ellis is regional vice president for Antero Resources. Jeff Isner is CEO of Pillar Energy.
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WVU report: Modernizing property laws would create new jobs Study projects up to $2.45B economic boost and nearly 2,000 jobs from policy change From Staff Reports
alty payments by millions of dollars, according to a new report from economists at West Virginia University. The policy change would also add to state revenues, which could help efforts to gradually eliminate the state’s income tax if lawmakers choose to pursue that objective in this legislative session.
M
odernizing our property laws will help lead a ‘Petrochemical Renaissance’ and allow royalty owners and the state to reap more of the benefits of our state’s vast natural gas resources. It will mean more efficient natural gas development, attract new industries and sustain long-term growth, all of which are good for landowners, local communities and the state economy.”
CHARLESTON — Modernizing Summary of Key Findings property laws would trigger more — Charlie Burd natural gas development and unWest Virginia has the third-largleash a burst of economic activity in est proved natural gas reserves in the the Mountain State, help create thou- country, behind only Texas and Penn- production growth in West Virgin- hind Pennsylvania and Ohio — both sands of new jobs and increase roy- sylvania. Despite this, natural gas ia over the last decade has lagged be- of which benefit from [modern] unitization laws. The total potential economic impact of a natural gas unitization law is estimated to be between $1.2 billion and $2.4 billion over five years, with about $0.7 billion to $1.5 billion coming directly from the natural gas industry. Total employment impacts are expected to be between 4,700 and 9,500 job-years. The economic impact of natural gas unitization will depend largely on the increase in drilling and production that will come as a result of resource unitization. Economic impacts from construction, drilling and completion are estimated to be between $1.1 billion and $2.1 billion, with employment between 4,000 and 8,000 job-years. Operational impacts are between $12.8 million and $25.6 million over five years. And impacts from royalties are expected to yield between 500 and 1,000 job-years. “Our economy and our people are hurting, and we should be doing what we can to create more jobs and growth,” said Charlie Burd, executive director of the Gas and Oil Association of West Virginia Burd (GO-WV). “Modernizing our property laws will help lead a ‘Petrochemical Renaissance’ and allow royalty owners and the state to reap more of the benefits of our state’s vast natural gas resources. It will mean more efficient natural gas development, attract new industries and sustain longterm growth, all of which are good for landowners, local communities and the state economy.” The study, conducted by the Bureau of Business and Economic Research at West Virginia University’s John Chambers College of Business and Economics, examines the potential economic impact of enacting proposed legislation to modernize West Virginia’s property laws and increase natural gas production in the state. Modernized property laws will unlock the potential of the state’s unique position as one of the world’s largest shale plays through a policy known as unitization. This commonsense solution would effectively treat an entire geologic shale formation as one resource unit, thus allowing production of the entire unit. This would have the effect of grouping together natural gas mineral rights in areas where a majority of rights holders have agreed to reap royalties from these rights, allowing the efficient production of the entire unit.
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Oil and gas industry looks to the future following difficult 2020 by Charles Young
SENIOR STAFF WRITER
CHARLESTON — U.S. consumption of natural gas is expected to average 81.7 billion cubic feet per day throughout 2021, down about 1.9% from 2020, according to forecasts from the U.S. Energy Information Administration. In the EIO’s Short-Term Energy Outlook report published in February, the agency said the decline in total U.S. consumption reflects less natural gas consumed for electric power as a result of higher natural gas prices compared with last year. In 2021, EIA expects residential natural gas demand to average 12.9 Bcf per day and commercial demand to average 9.1 Bcf per day. EIA forecasts industrial consumption will average 23.0 Bcf per day in 2021 as a result of increased manufacturing activity amid a recovering economy. Industrial consumption of 23.0 Bcf per day would be 0.1 Bcf per day below the 2019 level. EIA expects total U.S. natural gas consumption will average 81.0 Bcf per day in 2022. Overall, the EIO says the energy sector’s short-term forecast “remains subject to heightened levels of uncertainty because responses to COVID-19 continue to evolve.” “Reduced economic activity related to the COVID-19 pandemic has caused changes in energy demand and supply over the past year and will continue to affect these patterns in the future,” the report reads. Benjamin Sullivan, co-president of the Gas and Oil Association of West Virginia (GO-WV), said the COVID-19 pandemic has highlighted the important role the oil and gas industry plays in everyday lives of average citiSullivan zens. “Our field workers — our frontline workers — are really providing an essential service,” he said. “They were out there keeping people’s heat on, keeping natural gas flowing to power plants to produce electricity, fuel for vehicles and fuel for cooking and heating.”
