By: Peter M. Duncan
The Associated Press reported this week that lawmakers in West Virginia have proposed natural gas operators pay $10,000 per well with an additional $5,000 each for additional wells drilled on any site that lays in West Virginia’s share of the Marcellus shale field.
The amendment has already been adopted by a special House-Senate committee and the state Department of Environmental Protection claims the fees will result in $2.5 million and will help them hire needed inspectors and office staff.
Compare this new fee to the few hundred dollars drillers pay now for permits. The increase is substantial, and industry groups have already agreed to it. The revenue that the operators, but also the ECONOMIES stand to gain far outweighs the value of these fines.
What the state of West Virginia fails to document is the amount that their constituents stand to lose as oil and gas companies make adjustments to accrue for these new budget items. These fees are a cost of operating, just like the cost of electricity needed to light and heat the buildings we work in. When operating costs go up, profits go down-salaries decreases and bonuses and benefits can’t be provided.
West Virginia is a historically poor state with an unemployment rate of 8.1%. The infrastructure provided by shale gas drilling is proven. It’s time for local government to think about cost and benefits and do what’s best for their people, not the government.