Staff cuts and a budget squeeze at a West Virginia regulatory agency could pose a public health risk, conservation groups and state lawmakers warned Thursday.
The Department of Environmental Protection’s Office of Oil and Gas faces a $1.3 million shortfall and is down to a staff of 25 from 40 after the agency committed to slashing its ranks of inspectors and permit writers. A plunge in the number of horizontal-well applications triggered budget cuts.
“In a worst-case scenario, if these wells are not properly inspected and maintained, there’s an explosion risk or other types of bad things can happen to people who live nearby or people who work on these sites,” said Delegate Evan Hansen, D-Monongalia.
Joining Hansen at an afternoon news conference were state Sen. William J. Ihlenfeld II, D-Ohio; Dave McMahon, co-founder of the West Virginia Surface Owners’ Rights Organization; Ohio Valley Environmental Coalition project coordinator Dustin White; and moderator Angie Rosser, executive director of the West Virginia Rivers Coalition.
McMahon called for well operators to pay $100 per well per year, which he estimates would raise $6 million — enough to bolster the Office of Oil and Gas and leave some money for addressing abandoned and orphaned wells. Hansen said he has committed to co-sponsor legislation that would implement the fee.
The Office of Oil and Gas relies on one-time permitting fees to generate revenue.
“Funding the Office of Oil and Gas with only application fees on new permits has gone from being a bad idea to a disaster,” McMahon said.
The Office of Oil and Gas has approximately 60,000 active and 15,000 abandoned wells under its jurisdiction, according to DEP spokesman Terry Fletcher. The decline in the office’s number of applications to drill new horizontal wells grew sharper in 2020, having fallen from 517 in 2017 to 473 in 2018, 400 in 2019 and just 179 last year.
The office is expected to bring in about $1.1 million annually but would need another $1.3 million just to operate with a reduced staff of 25, Fletcher said. The office had planned to reduce its staff ranks to 25 and have the DEP’s Division of Water and Waste Management fund a position dedicated to reviewing water management plans, according to Fletcher. He said 10 Office of Oil and Gas employees have been moved to fill vacancies in other divisions of the DEP, and one took a job outside the agency.
The Division of Water and Waste Management is funding the water management plan position while the DEP works with three other Office of Oil and Gas employees to help fill other agency vacancies, Fletcher said.
“The layoffs of the DEP inspectors and the office being short-staffed is making our communities unsafe and putting oil and gas workers at risk,” White said.
Hansen expressed concern about unplugged or poorly maintained wells might leak methane, as well as worries over wells with oil and gas waste tanks situated near and upstream from public water intake points.
A member of the Senate Energy, Industry and Mining Committee, Ihlenfeld said he has discussed legislative solutions with DEP officials.
“It’s $100 a year, so it’s not a significant burden for any well that’s producing,” Hansen said of the proposed well fee.
But Charlie Burd, executive director of the Gas and Oil Association of West Virginia, said the proposed well fee would be too expensive.
“There’s just not a lot of discretionary revenues coming off marginal wells for us to be able to endorse a $100 fee per well,” Burd said.
Burd cited a law the Legislature passed last year expediting horizontal well permits for a fee split between operating permit and reclamation funds in the Office of Oil and Gas.
McMahon wants a more robust Office of Oil and Gas, with oversight that isn’t funded by an industry used to drilling booms and busts. He argued that wells that don’t make enough money to pay $100 a year should be plugged anyway.
“Nobody would try to run a business with this kind of cyclical funding,” McMahon said.
West Virginia was sixth in the nation in natural gas marketed production in 2019, with nearly 2.2 trillion cubic feet, according to the U.S. Energy Information Administration.