MORGANTOWN – The natural gas industry made up about 14% of the state’s gross domestic product – $11 billion – in 2021, according to GO-WV’s (Gas & Oil Industry of West Virginia) annual Gas Facts report.
“Having a flexible, readily available energy source has fueled manufacturing and attracted broad business growth that will drive prosperity at home,” said GO-WV Executive Director Charlie Burd in the report.
West Virginia is the nation’s fifth-largest gas producer, he said. The report shows that in Fiscal Year 2021, the industry generated $164.5 million in severance taxes, $155 million in property taxes, and 14,415 direct jobs paying $1.307 billion in wages.
Among the 15 industry jobs listed, wages ranged from $41,508 (crude petroleum extraction) to $115,716 (fossil fule power generation), with an average wage of $84,581. According to the U.S. Census Bureau, the 2020 median income was $26,187 for individuals, $48,037 for households.
On the topic of fueling manufacturing and business growth, Burd said GO-WV works closes with the West Virginia Manufacturers Association and the state Economic Development and Commerce departments.
“Having an abundance of natural gas here in the state assists the Department of Commerce when they do their outreach,” he said. Many manufacturers use natural gas and GO-WV gets engaged behind the scenes with many development outreach efforts, which can take months to years to come to fruition.
“You take a sense of pride in knowing that you have worked behind the scenes with the development office,” he said.
Rebecca McPhail,executive director of the WVMA, agrees with Burd.
“In recent years manufacturing has grown due in part to the abundance of natural gas in West Virginia,” she said in an email exchange. “Whether because of its use as a heating/energy source in manufacturing processes, or by attracting companies who are interested in the chemical derivatives of natural gas, natural gas makes our state more attractive for manufacturing investment.”
An Appalachian Storage Hub to spark and serve a petrochemical industry boom here has been a goal of state leaders for several years and McPhail spoke to that.
“The natural gas industry offers a unique opportunity for downstream manufacturing growth in West Virginia. With significant potential to produce ethane and methane-based polymers and petrochemicals used in the manufacturing sector, the natural gas industry is a catalyst for manufacturing growth.
“To maximize the benefit of natural gas in the region,” she said, “we must stay focused on developing infrastructure for ethane storage and trading to attract downstream manufacturing investment and jobs. Of course, this would also create a stronger system of supply chain management for the Appalachian region.”
McPhail concluded, “Manufacturers have an all-of-the above energy philosophy. Natural gas can offer an affordable, reliable energy option for industrial users. Developing natural gas fired power in West Virginia would help move the needle in maintaining competitive energy rates for the state.”
Burd holds out hope that the nearly complete Mountain Valley Pipeline will be finished next year in order to transport West Virginia gas to markets (completion estimates range form 55% by opponents to 95% by supporters).
The MVP website explains that MVP is a natural gas pipeline system that runs about 303 miles from northwestern West Virginia to southern Virginia.
The Associated Press report that the project has suffered delays and setbacks as green groups have challenged permits in court. Most recently, MVP received permits for revised crossing methods for 180 water bodies and wetlands, but other permit hurdles remain. The various challenges have delayed completion by four years and doubled the cost to $6.6 billion.
Apart from MVP, Burd said a couple pieces of state legislation passed during the 2022 session is helping the industry. One is SB 694, the unitization bill. “That will help us better unitize properties to drill longer laterals.”
While this and similar bills in prior years generate debate about property rights, Burd notes the property and environmental benefits. “That really means, in the long run, fewer wells with longer laterals.” And that means less burden on the surface lands.
SB 650, Burd said, also will ease the process of forming drilling units. It struck a provision of the cotenancy bill passed in 2018 dealing with mineral tracts with more than one owner. The 2018 bill required that on a property with seven or more owners, a supermajority of 75% of the cotenants must agree to leasing in order to develop the property.
SB 650 removed the reference to seven or more owners but preserved the 75% condition.
Here are a few other gas facts numbers from the report:
In 2021, the industry produced 2.674 trillion cubic feet (tcf) of gas. The top five producers were Antero, SWN, EQT, Tug Hill, HG Energy and Northeast Natural Energy, which has a Morgantown office. Antero produced more than double second-place SWN, with 1.061 tcf.
Total production has risen in each of the last three years. From 1.772 tcf in 2018, production rose to 2.156 tcf in 2019, 2.519 in 2020 and 2.674 in 2021.
Pipeline and related structures construction provided the most industry jobs, with 2,961 and an average annual wage of $96,206. Fossil fuel power generation was second, with 2,338 jobs. Gas and oil well drilling provided 1,047 jobs with an average annual wage of $88,332. Natural gas extraction provided 1,764 jobs with an average wage of $89,631.
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