dbeard@dominionpost.com
MORGANTOWN – Horizontal gas well permits dipped to an all-time low in 2023 and 2024. The Dominion Post talked with the Gas & Oil Association of West Virginia about the numbers, the trends and what might be ahead for the industry.
First a look at the numbers (summarized in the accompanying chart).
The state Legislature passed the Natural Gas Horizontal Well Control Act in December 2011, during a special session, to deal with the Marcellus drilling boom. The state Office of Oil and Gas then began compiling permit information regarding the wells falling under the act, called Horizontal 6A wells. Annual reports date back to 2013.
The business took off. There were 684 permit applications received and 661 permits issued in 2013, followed by 771 applications received and 638 permits issued in 2014.
Both numbers fell a bit in 2015 then dipped significantly in 2016 – to 264 and 223, receptively. The next couple years saw a leveling upward, in the lower 500s, then in the 400s for 2018-2019.
Another big dip occurred in 2020: 179 applications received, 223 permits issued. A slight rebound followed in 2021 and 2022, figures in the upper 200s.
2023 took another dive: 189 applications received and 195 permits issued. And 2024 saw the all-time low: 130 applications received, 140 permits issued.
GO-WV Executive Director Charlie Burd shared some insights on the recent numbers.
He agreed with a supposition that the 2020 dip was COVID related, followed by the post-COVID rebound in 2021-2022.
“During that process,” he said, “I think there was a lot of time invested in how to drill more efficiently, do more for less, longer laterals, more efficient drilling techniques, drill fluids.”
The more-for less concept was made clear in a 2023 The Dominion Post report on that year’s Marcellus Shale Coalition Shale Insight Conference. A Range Resources official said them that evolving technology allowed Rangeto reduce its surface impact. From 2,000 foot well laterals in the early days, a recent well reached 22,000 feet. This meant fewer pads and rigs.
A source called DrillingEdge shows that the state’s production has steadily increased even as permit numbers fluctuated: in 2013, 757,882,744 mcf (thousand cubic feet); 2016, 1,376,998,518 mcf; 2021, 2,675,207,978 mcf.
On another positive note, Burd said natural gas prices have been holding steady. But then he addressed geopolitical challenges.
One of those has been the federal policy-driven curbing of liquefied natural gas (LNG) exports and the decline in the permitting of export terminals. This has led some other countries to pick up the slack and assume some of what had been the U.S. role in supplying LNG.
This region’s gas industry, he said, is tied to the East Coast LNG terminals, and the interstate transport is regulated by the Federal Energy Regulatory Commission. By contrast, the Texas gas industry is regulated by the Texas Railroad Commission, which is not in the habit of hampering pipeline construction.
But with a change in administrations, some hope is on the horizon, he said. “We’re hopefully optimistic production is going to increase and prices are going to increase and hold.” They hope that under the new administration’s energy policy, “we will be able to do more here in West Virginia to enhance our ability to produce electricity with natural gas.”
That comment turned the conversation to intrastate gas business. West Virginia, Ohio and Pennsylvania for a tri-state gas region. Burd said that our two neighbor states have more than two dozen gas-fired power plants. We have none.
“We hope that will end,” he said.
It could. The CPV Shay Energy Center is in development in Doddridge County, Competitive Power Ventures reports. The $3 billion project is estimated to start construction the fourth quarter of this year. The 2,060 megawatt plant is projected to generate 2,000-plus jobs and power 1.8 million homes.
And in Monongalia County, the long-delayed gas-fired power plant adjacent to Longview Power is back on track. In November, the Public Service Commission granted Longview subsidiaries Mountain State Clean Energy and Mountain State Renewables an extension on the timeline to start and complete construction. They have until April 3, 2029, to start construction and April 3, 2034, to complete the job.
Beyond gas-fired plants, Burd said the hope is two-prong: to bring more downstream manufacturing into the state and to enhance what is here.
One of the major porjects he cited is Fidelis New Energy – a segment of the Morgantown-headquartered ARCH2 hydrogen hub. The company lists among its projects the Mountaineer GigaSystem lifecycle carbon neutral clean hydrogen facility and renewable microgrid, producing hydrogen form natural gas, in Mason County. Also planned for Mason County is the Monarch Cloud Campus hyperscale data center complex, also powered by hydrogen.
Also also mentioned the Nucor steel mill project in progress in Mason County and Form Energy in Weirton. “Those type of projects are exciting for us.”
Burd said industry jobs are holding steady and severance taxes are benefiting the cities and counties.
State treasurer’s office figures show that $26.4 million went out to the local governments in 2024 and $18.3 million in 2023. 2022 saw a whopping $41.7 million go out. While the recent two years reflect a dip, the numbers have grown since 2013. That year, it was just $7 million; 2016, $10.3 million; 2019, $16.2 million.
Burd said, “I think we should still be encouraged that West Virginia is the fourth leading producer of natural gas in the country. The challenge there is, being fourth and having no power production from natural gas is frustrating. That’s one of the things that has to change. Being fourth is good; being forth and being able to use more of the natural gas produced in our state, in our state is better.”
He’s looking ahead with optimism.
“We continue to do just do what we do best – drill and produce natural gas. We hope to get the opportunity, now that we have a change in leadership in Washington. D.C., to produce natural gas that’s used here in the state and even provide more enhanced benefits to the 1.8 million people here.”
