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U.S. Senate candidate Joe Sestak holds a meeting at Misericordia University.

By Sherry Longslong@timesleader.com
Staff Writer

DALLAS TWP. – Property owners concerned about the effects of Marcellus Shale drilling on water reservoirs made their views clearly known Saturday afternoon during a packed town hall meeting at Misericordia University’s library.

They wanted a moratorium enacted immediately on all gas drilling throughout the state until more is known on how to safely drill natural gas wells without using dangerous chemicals in the hydrofracturing process. The process uses between 1 million to 1.5 million of gallons of water per well laced with chemicals and dirt under high pressure to force the ground open to release natural gas, geologist Patrick Considine said.

Considine and Democratic U.S. Senate candidate Joe Sestak, whose campaign organized the town hall forum, said that during President George W. Bush’s administration, requirements on oil and gas companies were dramatically lifted. Considine, president of Considine Associates and forum panel member, explained that federal and state officials are not entitled to know what mixtures of chemicals each gas drilling company uses because it is considered a trade secret formula.

He warned that the federal and state governments need more officials to oversee the drilling processes, so the companies are not tempted to cut corners when disposing of the water after the fracking.

“Oil and gas companies need to be held to the same standards as other companies. We don’t need more regulations; we need to find ways to enforce the regulations we have,” Considine said.

People wanting the moratorium drowned out the drilling supporters, including business owner, economist and farmer Joe Grace of Morris in Lycoming County, who sees this industry being one of the biggest Pennsylvania has ever experienced by bringing 88,000 jobs to the state just this year and generating millions in revenue.

Worried about the environment and safety of area water systems, local podiatrist Dr. Thomas Jiunta adamantly disagreed with Grace, pointing to the recent gas well drilling incident in Clearfield County and a gas pipeline accident that killed one worker in Texas.

“This is not a safe activity as we know how to do it right now. We need to stop it first. We are putting the cart before the horse when you are talking about economic boom. You can’t drink gas,” said Jiunta of Dallas, a Gas Drilling Awareness Coalition founding member.

Jiunta added more focus should be put jobs that will support and grow green and renewable energy sources.

Sestak told people he sees gas drilling as an economic boon to the state, yet it needs to be done in a responsible way.

“I think this would be a good way to yes, exploit our resources, but not our communities. Business has to pause. Harrisburg has to stop until we get it right,” Sestak said, adding that he supports enacting a 5 percent severance tax on the drilling companies. He said is in favor of a moratorium

No representatives from the campaign of Sestak’s opponent, former U.S. rep. Pat Toomey, attended the forum.

A statement from the Republican candidate’s campaign staff said Sestak’s plan for taxing the drilling will backfire by pushing those companies to focus on other states.

“Marcellus Shale has the potential to provide Pennsylvania with over 200,000 new jobs and millions of dollars in added revenue, but Joe Sestak’s plan to tax natural gas extraction will chase these jobs out of Pennsylvania. A recent study warned that a tax on Marcellus natural gas output would very likely divert investment to other states like Colorado and Texas. This is further proof that Joe Sestak’s ‘more government, less jobs’ approach is bad for Pennsylvania,” Toomey’s Deputy Communications Director Kristin Anderson said.

State Rep. Karen Boback, R-Harveys Lake, did not attend the forum, but issued a statement Friday stating she was working to develop legislation to protect drinking water from gas drilling practices. Knowing that will take time to become law, she is urging Gov. Ed Rendell to issue an executive order implementing four additional rules before permits can be issued.

Her opponent, Richard Shermanski, a Democrat, attended the meeting, telling people he would not support any form of drilling if he knows it will damage water reservoirs.

Many attending the forum reside in Luzerne County, but some people, including Leslie Avakian of Greenfield Township in northern Lackawanna County, drove an hour to voice their views.

She believes the state’s Department of Environmental Protection needs to be spilt up into two separate agencies because DEP currently issues the permits and regulates the gas companies.

Lynn Hesscease of Dallas told her story of how she became deathly sick after three years of oil leaking in her cellar from a rusted pipe.

She explained how she can’t use any type of products made from petroleum – polyester clothing, petroleum jelly or use plastic cups.

“We have to be very careful it is not near our drinking water and we are not exposed to the chemicals or fumes because if we are, people will get sick,” Hesscease said.

Sherry Long, a Times Leader staff writer, may be reached at 829-7159.

Copyright: Times Leader

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

Doug Ayers has never been one to take the easy way out, and his fellow directors on the board of the Lands at Hillside Farms are following his lead.

While much of the land surrounding the Lands at Hillside Farms has been leased for natural gas drilling into the Marcellus Shale a mile below, the board is refusing to lease any part of the nonprofit organization’s 412 acres in Kingston and Jackson townships.

“The easy route would have been to take millions of dollars to fix those greenhouses and the barn roofs and pay off our debt,” Ayers said last week while sitting under some shade trees outside the farm’s dairy store.

