Energy Remains Vital to State’s Economy
West Virginia is in the midst of one of the most challenging economic periods in the state’s history due mostly to the collapse of the coal industry — down 51 percent in the state since 2010 — and the lack of economic diversification to lessen our dependence on that industry for jobs and as a tax base.
Certainly, the Marcellus and Utica shale gas reserves offer a long-term opportunity for offsetting the losses from coal and their effect on our state’s economy. But a worldwide collapse of the energy market due to OPEC flooding the market with cheap crude oil has had a chilling effect on shale gas development.
Sens. Shelley Moore Capito, R-W.Va., and Joe Manchin, D-W.Va., hosted an official field hearing of the Senate Energy and Natural Resources Committee Monday afternoon in Morgantown. Experts in academia, construction, labor, natural gas, coal and manufacturing discussed the future of West Virginia’s energy industry in the larger scope of the state’s flailing economy.
Some of the testimony showed a potential path forward for the coal and natural gas industries. Jeff Keffer, CEO of Longview Power LLC, testified about the coal-fired Longview Power Plant’s overwhelmingly positive results in efficiency and low-heat emissions.
“I’m encouraged that we’re going in the right direction from what we’ve heard today,” Capito told MetroNews. “My concern is that we’ve got to seize the moment. I don’t want to see this moment pass for us because we’ve got so much to capitalize on.”
But much of the afternoon involved economists Dr. Brian Anderson and Dr. John Deskins — professors at West Virginia University — talking about the urgency of West Virginia’s current economic predicament.
“Those job losses, those output losses, have been heavily concentrated in southern West Virginia and especially in six counties,” Deskins said. “We have six counties that have lost between 25 percent and 33 percent of their jobs just over the last few years.”
Fortunately, here in North Central West Virginia, the negative impact of coal’s decline has been significantly less than in southern West Virginia. Monongalia, Marion and Taylor counties are still producing significant coal output — in part due to the Harrison and Longview Power stations — but also due to the high-quality metallurgical coal that is still in demand on a global basis.
But the real key has been the economic diversification that has taken place in North Central West Virginia over the past two decades in high-tech, aerospace, biometrics, health care and higher education, which has enabled our region to weather the storm better than most.
In addition, Harrison, Doddridge, Wetzel and Lewis counties are poised to benefit greatly as the Marcellus shale gas resources continue to be developed and sent to market. There is no question that once the five major gas pipelines currently under review by the Federal Energy Regulatory Commission are approved and developed, our region will see a significant economic impact in terms of jobs and tax revenues.
The real opportunity lies in downstream investment in manufacturing jobs. However, if we are not diligent, this too can pass us by due to the lack of a skilled, drug-free work force necessary for industry to make multimillion-dollar investments in West Virginia.
Deskins does expect natural gas prices to stabilize and rebound. And that’s where he, Dr. Anderson and Sens. Manchin and Capito see a potential way forward.
“We don’t have to reinvent the wheel here,” Manchin said. “Go down to southwest Louisiana, go down into Texas. See what they’ve done. They built infrastructure. They built the lines to keep the product. They built the refineries. If you build it, they’ll come. If you have a product, they’ll come. If you have a workforce, they’ll come.”
Manchin and Capito both offered their support for streamlining regulations in the industry, encouraging additional investment in West Virginia in renewable energy, and simultaneously building the infrastructure — pipelines and storage basins — to fully capitalize on the potential of natural gas.
Though Deskins supports calls for economic diversification in the Mountain State, he testified that the surest economic answer in the short-term is investment in the energy industry.
“We need to help all these other industries, but that’s long term,” he said. “That’s not going to happen overnight. That’s not going to happen over five years even.
“That’s a long-term proposition that requires action on the part of community leaders, government leaders, business leaders, entrepreneurs. In the short term, a real solution is helping energy, helping coal, helping natural gas.”
Yes, our state’s economy needs diversification — much like the success that has occurred in North Central West Virginia. But there is no doubt that energy remains vital to our state’s economy and to our nation’s viability, security and independence.
By: John Miller
Source: The Exponent Telegram
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