Dominion Energy | Energy Services | Industrywide Issues | LDCs | M&A | Pipelines | Statewide WV | West Virginia
Dominion Selling WV Utility – Deal Incl. 2K Miles Gathering Pipes
Dominion Energy is divesting itself from a natural gas utility company it owns in West Virginia–Hope Gas, Inc. Dominion is selling Hope to investment firm Ullico Inc. for $690 million. Ullico plans to combine Hope Gas with another company it owns, Hearthstone Utilities, Inc. The reason this deal caught our attention is that Hope Gas owns and operates “2,000 miles of gathering pipelines” in the Mountain State.
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We’re not quite sure what to think of this. The West Virginia State Legislature passed House Bill (HB) 2581 on the last day of the annual WV legislative session in April 2021. HB 2581 required the State Tax Commissioner to develop a revised methodology to value oil and natural gas properties for the purposes of assessing property taxes. The State Tax Department submitted an emergency rule over the summer that was, quite frankly, a mess. The rule created a complex system that is currently mired in controversy with both drillers and landowners confused about how much of a tax bill they will owe this year. The legislature is doing it again.
Yesterday MDN told you about Pennsylvania, the state with perhaps the most abandoned and orphaned wells of any U.S. state (estimated at over 200,000 such wells, although the officially recognized number is 8,000+) has received some pocket change, $25 million, out of a promised $104 million, to begin the work of plugging some of those wells (see 
U.S. Senator from West Virginia Shelley Moore Capito “Zoomed” in to address the Gas and Oil Association of West Virginia’s (GO-WV) annual winter meeting last week. She talked about the Biden infrastructure bill, which she supported, and Biden’s so-called Build Back Better bill, which she does not support. As part of her comments, Capito mentioned the $1.2 trillion infrastructure bill includes money for “an Appalachian ethane/hydrogen storage hub.” Wow! We thought that project was long dead.
Earlier this week West Virginia State Treasurer Riley Moore announced the WV Board of Treasury Investments, which manages the state’s roughly $8 billion operating funds, will no longer use BlackRock Inc. investment funds as part of its banking transactions (see 
West Virginia House of Delegates member Lisa Zukoff (Democrat from Marshall County) is making a bold claim: Some out-of-state property owners aren’t paying taxes on oil and gas royalties, and it is costing the state millions of dollars in lost revenue. Zukoff is (once again) introducing a bill in the annual two-month session of the state legislature that requires gas and oil companies to subtract any taxes from the royalty check before it is sent to the property owner.
Our friends at NGI (Natural Gas Intelligence) are running an excellent series providing expert forecasts for the global natural gas and oil markets in 2022. The latest installment interviews several experts about the prospects for the Marcellus/Utica. With the Shell ethane cracker plant coming online sometime this year, the prospects for NGL sales in the M-U have picked up. Also in the discussion: capping Pennsylvania’s orphaned wells, drilling in the Wayne National Forest, and the Mountain Valley Pipeline coming online.
There is a clear delineation in the U.S. Constitution that says anything not specifically enumerated in the Constitution is left up to the individual states to govern and regulate. Leftists have for years tried to chip away, and under Joe Biden dynamite away, that distinction. Especially with regard to nationalizing the regulation of oil and gas drilling. The left’s favorite tool to regulate O&G is the Environmental Protection Agency (EPA), which is charged with regulating and enforcing various laws including the federal Clean Air Act (CAA) and federal Clean Water Act (CWA). In a case that will be heard by the U.S. Supreme Court next month, West Virginia v. Environmental Protection Agency, the “potential ramifications” are “profound” according to anyone and everyone paying attention.
The West Virginia State Legislature passed House Bill (HB) 2581 on the last day of the annual WV legislative session in April 2021. HB 2581 changes how the State Tax Department values producing oil and gas wells for property tax purposes (see 
Some really good (and expected) news to report. The West Virginia Dept. of Environmental Protection (WV DEP) issued a key permit for the Mountain Valley Pipeline (MVP) to finish work crossing rivers and streams in the Mountain State. MVP, a 303-mile pipeline from West Virginia into southern Virginia, is currently 94% built and in the ground. There are several portions left to complete it, including crossing rivers and streams in both Virginia and West Virginia. The permits needed to do so come from three sources: the U.S. Army Corps of Engineers, the Virginia Water Control Board, and WV DEP.
It was one year ago that West Virginia’s two oil and gas trade associations, the Independent Oil and Gas Association of West Virginia (IOGAWV) and the West Virginia Oil and Natural Gas Association (WVONGA) merged into one new organization called the Gas and Oil Association of WV, or GO-WV (see