21ST CENTURY ENERGY EMBRACING NATURAL GAS - The Decline Of Coal, Looking At The Numbers, How They Affect Calhoun/Regional Counties

(09/06/2012)

By Bob Weaver

We're told that West Virginia stands on the cusp of natural gas becoming the best new energy source to help the state rise from its economic doldrums, most recently the Marcellus Shale Boom and the transfer of energy from coal to natural gas.

In West Virginia, most of the Marcellus Boom has been in the northern panhandle and northwest section of the state.

During 2010, according to US Energy Information Administration, the gas and oil industry in WV employed about 15,000 workers, with another 5,000 connected to power generation and supply.

Those are not exciting employment numbers, while producers mostly employ out of state workers.

While the state's politicians continue their century long connection to King Coal, fighting their fight against Obama's "War on Coal," claiming that environmental regulations are destroying the industry, when in fact the transference to natural gas is primarily linked to market forces.

Natural gas is cheap and coal reserves are running out.

The transference from coal is a natural progression after the embracing of lower-cost natural gas, with the state's coal reserves mostly coming to an end in a decade.

While the politicos are blaming it on Obama's regulations, it is apparent to the almost blind it is a faulty rationale. Natural gas is the future and Charleston is ecstatic about it, politicos paving the way while playing all sides.

For the first time in U.S. history, natural gas generated as much electricity as coal.

Experts predict that the need for coal will drop to 40% by the end of this year and 30% by the end of the decade.

Coal generation decreased 29 billion-kilowatt hours from March 2011 to March 2012, while natural gas generation increased 27 billion-kilowatt hours during the same time period.

Natural gas prices were near a 10-year low last winter, causing some states to increase the construction of natural gas-fired plants that operate at higher efficiency than older, coal-fired units.

While there are problems with gas production, most agree that gas exploration and production is cheaper, safer and less destructive to the environment.

The Government Accountability Office says that power plants that burn coal produce more than 90 times as much sulfur dioxide, five times as much nitrogen oxide and twice as much carbon dioxide as those that run on natural gas.

What does the natural gas boom mean to West Virginians, under whose land it is being pulled?

If history reveals the answer, not much. Maybe better air and water, with a few thousand stable jobs.

Booms should have an attached nervous reaction. After a "boom," there is a long silence that drifts away. Remember the Deep Well Boom of a decade ago, or oil and gas booms of the last century.

What the latest boom means to Calhoun and central West Virginia counties is questionable.

Natural gas will not likely mean much to the economy of the region, except to investors, producers, a few job holders and royalty owners.

A Marcellus horizontal drilling project in the Stumptown-Normantown area of Gilmer has been announced.

While Calhoun has had about a dozen wells drilled into the Marcellus "pay zone," according to a 2011 map published by the WV Geological and Economic Survey, the county has yet to experience development associated with the boom.

While taxes on extractables are a major resource for state government, the counties under which the extractables are taken enjoy little of the proceeds.

In West Virginia, for example, the counties under which the most coal have been extracted in the last century, are among the poorest counties in the USA.

Calhoun County benefited from 2011 gas production $98,072 in gas severance taxes, with the Town of Grantsville receiving $6,269.


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