Riches under our feet

 

Increasing county revenue without hiking the real estate tax rate is a hot topic. County officials are exploring ways to attract business investment, including data centers, to Goochland. There might well be another significant source of tax revenue under our feet.

Extracting mineral wealth in Goochland has a rich history of mining for gold in the upper end and coal near Manakin, formerly known as Dover Mines. Now, pulling wealth from Goochland soil involves rock quarries that supply gravel and related products to the construction industry. Active quarries in Goochland are operated by Luck Stone, Martin Marietta, and Vulcan Materials. It’s called Rockville for a reason.

Could there be other mineral riches beneath our feet, whose extraction could fund exceptional government services, and add wealth to landowners, while having little impact on the county’s rural beauty?

Larry Hein, who lives in Texas and owns property in Goochland thinks so. An engineer who also holds an MBA, CPA, and is a graduate of the Southern Methodist University’s Oil and Gas Strategy school, with decades of experience in the energy field, Hein urged county officials to use the strategy of “drill, baby drill” to preserve the county’s rural character.

At both the August Board of Supervisors’ meeting and the August 24 economic development workshop, Hein declared that there is enough natural gas under Goochland to power the Richmond region for a century. He believes that using modern extraction techniques, including horizontal drilling, natural gas can be safely extracted with no impact on aquifers, residential wells, or geology. As his remarks were made near the anniversary of the 2011 earthquake, this is important.

Hein explained that he participated in mineral exploration on the east coast in the mid-80s and personally modeled this area believing it was a “busy work” project given to a young engineer. There is “hydrocarbon potential” on the coastal plain from south Jersey to South Carolina, he said. The question, said Hein, is how to “tap” it. Advances in horizontal drily, several miles down, now make extraction feasible and safe.

“The key thing,” said Hein, “is not whether there is oil and gas under us, but that the oil and gas industry thinks there is.”

Leasing operations are fast, they typically occur in less than a year, said Hein. “They (energy companies) get interested, the buy in and develop, or walk away from it.”

Exploiting Goochland’s natural gas resources, contended Hein, could generate enough revenue to eliminate much of residential property tax and provide income for landowners so they would not be tempted to sell to developers.

 He urged the county to be proactive and prepare for exploration by major energy companies by creating a severance tax of 7.3 percent on all minerals extracted from depths below 500 feet. Of this, he suggested that seven percent be used to pay all residential property tax over $4,000 (sharing some of the wealth with everyone). The rest would be put into a rainy-day fund to bring “city” water to western Goochland and pave all gravel roads. The remaining .3 percent would pay for all Goochland children to attend a Virginia college or trade school; a center for veterans; and transition housing for mothers who are victims of domestic abuse.

Other actions Hein suggested the county take include having fire-rescue use online resources to train in support of energy extraction;  have the Clerk of Court visit her counterpart in Midland, Texas to learn how to expeditiously process gas leases; have the county attorney familiarize herself with oil, gas and mineral extraction law; educate residents on the mechanisms and benefits of gas leases; establish oil industry overlays for storage of rigs, pipe, and equipment;  identify “lease squares” in discrete environmentally considerate locations; and use the Economic Development Authority to advise energy companies how Goochland is prepared for horizontal production. Hein contended that this last action would warn off “rogue” players and entice the considerate ones.

Hein claimed, on August 24, to have spoken with a major energy company that was interested in Goochland mineral resources and sent information about us.

Where will this lead? Hein has spoken with most, if not all, supervisors, and other county officials. The scenario outlined by Hein is intriguing. It will be interesting to see where this goes.

Stay tuned.