THEIR VIEW: Marcellus Shale hearing could mean progress

By The West Virginia Record | Apr 11, 2012


CHARLESTON -- Most politicians love to hear themselves talk. But today in Fairmont, it appears there will be some political dialogue which could lead to actual progress for the state economy.

A Congressional Committee overseeing commerce, science, and transportation will hold a hearing on the Marcellus Shale to discuss steps to further bolster safe development of natural gas in the state. The vast amount of shale gas locked in rocks thousands of feet underground throughout West Virginia have transformed the economic landscape.

In 2009, the natural gas industry directly employed almost 10,000 state residents, and supported the employment of about 24,400 West Virginians in the both industry and supporting positions all told. As the state has struggled to find funds to balance the budget, natural gas companies paid $65.9 million in severance tax and $88.4 million in property tax. It is exciting that the federal government is taking interest in expanding this activity, but could also pose a dilemma.

While West Virginia's authorities have been a mostly competent regulator of safe natural gas drilling on state and private lands, the federal government has been slow to approve permits and continues to search for safety lapses they seem positive exist. Far from promoting natural gas, federal regulators are seeking an additional $14 million to an already bloated budget to find potential worst case scenarios surrounding the drilling process used to extract natural gas.

This substantial investment of taxpayer dollars has yielded little useful information for state regulators, but it has resulted in three embarrassing "my bads" in which the EPA was forced to backtrack their findings. The Fairmont hearing could be a good sign that Federal officials are finally looking for ways to support states in developing resources safely, rather than throwing up new red tape roadblocks.

Local communities and landowners who've been involved in the natural gas boom are largely supportive of the oil and gas companies undertaking production activity. Holding a hearing in Fairmont provides a strong home court advantage for members of Congress who support natural gas drilling, far away from the activist intent on stopping drilling at all costs who operate on nearly unlimited budgets in DC. It also provides a little distance between the Democrat-held Senate and President Obama, who has been a major opponent of oil and gas companies since taking office in 2009.

From the year-long drilling moratorium in the Gulf to the rejection of the Keystone XL pipeline to deliver Canadian oil to U.S. refineries, President Obama has decided to take a strong stance against traditional oil and gas fuels. Despite this crusade, advances in drilling technologies and access to state and private lands has allowed shale production to surge in the U.S.

State residents are enjoying the benefits of this abundant production with cheaper energy bills. Hopefully the hearing in Fairmont will be an indicator that not all in Congress agree with the President on this issue. And this is a crucial time.

As gas prices remain high, some in Washington are looking for easy targets to place blame. President Obama has decided that oil and gas companies are the easiest target, and has called for billions in tax increases on these companies to raise government revenue and fund his "green" pet projects.

While green energy is a good thing, raising taxes on oil and gas companies will only boost the price of refining fuel, and boost prices for consumers at the pump. As we look to recover from recession, this is a horrible idea.

Instead, we should be diversifying our resources by developing shale, working with close allies like Canada to get access to their vast resources, and developing our own resources offshore. This will reduce our reliance on oil from unstable regimes abroad like Venezuela and Iran, and offer a cushion to the international price shocks which are pushing gas prices near $4 today.

The hearing in Fairmont offers a unique opportunity to understand politician's stances on increased production in the state and throughout the country. Hopefully we will see progress toward increased development of natural gas in West Virginia, and not just more politically divisive hot air.

Stuart is chairman of the West Virginia Republican Party.

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