Staff file photo
Careers in oil and natural gas pay well and have excellent benefits.
Natural gas and petroleum products provide the feedstocks for countless products, including those of vital importance during a crisis like a pandemic, Sullivan said. “It’s thousands of everyday items, including PPE, pharmaceuticals and other national security items,” he said. “So we feel like the pandemic has allowed us to show that we’re a very viable part of the community. We care about the communities we’re in and we didn’t stop during the pandemic and we hope to be part of the solution going forward with help from our elected officials and others.” Oil and gas prices were “very bad” throughout 2020, Sullivan said. “In 2020, pricing was historically bad and the industry suffered, not just in West Virginia but all over the country,” he said. “The severance tax income from the oil and gas sector, as well as the coal sector, was down sub-
stantially in 2020 versus 2019.” However, prices are starting to gradually trend upwards, Sullivan said. “The good news is, there’s been a bit of an uptick in price. It’s still not where it was in 2019 and it’s still very, very low, but when we look at pricing the first few months into this year and project it across the rest of the year, it’s going to be a little bit up from 2020,” he said. “2022 is looking better, still not a huge increase, but certainly much better than we saw last year.” Charlie Burd, executive director of GO-WV, said West Virginia’s oil and gas industry remains focused on growth and adaptation. “We haven’t changed too much from where we were at the end of 2020,” he said. Funding for plugging orphaned and abandoned oil and gas wells re-
mains among the industry’s biggest concerns, Burd said. In 2020, the West Virginia Legislature passed legislation that allows for expedited oil and gas well permitting upon payment of apBurd plicable fees. These fees go into a fund that pays for well reclamation projects throughout the state, Burd said. “We’ve had a year or so of regulations passed that did things like provide funding for orphaned and abandoned wells,” he said. “That is in place now, and those funds should be getting populated now with cash because the severance taxes are being submitted.”
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Manchin vows to support oil and natural gas US senator stresses need for responsible natural gas production as part of US energy portfolio, national security From Staff Reports
WASHINGTON, D.C. — Sen. Joe Manchin, D-W.Va., continues to stress the importance of natural gas and oil to the national energy portfolio and its role in national security. As chairman of Manchin the Senate Energy and Natural Resources Committee, Manchin continues to urge President Biden to consider the benefits of responsible production of natural gas as his administration evaluates the federal oil and gas leasing program and considers policies and regulations related to the energy industry. Chairman Manchin has stressed that responsible production of natural gas resources, along with the use of carbon capture, utilization and sequestration and other technologies and infrastructure to capture and transport methane, is critical to achieving energy security, economic growth and global emissions reductions. “I am an ardent advocate of an all-ofthe-above energy policy coupled with technological innovation to solve both our country’s energy challenges and the global climate challenge. Responsible production of natural gas and practices like hydraulic fracturing have improved our nation’s energy security while supporting the nearly 1.5 million hard-working Americans the industry employs, including in rural communities across our great nation,” Manchin wrote in a recent letter to the president. “I encourage you to bear in mind the many benefits of responsible domestic natural gas production as you consider any future executive or administrative action, and I look forward to working with you to achieve our shared goals of energy security, economic growth and global emissions reductions.” Earlier this week, Manchin reiterated his commitment to an all-of-theabove energy policy that includes hydraulic fracturing and responsible energy infrastructure development. Manchin’s Energy Act of 2020 was enacted at the end of last year, which modernizes the functions and structure of the Department of Energy’s program for carbon capture, utilization and sequestration to help make these technologies commercially viable for coal and natural gas generation. Below is Manchin’s letter to President Biden: Dear President Biden:
Washington Post photo by Astrid Riecken
With the Senate split 50-50 between Democrats and Republicans, Sen. Joe Manchin, D-W.Va., wields significant power in shaping policy. Manchin also will chair the Senate Energy Committee.
