West Virginia lawmakers listened.
It is now up to them to spend the taxpayer’s money.
Members of the House of Delegates embarked on a cross-state listening trip last fall. They visited Logan, Beckley and Pursglove as well as Moundsville, Moundsville, Welch and Moundsville to gather feedback from around 200 people.
They wanted to know how West Virginians would like them to address revitalizing communities whose tax bases, population, and reasons to hope were affected by the closing of devastating coal mines and plants.
We have suffered, Delegate Ed Evans (D-McDowell) told an engaged crowd of over six dozen in the Word of Life gymium during the first stop in Logan in October. You know well that we have suffered from businesses. [leaving]We’ve experienced a loss in population. I could go on and forth.
Evans is one 11-member member of a new committee that was created by a House resolution Monday. It met a few minutes later.
The 13-page document was delivered by the new committee charged with making policy recommendations to help coal communities at its first meeting. ReportTo the full House, compiling the most pressing community needs identified by West Virginians.
West Virginians put it all in words: Environmental protection should be a top priority in the Mountain State.
The report found that many communities face increasing floodplains because of climate change. It is not possible to get clean drinking water or wastewater treatment in these communities.
This is just the first page of issues that are identified in the document.
This report highlights the importance and necessity of cleanup efforts to convert previously mined land into suitable space for other energy jobs.
The report noted that increased recreation and tourism go hand-in-hand to restore the environment and provide clean water for people to fish, boat, and swim in, as well as beautiful land for hiking, riding, and camping.
Many of the legislative proposals rely on the state Department of Environmental Protection to do its job.
These include preparing for the use of the unprecedented influx in West Virginia money through the federal infrastructure law passed last November to reclaim abandoned mining lands. The DEP is the lead agency in this effort.
Other legislative suggestions include encouraging creative reuse of vacant properties for new businesses through DEP Environmental Remediation Programs, increasing resources to address dilapidated structures, and establishing policies to improve water quality.
In a budget presentation made before the Senate Finance Committee earlier, Harold Ward, DEP Secretary, stated that his agency has 874 full time equivalent positions 749 filled and one vacant. The 2017 total of full-time equivalent positions has fallen by 8%.
According to DEP officials, the number of inspectors at the DEPs Office of Oil and Gas that are responsible for monitoring the state’s oil and natural gas drilling and storage has fallen from 17 percent to nine.
To get back to the levels of staffing that were previously in place, the office requires $1.3million more annually. This is a shortfall caused by permit fees, its main revenue source, and oil and gas industry difficulties.
According to Scott Mandirola (DEP Deputy Secretary), there are between 70,000-75,000 abandoned, orphaned and active wells in West Virginia.
It’s a tragedy that we have wells and things we know are leaking,” Sen. Charles H. Clements of Wisconsin, told DEP officials following the presentation of the agency’s budget to the Finance Committee. There must be something done.
Despite environmental advocates lobbying legislators and holding a press conference before the session, the Legislature failed to address the inspector shortage in the 2021 legislative session.
The number of full-time equivalent positions at the DEPs Division for Mining and Reclamation has declined from approximately 300 in early 2010s, to around 190 in recent years due to a decline in fees revenues.
Senator Blair acknowledged that the DEP has multibillion-dollar mine rehabilitation liabilities. This is in response to the continuing decline of the coal industry. This could result in a spike and bankruptcies, which could leave the fund as well as state taxpayers liable for the unfulfilled reclamation obligations of coal companies.
Blair’s solution was suggested. Senate Bill 1Establishing a mining mutual insurance company requires $50 million in DEP-specified funds to provide seed money for the company. Ward informed the Finance Committee that his agency does not have this amount.
The Legislature has ignored the June report’s recommendations. It found that lawmakers and environmental regulators are at risk of allowing the state’s mining reclamation program slide into insolvency due to gaps in statutory and permit oversight.
State legislators chose not to fund a program for abandoned and blighted properties that they developed and charged the DEP with constructing last year. The agency is looking for funding to put the program in motion.
After the Legislature failed last session to pass a bill to stabilize its funding, the state’s air regulatory department is also facing a long-term decline of revenue.
Angie Rosser, West Virginia Rivers Coalition Executive Director, said in an email that these trends indicate a declining capacity of DEP to fulfill its responsibilities. Even if there are good environmental laws, they won’t be enforced unless there is enough money.
Concerns about staff shortages and funding problems have led to fears that the DEP may not be well-positioned to make the most from what Ward said to the Senate Finance Committee was five to six fold more federal money than it has seen. This was a result of the federal legislation on infrastructure, which Ward adopted in November.
