Transcript No Slide Title

Coal Valuation & Geographic
Information Systems
in West Virginia
Where we started
& where we are today
State of the art coal map, circa 1980
State of the art coal owner “database”, circa 1980
Controversy over perceived inequities in coal
valuation for ad valorem property tax purposes
led to a useful outcome, Executive Order 4-93,
in 1993, which led to the creation of the
Mineral Lands Mapping Program
Initial funding was provided in 1995 by
HB 2222.
Mineral Lands Mapping Program
• Collaborative effort between WVDTR,
WVGES, and WVU Department of
Geology & Geography.
• Purpose is to create a statewide GIS that is
an accurate inventory of natural resource
property.
• This is an ongoing process with coal being
the first resource mapped.
• Digital Line Graphs are provided by the WVU
Department of Geology & Geography’s GIS
Technical Center.
• Digital parcel mapping is done by Property Tax
Division, Mineral Parcel Mapping Project.
• Physiographic features such as streams & roads
are used to reference parcel source maps to
DLG’s.
• Because of inherent problems in paper source
maps this often requires “stretching” and
“warping” of line work of surface parcels.
Original Surface Map with DLG Linework
Ortho-photography also can reveal where parcel mapping needs correction. The
parcels indicated by the blue arrow should obviously be located to the southsouthwest.
• All sources of parcel mapping
are assembled into the “Big
File” for use in each Tax Year.
• Parcels can be stacked and
coincident parcels may or may
not be the same shape, interest,
or ownership.
• The WV Geological & Economic Survey creates
coverages by coal bed for each 7.5-minute
quadrangle in a county.
• Point-source data from drill hole records & mine
maps are used to create grids of various sorts
including coal-only and coal-plus-partings
• Previously mined areas are removed from the
coverage to form a grid of remaining coal for each
bed.
• Coal bed grids are later converted to contours with
mine barriers and buffers and low washability
areas removed from remaining coal.
Monongalia
County
Marion
County
23
1
Coal Thickness
(Inches)
Harrison
County
0-12"
12-24"
24-36"
36-48"
48-60"
60-72"
72-84"
84-96"
>96"
Original Pittsburgh Coal Seam Coverage of 3 County Area
Monongalia
County
Marion
County
23
1
Coal Thickness
(Inches)
Harrison
County
0-12"
12-24"
24-36"
36-48"
48-60"
60-72"
72-84"
84-96"
>96"
Remaining Pittsburgh Coal Seam Coverage of 3 County Area
Contoured PGH with barriers, buffers, low washability areas removed
• Where WVGES mapping has not yet become
available, various data sources are used to create
interim maps. Sources include WVGES,
taxpayers, USBM, WVDEP, etc. Data are queried
out by bed and used to create the necessary grids
which are later contoured. Sometimes
combinations of WVGES and interim mapping are
used.
• Data from the various sources are kept in the
wvalldata table. For last year there were around
140,000 useful observations.
EAG coal bed with mining, indicated arcs, washability cuts, combination mapping.
EAG dry btu data points from wvalldata table and contour.
10265 to 14000
PGH dry sulfur data points from wvalldata table and contour.
.94% to 7.06%
LKT dry volatility data points from wvalldata table and contour.
15% to 45%
Reserve Coal Valuation Model
• This complex system is the legislatively mandated
system for valuation of coal for property tax
purposes.
RCVM assumes that all the coal in the state has a
unit value, arrived at as follows:
Vaggr =
(C$ ave )(ROY ave)(PROD ave)/Cap Rate
The second important assumption is that the
aggregate value minus total active value equals
total reserve value.
RCVM determines value by determining the present
value of a future royalty income stream.
Items necessary for determining the future time of
mining include locations of transactions (sales, leases,
permit applications, etc.), current & past mining, oil &
gas wells.
All of these are mapped, as well as lease royalties, sulfur,
btu, volatility, subjective environmental problems, inplace price/mmbtu.
Royalty map: all coal beds - 3.26% to 5.55%
Transactions map: leases, sales, permits
Mines: pre 1974, 1974 - 1983, post 1983
Oil & Gas well locations
Environmental considerations map, all coal beds.
In-place price/mmbtu: all coal - $.0337 to $.0706
Inspection is run against the various
maps to “score” each coal bed on a
property for:
Market interest (transactions)
Market mineability (# of mines)
Prime coal bed factor
Environmental conflict
Use conflict (oil & gas)
Volatility
These are used to arrive at a final tfactor time) for valuation according to
Formula 6 of the legislative rule
governing coal valuation for ad valorem
property tax purposes.
Formula 6
$/ac/bed=($/mmBTU)X(Roy)X[1±(BTU+S)]X[(1/(1+I)(t+0.5))x(1/106)]X(BTU)X(2000)X(1800)X(RR)X(Thk)
Where: $/ac/bed = present value per acre of an individual coal bed on an individual property
$/mmBTU = coal price (FOB-source) per million BTU
Roy = average royalty rate
[1 ± (BTU + S)] = BTU and sulfur adjustment factor
1/(1 + I)(t+0.5) = standard mid-year present worth factor
(1/106) = 1 divided by 1,000,000
BTU = BTU content of one pound of dry coal by coal bed by location
2000 = two thousand lbs. per ton
1800 = 1800 tons per acre foot
RR = clean coal recovery rate
Thk = coal bed thickness in feet