“The more honorable route is to work hard and go to the public because the public owns this place, and we expect them to step up to the plate,” he said.

A veterinarian and chairman of the board of the Lands at Hillside Farms, Ayers said the board agreed “to not engage the gas companies for drilling in the foreseeable future because we don’t consider it safe for the land that we’ve been entrusted with, or safe for our neighbors.”

Chet Mozloom, executive director of the farm, said he “got blitzed over a two- or three-week period with calls from people who must have thought we signed (a lease) for some reason – I don’t know why – and they expressed their disappointment.”

“They were terrified of the impact, and this was before the Clearfield well explosion. They were afraid of Huntsville or Ceasetown (reservoirs) getting destroyed because that’s where their water is coming from,” Mozloom said.

Ayers said the potential for catastrophe is too great to agree to sign a lease.

“The proof is in your newspaper – the reporting that you’re doing on the (oil leak in the) Gulf, on the (gas well) explosion in Clearfield County, the spills in Dimock, the contamination of the well water in Dimock (caused by methane gas migration), the woman in Dimock who flushed her toilet and it blew the back of her house off,” Ayers said.

“And we’re trying to give people food here,” Mozloom added, “so it’s a whole different game if this soil gets ruined. I mean, just imagine Clearfield happening right next to the Huntsville Reservoir. If that happens, it’s over.”

Hillside keeps to mission

It was January 2005 when Ayers met with the Conyngham family, who owned the farm since 1891, to pitch the idea of selling it to the public with a mission to promote organic, sustainable agriculture, resource conservation and historical preservation.

An agreement was struck and the new organization raised about $2 million in private donations and public grants, secured a roughly $2 million loan from Luzerne Bank and bought the farm for $4.058 million last fall.

The plan is to use revenue from self-sustaining micro-enterprises, such as the dairy store, a restaurant serving locally grown fare, a bed and breakfast that would double as a rentable site for private functions, a colonial living-history museum and educational facilities pay off the loan and produce enough revenue to keep the farm operating.

Ayers said the property is one contiguous block of 412 acres including farmland, pasture, more than 36 buildings and 200 acres of forest. “We’re desirable (to the gas companies) because we’re (one) large chunk,” he said.

And while the board of the Lands at Hillside Farms wouldn’t even listen to a proposal from a gas company, the board of another local nonprofit that Ayers helped found 17 years ago did.

Ayers said the board of the North Branch Land Trust, of which he is still a member, was most recently offered a $4,000-per-acre bonus payment and a 20-percent royalty for a non-surface disturbance lease.

“That means no well drilling on the property. The Land Trust will not allow well drilling on the property for sure, and we’re not entertaining any leases now because we’re not comfortable,” Ayers said.

More information needed

Ayers believes the boards of both nonprofits would support more stringent legislation for the gas and oil industry, but he doesn’t believe a proposed 2,500-foot buffer zone between well sites and water sources is adequate because “we’re in an experimental phase. &hellip We don’t know what’s going to happen. It’s all new to the geology of this area.”

In fact, Ayers said, he’d like to see a moratorium on drilling in the Marcellus Shale “until it’s proven to be much, much safer than it is right now.”

Some Land Trust board members are more comfortable with the gas industry than others, Ayers said. So it’s possible that in the future, “if the industry proved itself to be very, very safe and didn’t harm the people downstream and the environment, I think the board may go for that,” he said of allowing horizontal drilling far below the land’s surface. “But not now.”

The Land Trust owns about 700 acres, the majority of which is an approximately 667-acre tract north of Tunkhannock in Wyoming County. The remainder lies in seven other counties, including Luzerne, Sullivan, Susquehanna, Bradford, Wayne, Lackawanna and Columbia.

Ayers said the trust has been offered large amounts of money to lease the large tract because it’s near the Trans-Continental pipeline, “which makes it very desirable to the (gas) companies. They call us regularly,” he said.

Ayers said it would be “tempting” for the board to sign a lease because “all nonprofits need to survive, and &hellip it would allow us to perform our mission better.” He said the board recommends that people considering a gas lease should call the trust “because they’re very educated about it, they know all about this and they would guide them.

“They would prefer that people not drill on their property and do only subsurface drilling if anything. And frankly, they would prefer that the people wait to learn more and allow the industry to mature and prove itself. And they’re exemplifying that by their own decisions regarding the land they own themselves. It’s pretty hard to turn down the amount of money they’re talking about – it’s millions and millions of dollars,” Ayers said.

Ayers – man on mission

Ayers stressed that the trust and the Lands at Hillside Farms are two separate and unrelated entities. “The mission of the Land Trust is to conserve open space. It’s more of a land-related, conservation-related mission. The purpose of this facility – the Lands at Hillside farms – is to teach sustainable ways of life, or, in other words, to help people make decisions that are healthy for them, their community and the world.”

If Ayers could say one thing to area land owners, “love thy neighbor I think is what I would say, and consider them in your decisions, because they won’t be able to leave as easily if a catastrophe were to happen.