After the agency reduced its staff of inspectors and permit-writers, the Office of Oil and Gas staff was reduced to 25 from 40 in 2013. The reductions were caused by revenue losses due to a decline in horizontal-well application numbers.
To generate revenue, The Office of Oil and Gas relied upon one-time permit fees.
Last year, Gov. Jim Justice signed into law Senate Bill 404The law established a $2,500 fee to modify well-work permits. Officials at DEP estimated that the bill would only provide $500,000 more for the Office of Oil and Gas. This is not enough to make up the shortfall.
The DEP supports Senate Bill 480It has been estimated that this will restore the offices inspector to-well ratio to about 4,000-to-1.
SB 480 was initially scheduled for Thursday’s meeting of the Senate Energy, Industry and Mining Committee, but was not taken up. The chairman of the committee, Senator Randy E. Smith, R.Tucker, was unable to be reached for comment.
James Martin, chief of Office of Oil and Gas told the Finance Committee that the 4,000 to-1 ratio inspector-to-well is a great place to be. Martin pointed out that most of the oversight required is on the front end, drilling and construction, rather than leak response.
David McMahon, cofounder of West Virginia Surface Owners Rights Organization, said that Oil and Gas requires far more inspectors to ensure safety than the SB 480 funding would allow.
McMahon stated that the bill isn’t good enough. He suggested that the office would need 40 inspectors, which is twice what SB 480 would cover.
Delegate Evan Hansen, D-Monongalia said that this would not get the Office of Oil and Gas there it needs to, referring to SB 480. But $1.3 million is still better than nothing.
McMahon called on the Legislature for an annual $100 fee to operators of all wells, or any other amount that will increase the Office of Oil and Gas inspectors beyond what they were before downsizing.
McMahon said that any well that is still operating can afford $100. It’s also time to plug it so it doesnt become orphaned.
Hansen is the sole sponsor for the event for the second year in a row. House Bill 2725The bill would establish a $100 annual oversight charge for all wells.
Eliminating the SB 480s fee limit for wells producing more than 10,000 cubic feet per day would result in a significantly higher revenue stream for Oil and Gas.
According to Terry Fletcher, agency acting spokesman, 13,500 wells in the state producing at least 10,000 cubic feet per day as of 2020 production year represented only 18% of unplugged wells in DEP records.
A 2018 study of West Virginia well locations was published in the peer reviewed journal Science of the Total Environment. The study found that conventional wells can be a significant source of methane emissions to the atmosphere.
The study found that each well with an active conventional well loses about 9% of its production.
We need more! [inspectors]McMahon claimed that there is more to come, than we have right now.
Rosser said that it was concerning that the DEP asked for fewer oil and gas inspectors than 20.
Rosser stated that we need more than the minimum number of inspectors required to handle incident reports. We need a shift of mentality to support an oversight system that helps prevent environmental emergencies from occurring in the first place.
The state’s abandoned well plugging and remediation programs are managed by the understaffed Office of Oil and Gas.
Ward informed the Finance Committee that it would cost $991 million to reclaim all 6,309 wells under the states orphaned-wells program.
Federal infrastructure law provides $4.7 billion nationwide to plug wells and restore well sites to prevent groundwater contamination.
The infrastructure law allows states to apply for grants up to $25,000,000 in the initial phase.
States are required to act quickly when receiving initial grants. Within 90 days of receiving funds, they must use at least 90% of the requested funding to issue new contracts, amend existing contract or issue grants for plugging or reclamation work. States must repay any funds they have not obligated within a year.
Ward said that Ward’s personal goal is for West Virginia be the state that returns the lowest percentage of all these money.
Mandirola stated that the DEP will apply separately for a formula grant to plug orphaned wells in accordance with the infrastructure law. Fletcher stated that preliminary estimates suggest that the state will receive $145million in formula grant money.
The DEP is also looking for $70 million in other grants to support the infrastructure law.
Mine reclamation funding concerns
Budget projections indicate that the Division of Mining and Reclamation could run a deficit in fiscal years 2026 without additional funding. The agency’s operations fund saw a drop in coal tonnage fees from fiscal year 2019. It was slightly lower than $1.4million.
Senate Bill 462would give the division a major boost by increasing fees associated to surface coal mine permits. It would allow for the updating of state water pollution control permits that are required for surface coal mine operations. The DEP estimates that the bill will generate $4.3 million in annual revenue.
Fletcher stated that this bill is a long-term fix.
State lawmakers have not met or acknowledged the long list of recommendations in June’s state legislative audit report. It found that they and the DEP are at risk of the state’s mining reclamation program falling into insolvency due to lapses in statutory oversight and permitting oversight.
