Archive for the ‘Times Leader’ Category

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

Drilling for natural gas in the Marcellus Shale that underlies much of Northeastern Pennsylvania is expected to create hundreds to thousands of jobs, depending on who’s doing the projections, and have other widespread economic effects.

Some of those new work opportunities will be with the drilling and gas companies, but others are expected to be with subcontracted services, from land surveying and engineering to hauling and construction. Legal and banking services also will be needed.

Chesapeake Energy has invested significantly in not only leasing land in Pennsylvania, but in doing business with private companies.

With 94 wells drilled in the state in 2009 and more than 200 additional wells planned for this year, the company has paid subcontractors and vendors in Pennsylvania $269 million since January 2009, company spokesman Rory Sweeney said in an e-mail.

Among the first employers to see the effects of natural gas exploration are law, surveying and engineering firms.

“We are seeing an increase in our business volume,” said Mark Van Loon, a partner with Rosenn Jenkins & Greenwald, a law firm with offices in Scranton, Wilkes-Barre and Hazleton.

“We’ve represented quite a few people in relation to the Marcellus Shale and land leases in Luzerne County, north to the New York border, and east and west from there in Susquehanna, Bradford, Luzerne and Lackawanna counties. There have been some in Wayne County, but not as much,” Van Loon said.

Lease holders also will also need to protect their financial assets, and that’s where banks come into the picture.

David Raven, president and chief executive officer of Pennstar Bank, said the financial institution is seeing a significant increase in business related to Marcellus Shale at branches in Susquehanna County.

“It’s specific to folks who receive lease (bonus) payments and eventually will receive royalties on the gas that’s produced,” Raven said.

In addition to landowners who want to protect their rights while negotiating the most lucrative deals, firms and individuals that enter into large contracts with the gas and drilling companies – engineers, construction firms, suppliers and haulers, for example – will want to have those contracts vetted before signing, according to Van Loon.

“If somebody has a contract that’s large enough, they’re likely to have it reviewed by their legal counsel because it involves too much risk for them not to. And there could be contractual disputes in relation to the delivery or performance of services,” he said.

Van Loon said his firm has five attorneys actively working on oil and gas lease issues, but at this point the partners have not seen the need to hire additional staff.

That’s not the case with Borton Lawson, an engineering firm based in Plains Township that also has offices in Bethlehem, State College and, as of two months ago because of the business generated by the Marcellus shale, in Wexford – a town in Pittsburgh’s northern suburbs.

Chris Borton, company president, has referred to the Pittsburgh area as “the heart of the gas and oil industry” in the region.

Last year, Borton Lawson laid off some of its survey crew workers as companies hurt by the recession cut back on land development. But over the last six months, the firm has hired six to eight people – including several surveyors – for jobs directly related to the Marcellus Shale.

And the company is looking for 13 more employees right now to fill positions such as environmental engineers and scientists, an electrical engineer, an automation engineer and a mechanical engineer.

Salaries for those jobs range from $40,000 to $80,000 depending on the type of job and experience of the employee, Borton said.

Borton said his firm is working with five natural gas companies in Northeastern Pennsylvania. The company will open a satellite office in the borough of Towanda, the county seat of Bradford County, on April 15 because of the extensive natural gas exploration and drilling in that area.

County drilling near

One of the gas companies – Encana Oil and Gas Inc. – has leased 25,000 acres of property in Luzerne County. The land is mainly on the north side of Route 118 in Fairmount, Ross, Lake and Lehman townships.

Encana so far has obtained permits for drilling one well in Lake Township and another in Fairmount Township and is seeking a permit for one in Lehman Township, said company spokesman Doug Hock. Hydrogeological studies are now under way, and officials hope to begin constructing wells by May.

“For every well drilled, that creates about 120 jobs, either directly or indirectly. … The bulk of these jobs as we begin operations are done by subcontractors,” Hock said.

