American Oil and Gas Reporter - June 2015 - 105

ConventionSection: Virginia Oil & Gas Association

VOGA Advocates Expanding
Natural Gas Infrastructure
By Corinne Westeman

RICHMOND, VA.-During the 2015
Virginia General Assembly, the Virginia
Oil & Gas Association worked with lawmakers to ensure that royalty owners
were provided proper payments from
funds held in escrow and that the Commonwealth's natural gas infrastructure
could be more readily expanded to underserved rural areas.
According to Association President
Brent Archer, president of Columbia Gas
of Virginia, VOGA dealt with a number
of energy related issues, including two
legislative initiatives endorsed by the industry. One sought to expand pipeline
infrastructure; another would release escrow funds to those owed royalty payments
from gas production.
He says VOGA members will have a
full update on the 2015 General Assembly
session during the association's annual
meeting, June 24-26 at Virginia Beach's
Hilton Garden Inn Oceanfront.

Expanding Infrastructure
HB 1475 and SB 1163 were passed
by the legislature, signed by the governor,
and will become effective July 1, Archer
confirms. These bills allow Virginia's
natural gas utilities to implement programs,
after State Corporation Commission review
and approval, to extend infrastructure into
unserved areas of the utility's certificated
service area. Recovery of the non-economic
portion of the expansion costs is achieved
through an "expansion rider" that applies
only to new customers served from the
new facilities, Archer notes.
"Despite the significant new supplies
of domestically produced natural gas now
available to the market, Virginia's natural
gas utilities are facing challenges in bringing many Virginia consumers the significant cost savings existing customers enjoy," he relates.
"Substantial increases in costs to build
infrastructure to unserved areas is making
expansion prohibitive in many cases,
denying Virginia consumers the opportunity to choose affordable, clean natural
gas," Archer says. "This legislation will

VOGA Annual Meeting
Virginia Beach, Va.
Wednesday, June 24

6 p.m. Welcome Reception, Hilton Garden Inn Oceanfront

Thursday, June 25

8 a.m. Golf Outing, Location TBA
11 a.m. Fishing Charter
6 p.m. VOGA Barbecue and Auction,
Hilton Garden Inn Oceanfront

Friday, June 26

8 a.m.-Noon VOGA Technical Program,
Hilton Garden Inn Oceanfront
8-8:30 a.m. "Politics and Business," Chris
Saxman, Executive Director, Virginia
FREE
8:30-9 a.m. "Update of Virginia's Oil
and Gas Development for 2013," Rick
Cooper, Director, Division of Oil and
Gas, Virginia Department of Mines,
Minerals and Energy
9-9:30 a.m. "A View From the Burnertip:
LDC Opportunities and Challenges in
Virginia," Gina Slaunwhite, Manager
of Government Policy and Customer
Efficiency Programs, Columbia Gas
of Virginia
9:30-10 a.m. "Dissolved Methane in
Groundwater: What the Science
Says/Recommended Best Practices,"
Gerald Kirkpatrick, Managing Partner,
Environmental Standards Inc.
10-10:15 a.m. Break
10:15-11 a.m. "Atlantic Coast Pipeline
Update," Robert C. Orndorff, Jr., Senior
Policy Adviser, Dominion Resources;
Kenneth Yagelski, Managing Director
Gas Supply-Gas Supply Operations,
AGL Resources
6 p.m. Annual Banquet & Awards Ceremony

help utilities meet the energy demands
of many Virginia homeowners and communities that otherwise might never have
access to natural gas."
According to Archer, the legislation
offers several benefits, including:
* Increased numbers of Virginia consumers will have the opportunity to benefit
from expanded natural gas availability,
and the corresponding benefit of lower
energy costs.

* Existing customers will not be asked
to subsidize the expansion of infrastructure
for the benefit of new customers.
* All customers will benefit from the
new customers added through the expansion program, since it will spread the
utility's fixed costs across a larger customer base.
* When expansion costs are recovered, the expansion rider will be removed
from customer bills.
* Expanded infrastructure creates additional economic development opportunities.
"VOGA will continue to work with
lawmakers to help expedite and enhance
Virginia's proposed pipeline expansion
projects," he remarks. "This way, we can
bring significant new capacity to areas
of the commonwealth that are either unserved or underserved today. We want to
encourage development of both interstate
and intrastate pipeline projects."

Escrow Bill
Another VOGA initiative, HB 2058,
was passed by both chambers and received
the governor's signature. The legislation
concerns coalbed methane gas, and the
release of royalty funds held in escrow
or suspense.
Archer notes that the measure requires
an operator of a previously pooled CBM
well to request, by the beginning of 2016,
the release of any funds held in escrow
or suspense to the person who possesses
a claim through a gas title.
According to the legislation, a coal
claimant may halt such a release of funds
by providing evidence either that a previously existing conflict as to ownership
has been resolved by agreement or that a
proceeding to establish ownership is pending. For any well pooled after July 2015,
the operator must pay royalties directly
to the gas title claimant unless the coal
title claimant meets a deadline to provide
evidence of an agreement or pending
proceeding.
"The escrow bill's passage was a huge
win for VOGA and provides a solution
to a problem that has been unresolved
for a long time," Archer says. "Overall,
JUNE 2015 105

American Oil and Gas Reporter - June 2015

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