I am an ardent advocate of an all-ofthe-above energy policy coupled with technological innovation to solve both our country’s energy challenges and the global climate challenge. Responsible production of natural gas and practices like hydraulic fracturing have improved our nation’s energy security while supporting the nearly 1.5 million hard-working Americans the industry employs, including in rural communities across our great nation. It is my hope that you will consider these benefits as you evaluate the federal oil and gas leasing program and consider other policies and regulations related to the energy industry. Technologies like hydraulic fracturing and horizontal drilling have allowed our country to more efficiently tap into our rich, domestic energy resources that reside in the vast shale plays across the country, including in my home state of West Virginia. These technologies catalyzed a “shale revolution” in the U.S. that has propelled a surge in domestic oil and gas production, culminating in the U.S. becoming a net total energy exporter in 2019 for the first time in 67 years. This energy security affords
your administration with expanded geopolitical tools and strengthens our national security. In addition, raw and refined natural gas and natural gas liquids (NGLs) serve as feedstocks for the chemicals, plastics and synthetic materials that are in nearly everything we use, including PPE, disinfectants and other medical equipment. Since beginning in 2014, U.S. exports of ethane have increased at least six-fold, with export to China alone accounting for nearly 30% of the increase in 2019. According to the Energy Information Administration, demand for ethane in China is expected to continue to grow with the Made in China 2025 initiative, which aims to increase the share of value-added activity in China in the manufacturing and hightech industries. We put ourselves as a distinct disadvantage by exporting large quantities of our natural gas liquids and the manufacturing jobs that go along with them to China to then simply import finished products. As we rebuild and strengthen our economy, I continue to support bringing those supply chains and manufacturing back home to the United States, expanding the domestic jobs support-
ed by our abundant natural gas and reducing our reliance on China. The U.S. Geological Survey recently estimated that there are still 214 trillion cubic feet of undiscovered, technically recoverable continuous resources of natural gas in the Marcellus and Utica shale formations alone. Responsible production of our abundant resources is critical. That includes using existing technologies and continuing to innovate new ways to reduce methane flaring and leaks from oil and gas systems and expanding our energy infrastructure and gathering lines to instead get that product to market. I also strongly support advancing carbon capture, utilization and sequestration technologies, including for natural gas applications, to further reduce emissions. I encourage you to bear in mind these many benefits of responsible domestic natural gas production as you consider any future executive or administrative action, and I look forward to working with you to achieve our shared goals of energy security, economic growth and global emissions reductions.
