For over 100 years, West Virginia has been behind the energy curve.
In a state which has been molded by the extraction industry like no other, much of the wealth that was mined and drilled from the depths was contained and shipped out, much like the wealth of individuals who have left the state since the first rumblings of trouble in the coal industry began in the 1950s.
While it may seem like that extraction mindset may have gotten the better of the Mountain State, Joshua Fershee and colleagues are looking for ways to reverse that trend.
Fershee, a law professor who teaches courses in business and energy law at West Virginia University, is part of the university’s Center for Innovation in Gas Research and Utilization (CIGRU) and spoke during WVU’s Academic Media Day on the West Virginia Forward initiative last week.
Although scientific work has been ongoing at the university for a long time, CIGRU was established to try to assist that research, specifically natural gas utilization, with economic, public policy and law research aimed at improving the efficiency of the state’s policies toward natural gas and attempting to help spur on economic development by keeping as much development in-state as possible.
“What can we do with it here?” Fershee asked the audience at the media day.
With the researchers at the school looking at natural gas for new or improved technologies such as converting natural gas to useful chemicals, using natural gas in combustion engines or the use of natural gas in the creation of fuel cells, the law professor described his role as learning how businesses respond to governmental regulations and how to find the best mix to spur on business creation while not interfering with important controls.
“One of the things I have been looking at is whether we should have new laws or whether we should just enforce the ones that we have,” Fershee said, adding that he has found often that laws have been sufficient though unenforced.
A national example he gave of that situation was the Deepwater Horizon spill that pumped billions of gallons of crude oil into the Gulf of Mexico resulting in fines totaling into the billions and untold environmental damage.
Fershee said laws were in place to stop such a spill and that enforcement of those laws could have prevented the associated damages and business losses to other fuel companies forced to shut down their operations near the spill.
With abundant natural gas in the Mountain State, Fershee said that an in-depth study on regulations in the state must be completed to see which rules on the books help and which hurt the potential economic improvement and how rules can be streamlined to help while not hurting regulatory efforts.
“We have a very unique position in the United States right now with cheap natural gas,” the professor said. “It’s not something that anybody else in the world can really appreciate in a way.”
The question is how best to utilize those resources in-state through the creation of new industries in-state and a better electric generation picture going forward.
With the decline in coal as a power source nationwide, dropping over 15 percent between 2006 and 2013, Fershee highlighted the growth of natural gas in the same period, up over 11 percent.
The increase in natural gas also coincides with a near doubling of renewables to over 6.5 percent of the energy market.
While that number may seem small, Fershee said that increase outpaced expectations, in large part due to the availability of cheap natural gas.
“Natural gas can be something that supports wind and solar, which are intermittent,” the law professor said, before adding that no one really saw low and stable natural gas prices that now exist 15 years ago.
While natural gas has grown to rival coal in the energy sector, Fershee added that declining fuel costs and expected electric savings have not yet been pushed back to the state’s customers.
That concerns the law professor, who said that may be due to the cost associated with switching from coal to natural gas or because of a highly regulated state utility structure in West Virginia.
Fershee is looking into that particular matter in an attempt to help move forward the West Virginia Forward initiative of making the Mountain State more appealing to outside businesses.
“One of the things we used to compete with was we had cheap electricity,” Fershee said. “That’s less true today.”
If CIGRU is able to find ways to increase efficiency in the state’s regulatory policy, Fershee is hopeful that the state will be able to attract business away from setting up shop in neighboring states.
While a gas boom is often looked upon as an economic engine, Fershee cautioned against over-simplification and lobbied for using the economic uptick created by extracting natural gas to improve the quality of life for everyone.
That caution comes from first-hand experience.
Before coming to WVU, Fershee taught in North Dakota during that state’s shale boom, which brought thousands of workers into the rural state.
While many thought that the boom would create massive improvement, that wasn’t always the case.
Fershee said that while incomes increased dramatically in the shale boom area of North Dakota, the poverty level remained the same throughout the uptick.
In response, Fershee said that the state needs to remain proactive in staying ahead of the energy curve to use it for the betterment of the state’s residents.
“As this whole process starts to evolve, we need to evolve with it,” the law professor said, adding that the energy sector is in constant change while laws and regulations generally lag behind.
“Some of that is because we don’t know where we are going, and some of it is because we’re afraid to make changes,” he said.
Fershee also warned that while the natural gas is there, the state has to do more to improve things such as infrastructure, education and health care to entice outside business to establish roots in the Mountain State.
When asked about proposals by the Trump administration to create subsides in the coal industry to shore it up, Fershee said that before he could make a judgment of an impact of the subsidies, he would first have to know the amount of the subsidies and the way they will be implemented.
While speaking cautiously, Fershee said that the subsidies would have to be quite substantial to impact the natural gas market and shared his concern that a moderate subsidy may not improve the coal industry significantly while costing the nation a great deal of money.
Email: firstname.lastname@example.org; follow on Twitter @mattcombsRH