Archive for the ‘Blog’ Category

State county commissioners association is working to broaden taxing authority.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

Counties, municipalities and school districts aren’t seeing any significant tax revenue related to Marcellus Shale development under current tax law.

But the County Commissioners Association of Pennsylvania is working to change that, lobbying for legislation that would give those governmental bodies property taxing authority on natural gas similar to taxes levied on coal extraction.

“We have to have the assessment law changed. The reason (is that) other minerals are assessed. It’s not fair to the other mineral (extraction companies) and it’s not fair to the rest of the taxpayers who have to pick up the burden of their exemption,” association Executive Director Douglas Hill said of natural gas and oil companies.

Hill said the state Supreme Court in 2002 ruled that counties had no statutory authority to tax oil and gas because state assessment law specifically includes coal but makes no mention of oil or gas.

Since that time, oil and gas interests have been escaping local property taxes, which had been paid in oil and gas-producing counties since at least the early 1900s, according to a position paper released by the association.

“Producers of other minerals such as coal and limestone already pay their fair share of the property tax. Counties support reversing the Supreme Court’s 2002 decision to assure that oil and gas companies contribute their share to the local tax base as well,” the paper states.

Hill said House Bill 10 of 2009, sponsored by state Rep. Bill DeWeese, D-Greene County, would restore property tax assessment authority on oil and gas.

The levy proposed in the bill would apply only to proven wells. “If there’s nothing to be extracted or (the gas) can’t be extracted, then there is no value,” Hill said.

Hill said there is, of course, opposition to the bill from the oil and gas industry. But he pointed out that other oil and gas producing states assess oil and gas extraction. Hill also said that large, multinational companies involved in Marcellus Shale exploration already had payment of such a tax built into their business plans and were surprised to learn that Pennsylvania counties can’t assess natural gas extraction.

Another association position paper points out several ways local communities are impacted by Marcellus Shale exploration that justify taxation.

“Some of the most visible impacts have been to township roads, county bridges and other infrastructure as developers bring drilling rigs, construction equipment and truckloads of water to and from drilling sites. &hellip Hotels might be filled with workers associated with Marcellus, impacting both the tourism industry and the county hotel tax,” according to the paper.

“Workers from out of state and their families have utilized social services such as drug and alcohol treatment and children and youth services. County jails, county probation and law enforcement have been affected. Even county recorder of deeds offices are affected, flooded by title searchers confirming ownership of subsurface rights,” the paper states.

House Bill 10 is still in the House Finance Committee for consideration.

“We’ve been working on getting agreement to move on it. We want to have things in place for a vote in the House and prepare for going to the Senate. We’ve also been working on an introduction of a bill in the senate,” Hill said.

Generally, legislators understand the issue, Hill said, but it “gets confusing at times because they are looking at a state severance tax,” and the county and local taxation issue “gets tied up in all the other issues related to the Marcellus,” he said.

Currently, there are at least five Senate bills and at least 17 House bills pertaining to Marcellus Shale exploration as well as one House bill, two senate bills and a budget proposal from Gov. Ed Rendell that address the imposition of a severance tax, according to information provided by state Sen. Lisa Baker, R-Lehman Township.

In the meantime, county assessors are waiting for some legislative determinations.

Luzerne County Assessor’s Office Director Tony Alu feels pretty confident that legislation eventually will be adopted and that the county will see some tax revenue from natural gas extraction.

Alu said assessors from various counties had been discussing among themselves various taxation formulas that would be most appropriate to tax natural gas extracted.

“We’re waiting on the state to make a determination so that we can all be uniform. &hellip We just want to make sure we’re doing the right thing,” Alu said.

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

Copyright: Times Leader

Gov. says drilling industry’s top issues will be dealt with separate from taxes.

MARC LEVY Associated Press Writer

HARRISBURG — Pennsylvania’s Legislature is a place where victory almost always arrives in the form of a hard-won compromise, and the state’s rapidly growing natural gas industry may be about to discover that.

So far, the industry has been successful in dodging efforts by Gov. Ed Rendell and many Democratic lawmakers to slap an extraction tax on the methane they pump from the rich Marcellus Shale reserve that lies underneath much of the state.

But the drilling companies will need help from those adversaries in addressing a wish list of changes in state laws they are seeking to make it easier for them to pursue the gas.

Paying a tax just might be the price.

“What we’ve said all along is that the conversation begins and ends with the extraction tax,” said Brett Marcy, a spokesman for House Majority Leader Todd Eachus, D-Butler Township . “We cannot even begin to seriously discuss some of the issues that the natural gas industry wants us to take action on until we get the necessary support for a natural gas extraction tax.”

The Rendell administration says the industry’s top issues — such as a law that could limit municipal zoning authority over where drilling can occur — will be dealt with separate from the pursuit of a tax.