“The principles upon which this country was created rely upon giving more than taking. I mean, Aristotle, when he and his gang created democracy 2,500 years ago, said democracy is the best form of government, but it can only exist in the face of virtue. I’m not sure how long democracy can last when people are willing to risk their neighbors’ safety and welfare for money,” Ayers said.

Ayers said he thinks many people in the area are disappointed, and not just because of the ongoing corruption scandal in Luzerne County in which 30 people – including three county judges – have been charged by federal agents over the past 18 months.

Seeing neighbors signing gas leases, Ayers said, “is just another example of how people might get discouraged because they see people being selfish, they see people not caring for one another. How could the government possibly have allowed this to have occurred here without better regulation? It makes no sense,” Ayers said.

“But again, everything that goes wrong is the people’s issue. I mean it’s the people who run this place. It’s easy to say it’s the politicians and the oil companies and everybody else, but the reality is that it’s us. We are the ones responsible for all of this going on. And if we stand around and watch it, then maybe we deserve what we get.”

Steve Mocarsky, a Times Leader staff writer, may be reached at 970-7311.

Copyright: Times Leader

MSC president cites need for commonsense TDS regulations

Canonsburg, Pa. – The responsible use, treatment and stewardship of the Commonwealth’s water resources are among the most important considerations involved in the development of clean-burning natural gas from shale. As a result, the Marcellus Shale Coalition (MSC) – whose members represent 100 percent of the shale gas producers throughout Pennsylvania – counts among the industry’s major accomplishments the tremendous increase in recycling of shale water. Today’s meeting at Reserved Environmental Services facility features one example of the many facilities the industry is using to achieve its high recycle rates, reducing the amount of water used at each Marcellus well and decreasing the overall discharge volumes.

“Protecting the Commonwealth’s rivers, streams and tributaries remains a top priority for the MSC. New technologies allow our members to recycle on average nearly 60 percent of the produced water used in this tightly regulated process. And because of these technologies – which continue to advance by the day – some MSC members are recycling nearly 100 percent of their water,” said Kathryn Klaber, president and executive director of the MSC.

New regulations sought by the Pennsylvania Department of Environmental Protection (DEP) call for an “end of pipe”, 500 milligrams per liter cap on the concentration of total dissolved solids (TDS) in the disposal of produced water. These proposed regulations, which are now pending before the Independent Regulatory Review Commission, could create a host of unintended consequences — as virtually no water treatment facilities across the Commonwealth could meet this threshold.

In fact, the Reserved Environmental Services facility is not currently capable of treating produced water at the discharge standards in the pending regulation, and will not have that capability before the effective date of the that regulation. For context, San Pellegrino Mineral Water’s TDS concentration is nearly twice the level of what these proposed regulations would require.

“As the safe and steady development of the Marcellus Shale continues to generate jobs, revenue and opportunity for the Commonwealth, the MSC stands ready, willing and eager – as always – to partner with DEP, the governor and the General Assembly to ensure this opportunity is seized upon in the safest, most beneficial manner for residents of the state and for our environment,” Klaber said. “Unfortunately, the new TDS rules represents a bump in that road and require more work to actually solve the TDS issues they are purported to address — but one we hope will be smoothed out along the path to an energy future to which we will continue to contribute, and of which we can be proud.”

READ MORE

• Gov. Rendell: “The technology in treating [produced] water is improving rapidly.” (CNBC’s Squawk Box, 6/9/10)
• Release: Marcellus Shale Coalition Releases the Facts on Flowback Water Treatment
• Study: Evaluation of High TDS Concentrations in the Monongahela River (Tetra Tech)
• Release: Environmental Firm Finds Marcellus Shale Drilling Activity Had Minimal Impact On Total Dissolved Solids

Copyright: Marcelluscoalition.org

Pa. American Water Co. wants state government to offer water supply protection.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

Officials with the water company that owns two Back Mountain reservoirs want to see state action to better protect those drinking water sources from contamination related to natural gas drilling.

They also want the opportunity to have input into the permitting process for natural gas wells located near those reservoirs.

Terry Maenza, spokesman for Pennsylvania American Water Co., said there is no requirement that natural gas companies or any state agency notify water suppliers when well-drilling permit applications for land near water supplies are submitted to the state Department of Environmental Protection.

“We would like to see those laws and regulations revised so we can be notified and have a chance to express any comments or concerns while a permit is under review,” Maenza said.

Maenza’s comments follow the revelation on Monday that at least one property on the shore of the Huntsville Reservoir in Lehman Township, and an adjacent property, have been leased to EnCana Oil & Gas (USA) Inc., which will begin exploratory drilling operations at a well in Fairmount Township in July and at a second in Lake Township in late summer or early fall.

Paul Siegel, who owns the three acres on the Huntsville shore, said on Monday there is language in his lease that allows him and his wife, Janet, to restrict any surface drilling on his land but would allow EnCana to drill horizontally underneath his property.

