After causing quite a stir in 2005 with his unsuccessful attempt to open up the Virginia coastline to natural gas drilling, state Sen. Frank Wagner (R-VA) introduced energy legislation in the opening days of the General Assembly last week that is more comprehensive in scope than his energy measure that was debated by state lawmakers last year.
The broad bill (SB 262), among other things, seeks greater access to the federal Outer Continental Shelf for natural gas development, an exemption for Virginia from the moratoria against drilling off its coast, construction of more gas pipelines and the siting of one or more liquefied natural gas (LNG) terminals in the state, as well as the creation of a research center at Old Dominion University to explore frozen methane-gas crystals.
Wagner's draft bill proposes that Virginia share the revenues from offshore production with the federal government, and would give the state authority over its offshore resources. All of the state's royalty revenues would be used for Chesapeake Bay clean-up, transportation infrastructure, renewable electricity production, clean-coal technology and methane-gas research.
The legislation has a "very good" chance of clearing the Virginia legislature this session, said Jim Kibler, vice president of government relations for AGL Resources, parent of Virginia Natural Gas (VNG) in Norfolk, VA. "The criticism last year was that it [Wagner's bill] was too focused on conventional energy," he told NGI.
"I feel pretty good about the bill," Wagner said. "A lot of legislators had their eyes opened" to the need for strong state energy policies in the wake of Hurricane Katrina last year, he noted. Wagner said he already has discussed the bill with Virginia's new Gov. Tim Kaine.
The measure that Wagner introduced in early 2005 sought to open for the first time Virginia's coastal waters to gas exploration and production. It cleared both houses of the Virginia General Assembly, but was vetoed by former Gov. Mark R. Warner (see NGI, April 4, 2005).
In addition to the gas-specific provisions, this year's bill proposes the siting of at least one new nuclear and wind facility in the state; promotes renewable energy development, clean coal technology and methane-gas research; establishes a state tax deduction for the purchase of energy-efficiency appliances; and requires the state's administration to develop an energy plan for Virginia, among other items, Kibler said. "This is the most comprehensive piece of state energy policy that I've ever seen."
VNG supports all provisions in Wagner's bill that favor supply diversity, which would relieve the pressure on natural gas, Kibler said. The existing tight supply-demand situation "has been exacerbated for VNG because we are at the end of the pipe."
The measure is expected to trigger significant opposition from environmental groups and local governments when the General Assembly takes it up, according to a published report in the Virginia Pilot.
A special subcommittee of the state's Coal and Energy Commission has been reviewing the proposal since October, and its chairman, state Sen. John C. Watkins, is scheduled to issue a final report on Jan. 17 on its prospects for clearing the legislature, the newspaper noted.
Local officials have objected to a provision in Wagner's draft proposal that would require the state to rank the sites to build low-emission nuclear, LNG and wind facilities in the state. Once designated, the sites would be exempt from local zoning ordinances, Kibler said.
Environmental groups, who are opposed to the Wagner legislation, are backing a bill that would require individual power companies to use a greater amount of renewable energy, such as solar and wind, in their energy production until it represents 20% of their overall production by 2015.
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