The recent rise of oil and gas drilling across West Virginia has raised questions about industry regulation and taxation. Many bear a striking resemblance to similar questions raised about the coal industry in years past.
Ken Ward Jr. is a reporter for the Charleston Gazette-Mail. He’s been writing about the coal industry his entire career. He sees a number of similarities between the coal and natural gas industries and how those industries are regulated.
In the 1950s, then Gov. William C. Marland proposed taxing coal with a 10 cent per ton severance tax. “Let’s use this equitable source of revenue, because whether we like it or not, West Virginia’s hills will be stripped, the bowels of the earth will be mined and the refuse strewn across our valleys and our mountains in the form of burning slate dumps,” he said. The move was considered political suicide.
“I think we see that now,” Ward said. “We see places where coal jobs have vanished were greatly diminished. We see that a lot of these places still don't have good roads. They don't have good schools. A series that Caity Coyne from the Gazette-Mail worked on last year, a lot of these places don't have clean drinking water. Jessica Lilly from [West Virginia] Public Broadcasting has reported tons of stories about those issues in southern West Virginia.”
Academics often discuss the concept of a “resource curse” where places with large amounts of natural resources do not attempt to diversify and then are stuck when those resources run dry. Ward said he doesn’t think it's inevitable, but in West Virginia we have to work hard to fight it.
Ward recalled one public hearing he attended about mountaintop removal coal mining in which a young man from eastern Kentucky testified against a proposed regulation from the U.S. EPA.
“And you know, he's a young man, he's like a kid, really, and he said, ‘If you shut down this mining, there's nothing for me. That's the only future I possibly have,'" Ward said. "What a sad sort of thing. I mean, who doesn't want for their kids any possible future they could imagine?”
Ward said there are other states that have large amounts of natural resources, but they have also planned for downtimes with a “future fund” where money is set aside from the sale of those resources. Alaska is the primary example where everyone in the state gets a check. Most places use the money for infrastructure projects and schools.
The Legislature passed a bill establishing a future fund in West Virginia, but they never funded it.
“They set up all of these little requirements. Well, if the state rainy day fund exceeds this, and if tax collections are XX percentage above this, then we'll put some money into it, but they've never actually put any money in. We have this future fund with no funds,” Ward explained.
Ward said one of the biggest mistakes West Virginia is making right now is attempting to carry out new projects and new developments with the natural gas industry in secret.
“I think it's really difficult to know if it's the direction West Virginia should go, when anybody — whether it's a newspaper reporter, or an environmental activist or a housewife —anybody who tries to just say, ‘Hey, wait a second, let me ask some questions about that' immediately the reaction [is] ‘Oh, you're just against jobs’ or “You're just negative. You're driving people from West Virginia,'" he said. "I mean, if all of these things are so fantastic for West Virginia, then they will withstand scrutiny."