Shale Daily / NGI All News Access

WV Bill Aims to Boost Investment in Natural Gas

Several state senators introduced legislation last week designed to help spur investment in the natural gas industry.

The Marcellus Shale Gas and Manufacturing Development Act, introduced Feb. 8 by West Virginia state Sen. Brooks McCabe (D-Kanawha) and a dozen of his colleagues, contains several incentives, including a tax break for natural gas fueling stations. Under the bill, an expired tax credit for vehicles that run on natural gas would also be reinstated.

''This really focuses on the economic development potential," McCabe told the Charleston Daily Mail. "We want to try to accelerate in the next five years the introduction and usage of natural gas-powered vehicles."

Denise McCourt, communications director for Natural Gas Vehicles for America (NGVAmerica), told NGI'sShale Daily on Monday that, if enacted, McCabe's legislation would be a boon for natural gas usage in West Virginia.

"If you look at those states that have good state programs, that's where you see the growth of natural gas vehicles," McCourt said. "While the market for natural gas vehicles is going to grow, it grows even faster when there are incentives in place that encourage people (to switch), particularly when you are talking about fleets that are going to convert to natural gas."

Those fleets, McCourt said, would include garbage and delivery trucks, buses and other commercial vehicles.

She added that McCabe's bill, known as SB 465, "eliminates the whole 'chicken-and-egg issue' of (either building) service stations first or getting vehicles going by. When you have fleets going to natural gas, you have the right number of vehicles. It makes it so much easier to make sure that you have the appropriate fueling for the appropriate vehicles."

McCourt said the federal government currently offers tax breaks for natural gas vehicles in the form of a fuel tax credit, and an incentive to build infrastructure.

Two additional bills affecting the natural gas industry are also up for consideration in the Mountaineer State. The first, drafted by the state's Department of Environmental Protection (DEP) and supported by Democratic Gov. Earl Ray Tomblin, includes a statutory pooling provision for shallow horizontal wells, which would include Marcellus Shale drilling (see Shale Daily, Feb. 1).

Meanwhile, a second bill calls for regulating high-volume hydraulic fracturing operations (see Shale Daily, Jan. 24).

SB 465 would offer research and development tax credits, and also reallocate about $60 million of West Virginia's future oil and gas severance taxes to city and county governments in the state, as well as provide more money for fixing roads. The DEP would also receive increased funding.

The bill also contains incentives to build infrastructure for removing natural gas liquids from the gas stream. (see Shale Daily, Oct. 28, 2010). State officials believe those facilities would create hundreds of jobs.

West Virginia appears to be embracing the opportunities that come with the rock formation that runs beneath the state. On Tuesday Tomblin, joined by leaders in the natural gas and chemical industries, announced the formation of the Marcellus to Manufacturing Task Force, intended to harness the business opportunities surrounding the development of the Marcellus Shale (see Shale Daily, Feb. 16).

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