Posted: April 4, 2013 at 11:40 pm
By Omar Ghabra, Laura Clark and Sarah Davis
For decades, coal has been king in West Virginia. The coal industry has dominated the state’s economy and its money has bought the acquiescence of generations of politicians at the state and federal level.
But with the rise of the natural gas industry in the Appalachian region, coal’s stranglehold may finally be weakening. Experts say the natural gas industry’s clout has steadily grown in West Virginia and it is now widely perceived to be threatening the long-held dominance of the coal industry.
“We’re looking at trading off one energy source for another energy source and we better do it with our eyes open,” said Paul Ziemkiewicz, the director of the West Virginia Water Research Institute.
Because of all the drilling in the Marcellus Shale in recent years, there is a glut of natural gas on the market and gas prices are uncharacteristically cheap. This in turn is threatening the coal industry, according to Richard A. Bajura, the director of the National Research Center for Coal at West Virginia University. Bajura says the cheap prices make natural gas a more attractive choice for prospective buyers.
West Virginia’s labor market has already felt the impact of this changing dynamic. According to the WVU Bureau of Business and Economic Research, coal mining employment has steadily declined in West Virginia over the past two decades. In the early 90s, the coal industry employed approximately 30,000 people in West Virginia. Today, experts estimate the industry has shed a third of those jobs.
In contrast, jobs in natural gas drilling have jumped from just over 9,000 individuals in 2008 to more than 12,000 today, according to the West Virginia Department of Commerce. The U.S. Chamber of Commerce projects this trend will continue, leading to the creation of approximately 30,000 jobs in West Virginia by 2020.
The natural gas industry is also making its mark on the state’s political scene.
According to campaign finance reports posted on the West Virginia Secretary of State’s website, the oil and gas industry donated nearly $300,000 to candidates across the state in the 2012 election. Former West Virginia governor and current senator Joe Manchin, who sits on the U.S. Senate’s Energy and Natural Resources committee, has accepted more than $250,000 from the oil and gas industry in the past five years. Governor Earl Ray Tomblin, who expressed his opposition to Morgantown’s fracking ban in a letter to the Morgantown City Council two years ago, accepted almost $100,000 from the industry in the past election alone. However, these figures have not yet surpassed the sum donated to West Virginia candidates by the coal industry, which totaled nearly $500,000 for the 2012 election.
Two recent bills in the West Virginia Legislature point to the growing influence of the natural gas industry in the Mountain State. The first, HB 2579, seeks to relax regulations on the amount of selenium, one of the chemicals used in fracking, permitted in water supplies surrounding natural resource excavation sites. This bill passed in the House of Delegates unanimously earlier this month.
The second measure, SB 245, aims to designate the combination of the chemicals used by Shale drillers as trade secrets, and is currently making its way through the legislature’s various committees. The natural gas industry claims this bill will prevent competitors from stealing fracking recipes, but critics say it will prevent researchers from studying the health effects of the toxic chemicals used in the fracking process.
“The same politicians who are accepting tens of thousands of dollars from this industry also happen to be passing laws making it easier for these companies to hide the negative effects of what they’re doing,” says Aman John McWilliams, a lifelong Morgantown resident who is still angry by city officials’ decision to allow fracking to go forward on industrial sites within city limits. ““This may make people suffer to the point where they can’t even drink their own tap water.”
McWilliams and others charge that the rising influence of the natural gas industry in West Virginia is shaping state policy to favor the industry at the expense of the state’s population.
“It’s the same experience West Virginia has had with the coal industry over the past century buying politicians all over again. We’ve seen this movie before,” McWilliams said.
West Virginia’s state budget has also been affected by the changing dynamic. Last month, Gov. Earl Ray Tomblin announced a hiring freeze for some state agencies due to the unexpected shortfall of $45 million in tax revenues, largely because of declining coal industry revenues. At the same time, the state did not receive its anticipated allotment in tax revenue from the natural gas industry because of low gas prices, according to The Charleston Gazette.
However, Bajura noted that gas prices change in response to transient market pressures and rising prices may lead to a resurgence of coal. Although Bajura acknowledges that the coal industry is currently facing a downturn, he dismissed the notion that is it dying.
“It’s important to have a diversity of supply. What if we were wholly dependent on natural gas and a natural gas pipeline breaks? Coal will continue to have an important role,” he said.