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What deep well drilling could mean to poor counties like Calhoun is a
question being asked in the region, with few answers. Government often
complies with complicated formulas, adjustments and taxation methods
which eventually favor the large producers.
Calhoun County Assessor Jason Nettles said he is concerned about taxation
rates in deep wells. "We just don't know what is going to happen with it."
Calhoun County has over thirty deep wells permitted, with two sites in the
White Pine area already prepared.
Since there is little information regarding the long-term production of deep
wells, the large corporations appear to be using that to their advantage. The
taxation formula in West Virginia is, in part, based on the life expectancy of
the well.
Roane County school's Finance Director, David Kinison, said the wells are
taxed on profits which allow them to count expenses "everything remotely
related to the well's production," before there is a figure upon which the
business can be taxed.
He said the current formula is ten years old. It will be adjusted for deep well
drilling, and most county commissioners and local officials fear it will not
favor local interests.
Sources in the drilling industry are saying the industry may include the the
cost of transmission line construction to take the gas out of West Virginia, in
which case royalty owners or public services will suffer.
Unlike the state of Alaska, West Virginia has a history of catering to the
energy corporations. Alaska took control of their resources, adequately
taxing the companies and looking out for its citizens. Alaskans, for example,
not only do not pay state income taxes, they get an annual "cash bonus"
check from state government based on resources taken from the state.
Dominion Transmission is about to announce plans to build a natural gas
pipeline from Cornwell Station in Kanawha County to Rockwell County in
North Carolina. The 265 mile, 30 inch transmission line would feed natural
gas to Virginia and the Carolinas from the state's deep well gas fields.
Information regarding the massive project was released at a recent Fayette
County Commission member, after the commission was concerned the
pipeline would run through Hawk's Nest State Park.
Roane County Assessor Emily Westfall has questioned the values the state is
putting on deep wells and how they reflect market value.
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