CHARLESTON, W.Va. -- Between 2002 and 2008, West Virginia led the nation in the number of gas drilling permits issued. More than 2,800 permits were issued for new drilling in 45 of the state's 55 counties.
Those statistics were part of a study released Tuesday by the West Virginia Oil and Natural Gas Association.
The study focuses on the economic impacts of growing efforts to harvest natural gas from major Marcellus Shale reserves.
Tom Witt, director of the Bureau of Business and Economic Research at West Virginia University, co-authored the study with three of his colleagues.
In 2009, the study shows, West Virginia's natural gas industry generated more than $12 billion in business, created more than 24,000 jobs in the state and paid more than $550 million in wages.
The Marcellus Shale is a formation of sedimentary rocks that developed 390 million years ago. It lies under a 95,000-square-mile area that includes part of southwestern New York, most of western Pennsylvania, eastern Ohio and nearly all of West Virginia.
Marcellus gas reserves lie between 3,000 feet and 9,000 feet under the land's surface.
"Severance taxes affect locations where corporations will develop new wells," Witt said. "Marcellus Shale could be a major source of long-term economic development in West Virginia."
West Virginia severance taxes are now 5 percent of the gross value of natural gas production - higher than the other states. Ohio has lower severance taxes. Maryland, New York and Pennsylvania have none at all.
However, the new report adds, "For overall state and local tax burden, West Virginia's general tax policy climate is relatively more conducive to natural gas industry operability than other states with significant Marcellus Shale deposits."
Greg Kozera, an engineer with Superior Well Services Ltd., believes the "fracking" process is being criticized unfairly.
Fracking, or hydraulic fracturing, pumps millions of gallons of water - filled with sands and various chemicals - underground to fracture shale deposits to release the natural gases trapped inside.
Kozera believes drilling and fracturing underground rocks will not pollute water supplies. "Contamination from a septic tank, through the soil, is far more likely to pollute them."
The Marcellus Shale formation is the second-largest natural gas field in the world, Kozera pointed out, second only to gas fields in parts of Russia, Iran and the Caspian Sea.
"We can produce enough natural gas to get off of foreign oil," Kozera said. "Today, we send $1 billion overseas every day to pay for oil.