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Study Projects Up to $2.45 Billion Economic Boost, Nearly 2,000 New Jobs from Policy Change

CHARLESTON, WEST VIRGINIA – Modernizing property laws would lead to more natural gas development, unleash a burst of economic activity in the Mountain State, help create thousands of new jobs and increase royalty payments by millions of dollars, according to a new report conducted by economists at West Virginia University.

This modernization would also add to state and local tax revenues if lawmakers choose to pass H.B. 2853 this legislative session.

Summary of Key Findings

  • West Virginia has the third-largest proved natural gas reserves in the country, behind only Texas and Pennsylvania. Despite this, natural gas production growth in West Virginia over the last decade has lagged behind Pennsylvania and Ohio – both of which benefit from sensible unitization laws.
  • The total potential economic impact of a natural gas unitization law is estimated to be between $1.2 billion and $2.4 billion over five years, with about $700 million to $1.5 billion coming directly from the natural gas industry.
  • Total employment would increase by about 2,000 jobs.
  • The economic impact of natural gas unitization will depend largely on the increase in drilling and production that will come as a result of resource unitization.
  • Economic impact from construction, drilling and completion is projected to be between $1.1 billion and $2.1 billion, with employment between 4,000 and 8,000 job-years.
  • Operational impacts are between $12.8 million and $25.6 million over five years. And impacts from royalties are expected to yield between 500 and 1,000 job-years.

“Our economy and our people are hurting, and we should be doing what we can to create more investment, jobs and growth,” said Charlie Burd, Executive Director of GO-WV. “Modernizing our property laws will help increase the potential of a ‘Petrochemical Renaissance’ and allow royalty owners and the state to reap more of the benefits of our state’s vast natural gas resources. It will mean more efficient natural gas development, attract new industries and sustain long-term growth, all of which are good for landowners, local communities and the state economy.”

The study, conducted by the Bureau of Business and Economic Research at West Virginia University’s John Chambers College of Business and Economics, examines the potential economic impact of enacting proposed legislation to modernize West Virginia’s property laws and increase natural gas production in the state.

Modernized property laws will unlock the potential of the state’s unique position as one of the world’s largest shale plays through a policy known as unitization. This commonsense solution would effectively treat an entire geologic shale formation as one resource unit, allowing production of the entire unit. This would group together natural gas mineral rights in areas where a majority of rights holders have agreed to reap royalties from these rights, allowing the efficient production of the entire unit.

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