The couple’s son and daughter-in-law, Christopher and Maureen, own 10.88 acres bordered by Christopher’s parents’ land on the east and by Huntsville-Idetown Road on the west that is also leased to EnCana.

Maenza said there is a 500-foot buffer between other properties and the high-water point of the Huntsville and Ceasetown reservoirs in most areas, but some parcels of land were “grandfathered in” without buffers when Pennsylvania American bought the water system from PGW in 1996.

As far as allowing a gas company to drill underneath the reservoirs, Maenza said it “would depend on what the driller was proposing and who owns the land. I’m not sure how far (down) our rights extend under the reservoirs,” he said.

Maenza said Pennsylvania American started water sampling and visual creek inspections about two weeks ago “so we can get some baseline data before the drilling begins.”

Huntsville Reservoir provides water for about 30,000 people living in Dallas, Kingston Township., Swoyersville, Wyoming and West Wyoming. Ceasetown Reservoir provides water to about 70,000 people in Ashley, Courtdale, Edwardsville, Larksville, Nanticoke, Plymouth, Pringle, Shickshinny, the townships of Conyngham, Hanover, Hunlock, Newport and Plymouth, and portions of the city of Wilkes-Barre.

Wyoming Mayor Robert Boyer said he’d like to learn more about the drilling process, given that his town receives water from the Huntsville Reservoir.

“There is a potential for environmental concerns. If we drill for oil a mile under the ocean floor and we don’t have a plan in place to deal with a catastrophic event like we had off the Gulf Coast, it makes sense that we want to have environmental protections in place before we start drilling here. Don’t put the cart before the horse,” Boyd said.

Maenza noted that state Sen. Lisa Baker, R-Lehman Township, is working on legislation to protect water sources.

In order to protect aquifers and determine any adverse consequences attributable to drilling, one bill would require testing at three times – before drilling, at the completion of drilling and six months afterward – at three different depths.

A second bill would rule out drilling at sites too close to drinking water sources such as reservoirs.

A third bill would require DEP to ensure that the operators of wastewater treatment facilities are properly trained and sufficiently monitored to lessen the chances of human error creating a major problem.

Jennifer Wilson, Baker’s chief of staff, said specifics on the proposed bills, such as minimum distances from aquifers, are still being worked out.

Although EnCana has obtained a drilling permit for a site in Lehman Township about midway between Harveys Lake and Huntsville Reservoir, Wendy Wiedenbeck, public and community relations adviser for EnCana, said the company has not yet put together a full development program for drilling in Luzerne County should production at wells in Fairmount and Lake townships prove successful.

She did say the company is starting to look at additional potential drilling locations in the county.

As for company policies on proximity of drilling to water resources, she said the company naturally abides by the minimum setbacks set by states. But in considering additional setback distances, she said each potential drill location is unique and is assessed individually.

“We would take the same thoughtful, measured approach to any future operations as we have with our first two wells,” Wiedenbeck said.

Steve Mocarsky, a Times Leader staff writer, may be reached at 970-7311.

Copyright: Times Leader

The order against EOG Resources Inc. will remain in place until DEP can finish its investigation.

MARC LEVY Associated Press Writer

HARRISBURG — Pennsylvania regulators halted work Monday at dozens of unfinished natural gas wells being drilled by the company whose out-of-control well spewed out explosive gas and polluted water for 16 hours last week.

The order against Houston-based EOG Resources Inc. will remain in place until the Department of Environmental Protection can finish its investigation and until after the company makes whatever changes may be needed, Gov. Ed Rendell said.

The order stops EOG from drilling and hydraulically fracturing wells. It affects about 70 unfinished EOG wells into the gas-rich Marcellus Shale formation.

Another concern was the apparently bungled attempts to notify the right emergency-response officials about the accident. Fines are likely, said Environmental Protection Secretary John Hanger.

Nobody was hurt in Thursday’s blowout in a heavily forested section of north-central Pennsylvania.

The accident shot highly pressurized gas and wastewater as high as 75 feet. The gas never caught fire, but state officials had worried about an explosion and ordered electrical service to the area cut before specialists secured the well at about noon Friday.

About 35,000 gallons of wastewater have been pumped into holding tanks so far, the company said.

Monitors in a nearby spring show signs of pollution, although Hanger said the spring is in such a rural area that it is not viewed as a public health hazard. Officials say they have detected no pollution in larger waterways that feed public water supplies.

The state says the company is cooperating and is supportive of the stop-work order.

Gary L. Smith, vice president and general manager of EOG’s Pittsburgh office, said the company regrets the accident and would continue to work with Pennsylvania officials.

“After the investigations are complete, we will carefully review the findings with the goal of enhancing our practices,” Smith said.

“When all outstanding issues are resolved, we look forward to resuming full operations in Pennsylvania,” Smith added.

DEP officials said the well’s blowout preventer failed, and they were investigating whether the failed equipment was the primary cause.

A blowout preventer is a series of valves that sit atop a well and allow workers to control the pressure inside.