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Natural gas must lift our energy future
Shelley MOORE CAPITO
According to the U.S. Department of Energy, if the Appalachian region were an independent country, it would be the third-largest natural gas producer in the world. Job creation and economic growth through the natural gas industry cannot
be overstated. It’s why I’ve pushed so hard to create a natural gas storage hub in West Virginia. Sadly, natural gas growth faces tremendous headwinds over the next four years. Despite calls for “unity,” in some of his first actions, President Biden managed to kill thousands of jobs and paralyze America’s energy industry with executive orders. The Biden moratorium on new oil and gas leases on federal lands is an
economic, energy and national security disaster rolled into one. This order moves America from energy independence back to relying on foreign adversaries for fuel — countries who have much laxer environmental standards. This action is indicative of the incoming climate agenda that will have drastic impacts on West Virginia’s energy sector. The forces against natural gas are growing. And they’re against natural gas, nuclear or any other energy source that’s not blessed by the Green New Deal. President Biden installed Gina McCarthy and John Kerry as his climate czars. Both are unaccountable to Congress and have made clear they’re the ones in charge of the administration’s ambitious climate agenda. By claiming every policy issue touches climate, McCarthy and Kerry have broad jurisdiction to do their bidding. They’ve made no secret of their ultimate goal: Banning fossil fuels. In fact, Kerry suggested folks should “go work on solar panels.” I have great skepticism when I hear this administration talk about giving industry time to transition and giving workers clean energy jobs. Tell that to the Keystone XL pipeline workers. Where are their clean energy jobs? Do they get a new clean energy job tomorrow? Next month? Next year? West Virginia has powered this country for decades. We’re incredibly proud of that fact. Coal, natural gas, oil, solar, wind, nuclear, biomass: Our country has been incredibly blessed with a variety of energy resources, and using all of them keeps America safe and running. Natural gas in particular burns cleaner, moves safely and efficiently in our world-class national pipeline network, and is an essential feedstock for several domestic supply chains like medical supplies, which are critical now more than ever during this pandemic. Environmentalists fighting
AP Photo
Sen. Shelley Moore Capito, R-W.Va., walks in the U.S. Capitol in Washington on Feb. 11.
against natural gas can’t see the forest for the trees. Eliminating natural gas from our energy mix will lead to higher utility costs and less reliability — just ask California. Renewables can’t power our country at 100 percent all the time, and battery technology can’t fill the gaps. But we can address climate change together though innovation and technology. Sadly, President Biden’s climate executive orders really alienated key players in the solution. That’s not a way to build unity. That’s picking winners and losers. That’s pitting American jobs against each other. That’s creating resentment. This country has always risen to every challenge we’ve faced. This climate challenge is no different. Through American ingenuity, we will find solutions. U.S. Sen. Shelley Moore Capito is the ranking member of the Senate Environment and Public Works Committee
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Gas and Oil Association of W.Va. monitoring legislative session by Charles Young
SENIOR STAFF WRITER
CHARLESTON — Representatives of the newly formed Gas and Oil Association of West Virginia (GO-WV) are keeping a watchful eye on the current session of the West Virginia Legislature as bills relevant to their industry change and progress. Access to this year’s 60-day session has been greatly curtailed because of COVID-19 protocols and precautions, making it difficult for industry stakeholders to monitor issues and lobby for or against specific legislation. Charlie Burd, executive director of GO-WV, said he has largely been participating in this year’s session remotely. “No one is getting into the Capitol, so no one is able to testify for or Burd against (proposed legislation), but we’ve been following from a distance and we see things as they happen,” he said. Ben Sullivan, co-president of GOWV, said passage of a bill to allow pooling for Utica shale wells is among the group’s top legislative priorities this year. Sullivan “We are working on a pool bill. That continues to be of great interest to our larger drillers in the state,” he said. “We are at a competitive disadvantage because our surrounding states by in large do have some form or fashion of pool, and pooling is allowed for different types of wells.” One of the biggest unknowns for the oil and gas industry this legislative session is Gov. Jim Justice’s plan to phase out the state’s personal income tax. During his 2021 State of the State Address, Justice outlined a series of strategies for replacing the $2.1 billion in revenues the state receives annually from personal income tax collections, including implementing a “tiered” system for severance taxes on extractions of coal, oil and natural gas. This system would tie severance taxes collected by the state on oil, natural gas and coal extraction to the current going rate for each commodity. Each commodity would be taxed at one rate as long as the price remained below a designated level, but would be taxed at increasing rates as the price rises. Justice said the tiered system could help offset lost revenues if the income tax is successfully eliminated, but he acknowledged it is unlikely to produce substantial money for the state. “It won’t bring in a whole lot of dollars, but it will bring in a few,” he said. The Justice administration supported a similar idea in 2017 when it backed Senate Bill 415, which outlined a graduated rate system for severance taxes on natural gas.
