A program of the West Virginia Oil & Natural Gas Association

Gas Boom Brings both successes, struggles to West Virginia Communities

By Sarah Tincher, Energy Reporter | August 21, 2015 | The State Journal 

When Linda Colliere opened up her six-unit motel in the small, remote Harrison County community of Shinnston 15 years ago, she never could have anticipated the influx of demand she would eventually receive.

“I don’t even advertise anymore,” Colliere said. “For the past three years, everything I’ve got is full. I’ve added more units and they’re full.”

Catering to the out-of-town worker, Colliere’s Bunkhouse Lodging LLC now rents out 36 units in the form of motel rooms, mobile homes, apartments and houses, in addition to 50 RV sites, where she provides utilities to anyone who brings his own RV. 

“I provide a home away from

home,” Colliere said. “The only thing they need is their telephone and clothes. I provide everything else: I provide cable TV, utilities, extra linens, pots and pans, a vacuum; and if they want to pay for cleaning, I provide that too.”

While Colliere said she always primarily housed out-of-town workers from various industries, such as power plant employees and construction workers, she now is one of the many local business owners to benefit from North-Central West Virginia’s recent oil and gas boom.


Local prosperity

In addition to maintaining — and continuously expanding — her rental business, Colliere also serves as president of Universal Enterprises Inc., a steel fabrication shop that supplies the oil and gas sector with parts for anything from compressor stations to stairs.

“Without the oil and gas industry, we’d be gone,” she said, adding that her two ventures complement one another. “Through the long-term rentals, one business has literally helped the other through gas and oil.”

And Colliere said the entire community has profited from her successes as well. 

“As long as they stay with me, they eat at local restaurants, shop at local stores, drink at local bars,” she said.

Ron Watson, president of the Harrison County Commission, agreed, saying a lot of businesses have been able to take advantage of the inundation of out-of-state industry workers traveling to the region.

“They spend money at restaurants and businesses out there,” Watson said. “It’s been a positive thing.”

And Harrison County isn’t alone. Wheeling Mayor Andy McKenzie said this has been the case for his Ohio County community as well.

“It’s created a demand on gas stations, grocery stores, restaurants (and) even things like dry cleaners and laundromats,” he said. “We’ve also seen a lot of new opportunities for things like hotels. 

“Wheeling has always had vibrant and robust tourism, but we’ve always lacked in hotels.” 

To meet demand for oil and gas workers, McKenzie said, eight new hotels have been built in the greater Wheeling area over the last three years.

“The business community in the area has embraced opportunities for more sales, more investments, more opportunities to make more money and employ more people,” he added.

Additionally, McKenzie said the industry has provided a much-needed economic boost to the region.

“Oil and gas has created a tremendous amount of direct jobs for our community throughout the Ohio Valley, so we’ve seen a lot of people who had struggled or lost their jobs — like steel  workers and coal miners — who have gone to working in the oil and gas industry,” he said. “I would still say the vast majority of oil and gas workers are still out-of-state workers, but I would tell you that’s not necessarily a negative thing. 

“These new people are bringing their families, living in our community, spending their working dollars in our community.”

Reviving communities

On a broader scale, cities and counties throughout the region have been able to take advantage of major funding increases. Royalty payments, like severance and property tax revenues, have also been on the rise.   

McKenzie said the city itself has been paving more roads than “they’ve ever paved in the City of Wheeling,” as well as paying down pension liability with the major increase in funding the industry has brought to the county. 

Additionally, he said the city has actually been able to reduce its tax burden on the local business community because its revenue has been so high. 

“Wheeling-based businesses, companies that are licensed in and do business in the City of Wheeling, have been able to reduce their B&O tax rate, which has helped these local communities,” McKenzie said. 

And for some areas of the state, the spike in oil and gas revenues has been a saving grace. 

Doddridge County Commissioner Gregory Robinson said severance tax revenues and royalty payments, as well as the increased valuation for drilling-related sites, have provided a major boost to his county’s economy.

Doddridge County received the third-highest oil and gas severance tax payment in the state when they were last disbursed in October 2014, collecting more than $1.2 million. 

“It’s helped significantly,” Robinson said. “We have been able to increase our Rainy Day Fund — probably three or four years ago it was at a very minimal amount; now we have probably $1.3 million in the Rainy Day Fund.”

Robinson said the county also has been able set aside money to fund future building needs in and around the county courthouse, in addition to new communication towers and a library. 

Additionally, he said the revenue has helped fund various entities in the county, such as the health department, county fair, county historical society and the humane society. 

“We’ve been able to maintain or increase those contributions, so it has helped significantly,” Robinson said.

However, all these positives have come with a catch or two.


Residential consequences

“As with any situation in life, there are positives and there are negatives,” Robinson said. 

As oil and gas workers have flocked to the Ohio Valley to follow work, permanent residents of some of the Mountain State’s rural, gas-rich communities have had to put up with a surge of truck traffic on the roads, which has caused major road damage in many cases.

“This is a typical problem with a small, rural county,” Robinson said. “The road infrastructure system is not designed for the extremely heavy loads ... and the constant pressure they’re under. 

“It’s a significant problem,” he said. “It’s difficult for the highway maintenance to keep up.”

He added, however, “Most of your oil and gas companies will come in eventually and repair the roads and repave the highway. When they do get to that point, it’s a significant improvement over what it had been.”

Robinson said oil and gas companies are required to post a bond so they can’t skip out on repairing the roads; so, “In theory, if the company does not fix the road then that money is taken out of the bond,” he said. “The only problem is road repairs are very expensive,” and the bond might not cover the full cost of the repairs, Robinson explained. 

Additionally, Robinson and McKenzie both said the cost of living, particularly with regard to housing, has increased throughout the region.

“We have seen the cost of living increase,” McKenzie said, particularly noting a big jump in housing prices. “Apartments that went for $400 to $500 a month are now renting for $2,000 a month,” he said. “We’ve definitely seen costs go up. 

“But the flip side is that for the first time in the history of the city, we are literally seeing hundreds and hundreds of new housing being built in our community,” he added. “I think that our area is a lot like other parts of West Virginia. We’re starved for economic development, starved for good jobs. 

“All in all, while (the industry) is not perfect, it has been a well-needed and well-wanted revitalization of the Upper Ohio Valley.”

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