A recently released 56-page report, "The Economic Impact of the Natural Gas Industry and the Marcellus Shale Development in West Virginia in 2009," said 7,600 jobs were created in the state, paying almost $298 million in wages and benefits in 2009 from drilling directly related to the Marcellus Shale formation.
The report was done by West Virginia University's Bureau of Business and Economic Research for the West Virginia Oil and Natural Gas Association.
The Marcellus Shale formation stretches across an area of 95,000 square miles from southern New York across Pennsylvania, into western Maryland, West Virginia, and eastern Ohio. While formed in the Appalachian Basin over 300 million years ago, the Marcellus Shale formation has recently become an economically viable source of natural gas due to technological advances in horizontal drilling and hydraulic fracturing as well as relatively high natural gas prices, the report said.
The report says gas industry employment in West Virginia jumped 34 percent between 2001 and 2009, mainly because of Marcellus drilling, but notes those 7,600 jobs accounted for only 1.5 of the state's total employment.
Denny Harton of Wood County serves on a nine-member task force who is working to help the Department of Environmental Protection determine how to best regulate West Virginia's gas drilling industry. He is the former chief executive officer/president of GasSearch Corp. of Parkersburg and a former president of the state's Independent Oil & Gas Association.
Harton believes Marcellus Shale drilling in the state could bring big financial gains to the state as many major companies are now looking at getting in on it and it has the potential to bring billions of dollars in investment to the state.
Marcellus drilling contributed some $2.3 billion in business volume to the overall economy in 2009, the report said, and some $14.5 million in sales, income and business franchise taxes.
''This does not mention the more that $100 million in severance tax paid by the industry's producers and nearly $90 million paid to the counties in property tax in each of the last few years,'' Harton said. ''Because of the Marcellus, this is expected to grow significantly unless legislative action causes the capital to go to contiguous states because of unreasonable regulation.''
As the prospects grow for development so do a number of legal and environmental concerns.
''This is of great concern to the leaders in the industry and to the capital markets that supply much of the capital necessary to continue to bring the capital dollars necessary to support the continued efficient exploration of this great natural resource,'' Harton said. ''In addition to the (Department of Environmental Protection) attempting to write new legislation to more stringently regulate the industry, there are environmental groups who, through their lobbyists, have acquired the support of certain legislators that are attempting to bring about more radical changes through their own legislation.''
With the publicity surrounding the Marcellus Shale formation, a number of environmental groups are using it as a platform to advance agendas that have not gotten a lot of attention lately, Harton said.
''In an ill fated attempt to sway public opinion, the environmental groups are trying to focus the attention on the use and disposal of water in the state,'' he said. ''This is nothing new and despite several studies over the years by the EPA and others in multiple states, there has never been a single confirmed case of drinking water contamination.
''While the Marcellus does require the use of more water than do the more conventional wells, the amount of water used by the industry in total is but a fraction of the amount of water used by the power plants operation in West Virginia.''
The Marcellus shale natural gas boom has brought damage to West Virginia country roads along with millions of dollars of investments.
A hearing on Marcellus Shale drilling was held Friday in the state House of Delegates. Representatives from the highways department said some rural roads have been crushed in the rush to tap the vast natural gas reserve. Drillers use heavy equipment carried by trucks and the process to frac a well requires loads of sands and water including a chemical micture.
Chesapeake Energy and other exploration companies have taken it on their own to repair and improve roads.
Among the opponents to the drilling of the Marcellus Shale is the Sierra Club. The organization recently named Deborah Nardone as the director of a national initiative to change the natural gas industry.
She comes from State College, Pa., where Penn State University is located. Penn State has pledged to switch from coal to natural gas by 2014.
Many legislators have been fair in determining a good balance between economic development and environmental stewartship, Harton said. A fair and balanced risk and reward system needs to be in place in West Virginia to encourage development, he said..
''If not, that money could go to Ohio, Pennsylvania and New York,'' Harton said. ''The only thing unconventional about the Marcellus is the more efficient means by which the wells are being drilled today.
''These are all positives for the most part and if pressed on the matter, most legitimate environmentalists would agree that horizontal drilling, the only fairly new technique employed in Marcellus development is good for the environment, surface owners and the state.''
The Associated Press contributed to this story.