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Representatives of the Gas and Oil Association of West Virginia are monitoring this year’s session of the state Legislature.
The language in SB 415 proposed that when the price of natural gas was less than $3 per thousand cubic feet, it would be taxed at 5%. As the price of gas rose, the rate would increase correspondingly, maxing out at a 10% rate when prices exceed $9 or more per thousand cubic feet. According to a fiscal note attached to SB 415 prepared by Deputy Secretary for the Department of Revenue Mark Muchow, the bill had not been expected to impact state “revenues in the near term” because of low natural gas prices. “The proposed rate structure imposes a 5% tax on the gross value of natural gas when the price per mcf is less than $3.00,” the note read. “Given that prices are not expected to exceed this floor in the next three years, it is anticipated that the proposed changes will not affect revenues in the near term. However, natural gas prices are highly volatile. Therefore, there is some chance of higher effective tax rates applying in any given year.” The note also had stated the tiered system for severance taxes would cost the state “$25,000 for the remainder of FY2021, $79,000 in FY2022 and $73,000 for each year thereafter” in additional administrative costs. A memorandum to the fiscal note pointed out errors in the introduced version of the bill’s language, saying the proposed bill had not defined “annualized gross value” or provide a method for calculating it. “This value is used to determine the rate of tax the taxpayer is to use,” the note read. “The omission of a definition or calculation may lead to difficulty in administering the tax and could result in litigation.” SB 415 ultimately failed to make it out of the Senate Energy, Industry
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Oil and gas industry stakeholders are waiting to hear more details of Gov. Jim Justice’s plan to phase out West Virginia’s income tax.
and Mining Committee. His organization is waiting to learn more about the details of Justice’s proposal, Burd said. “We’re still awaiting language on that bill,” Burd said. “The governor is putting together a rather comprehensive bill that probably focuses on several different areas to make up some of the difference from what would be taken away on the personal income tax side. But we haven’t yet seen language, so we’re just holding any kind of comment until we do, so we can look at it and see how that might apply directly to us and what the rami-
fications might be.” However, he remembers when SB 415 was being debated, Burd said. “This is not exactly a new concept,” he said. Average natural gas prices have remained “well below” the bill’s $3-per thousand-cubic-feet threshold, Burd said. “So unless the tiering is constructed differently, I don’t know that it would be anything more than neutral to what’s out there now,” he said. Senior Staff Writer Charles Young can be reached at 304-626-1447 or cyoung@theet.com
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Natural gas to become world’s primary fossil fuel by 2050 by Jeremiah Shelor
Natural Gas Intelligence
Amid the ongoing energy transition, natural gas and renewables are seen accounting for more than 90% of incremental energy demand globally through 2050, according to a new report from the Gas Exporting Countries Forum (GECF) The GECF on Wednesday released the latest edition of its Global Gas Outlook 2050 report, which outlined a future in which natural gas emerges as the world’s primary fossil fuel in the 21st century on a combination of affordability, abundance and lower carbon intensity. Natural gas demand is set to grow 50% to reach 5,920 bcm in 2050, with consumption of the fuel expected to expand in particular in the Asia Pacific, North American and Middle Eastern markets. Asia Pacific will become the largest gas consumer by 2050, doubling its consumption to 1,660 bcm, the group said. As an alternative to more carbon-intensive fuels and as a complement to intermittent renewable resources, natural gas is expected to receive “positive policy support in several countries” during the outlook period. However, this support is not universal, with some governments setting more ambitious renewables targets and with lenders, including the World Bank, moving to stop financing for natural gas projects, according to the report. [We want to hear from you! NGI is col-
laborating with industry participants to develop independent market-driven LNG price indexes. Please contact us for more information.] The GECF report expects global primary energy demand to grow by 24% during the outlook period, returning to 2019 levels by 2023. Natural gas and renewables are expected to make up 60% of global electricity supply by 2050. Natural gas is expected to overtake coal in 2025 and eventually emerge as the primary energy source globally by 2047. Oil demand is expected to plateau around 2040 and then begin an “irreversible decline,” according to the GECF. Liquefied natural gas (LNG) will make up a larger share of the gas trade moving forward, accounting for 48% of all traded gas by 2030 and 56% by 2050, the report found. By 2050, the GECF expects 1,990 bcm of the 5,920 bcm of global gas demand to be imported.