“Those are apples and oranges in some respects,” said Rendell’s chief of staff, Steve Crawford. “We’re not willing to say, ’We will roll local governments in this state if you support a tax.”’

But Dave Spigelmyer, a Chesapeake Energy Corp. executive who is also vice chairman of the Marcellus Shale Coalition, said the administration has told the industry group that a discussion of drilling issues will include talking about a tax.

For now, talk is in the early stages and industry-backed legislation that encompasses the wish list has not been introduced.

Two of the top issues could be controversial.

One would essentially outlaw a municipality from using zoning to prevent the collection of gas from below the property of someone who wishes to sell it — a change opposed by the Pennsylvania State Association of Township Supervisors.

Municipalities “have the ability to properly zone different activities within the jurisdictions. With the industry being able to drill horizontally up to a mile, why do they need to have zoning done away with?” asked Elam Herr, the association’s assistant executive director.

The other would allow a state authority to force a holdout landowner into a pool with neighbors who wish to sell their mineral rights in a block to a drilling company.

The state would decide how the holdout is to be compensated for the gas, based on the agreements between the willing landowners and the company.

Copyright: Times Leader

Copyright: Times Leader

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

By Sherry Long slong@timesleader.com
Staff Writer

Published on June 13, 2010

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: The Times Leader

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

By Steve Mocarsky smocarsky@timesleader.com
Staff Writer

 LEHMAN TWP. – Back Mountain residents and local legislators knew parcels of land leased to natural gas companies for exploration were close to two major water sources – the Huntsville and Ceasetown reservoirs, but some had no idea just how close.

There is at least one parcel of leased land on the shoreline of the Huntsville Reservoir, and another parcel just a few hundred feet from the shoreline, The Times Leader learned on Monday.

The discovery was made by title searcher Eric Gustitus, of Exeter, and verified by the newspaper through a Luzerne County property records check.

“I was doing a title search on property next to Penn State Lehman and I came across a gas lease on land close to the reservoir. I was shocked,” Gustitus said, explaining that he heard local activists expressing concerns about potential gas well sites being within a mile or two of water sources.

Gustitus located a 3.72-acre property on the shoreline of the reservoir owned by Paul and Janet Siegel, and an adjacent 10.88-acre property to the west owned by their son, Christopher Siegel, and his wife, Maureen.

“Oh my God, am I concerned,” said state Rep. Phyllis Mundy, D-Kingston, when told of the proximity of the leased land to the reservoir.

“I’m very concerned about the potential for drilling so close to the reservoir. If you’ve been following the news about Clearfield County and how frack water spewed from the well for 16 hours, you can see why potential for contamination of our water supply is of grave concern to me. And I know my constituents are concerned,” Mundy said.

A blowout at a natural-gas well in Penfield shot explosive gas and polluted water as high as 75 feet into the air last week before crews were able to tame it more than half a day later.

EnCana Oil & Gas plans to drill two exploratory wells this summer – one next month in Fairmount Township and another in Lake Township. After drilling an initial vertical well on a site, the company will drill horizontally, using a process called hydraulic fracturing (fracking) to release natural gas from the thick layer of shale about a mile beneath the earth’s surface.

Mundy is a co-sponsor of legislation that would create a 2,500-foot buffer around water sources such as the reservoirs to protect them from possible contamination from gas drilling-related activities.

The Huntsville and Ceasetown reservoirs serve as a water supply for Pennsylvania American Water Co., which serves many of Mundy’s constituents.

Mundy said Pennsylvania American President Kathy Pape had expressed concerns to her about water contamination.

Pape said on Monday she is working with Mundy to prepare testimony for the state Public Utility Commission on Marcellus Shale drilling.

Harveys Lake resident Michelle Boice, a member of the Gas Drilling Awareness Coalition and a commentator on environmental issues related to gas drilling at local meetings, said allowing any kind of gas drilling operations so close to the reservoir is “beyond any kind of reasoning., and it goes to show there are no rules or protections in place for the people.”

Dr. Tom Jiunta, a founding member of the coalition, said it’s “insane how close they are with these leases” to water sources.

Paul Siegel said he’s just as concerned as his neighbors about the potential for reservoir contamination, and that’s why there’s a protective clause in his lease with EnCana. “We have the right not to let them on our land, and we wouldn’t do that because we want to live here,” he said.

Siegel said he agreed to lease the land because he got the impression that everyone around him was signing gas leases.

“When everyone around you is signing, it gets kind of like a mad rush. So, if they’re going to be drilling next to us, and they’re going to be down there anyway, we said we don’t mind if they go under us,” Siegel said.

Christopher and Maureen Siegel could not be reached for comment. Neither could EnCana spokeswoman Wendy Wiedenbeck.

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Copyright: The 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