American Oil and Gas Reporter - June 2017 - 107

ConventionSection: Virginia Oil & Gas Association

Virginia Continues To Seek
Regulatory Relief
By Dan Holder

ABINGDON, VA.-Virginia lies south
of the Marcellus Shale plays that continue
to tantalize operators, but Ian Landon,
president of the Virginia Oil & Gas Association, points out the federal regulations
designed for those large-scale operations
also burden the commonwealth's much
smaller well sites.
"Virginia producers are competing for
capital with those shale plays, but the
regulatory environment is a huge challenge
for both," says Landon, manager of operations for EnerVest Operating in Abingdon. "This push for one-size-fits-all regulation has been very difficult for the
traditional oil and gas plays such as we
have in Virginia. There are a lot of added
costs for minimal, if any, benefits."
Regulatory updates will be one of the
topics covered when VOGA holds its
annual convention on June 21-23 at the
Hilton Garden Inn in Virginia Beach,
Va., Landon says. "Going into the annual
meeting, VOGA members are seeing
some light at the end of the tunnel.
Virginia is seeing activity pick up a little.
There will be some optimism, with people
thinking maybe the worst is behind us,"
he describes.
All of the commonwealth's natural gas
production comes from seven southwestern
counties, Landon says, adding that a 2011
assessment by the U.S. Geological Survey,
which projected plays in eastern Virginia
could hold significant amounts of gas, has
generated some interest.
The USGS assessment of East Coast
Mesozoic basins included two regions of
the commonwealth: the Taylorsville Basin
in the Tidewater area that runs from
Richmond, Va., to Clinton, Md., and the
Danville-Dan River Basin in Central Virginia. According to the agency, the mean
estimate of all projections for total undiscovered gas resources in the Taylorsville
play is 1.06 trillion cubic feet, and 37.0
million barrels of natural gas liquids. For
the Dan River Basin, USGS projects 1.66
Tcf as a mean average of resources, with
83.0 MMbbl of NGLs.
"There was some interest in Eastern

Virginia, with some leasing in the Tidewater
Basin, but nothing has happened there,"
Landon offers. "As a result of this interest,
there has been quite a bit of regulation at
the state and local levels, putting a lot of
hurdles in the way of any development."

Seeing The Benefits
With Virginia's natural gas coming
from a small area in the far southwest,
most of the commonwealth has not seen
the benefits the industry brings, meaning
the production process is foreign to most
local officials and residents, Landon suggests. The anti-development community
has seen several successes at the county
level, he notes, with one Virginia county
enacting a slate of onerous restrictions
on gas activities, and another imposing
an outright ban on hydraulic fracturing
operations.
"Those are counties that do not have
any oil and gas operations, so they haven't
given up anything. There is nothing there,
so it is mostly symbolic," he says. "The
county that has restrictions is in the Tidewater region of eastern Virginia, where
the leasing had gone on. Some county
residents there have been susceptible to
the fear mongering that the environmental
movement has pushed."
In addition to speculation about the
Taylorsville and Dan River plays, the
potential for oil and gas activities in the
Atlantic Ocean has revived under the
Trump administration, Landon says.
"There was some interest in offshore
activities, and there has been some talk-
certainly at the federal level-that this
idea may be resurrected," he reports.
"This is something VOGA absolutely is
all for, and will support any way it can.
It would be a difficult fight, I am sure.
There is a large naval base (in Norfork,
Va.), and that must be taken into consideration before any offshore development."
Eastern Virginia is short on natural
gas, so offshore operations may fill a
need, he points out, adding that the maritime industry supporting Norfolk's port
and naval base has the potential to develop
facilities to support an offshore industry,
similar to the businesses throughout south-

ern Louisiana that support rigs in the
Gulf of Mexico.

Virginia Legislature
Virginia faces an uncertain budget situation, with spending cuts likely, Landon
predicts. He points out while the commonwealth's gas production is very important for seven southwestern counties,
it does not impact the entire state, so the
industry is not on most legislators' collective radar.
The commonwealth's gas producers
typically experience mixed receptions in
the capital, he assesses, with a positive
relationship existing with legislators while
Governor Terry McAuliffe doesn't show
many cooperative signs. "The governor
has supported two major pipeline projects-the Atlantic Coast Pipeline and the
Mountain Valley Pipeline-but he has not
been particularly friendly to producing
operations. VOGA tries to educate and
work with his administration as best it
can," Landon says.
Of course VOGA enjoys a strong connection with representatives from the
seven producing counties, he notes.
"They work well with industry, and
always are anxious to know what operators' needs and concerns are," he describes.
"There also is a pretty good relationship
statewide. Legislators in the Tidewater
Basin leasing play certainly had concerns
from their constituents, but we had a delegate from that region carry a bill for the
industry. Those legislators also understand
the needs of the industry and the importance of what we do. They also appreciate
that the oil and gas industry is a revenue
and employment source for the state."
According to Landon, the major industry initiative considered by the 2017
Virginia Legislature was HB 1679, introduced by Delegate Roxann Robinson, RMidlothian. It required the disclosure of
chemical ingredient names, abstract numbers, and the amount or concentration of
chemicals used in well stimulations
notwithstanding mandatory disclosure exclusions granted as trade secrets. According
to the legislative website, the bill limited
disclosure of chemical information to
JUNE 2017 107

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