Global natural gas production is projected to grow by about 1,900 bcm by 2050, reaching more than 5,900 bcm, according to the report. This includes 560 bcm of growth in North American production, with Middle East production forecast to rise 1,150 bcm during that time frame. Investment in upstream and midstream natural gas development from 2020 to 2050 is expected to reach a cumulative total of $10 trillion. The GECF, an international governmental organization headquartered in Doha, Qatar, is made up of 19 member countries — Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago, Venezuela, Angola, Azerbaijan, Iraq, Kazakhstan, Malaysia, Norway, Peru and the United Arab Emirates. © 2021 Natural Gas Intelligence. All rights reserved.
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Some experts predict natural gas will be the primary fossil fuel by 2050.
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West Virginians turn to natural gas for warmth From GO-WV Staff
With much of West Virginia — and the country — on ice in February, many folks leaned on natural gas for warmth and power. With thousands of residences and businesses without electricity in our region, it is an important reminder of the critical role that natural gas plays for backup heat and power. Whether the electricity was generated by renewables or fossil fuels, it doesn’t matter if the power grid is down. While many suffered during the long outages, the natural gas util-
ities in West Virginia were able to keep almost every customer who had gas logs, wall heaters and gas backup generators warm and safe in their homes. We know natural gas is a dependable, affordable source of energy. When so many lost power recently, they were left without a way to warm their homes or turn the lights on. Those fortunate enough to have gas logs, gas wall heaters and gas generators were able to keep warm. They experienced the benefit firsthand. Natural gas utilities in West Virginia reported that nearly all of their
Sholten Singer
West Virginia Division of Highways and electric companies worked to clear roads and power lines after a recent batch of snow and sub-freezing temperatures. Through it all, natural gas kept flowing in most areas.
customers maintained service as ice and freezing temperatures took over West Virginia. In addition, natural gas utilities have been receiving hundreds of requests for new natural gas service and are working overtime with hooking up new customers in areas where the utilities have existing main lines and facilities. Many of our state’s residents are in the process of purchasing and installing natural gas generators, and natural gas utilities are providing new natural gas hook-ups or up-
grading existing meter hook-ups to meet residents’ needs where existing main lines and facilities are in place. It is good planning on residents’ part to have a reliable backup source of heat and power for their homes. The national spotlight has been on Texas, where grid failures left thousands without power and freezing. The grid’s portfolio of resources — from fossil fuels to wind — came up short.
See WARMTH, 22
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Environmental Partnership releases 2020 performance highlights From Staff Reports
The Environmental Partnership, which is comprised of companies in the oil and natural gas industry committed to improving environmental performance, has released its 2020 Annual Report. Performance areas include leak detection and repair, high-bleed pneumatic controllers, improving the manual liquids upload process and the pipeline blowdown program. Performance highlights include: — A leak occurrence rate of less than one per 1,000 components — More than 87,000 sites surveyed — More than 116 million component inspections performed — More than 10,500 additional gas-driven controllers replaced or removed — More than 2,800 zero-emission pneumatic controllers installed In 2019, the Environmental Partnership focused its second full year on growing the coalition, expanding its reach and impacts, and harnessing the growing enthusiasm within the participating companies. The Partnership continues to demonstrate the oil and natural gas industry’s commitment to deliver improved environmental performance by taking action, learning and collaborating while delivering the essential energy that powers America’s economy and quality of life. “The Partnership has tripled its membership since its December
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Antero Resources workers practice sound environmental practices. The company is a member of The Environmental Partnership.
