Mountain State Stewardship: A Q&A with Austin Caperton

June 2, 2017

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Mountain State Stewardship: A Q&A with Austin Caperton

Photo by Tracy Toler.

By Samantha Cart

Austin Caperton’s long-time career as a coal executive and his family’s history in politics seem to have groomed him for a position in public service. A successful, self-made entrepreneur and the cousin of a former West Virginia governor, Caperton was appointed cabinet secretary of the West Virginia Department of Environmental Protection (DEP) by Governor Jim Justice in January 2017. With a proven record of working with companies and creating jobs in the energy industry, he brings a unique perspective to the role that he hopes will allow him to balance protecting West Virginia’s land, air and water with eliminating inefficient red tape that prevents growth and prosperity.

Caperton took time to discuss with us his background in energy and provide insight into the role the DEP plays in the Mountain State. Here, he discusses the strengths and weaknesses of West Virginia’s leading industries, the major challenges he faces as DEP cabinet secretary and how he hopes to use his private sector experience to inspire efficiency in West Virginia’s state government.

WVE: Tell us about your experience in the coal industry and how it will help you in your new role as DEP secretary.

AC: I was an executive in the coal industry, so I understand surface mining and deep mining and the permitting of those activities. I’m also an attorney, so I can read a law or a statute, and I’ve been an entrepreneur, founding my own business in 1989. I’ve had a world of experience in mining, mining transactions and equipment manufacturing related to the mining industry. What I learned early on in this position with the DEP is there is so much about the work of this agency that is technical. No one person could ever learn it all, so you better have good people and rely on them and try to lead as opposed to doing it all yourself.

WVE: What do you hope to accomplish in this role over the next four years?

AC: It’s a little early in my tenure to say exactly what I hope to accomplish. I think one thing we want to make absolutely sure of is that we’re as efficient as we can possibly be. In an organization of 811 employees, there’s always room for improvements.

I am trying to get to the bottom of where we might make efficiency improvements because the DEP is the gateway to economic development in West Virginia. Virtually nothing of significance can go on in the state without a permit of some sort, be it air, water, mining, oil or gas—all are permittable activities. We want to make sure when somebody has a valid reason to have a permit that we get it to them as efficiently as we can and that it conforms to the laws of the state of West Virginia as well as the federal laws we must adhere to.

WVE: Share with us your perspective on the current state of the energy and chemical industries
in West Virginia.

AC: We’ve had a major structural shift in the U.S. economy, and that shift has entailed a fairly dramatic decline in national coal production and a fairly significant increase in natural gas production. I think if you look at the statistics, you’ll find that coal used to be around 45 percent of the electrical generation in the country and gas was about 35 percent, and that has reversed. Now gas is, give or take, in that 45 percent range, and coal is in the 35 percent range. Combine that with the fact that in Southern West Virginia production has been falling off since 1998 because the reserves have been heavily mined, and we have a structural shift in our industry that benefits certain parts of our state and is a little harder on the other parts of our state.

As for the chemical industries, it is pretty obvious that the natural gas production we have can be used to completely rejuvenate and provide phenomenal growth for our current chemical companies or new chemical companies that come into our state.

WVE: What are the major challenges you see, and how do you plan to address them?

AC: I think our biggest challenge is going to be figuring out how to fit in with what comes down from Washington. We have a brand-new administration and a whole new way of thinking—at least that’s what is being said. West Virginia is the beneficiary of a great deal of federal money, particularly in our agency. About half of the money we spend comes from the federal government and is used on projects and spent in West Virginia, so I think another big challenge is going to be assessing what is going on in that regard, trying to figure out how to keep those funds rolling and adjusting as time goes on.

WVE: What opportunities have you identified, and how will you take advantage of them?

AC: The potential for our natural gas industry to rebuild economies and parts of the state is huge, and I think we are taking advantage of that. There is a huge amount of production, and we are attempting to build pipelines that will allow us to get that production out of the state and let it flow to where it can be sold. The state needs the revenue, so we want to make sure we can get that gas out of our state, but more importantly, we want to make sure that if that gas can be utilized in our state in downstream activities that we can take advantage of it.

