Appalachian Basin

West Virginia Sets New Oil and Natural Gas Production Record (Again)

West Virginia continues to add to the prolific Appalachian Basin’s status as one of the world’s top-producing natural gas regions.

For the 10th year in a row, West Virginia set a new oil and natural gas production record, according to the state Department of Environmental Protection. Between 2017 and 2018, natural gas production grew 17 percent to 1.8 trillion cubic feet (Tcf), while oil production rose nearly 60 percent to 12 million barrels. This is the largest amount of oil produced in the Mountain State since 1900.

The top three natural gas and liquids producing counties in 2018 were Doddridge, Tyler, and Ritchie, in the heart of the state’s Marcellus Shale region. Doddridge County increased production by 14 percent last year, bringing the county’s annual total to434 billion cubic feet (Bcf) of natural gas. Meanwhile Tyler County produced 272 Bcf and Ritchie County produced 200 Bcf, rising 59 percent and 26 percent, respectively.

Anne Blankenship, executive director of the West Virginia Oil & Natural Gas Association,described the scale of this production:

“To put this monumental volume of gas production into context, the average West Virginia household consumes about 72 Mcf (thousand cubic feet) of natural gas per year. We produce enough gas in one day to meet the needs of all West Virginians.” (emphasis added)

Record-breaking production is filling state coffers.

The continued production growth directly benefits West Virginians by spurring job growth, boosting state revenues and helping the state achieve the highest economic growth in the country. Between 2015 and 2018 alone, the state received more than $550 million in severance taxes from natural gas production, plus an additional $63 million from severance taxes on oil, according to the West Virginia State Tax Department.

Blankenship explained the direct impacts of these taxes:

“Rising production results in higher severance and property tax receipts which help fund critical services like education, road improvements, and health care, while also creating more jobs for West Virginians.”

Charlie Burd, executive director of the West Virginia Independent Oil and Gas Association, underscored the broad revenue implications of  the industry’s success:

“[S]ince 2008, when horizontal drilling took off, the state’s oil and natural gas industry has contributed over $1 billion in severance taxes to the state’s general revenue fund, over $1 billion in property taxes to the counties and hundreds of millions of dollars in royalty payments. Ask any shop or restaurant owner in the areas being drilled, and they will verify the wonderful economic boon they are experiencing.”

West Virginia abounds with high paying industry jobs.

The growth in production is also helping create high-paying jobs across the state, especially as more critical pipelines and related infrastructure are built to transport new supply to demand centers. In 2017, West Virginians experienced a 1.3 percent decrease in unemployment and a 2.75 increase in personal income.

As noted above, pipelines are a critical driver of West Virginia’s employment growth. In fact, the Weirton-Steubenville, West Virginia/Ohio metropolitan area ranked first in the country for construction job growth between March 2017 and March 2018, according to the Associated General Contractors.

With eight major pipelines under construction across the state, the industry is continuing to provide family-sustaining job opportunities for West Virginians. As  Patrick Ford, executive director of the Business Development Corporation of the Northern Panhandle,  told EID in 2018:

“The growth in our GDP and economy has been driven by energy. Natural gas has given a rebirth to the value-added metal, energy, and chemical industry clusters, expanded our transportation logistics and health care industry clusters, cut our unemployment rate in half, attracted over $400 million of private investment, driven up worker pay rates to the highest levels we have seen since 2008, and fueled a construction industry that has our region growing construction jobs faster than other metro area in the country.”

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