2017 launch,” said American Petroleum Institute President and CEO Mike Sommers. “It serves as a model for industry-led climate solutions and collaborative investment in the technologies and best practices that are driving down emissions of Sommers methane and vola-
tile organic compounds.” Several companies doing business in West Virginia — including Antero Resources, EQT, Southwestern Energy and Williams — are part of the Partnership. According to a Southwestern statement, the company “has a longstanding commitment to being a good steward of the environment and doing the right things in all facets of our operations. One area
of focus under this commitment is our early and continued work with methane intensity as an indicator of environmental performance. As the underpinning of our continued environmental success, our teams have focused on creative and innovative ways to voluntarily minimize emissions associated with our operations.”
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INDUSTRY (Continued from Page 7)
According to a study published by the Interstate Oil and Gas Compact Commission that looked at idle wells in 30 states and five Canadian provinces, 28 states and provinces have wells approved to remain in idle status, with most having between 100 and 10,000. The total number of approved idle wells is 294,743, which is 15.6% of the total number of documented wells that have been drilled and not plugged. Orphaned wells are idle wells for which the operator is unknown or insolvent. Most states and provinces have inventories of documented orphan wells and prioritize orphan wells for plugging according to risk. According to IOGCC’s findings, there are currently at least 4,646 orphaned wells in West Virginia. An additional 9,000 orphaned wells are estimated to exist but are not documented. The latest count of West Virginia’s active drilling rigs shows increased activity in the state, Burd said. “The latest rig count has us up to 12 rigs — last year at this time we were at eight,” he said. “The rig count is up, and that is always a good sign.” Industry stakeholders remain watchful of the Biden administration as its rolls out its energy policies, Burd said. “We wait with anticipation with what will happen in the future. Obviously, the administration in D.C. has changed, and we are now begin-
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Oil and gas prices are starting to slowly trend upward following sharp declines throughout 2020.
ning to see the effects of some of the executive orders that were executed that have changed the way oil and gas were operating,” he said. “The Keystone XL pipeline and some of the activities on emissions and methane, it remains to be seen exactly how they will play out. But certainly we will learn to operate within the framework of the regulatory guidelines, and we will do what we’ve always done. We will persevere and we will continue to produce energy for our state and our nation,” he said. White House leadership may have changed, but West Virginia’s senators remain committed to protecting its energy industries, Burd said.
“Senators Manchin and Capito are veteran legislators and certainly understand the importance of fossil fuel development in the state of West Virginia and how that impacts the entire country,” he said. “Having Sen. Manchin at the top of the Senate Energy Committee is a very big plus for the state of West Virginia.” Manchin has expressed his support for an “all of the above” energy strategy that embraces a diversified energy production portfolio, Burd said. “He wants to look at all energy forms, but as a former governor, he understands the significance of fossil fuel development,” he said. He views the goal of phasing out
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Oil and gas industry stakeholders continue to monitor the Biden administration as it rolls out its energy policies.
