“Drilling Down on Marcellus” Workshop Held at WVU College of Law

Views at the symposium ranged from guarded optimism to hope-tinged cynicism, according to David Beard of the Morgantown Dominion Post. Much was familiar: Let’s regulate, let’s protect people and the environment, let’s make money. But one lawyer worried that West Virginia may be institutionally incapable of getting things right. One economist offered a less-than-rosy possibility of a boom-bust followed by a brain drain as native talent follows the money to other states. During a debate on local fracking regulations, another attorney suggested Morgantown made a strategic error in trying to protect itself through a ban instead of a court injunction. See also here.

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West Virginia was unprepared for the new type of drilling, Department of Environmental Protection (DEP) Secretary Randy Huffman said. WV took a different approach: Get by on existing rules until new ones were legislated. He said Marcellus permit numbers are:  2006, 0; 2007, 11; 2008, 383; 2009, 480; 2010, 430 (reflecting the drop in gas prices); 2011, 500 projected. “I don’t think we’ve seen a major industry like this go from nothing to what it is today in such a short amount of time. … It was difficult to prepare. …. We’ve managed to get by.”

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Mark K. Boling, Vice President and General Counsel at Southwestern Energy, presented a talk in cooperation with the Environmental Defense Fund. Boling said that leakage is a problem that should be addressed by the industry. Casing leakage involves (1) cement channeling primarily in the shallow zone of the well, (2) casing leakage at joints or ruptures, and (3) insufficient cement coverage at the shoe.

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Tom Witt, director of WVU business school’s Bureau of Business and Economic Research, reviewed economic impact studies on the possible Marcellus impact on the state, i.e. from 6,600 to 19,600 new jobs in 2015 and $400 million to $890 million in wages. Thomas Kinnaman, Bucknell University in Pennsylvania, said Witt’s view may be too rosy with forecasts based on economic models outmoded since 1975, and no longer considered sound scholarship. Studies of other gas communities reveal other facts. Marcellus activity may simply shift workers from other jobs. See also here.