MORGANTOWN — West Virginia’s two major oil and natural gas associations will soon be one.
The West Virginia Independent Oil and Gas Association (IOGA) and the West Virginia Oil and Natural Gas Association (WVONGA) announced that their organizations will merge into the Gas and Oil Association of WV (GO-WV). Members of both organizations voted overwhelmingly to approve the merger.
IOGA Executive Director Charlie Burd will remain as executive director of GO-WV when the merger becomes official Jan. 1.
He joked about the new name. “I don’t think anyone really intended for it to emulate going to a Mountaineer game and screaming ‘Go WV!’ I think it more signifies ‘Go, West Virginia,’ to advance the state forward. That’s our hope: that two good, strong associations merge into one really great, very strong association with one voice over at the Capitol.”
Discussions about a merger probably began in early April, he said. As it happened, the timing coincided with the news that WVONGA Executive Director Anne Blankenship would leave her post in late June to return to her law practice.
“With the parallel pathways that the two associations had been traveling for a long time, it was an opportunity to explore to once again explore a merger and this time, they were successful.”
It was once perceived, he said, that WONGA represented the larger gas companies and IOGA the smaller ones, and up until 2008 IOGA did consist of all small producers. But the expansion of horizontal production brought more big players into IOGA – EQT, Southwestern, Antero, Chesapeake – and they membership gradually coincided. There remain a few companies that don’t belong to either but they’ll be courting them with word of the new stronger, unified voice.
Burd said he’ll be juggling a lot of balls at the merger date approaches. There are various logistics issues – a new logo, email addresses, a new website, uniform employee programs and benefits. And then there’s the legislative agenda. Committees are meeting already.
“We’ll be lining up some initiatives that we think might benefit us in the future.”
The Legislature is supposed to convene Feb. 10 (it’s always delayed a month in a gubernatorial election year), but COVID has raised still-unanswered questions of how, where and how long legislators might meet and vote this time. The only issue they are constitutionally required to vote on is the state budget.
So that’s a factor in GO-WV’s planning, Burd said.
They’re exploring measures that might encourage more investment dollars coming into the state for exploration and drilling. There may be some horizontal well permitting tweaks to make the process quicker and more efficient.
And they’re paying attention to the governor’s tax reform plans. Gov. Jim Justice has said he wants to explore phasing out the income tax . That could affect the so-far unsuccessful Senate GOP plans to phase out the business inventory and equipment tax.
“It takes X number of dollars to manage all the good programs that that state has in place for its citizens,” Burd said. “So if you take tax dollars away from one area it could maybe stand to reason to be on the alert to see what taxes may increase to in other areas to make up the shortfall.”
So they’re, as always, keeping an eye on severance taxes,he said. A few years ago, Justice proposed a tiered system based on production but both organizations opposed it because gas prices were depressed and the system didn’t offer any relief. So another go at tiered taxation would have to begin with some kind of reduction below the current 5%, as prices will continue to remain depressed.
West Virginia still lags behind Pennsylvania and Ohio in production, he said, and may never catch up to Pennsylvania. One reason is that both states have several gas-fired power plants on line while West Virginia has only one in the queue – Longview II in Morgantown.
The state has some regulatory issues that might help smooth the way, he said.
Burd didn’t comment on this, but Justice himself played a role in the sidelining of a proposed gas-fired plant in Brooke County, publicly complaining it would benefit our neighbors and not West Virginia. Burd did note that by the time the issues were cleared up and approvals granted it was too late, the investors had turned their attention elsewhere.
An Appalachian Storage Hub in the area is still much talked about, if not a whole lot closer to reality, The Dominion Post mentioned. In response, Burd said that yes, investors are interested in downstream gas usage and pipeline infrastructure to move the gas to where it can be used.
He said that there is a misconception that in pursuing gas-fired power plants, the industry wants to indirectly displace coal jobs. “That’s not what we hve ever have sought to do.”
What they are looking for, he said, is investment in natural gas generating units – looking to get investment capital here instead of losing it to our neighbors.
WVONGA and IOGA made a pair of announcements about the merger. In one, IOGA board President Ben Sullivan said, “The natural gas industry and our state are stronger today than they were yesterday. With the merger of these two great associations, the industry is better positioned now to advocate for public policy that will help grow this vital industry. We also have a singularly focused voice when it comes to publicizing our industry’s positive economic and environmental impact on this state, region and nation.”
A newly formed GO-WV board will work with Burd on the transition, new brand and unified goals, the announcements said.
WVONGA Board President Thomas Westfall said, “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. The merger also provides a unique opportunity for sharing best safety and environmental practices across industry sectors.”
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