fossil fuels in the coming decades as unlikely, Burd said. “We all have to recognize that the dynamic of producing and using energy in our country and in our world is changing, but a radical shift from fossil fuels virtually overnight is not as realistic as some may think,” he said. Senior Staff Writer Charles Young can be reached at 304-626-1447 or cyoung@theet.com
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GO-WV accepting scholarship applications From Staff Reports
The Gas and Oil Association of West Virginia (GO-WV) is accepting scholarship applications through March 19. In 1997, the Independent Oil and Gas Association of West Virginia Inc. (IOGA) established the Scholarship Program in an effort to become more involved in higher education in West Virginia. The program will now transfer to the newly merged GO-WV. The Scholarship Program was specifically created to reward the outstanding scholastic achievements of high school seniors whose parents work in the oil and natural gas industry for member companies. The association also awards deserving high school “student employees” who have completed a required number of working hours at a member company. Beginning in 2020, two annual onetime, $1,000 scholarships were spon-
sored by ConServ Incorporated. They are for students who are choosing a career path that benefits the oil and gas industry in a vocational/technical field such as, but not limited to, welder, truck driver, well tender, electrician, mechanic and other related trades. Since the Scholarship Program’s inception, a total of $180,500 in scholarships has been awarded to these very deserving students. Complete eligibility rules for both scholarship types are available at gowv.com The completed application, including all required forms and information, must be signed by a high school counselor and postmarked no later than March 19, 2021. GO-WV will accept completed applications postmarked by that date. From all the applications received, a GO-WV Scholarship Review Committee will award a number of one-time-only scholarships. Here is a quick glance at the rules:
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(Continued from Page 18) Informed by the Environmental Protection Agency’s Greenhouse Gas Reporting Program data, the program is focusing its efforts to take commonsense actions to further reduce emissions from compressors and pipeline blowdowns within oil and natural gas transmission operations. “By taking action on environmental performance, building upon knowledge and fostering collaboration among stakeholders, the collaborative highlights some of the voluntary actions that demonstrate continuous improvement for the industry. We share in a common belief that addressing environmental performance is a critical component of securing America’s long-term energy future,” the Southwestern statement said. Starting in 2020, the Partnership has expanded to include the industry’s midstream segment. Midstream companies are an integral part of the supply chain and are necessary to move oil and natural gas from the wellhead to the transportation infrastructure necessary to get these fuels and feedstocks to market.
“The Partnership continues to demonstrate the oil and natural gas industry’s commitment to deliver improved environmental performance by taking action, learning and collaborating while delivering the essential energy that powers AmerTodd ica’s economy and quality of life,” said Partnership Director Matthew Todd. Learn more at www.theenvironmentalpartnership.org.
1. Applicant must be a West Virginia high school senior. 2. Applicant must be a dependent of an employee/retiree of a GO-WV company in good standing OR be employed by a GO-WV company in good standing. (Student employee must have worked a minimum of 400 hours in the past calendar year. Validation of hours worked and a letter of recommendation from the employer must be provided.) 3. Applicant must enroll in a fouryear West Virginia college or university or a community college/voca-
tional-technical school depending on scholarship. 4. Applicant must compose an essay answering the question asked on the application form. 5. Application must be signed by high school counselor. 6. The completed application and all documentation requested must be postmarked no later than Friday, March 19, 2021. Should you have any questions, please contact Dee Beane at 304-3449867 or dbeane@gowv.com.
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Natural gas utilities in West Virginia were able to keep gas flowing during recent inclement weather which led to power outages.
WARMTH
(Continued from Page 1 3) In West Virginia, natural gas is a critical part of powering the country today. More and more, the country will be bringing renewables online. But along the way and into the future, we’re going to need natural gas. More than 365,000 West Virginians use natural gas in their homes. The natural gas infrastructure, much of it underground, is often more stable than powerlines, which are affected by tree limbs and strong storms. And according to the West Virginia Public Service Commission (PSC), those customers have seen their rates
decrease over the past decade while other utility rates have gone up. Cold weather won’t be the only factor driving more customers to natural gas. The PSC expects recent legislation that encourages the expansion of natural gas infrastructure to underserved areas of West Virginia to “almost certainly” lead to an increase in new customers. The Natural Gas Utilities as part of the natural gas industry in West Virginia take incredible pride in providing warmth for so many West Virginians. They talk a lot about the pride they take in the natural gas industry as a whole, which is absolutely true. But when they see how it truly benefits West Virginians when things get rough — that really brings it home.”
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