The audit report recommended that the DEP adjust the bonding rates to ensure reclamation costs don’t become a greater financial burden for the state.
In a response to audits findings, the agency stated that only the Legislature has the authority to alter bonding rates.
The report recommended that the Legislature establish maximum thresholds for the face amount of reclamation bonds that can be underwritten only by one surety company. According to the report, such limits should cover both single bond issuances and the aggregate issuances of reclamation Bonds by the company.
Those suggestions were not mentioned at this session’s budget and legislation meetings.
Instead, the Senate passed SB 1, which would create an independent, nonstock mining mutual insurer company that is funded by $50 million of DEP-specified funds. The deposit would be treated as a noninterest loan, and would be repaid as credits are earned from mine reclamation activities.
With little discussion Wednesday, SB 1 passed the upper chamber with a 32-0 vote.
Blair claimed that coal companies wouldn’t be required to join the mining insurance company. This raised concerns over low participation.
According to the June legislative auditor report, nine companies own 91% of the states’ coal mining reclamation bond. Indemnity National Insurance Company holds 67%, or $620 million.
Blair acknowledged that it was possible for a single company to collapse if they own a large portion of the mine reclamation bond marketplace.
Blair stated to the Finance Committee that it is not a bailout. It is an insurance policy.
Ward warns that the DEP lacks funding to seed the company. This is a major obstacle that lawmakers must overcome in order to pass the bill.
The location from which we borrow it would depend on whether it comes directly from the insurance commissioner, or if it is in the back of the budget surplus, Eric Tarr, R-Putnam Chairman, Senate Finance Committee Chairman Eric Tarr said. These are the most likely options.
The longer-term obstacle would be to ensure a return for taxpayer money in the face of the decline in the coal industry.
It is hard for me to see it as anything other that a way to lose $50,000,000 of West Virginia’s money. Because of whats happening in West Virginia’s coal mining industry anyone issuing those types of bonds will have to pay out their full value, Peter Morgan, Sierra Club senior attorney, said. This will quickly drain the $50 million state money and any additional money.
Not investing in air quality
The House Finance Committee has yet not to consider a bill to increase funding for the state’s air regulatory department, which is facing a long-term decline of revenue.
House Bill 3082The Division of Air Quality would be able to invest money in two funds to compensate for the loss in revenue due to decreasing permit fee collections. However, it would be prohibited from moving money in the funds into other accounts.
A 80% decrease in industrial air emissions in West Virginia has led to a drop in revenue. According to the bill, fees for large industrial sources are determined based on their emissions rates.
According to DEP officials, the Division of Air Qualitys funding levels were adequate last year. The U.S. Environmental Protection Agency recommended that the division consider asking state legislators for an increase in the state emission fee in fiscal years 2021. They could also charge additional fees to apply, maintain operating permits or a fee per hour based on the complexity and number of permits being issued.
HB 3082 addresses the Air Pollution Control and Air Pollution education and Environment funds. The bill states that the cash balances of the former and the latter were $5.7 million and $1 million respectively at the end of 2018. According to the bill, the interest rate paid for other DEP funds in the 2018 fiscal year could be anywhere from $84,000 to $160,000.
HB 3082 doesn’t address the fee structure of Division of Air Quality Title V, which is a dollar-per-ton fee for pollutant emissions, adjusted by the Consumer Price Index with a limit of 4,000 tonnes per pollutant.
Rosser stated that the closing of coal-fired power plants could cause financial problems for the Division of Air Quality and lead to the EPA taking over enforcement of state air quality standards.
Rosser and other water quality advocates criticize the DEP as well as state lawmakers for approving a weakening in some water quality standards.
The agency supported the changes to a rule that is currently before the Legislature. These standards would be strengthened but less strict for possible carcinogens. They also include insecticides banned since the 1970s, as well as a highly toxic fumigant.
Mandirola said that the water quality standards updates were in the best interests of the public. They would provide the same risk level as one additional case of cancer per 1,000,000 people.
Tuesday’s approval by the Senate Judiciary Committee of the rules changes was a major step towards advancing them to full Senate.
Be a part of a compliance culture
Hansen acknowledged the fact that state regulators are less burdened by declining permit fee revenues. Hansen stressed the importance to ensure adequate staff to process, oversee, and inspect permits.
Hansen stated that regulations that aren’t properly administered is the worst thing. The government will cease to function.
If the legislative suggestions made by the coal communities listening tour are implemented, West Virginia’s government must work.
Rosser stated that the DEP is needed to foster a culture in compliance among all companies doing business within the state.