Hanger and EOG said the blowout preventer had been tested successfully by the company on Wednesday morning.

Copyright: Times Leader

STEVE MOCARSKY smocarsky@timesleader.com

An attorney and a gas company land man warn that attractive lease offers from energy companies might not always be as generous as they seem.

Kit Akers, lead land man for new ventures at EnCana Oil & Gas, said other natural gas companies could come in throwing around relatively large bonus money offers to Luzerne County landowners if EnCana’s exploratory drilling is successful in Fairmount and Lake townships.

“Sometimes people get blinded by bonus money and aren’t always thinking about protecting themselves in the long run,” Akers said.

Luzerne County landowners might be experiencing bonus envy, considering that gas companies in Susquehanna and Bradford counties are offering $5,000 to $6,000 per-acre bonuses for drilling rights leases while EnCana is offering $2,500.

But Akers said the value of drilling rights in Luzerne County will increase if EnCana’s exploratory drilling is successful.

“Just the very fact that (EnCana’s acquiring state) permitting for the wells made the area more attractive to competition; that alone increases the potential value,” Akers said.

But Akers said landowners should consider more than just the bonuses and royalties offered in exchange for drilling rights.

“The WhitMar (a company EnCana has purchased leases from) lease form is very friendly to landowners. The lease is 14 pages long and loaded with surface protections, generous well location fees and other benefits to landowners. Other leases can be as short as two pages and include none of these protections. People sometimes get blinded by the money offered on the front end for a lease that is not worth as much to them,” Akers said.

Garry Taroli, an attorney with the Wilkes-Barre law firm Rosenn Jenkins & Greenwald, has been representing landowners in lease negotiations for about three years.

“The leases have become more friendly to property owners. With competition comes more benefits from the property owners’ point of view,” he said.

Many newer leases require minimum setbacks from structures and water sources, extra payments for damaged timber, reimbursements for harm to water or land and testing of water before, during and after drilling activities – paid for by the gas company, Taroli said.

Taroli advised that landowners at least have a lease reviewed by an attorney before signing it.

Some leases he’s seen contain language that could be a headache for landowners. While most leases set specific time limits for drilling, one lease he saw allowed a gas company to drill “for so long as gas could have been produced on the property.”

That term, Taroli said, “could be until doomsday.”

Jeffrey Nepa, an attorney with Nepa & McGraw in Carbondale and Clifford, said he’s happy to see property owners communicating on Internet forums to try to stay informed about lease issues.

“It’s nice to see people pooling their resources together to battle against the gas companies,” Nepa said.

“We live in the age of information. … We see that the gas companies are controlling the information. And a lot of times we see them put out misinformation. But at the end of the day, it comes down to caveat emptor – buyer beware.”

Steve Mocarsky, a Times Leader staff writer, may be reached at 970-7311.

Copyright: Times Leader

EnCana is currently signing standard leases giving Luzerne County landowners $2,500-per-acre bonuses.

STEVE MOCARSKY smocarsky@timesleader.com

The value of land leases with natural gas drilling companies has been climbing in counties to the north, but whether that happens in Luzerne County will depend on the results of exploratory drilling scheduled to begin this summer.

Natural gas exploration companies are now offering leases in Susquehanna and Bradford counties with up-front per-acre bonuses in the $5,000 to $6,000 range and royalties as high as 20 percent, said Garry Taroli, an attorney with Rosenn Jenkins & Greenwald representing area landowners.

Late last month, natural gas producer Williams Companies bought drilling rights to 42,000 net acres in Susquehanna County from Alta Resources for $501 million, placing the lease value on that land at nearly $12,000 per acre.

So people like Edward Buda, who owns land in Fairmount Township on which the first natural gas well in Luzerne County will be drilled in July, might be feeling some lessor’s remorse, given that they agreed to comparatively paltry up-front bonuses for the first two years of the lease term.

When Buda, 75, of Ross Township and his late brother and sister-in-law were in negotiations with WhitMar Exploration Co. early last year, they, like many others, agreed to bonus payments of $12.50 per acre each year for the first two years of the lease. The bonus increases to $2,500 for the third year.

However, if drilling begins on or under a landowner’s property before an anniversary date of the lease, any bonus payments for subsequent years become null and void and the royalty provision of the lease kicks in. So, if the drilling that is to begin next month on Buda’s property is successful, he likely won’t ever see that $2,500-per-acre bonus but will receive much larger royalty payments.

Since Buda’s lease was negotiated, WhitMar sold most of the company’s interest in the leases to EnCana Oil & Gas (USA) Inc.

EnCana is currently signing standard leases giving Luzerne County landowners $2,500-per-acre bonuses – $1,000 the first year of the lease and $1,500 the second year, according to EnCana’s Group Lead for Land (New Ventures) Kit Akers.

Some landowners who signed the same type of deal with WhitMar as Buda believe they’ve been treated fairly.