WVE: You have spoken out about the importance of finding balance between protecting the environment and meeting the needs of West Virginia businesses. How do you hope to achieve this?

AC: That is very simple. The laws and regulations of the state of West Virginia and the U.S. recognize that industry and the environment can co-exist. My job, as I see it, is to make sure we’re applying those laws consistently and as they’re written on the books because the laws themselves come down from the Legislature, and that’s the will of the people.

WVE: Given the debate over extraction versus environmentalism, what would you like people to better understand about the DEP’s purpose and mission?

AC: We’re an executive branch. When I accepted this position, I had to recall my civics lessons. The Legislature passes the laws, and the executive branch implements and carries out the laws. I am often asked about my position on environmentalism and the environment. I can have positions on those things, but I don’t get to allow my personal opinion about what should or shouldn’t be done to enter into the execution of my job. The execution of my job is if somebody comes in and wants to do something, they have to submit a permit. If that permit meets the laws and regulations of the state of West Virginia, the DEP doesn’t get to pick and choose who gets a permit. If a permit is valid and their activities meet all of the regulations of the state, then we have to give them a permit.

WVE: What is your response to those who disagree with scaling back regulations over concern for the state’s environment? For example, many feared HB 2506 would increase water pollution.

AC: I am learning that this water regulation is very complex and technical. The bottom line is there is nothing out there that scales back the standards required for drinking water. Of course, we only regulate the input side, so when water reaches a certain point in any stream, it has to meet certain standards before it can be used as drinking water. It’s still going to go through the drinking water clarification and purification process, but we don’t regulate the output side. That’s the Department of Health. We regulate what happens before the water gets there. There are different ways of measuring the amount of discharge that any particular permittee can release into a stream. House Bill 2506 really changes how we measure what can go into a stream, but it has no impact whatsoever on the final product entering our water plants.

WVE: When you took office, you removed the head of the DEP’s Office of Environmental Advocates, a move that has been met with some concern from the environmental community. Tell us about this move and others you’ve made and why they were necessary.

AC: The laws and regulations of our state and the federal government recognize that when a new administration comes into power, they have the right to build their own team. Consequently, in our agency of 811 people, I think there are 17 or 18 at-will employees, meaning they are not protected by civil service, and there is a purpose for that. The new governor is allowed to build his team, and his cabinet secretaries are allowed to build their teams. I exercised my prerogative to build my own team. I had somebody I wanted to have that job that I felt was eminently qualified, and he was on the job a couple of days after I made the change. I have been very satisfied with his performance.

WVE: Tell us about asking the more than 800 DEP employees to submit at least one cost-saving idea in an effort to eliminate waste and what kind of feedback you received.

AC: There were two things that were important when I put out that email to ask for ideas. The first was I wanted people to understand I am interested in what they have to say about their agency and about what goes on in their agency. The second thing I wanted to get across to them was that in a time when we have such a tough economic environment, every penny counts. A cost-saving idea might not be a big idea—it might not save $100 million or save the state—but every dime counts, just like managing your household budget.

The email resulted in many ideas. For instance, some employees questioned that if we regulate the intake side of drinking water, should we be serving bottled water at the agency? Somebody said we shouldn’t, and we decided they were exactly right. So approximately $25,000 a year was saved.

WVE: Given West Virginia’s dire budget situation, what role, if any, do you think the state’s coal, natural gas and chemical industries can play in resolving our financial deficit?

AC: I think the proposed legislation that would scale the severance tax up and down based on pricing is very solid. I am a big fan of that adjustment so we as a state can benefit when the industry is benefitting. When you have more and you’re making more, you ought to be willing to give back more. I’m sure there are some who are opposed to it, but coal and natural gas are commodities, and the prices can fluctuate rapidly.

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