American Oil and Gas Reporter - January 2019 - 107

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ConventionSection: Independent Oil and Gas Association of West Virginia
percent of West Virginia's total gas output,
halving marginal wells' severance tax
would have scant impact on state revenue,
Loflin says, but could mean a lot for
reclamation. "Certainly, it would be a
big boost," he affirms. "We think we can
raise between $3 million and $7 million
in the first three or four years."
Going Downstream
In addition to a proposal to cut marginal
wells' severance tax load, the association
also supports a severance tax break and
possible transportation fee caps for production from conventional wells that supply local natural gas distribution companies
in the state's rural areas, Loflin says. A
tax exemption for perhaps five years
would help IOGAWV operators providing
production that specifically benefits rural
West Virginia, he describes.
Some rural local distribution companies
have little alternative because pressures
from unconventional Marcellus wells are
too high for rural lines, he says.
"We had a couple issues last winter in
which some rural communities served by
the conventional natural gas industry were
running out of natural gas," Loflin recalls.
"It is simply not profitable to operate some
wells in those areas anymore. It's not economic to bring in a swab rig, unload the
fluid and get those wells back in production.
A severance tax break, hopefully, will
provide enough incentive to, if not drill a
new well, at least go in and work a well
over and get it back into production for
the benefit of these local distribution companies and their customers."
IOGAWV will continue to promote
downstream natural gas use and strongly
support the proposed Appalachia Storage
Hub, which could accelerate the region's
growth in the petrochemical industry,
Loflin considers.
"The hub and corresponding growth
would produce a huge number of jobs,
with a corresponding increase in the
state's tax base," he predicts.
IOGAWV also continues to push for
the construction of natural gas-fired power
plants in the state, Loflin says. New
plants are being built in neighboring
Pennsylvania and Ohio, but gas plants
produce only about 1 percent of West
Virginia's electricity, he says.
"Folks should understand the need
to reduce power plant permitting timelines," Loflin suggests. "It takes eight
months, minimum, to get a siting certificate from the Public Service Com-

mission of West Virginia. People object
to some of the permits and that further
delays the process. That's why Pennsylvania and Ohio are attracting several
natural gas power plants: Power plant
operators see it takes forever to build a
power plant in West Virginia and decide
they can get it done a lot quicker in
Pennsylvania and Ohio."
Also from a regulatory standpoint,
IOGAWV members continue to face challenges obtaining extradited well work
permits because of staffing challenges at
the West Virginia Department of Environmental Protection, Burd observes.
"Once inspectors are trained, they can
be recruited away," he says. "The challenge
is keeping staffed with personnel who

can assess permits and approve them in a
timely manner."
Meanwhile, at the federal level, West
Virginia oil and gas companies continue
to deal with Environmental Protection
Agency regulations on methane emissions,
Burd notes.
"We are part of a coalition that is
looking into those emissions and working
with the EPA on applying more realistic
regulations," he says. "West Virginia has
a lot of low-producing marginal wells.
EPA has written its emissions rules as if
all wells are created equally and we know
that isn't true. We are working with the
EPA to provide evidence and prove that
small wells produce and emit less than
larger wells."
r

IOGAWV's Winter Convention
To Explore Key Industry Topics
CHARLESTON, W.V.-Members of
the Independent Oil and Gas Association
of West Virginia will gather for IOGAWV's
2019 Winter Meeting at Charleston's Marriott Town Center to hear the latest on
drilling and completion technologies and
industry trends and get a firsthand opportunity to sway lawmakers in town for the
second session of the 83rd Legislature.
"This is a very popular event because
it gives our members the opportunity to
interact with state lawmakers and other
state government decision makers and it
gives elected members the opportunity to
meet the industry that is creating the
state's greatest amount of jobs and investment growth," says IOGAWV Vice
President and Program Chair Kevin Ellis.
The event gets under way with a kickoff breakfast at 8 a.m. on Tuesday, Jan.
22. A separate producer issues breakfast,
limited to IOGAWV producer members,
also is planned to start at the same time.
Technical sessions get under way an
hour later, and will include presentations
from breakfast sponsors C&J Energy Services, Schlumberger Oilfield Services and
SLS Energy & Land Development, details
Ellis, vice president of governmental relations at Antero Resources Corp. He says
the schedule calls for C&J and Schlumberger
to offer the morning sessions and for SLS
to present following lunch. Topics will include new products, innovations and the
latest in well completion techniques.
"We learn about developing and emerg-

ing trends relative to drilling and completion practices, and in this particular instance,
we will have a session from a member on
the uses of drones on operations, including
inspections, pipeline rights-of-way and
well siting," Ellis details.
The Past Presidents/Gunslingers Luncheon will begin at noon, with a simultaneous
lunch planned for technical session attendees. A membership reception beginning
at 5:30 p.m. will close the day's events.
Day Two
The next day, members gather for
breakfast, sponsored by Ergon Oil Purchasing, at 8 a.m. IOGAWV has invited
West Virginia Governor Jim Justice to
provide the keynote remarks, Ellis says.
At 9:20 a.m., IOGAWV President
Brett Loflin will provide an association
update, followed by remarks from Dr.
Jill Justice of The Greenbrier Clinic. Remarks from industry executives will follow,
with talks from Rusty Hutson, chief executive officer of Diversified Gas & Oil
Corp., Tim Dugan, chief operating officer
at CNX Gas and Frank Bakker, CEO of
U.S. Methanol.
"It's always great for our members to
hear the perspective of CEOs whose companies operate in the Appalachian Basin,"
considers IOGAWV President Brett Loflin.
"It's beneficial for members to hear the
market updates and what they can expect
in the future."
Those executives are expected to disJANUARY 2019 107

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