Michael Giamber, 57, of Fairmount Township, lives about 2 miles from the Buda drill pad. While the Budas negotiated their lease on their own, Giamber joined a consortium of landowners who negotiated a deal with WhitMar in 2008 for bonuses of $12.50 per acre each year for the first two years of the lease, $2,500 per acre for the third year, and a 20-percent royalty on all gas produced.

“It was in the middle of a recession and leasing had pretty much stopped except in Dimock. We essentially partnered with WhitMar,” Giamber said.

In exchange for landowners accepting the initially small incremental bonus payment arrangement, WhitMar promised to do seismic testing of the leased land and partner with a company that would handle the drilling and secure permits for one to three exploratory wells in the county within two years.

“I signed on not because of the bonus, but because of the 20-percent royalty and because if they did not drill one to three wells after two years, we’d be free agents again,” able to renegotiate for better terms, Giamber said. “Because we were in a recession, what did we have to lose?”

“A lot of older people would rather more up-front money, and I can appreciate their position,” Giamber said.

Jeffrey Nepa, an attorney with Nepa & McGraw in Carbondale and Clifford, believes people who signed leases early for smaller bonuses were either “more desperate and needed money or were misinformed about what the extent of (drilling in the Marcellus Shale) was. Some people have had buyer’s remorse, so to speak, regretful that they signed and wanting to get out,” Nepa said.

Nepa said he’s seen bonus money increase, dip back down, “and now it’s creeping back up again. And it appears that landowners “who held out, so to speak, are the ones that are rewarded with the largest contracts. In the Barnett Shale (in Texas), I’ve heard of property owners getting in excess of $20,000 per acre, and they were the ones who held out.”

Gas companies normally drill in 640-acre blocks of land. So people with a larger tract of land are better off holding out for better lease terms, Nepa said.

On the other hand, those who signed leases earlier are now the ones who will see royalty payments kick in much sooner than anyone else, because they will be the first to have wells drilled, said Robert Schneider, 39, of Fleetville, Lackawanna County.

Schneider joined a landowner consortium that negotiated leases with a $2,100 bonus and an 18-percent royalty in 2008 with Exco Resources, and he’s glad he didn’t hold out for more.

“Two years have gone by and I have three years left. … There’s a risk if you wait,” Schneider said, speculating that implementation of more rigorous and costly government permitting requirements, the establishment of a severance tax or finding insufficient or no gas in his area are all reasons that companies might pull out and stop leasing.

EnCana’s Akers backed up what Giamber and Schneider had to say. “People who leased earlier put themselves in a position to most likely have their land drilled earlier,” she said.

And Akers said, if WhitMar had not been able to secure leases at relatively low cost to the company, exploration in Luzerne County might not have begun as soon as it has.

“Because these people leased early to WhitMar, WhitMar was able to build a large position of leases that allowed for horizontal drilling. That’s what got a company like EnCana interested in coming to Luzerne County. If we had not seen a consolidated lease position, it’s unlikely WhitMar would have gotten a company like EnCana to come in … It was possible that the $12.50 offer was the only offer those people would ever get,” she said.

Akers also believes that the reason landowners in Susquehanna and Bradford counties are being offered much higher bonuses is because hundreds of wells have been drilled there and natural gas extraction has proven successful.

“Luzerne County, on the other hand, is really on the frontier. There’s no way to know if shale within a geographic region will produce any gas or enough gas to make drilling profitable without actually drilling wells. There have been no wells drilled in Luzerne County, so that’s the reason why there’s a difference in lease prices between Luzerne County and other counties,” Akers said.

If wells on Buda’s land and a site in Lake Township don’t produce any gas or at least enough of it to make drilling there worthwhile, land lease values in Luzerne County could drop to zero, Akers said.

If the wells do produce significant amounts of gas, however, competition for drilling rights will definitely heat up, Akers said, and with it the price.

Steve Mocarsky, a Times Leader staff writer, may be reached at 970-7311.

Copyright: Times Leader

MARC LEVY Associated Press Writer

HARRISBURG — State environmental regulators worked Sunday to get to the bottom of what caused a natural-gas well to spew explosive gas and polluted water for 16 hours last week before it could be brought under control.

Neil Weaver, spokesman for the Department of Environmental Protection, blamed a failure on the well’s blowout preventer, a series of valves that sit atop a well and allow workers to control the pressure inside. Investigators are trying to figure out what caused the malfunction.

The blowout is the latest in a string of accidents connected by regulators to the rapidly growing pursuit of the rich Marcellus Shale gas reserve that lies beneath much of Pennsylvania.

It seems likely the Pennsylvania blowout will enter the debate in the Capitol, where legislators are battling over the merits of an extraction tax and tighter regulations on an industry that has spent several billion dollars and drilled more than 1,000 wells in Pennsylvania in just a couple years.

State Rep. David Levdansky, D-Allegheny, said such oil problems could bring increased interest in a moratorium on leasing public land for gas drilling and a severance tax that could largely fund existing environmental protection and cleanup programs. Levdansky is a leading environmental advocate.

