Date Requested:February 09, 2011
Time Requested:04:52 PM
Agency: Environmental Protection, Department of
CBD Number: Version: Bill Number: Resolution Number:
2011R2315 Introduced SB424
CBD Subject: REGULATION OF OIL AND GAS WELLS
FUND(S)
3323 Oil and Gas Operating Permits
Sources of Revenue
Special Fund
Legislation creates:
Neither Program nor Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

    SB424 is the result of a comprehensive program review undertaken by the DEP involving a variety of stakeholders that will enhance the environmental protection regulations and oversight of the oil and gas industry. An additional 34 positions are needed in the oil and gas program of DEP to handle the increased volume of work due to the Marcellus Shale horizontal drilling activity in West Virginia. The annual cost of these 34 positions is estimated to be $3,071,216. The bill includes increased permit fees on horizontal drilling resulting in an estimated annual special revenue of $4,260,000. The increase in permit fees received is projected to cover the cost of additional staff and to cover a current deficit in the program of $1,055,377.
    
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2011
Increase/Decrease
(use"-")
2012
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 3,071,216 3,071,216
Personal Services 0 2,191,595 2,191,595
Current Expenses 0 879,621 879,621
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 4,260,000 4,260,000
3. Explanation of above estimates (including long-range effect):
    DEP has estimated that the increased cost to the Department for 34 additional staff in the oil and gas program would be $1,542,323 for wages and $649,272 for benefits. Current expense is estimated at $879,621 which includes vehicle expenses, uniforms, office expenses, training costs, and supplies. Bringing the total cost for 34 staff to $3,071,216. This is expected to be an on-going annual cost.
    
    The Department has included a proposed increase to the permit fee for horizontal drilling. This revenue is projected to cover the cost of the new staff and to cover a $1,055,377 deficit currently in the program.
    
    


Memorandum
Person submitting Fiscal Note:
Jean Sheppard
Email Address:
Jean.J.Sheppard@wv.gov
    The proposed permit fee increase is projected to cover the cost of the proposed additional staff in the oil and gas program.