Pipeline Questions & Answers at August 19th Pocahontas County Commission Meeting
“What power does the county commission have to deny permission for the construction of this pipeline in Pocahontas County?”
A number of important questions were brought up at the August 19th County Commission meeting. During the meeting, Pocahontas County residents had the opportunity to ask about the Southeast Reliability Project, the natural gas pipeline that could travel across 12 miles of the county.
Commissioner Jamie Walker said that he believes pipeline construction should rely completely on the landowner and the company. “I don’t feel we have any obligation to tell anybody in this room what to do on your own property,” Walker said. “I think our job is to try to get you the facts and what’s exactly going to happen and where it’s going to go. But as far as to tell you whether you can do it or not, I don’t feel that that’s our job.”
During the meeting, representatives from Dominion Resources, Inc. provided some details on where they are in the surveying and planning process. There are 3 compressor stations planned for the 550-mile route, as well as remotely or manually controlled valves every 20 miles, doors for “pigs” or machinery sent through the pipeline to clean equipment, every 90-100 miles, and metered stations in places where natural gas is distributed.
Robert Orndorff also said the company has had two meetings with the Monongahela National Forest staff. Dominion is continuing to meet with them, working through what he called the “corridor issue.”
“At some point in time, when we make our filing with FERC, we will have to list where we plan to cross the Mon Forest in our filing,” Orndorff said. “We’re not at that point yet, and that’s why we haven’t surveyed in Pocahontas County.”
“Would anything prevent Dominion, after constructing this pipeline, from making the corporate decision to export all of this natural gas?”
Orndorff responded to this question by saying that the end user of this pipeline is in North Carolina, far away from any ports. He didn’t mention the lateral pipeline, which will travel to the Chesapeake Bay in Virginia.
According to Orndorff, the public will have access to customer information once Dominion makes their filing with FERC. “The gas flowing through this pipeline will not be exported,” he said.
Questions were asked about the dangers of pipeline explosions. Orndorff said that typically, pipeline ruptures are isolated, and natural gas is only explosive in an environment where it’s between 5-15% atmosphere. “That gas in that pipeline is all totally 100% methane, so it’s not going to explode within the pipeline,” he said. “When a pipeline does rupture, it generally comes out of the ground, and because the pipeline is 100% methane, it will not explode. It will catch fire.”
The subject of tax benefits was also brought up at Tuesday night’s meeting.
“You said that we would benefit from tax money from the natural gas line. I did speak with the WV State Tax Department, Division of Oil and Gas today. They said that since the natural gas was not extracted here, we would not get any royalties for that gas. Pocahontas County would not get money for the gas. It cannot be metered; it is transferred through the pipeline. You get royalties for it when it is extracted only.”
Orndorff confirmed that this information was true. He said that Dominion would pay personal property taxes that will be levied upon them by the Board of Public Works in West Virginia. According to the West Virginia State Treasurer’s Office website, Seventy-five percent (75%) of severance taxes paid on oil and gas extraction is distributed to oil and gas producing counties. The remaining twenty-five percent (25%) is distributed to all the other counties and municipalities of the state, based on their population.
“That severance tax is paid by the producer into the State Tax Department,” Orndorff said. “That tax goes into a formula that is divided amongst a lot of the counties. This county here receives an annual severance tax on gas that may have been produced in Marshall County or other counties throughout the state.”
“Board of Public Works will come in and assess the value of the pipe in the ground and put a cost to that,” Orndorff said. “The same way that the taxes are done from a severance standpoint, they will be divided amongst the 55 counties, with the higher percentage going to the county where the asset is located.”
Orndorff said Dominion will perform an economic impact study. “And the economic impact study will tell this county how much specific revenue they will gain as a result of the project being built here.”