Weaver declined to discuss whether investigators have found anything so far or whether well driller EOG Resources Inc. of Houston committed any violations that could lead to fines or any other penalties.

An EOG spokeswoman said Sunday the investigation into the cause is ongoing, and the company had no light to shed on the blowout.

Crews evacuated the site Thursday night and didn’t regain control over it until just past noon Friday. No one was injured, the gas didn’t explode and polluted water didn’t reach a nearby waterway, officials said.

The blowout sent highly pressurized gas and polluted water 75 feet into the air. Huge tanks were required to cart off chemical- and mineral-laced water collected on the grounds of the private hunting club where the well had just been drilled.

Copyright: Times Leader

A company drilling for natural gas says it is already working with local officials.

STEVE MOCARSKY smocarsky@timesleader.com

Although the community at large hasn’t been privy to it, some local emergency management officials have been working closely with an energy company to draft emergency response plans to address any local natural gas drilling-related catastrophe that might occur.

EnCana Oil & Gas USA is slated to begin drilling a well at a site in Fairmount Township in about a month, and many local residents, officials and emergency responders have become anxious, feeling left-in-the-dark about whether local emergency responders have the equipment, knowledge and protocols in place to handle a drilling-related catastrophe.

But Wendy Wiedenbeck, public and community relations advisor for EnCana, said local firefighters would not be responsible for containing or fighting a gas well fire or gas release at a well site.

“In the event of an incident, local emergency responders will be asked to provide support to our operations personnel who are specially trained to deal with incidents at oil and gas locations,” Wiedenbeck said.

“Should a serious well-control incident occur, such as release of gas or fire, EnCana will look to local emergency responders to provide support while EnCana calls upon well-control experts to assist in addressing such an incident,” she said.

The well-control company EnCana has identified in an Emergency Response Plan submitted to the state Department of Environmental Protection is Wild Well Control in Houston, Texas. A second call would be placed to Cudd Well Control, also in Houston.

“Depending on the severity of the well-control issue, they would respond as soon as possible. In the meantime, the area around the well – the exact area again depends on the well-control issue – would be secured and/or evacuated. This is another example of how Encana and local emergency responders will work together,” Wiedenbeck said.

Wiedenbeck said Encana has experienced well-control incidents in the past, and the risks are inherent in the oil and natural gas industry.

“Our training, systems, and protocols are designed to fit the level risk associated with the activity. Our goal is to minimize the risk and to operate in a safe manner. Safety is our number one priority,” she said.

County office works on plan

Steve Bekanich, coordinator of the Luzerne County Emergency Management Agency, said last week that he has had several conversations with EnCana officials, but a volunteer with the county EMA “has taken the lead for my office. … We are close to completing an emergency response plan.”

Bekanich said Barney Dobinick, who is also the EMA coordinator for Lake Township, is “handling all direct talks with EnCana for ease of operations. He’s briefing me almost on a daily basis. … I’m very comfortable with what Barney has been doing. He’s been a trusted staff member for 20 years.”

Dobinick said a 230-page set of response guidelines is near completion. After meeting with EnCana representatives in mid-June, the plan will be shared with area municipal officials for their approval and made available to the public. Sometime in the next few, a public meeting also will be scheduled to gather input and answer questions.

Until the plan is complete, Dobinick said it would be counter-productive to release any aspects of it until EnCana has reviewed it and possible changes are made.

“If we determine there’s a better way, we’ll amend it. We’re not hiding anything. We just want to have a complete plan in place (before it’s released),” he said.

Bekanich said adjustments can be made even after the plan is disseminated to municipal officials and input is gathered from the public.

Dobinick did say, however, that local emergency responders would handle some emergencies at well sites, for example, a brush fire, an office trailer or vehicle fire or a hazardous materials spill.

Jack Dodson, emergency management coordinator for Dallas Township and Kunkle fire chief, has said his major concern was having emergency personnel who might have to extract disaster victims from a well-related catastrophe prepared to do so.

Dobinick said there are response guidelines for mass-casualty incidents, getting basic and advanced life support on-scene and implementing a disaster plan for hospitals and medical air transport.

“And depending on the seriousness of an event, it would determine how much, if any, of an area would be evacuated,” Dobinick said.

Off-site also part of concern

Dobinick said he’s more concerned about local responses to off-site incidents, such as the crash of a truck carrying “residual backflow” material, or “frack water” used in the hydraulic fracturing of the Marcellus Shale formation.

He said fire departments would handle the initial stabilization of such an incident and work to prevent contamination of any nearby waterway. A state-certified hazardous material clean-up team would come in if needed to remove the material and any contaminated soil.

Dobinick said he feels “very comfortable” with the guidelines and hopes to have the majority of the document complete by the end of the week. He’s still waiting on some information from the county 911 office and the American Red Cross.

Plus, Bekanich noted that Luzerne County is a member of and has access to the resources of the East Central Pennsylvania Regional Task Force – a seven-county all-hazards task force formed in 1998 along with eight other such task forces in the state in response to terrorist threats.

