WV Gov. Jim Justice

West Virginia Gov. Jim Justice is turning out to be a major disappointment. He’s pro-coal (because much of his personal fortune comes from coal), and increasingly anti-shale. The latest evidence is an attack on the shale industry claiming shale is responsible for the poor condition of roadways in the Mountain State.

Justice’s “fix” for bad roads “made worse” by shale industry trucking? Soak shale drillers with higher severance tax rates–even though WV shale drillers currently pay a 5% severance tax, the highest in the Marcellus/Utica.

Highways Commissioner Jimmy Wriston received a firsthand look of the road conditions in Marshall County on Wednesday, seeing the damage at the top of residents’ minds.

Wriston, following an order from Gov. Jim Justice, traveled to the county as the Division of Highways issued an updated list of secondary road projects.

“There is no doubt much work is needed in Marshall County, Preston County and the 53 other counties across West Virginia, and that is exactly what we are doing through Governor Justice’s Secondary Road Maintenance Initiative,” Wriston said in a statement.

According to a state Department of Transportation press release, Wriston met with officials of the division’s District 6 region to assess work. The area includes Brooke, Hancock, Marshall, Ohio, Tyler and Wetzel counties.

The DOT announced an update to maintenance activities completed across the state since Justice ordered secondary road repair last month. The department noted 35 projects in Marshall County, with seven efforts completed.

Marshall County residents voiced their concerns to Justice on Monday during a federal grant presentation. Justice said while the problems have been evident for years, the growth of the natural gas industry has made the issue worse.

“They’ve got to know that they can’t expect you to put your children at risk and all the different things that are happening because the roads are torn all to pieces,” Justice said of natural gas companies. “They are going to continue to be torn up. You can’t have enough rock or asphalt to keep them together if you have that magnitude of traffic on them.”

Anne Blankenship, the executive director of the West Virginia Oil and Natural Gas Association, said on MetroNews “Talkline” blaming natural gas development is too simple of a response.

“It’s easy to point the finger and the oil and gas industry,” she said. “There are comprehensive programs where oil and gas operators are essentially paying to use these roads.”

Drilling companies are required to pay bonds dependent on factors such as how many barrels of gas are collected.

“What has caused the additional concerns and the additional problems to the roads that are the concerns of the industry as well are the lack of maintenance that can prevent and deal with slips and slides that are very common in West Virginia because of the weather and because of the terrain,” Blankenship added.

Blankenship said oil and natural gas companies have even voluntarily contributed money for road construction efforts.

“We are aware of the issue. We are helping to deal with the issue. We are certainly trying to keep on top of it and do what we can,” she said. “I don’t have an industry-wide number on how much is given on top of oil and gas policy. What I can tell you is five companies alone spent more than $22.5 million in 2018.”

Justice also said Monday state lawmakers should reconsider a tiered tax structure; lawmakers rejected the plan in 2017, which would have allowed different tax rates for oil and natural gas companies as prices change.*

Voluntary road fixing appears to work in Pennsylvania, but maybe it’s not working in WV where the roads were already in crap condition to begin with, even before the shale industry showed up. Might we recommend the solution Ohio uses? They use a RUMA, a “road use maintenance agreement.” Drillers (and midstream companies) work out a deal with a given township where their trucks will be active to chip in X amount of money for road repair and maintenance. Seems to be working fine in Ohio.

One thing’s for sure, boosting the severance tax even higher is a bad idea. The extra cash that comes from it (provided there actually is extra cash) will not go for repairing roads. You can bank on that (see WV Teachers Get Greedy, Want to Boost Already-High Severance Tax)!

*Charleston (WV) MetroNews (Apr 24, 2019) – Wriston visits Marshall County over roads; natural gas leader defends industry