Still wanting to make his state the “energy capital of the East Coast,” Gov. Bob McDonnell last week unveiled a series of recommendations for the 2012 Virginia General Assembly session, which he said will allow the state to take advantage of “a bounty of natural resources that can aid in our nation’s growing need for affordable and reliable energy sources.”

Among the legislative items endorsed by McDonnell are proposals to ease restrictions on natural gas infrastructure and to create an alternative fuel vehicle conversion fund.

“To be the energy capital of the East Coast we must work together to empower the private sector to invest in the projects necessary to develop these resources…Only by aggressively developing all types of energy and removing bureaucratic hurdles to this development will we be able to meet our energy needs and reduce our nation’s dependence upon foreign sources of energy,” McDonnell said. “We will aggressively pursue state-based strategies to improve American energy independence and cost reductions in observance of the federal government’s total lack of a coherent energy policy.”

McDonnell said he supported seven legislative proposals that would support energy infrastructure expansion and access to traditional energy sources, promote conservation and efficiency, and support the development of alternative and renewable options. One proposal would allow natural gas utilities to expand infrastructure as necessary to provide gas to economic development projects where it is not already available and when a project developer commits to at least a five-year contract for natural gas use. The state currently does not permit utilities to invest in infrastructure construction above the amount that will be paid for gas use. The proposal would also increase the potential for expanded natural gas use in areas of the Commonwealth, spur economic growth and job creation in those areas, and expand the markets for Virginia natural gas resources.

A second proposal would create an alternative fuel vehicle conversion fund to support the implementation of a plan to convert the state’s fleet to alternative fuel vehicles. The plan was requested by the General Assembly and advanced by McDonnell last year (see NGI, July 18, 2011).

Other proposals recommended by McDonnell would improve the regulatory approval process for electric transmission, increase the use of energy efficiency programs, enable research and development for renewable energy, provide renewable energy certificates for renewable thermal energy, and ensure safety of mining and drilling operations in the state.

McDonnell’s proposed budget includes $300,000 annually to support the Division of Gas and Oil’s permitting processes and $500,000 in fiscal 2013 for research and development of the federally designated “wind energy area” off the coast of Virginia.

“By continuing to support our energy infrastructure and encouraging alternative energy development, we will send a message that Virginia is committed to doing everything it can to support traditional forms of energy like coal, nuclear and natural gas; while pursuing efforts to develop offshore energy resources, making advancements in alternative forms of energy like wind, solar and biomass; and supporting responsible energy conservation measures,” said Lieutenant Gov. Bill Bolling “This type of an ‘all of the above’ approach is what we need to position our state as the East Coast’s energy leader and do our part to help our nation adopt a comprehensive and effective national energy policy.”

McDonnell, a Republican, has promoted Virginia as the energy capital of the East Coast since his 2009 campaign to become governor (see NGI, March 9, 2009), but he has seen his efforts to begin oil and natural gas exploration, development and production off its coast stymied by federal government restrictions (see NGI, March 15, 2010).

Virginia’s two Democratic U.S. senators, Jim Webb and Mark Warner, have indicated that they too support oil and gas exploration and production off the state’s Atlantic coast (see NGI, July 11, 2011), though they did join other Democrats who last year blocked a Republican bill that would have promoted drilling off the coasts of Virginia and Alaska and in the Gulf of Mexico (see NGI, May 23, 2011).

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