Bekanich said 48 professionals from Luzerne, Wyoming, Schuylkill, Colombia, Northumberland, Montour and Berks counties attended a training event/exercise last week at the county EMA headquarters and worked on a scenario to determine “how we would bring logistics and resources together for an event such as a catastrophic well failure.”

If a catastrophe did occur, Bekanich said, “it’s not like we would be in this on our own. We have resources and technical expertise from seven other counties to rely on for support.”

Dobinick also said EnCana has commissioned a transportation study and will be sitting down with officials from the Lake-Lehman School District to address any concerns about incidents that could affect school bus routes.

Several area residents have voiced concerns about emergency response and traffic at public meetings over the last few months and have been dissatisfied with information supplied by EnCana.

Company schedules meetings

Wiedenbeck said meetings with stakeholders are scheduled for this week.

“Our goal is to understand how these agencies work together, how our operations impact them and how we can work together to make sure we collectively work together so local emergency responders continue to do the great job they’re already doing,” Widenebeck said.

The purpose of sitting down with Dobinick and others is to determine the capabilities of local responders and “if there are gaps, how do we fill them.”

In some instances, Wiedenbeck said, there might be grants available to purchase emergency response equipment that might be needed – for example, a new radio system.

“Our job is to work together with emergency responders, the recreation district, township supervisors and the school district to understand existing protocols and how those protocols might be impacted if there is an incident. We also need to understand existing resources, identify potential gaps and solutions for addressing the gaps, if any,” Wiedenbeck said.

Steve Mocarsky, a Times Leader staff writer, may be reached at 970-7311.

Copyright: Times Leader

The Susquehanna River Basin Commission has a set of rules for gas companies.

STEVE MOCARSKY smocarsky@timesleader.com

The Department of Environmental Protection isn’t the only state agency intent on protecting water sources from natural gas drilling activities that could affect area residents.

Tom Beauduy, deputy director of the Susquehanna River Basin Commission, said the commission requires drilling companies to account for “every gallon of water” withdrawn from any water source within the basin – where it comes from, where it’s used and what happens to it after it’s used.

And, a $1 million water quality monitoring system is being put in place near drilling sites within the basin, Beauduy said.

Beauduy said Marcellus Shale development in Pennsylvania hit the commission “like a tsunami,” just like it did every other impacted agency in the state.

The natural gas industry uses 4 million to 6 million gallons of water per natural gas well to release gas from the shale in a process called hydraulic fracturing, or fracking. Currently, the industry is using about 1 million gallons per day in the state, and Beauduy expects that amount to increase to 28 million a day.

The commission, which is responsible for water resources planning, management, conservation, development, use and allocation, responded quickly to the industry’s needs. Protocols were adjusted so the commission could deal with the surge of water allocation requests, but no corners are cut when granting water withdrawal approvals, Beauduy said.

All companies known to be drilling in the Marcellus Shale region, which underlies more than 72 percent of the Susquehanna River Basin, were notified of the commission’s regulatory requirements. And the commission activated a previously unused rule that authorized an administrative “approval by rule” process for water withdrawals solely from public water supplies.

To date, Beauduy said the commission has approved 111 surface water withdrawals, with 55 applications pending; and 22 approvals of public water supply withdrawals, with 14 pending. It has also issued 662 approvals by rule for individual well pad sites and has 181 pending.

While the amount of water the gas industry needs might seem massive, Beauduy pointed out that the golf and ski resort industry in Pennsylvania consumes an average of 56 million gallons per day. He said industry needs can be accommodated if regulated properly. The industry must abide by restrictions that prevent negative impacts on streams and rivers that could harm aquatic life and water quality.

And while DEP regulates how the industry must dispose of flowback water from fracking operations, the commission will track area rivers and streams to catch a contamination problem.

The commission will have 30 water quality monitoring stations set up by the end of June in the regions where drilling in the Marcellus Shale is most active, as well as other locations where no drilling activities are planned so the commission can collect control data. The monitoring network will provide constant data collection with instruments sensitive enough to detect subtle changes in water quality on a frequency that will allow background conditions and any changes to them to be documented throughout the year.

Each monitoring station will be equipped with water quality sensors and a transmitter to continuously monitor and report water temperature, pH, dissolved oxygen, ability to conduct electricity (conductance) and water clarity. The water depth also will be recorded to establish a relationship with stream flows.

The monitoring of conductance is key to detecting impacts associated with natural gas activities if they occur because water produced by the natural gas industry is generally 200 times more conductive of electricity than water normally measured in streams in the basin.

The monitoring network, the data from which will be accessible online by the public, will provide early warnings to help DEP officials respond more rapidly and better pinpoint causes if water quality conditions change. It will also help local public water suppliers, local watershed groups and communities stay informed.

Steve Mocarsky, a Times Leader staff writer, may be reached at 970-7311.

Copyright: Times Leader