State of the State (Commonwealth): Virginia and Energy

Virginia’s new Gov. Bob McDonnell delivered his State of the Commonwealth address Jan. 18, fleshing out the policy programs he mentioned in his earlier inaugural address. While he did not use the word “manufacturing” — the term we’ve been searching for in governors’ addresses this month — the Republican governor did talk about “industry,” e.g., the bio-tech industry, an industrial mega-site, the wine industry, and, with the most detail, the energy industry.

McDonnell’s prescription for economic growth via energy is an all-of-the-above approach, including offshore oil and gas development, nuclear power, coal and bio-fuels. The Virginia governor is giving the Republican response to President Obama’s State of the Union address Wednesday, but his vision of energy development is non-partisan and one that the President would profitably embrace in pursuit of jobs, growth and tax revenues.

From McDonnell’s prepared remarks:

I am committed to utilizing all of our vast, God-given natural resources to make Virginia the “Energy Capital of the East Coast.” We must do our part to promote American energy independence.

We have the opportunity to be the first state on the Eastern Seaboard to sell the leasing rights to explore and drill offshore for oil and natural gas in 2011. The federal moratoria have been lifted. The state that is first will reap an economic bonanza. We can lead or be left out. Four years ago you had the foresight to pass legislation giving us a critical advantage. We cannot now let Washington bureaucracy undermine the clear desires of the people of Virginia.

I have written to Secretary of Interior Ken Salazar, and have let our congressional delegation know that this is a priority for our Commonwealth, consistent with President Obama’s commitment to make our nation more energy secure. Several studies show that environmentally-safe offshore exploration and production will create thousands of jobs, put hundreds of millions into our depleted state coffers, and spur billions in capital investment in the Old Dominion. There are many unemployed Virginians who are ready to work in the oil and gas production industry.

And we must continue to prepare for the reality of offshore production this session by mandating that 20% of the new tax revenues we generate, and any future royalties we receive, will be invested in renewable energy projects, with the other 80% going to transportation.

We must also promote Virginia’s coal and natural gas industries in Southwest Virginia. As carbon sequestration and coal gasification technologies become cost-efficient, coal production can grow. Nuclear power growth must be incentivized. Virginia has more private sector nuclear industry capability than any other state, and new partnerships between AREVA and the University of Virginia are producing the engineers needed to grow this sector.

To further make Virginia a welcome home for alternative energy, I ask you to pass legislation making the entire Commonwealth a “Green Jobs Zone.” Any business in the state that creates a green energy job over the next 5 years will receive an income tax credit of $500 per position. “Virginia is for Lovers”….of renewable energy.

In Southside Virginia, I visited the entrepreneurs at Piedmont bio-products, who are using a creative distillation process to turn hardy sugar cane and switchgrass into a fuel that you can put in an engine or you can drink. It’s not tasty, but it’s another emerging Virginia energy technology. I look forward to working with Delegate Terry Kilgore and the Tobacco Commission to create an energy corridor in Southern and Southwest Virginia.

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