Subcontracted work includes water haulers, truck drivers, construction crews for well pad grading and construction and rig hands after the wells are built. Local average wages could see a boost, given that salaries even for less skilled positions range from $60,000 and $70,000, he said.

Hock said Encana prefers to hire local contractors, “but it’s not always possible because of the skills available in the labor market.”

He couldn’t predict how many new jobs will be generated by Encana operations because officials won’t know how many additional wells – if any – might be drilled until they see the results of natural gas production from the first two or three.

“By the end of 2010, we’ll have an idea if we have a good program, something that’s economically viable that we can continue to develop,” Hock said.

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

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Nearly $2 million will be allocated for a look at environmental results.

STEVE GELSI MarketWatch

NEW YORK — The U.S. Environmental Protection Agency said Thursday it will conduct a massive study to investigate any potential adverse impact of hydraulic fracturing to extract natural gas, as the energy industry moves to boost domestic natural gas supplies.

The effort comes as part of a move by government officials and academics to grapple with an expected increase in the decades-old practice of extracting natural gas by injecting water and fracturing rock, a practice known as fracking.

In Northeastern Pennsylvania, drilling is proceeding in the Marcellus Shale, a layer of bedrock containing natural gas.

“There are concerns that hydraulic fracturing may impact ground water and surface water quality in ways that threaten human health and the environment,” the EPA said Thursday.

The agency said it’s reallocating $1.9 million to help pay for a “comprehensive, peer-reviewed” study. Regina Hopper, president of industry group America’s Natural Gas Alliance, said the EPA study will help affirm the safety of fracking.

“Hydraulic fracturing has been refined and improved over the past 60 years and has been used safely on more than one million U.S. wells,” Hopper said in a prepared statement. While hydraulic fracturing usually takes place far underground, well below aquifers for domestic water supplies, it also produces wastewater which must be treated on site or trucked off for disposal.

Last month, the House Energy and Commerce Committee launched an investigation into the potential impact and said it would like to see more information on the chemicals used in fracturing liquid.

“Hydraulic fracturing could help us unlock vast domestic natural gas reserves once thought unattainable, strengthening America’s energy independence and reducing carbon emissions,” said Chairman Henry Waxman, D-Calif. “As we use this technology in more parts of the country on a much larger scale, we must ensure that we are not creating new environmental and public health problems.”

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The organization represents six communities in the Back Mountain area.

By Rebecca Briarbria@timesleader.com
Staff Writer

DALLAS TWP. – Members of the Back Mountain Community Partnership hope to pass an ordinance that addresses natural gas drilling issues.

The partnership is an inter-municipal group composed of Dallas, Franklin, Jackson, Kingston and Lehman townships and Dallas borough.

The group voted Thursday afternoon at Misericordia University to have their solicitor, Jeffrey Malak, perform research as to what can be done to control the drilling process.

Partnership President Al Fox said he did not want to comment as to what the ordinance may contain because he is not sure legally what can be in it.

“Whatever we can do we need to do as quickly as we can,” Fox said.

Malak said the Oil and Gas Act pre-empts local interference in gas drilling.

“I can give you some options of what some other municipalities are doing,” Malak said. “There’s not a one size fits all.”

In a related matter, the partnership shared responses from EnCana Oil and Gas Inc. on questions the public asked company officials during the January meeting.

Fox said the company answered only six of the many questions that were asked during the meeting. The responses briefly addressed issues such as the chemicals used and the prevention of cross contamination.

Tom Yoniski, a representative for state Sen. Lisa Baker, R-Lehman Township, said he can set up a public forum with Penn State University and the Pennsylvania Department of Environmental Protection to inform the public of the state’s plans to protect water quality.

In other news, the partnership approved proceeding to jointly apply for Pennsylvania Commission on Crime and Delinquency funding to purchase Tasers for each municipality’s police department. Franklin Township does not have a department and uses state police coverage, but voted to proceed with the application for the group.

Up to $10,000 is available for each municipality, said Joe Chacke, of NEPA Alliance, a nonprofit organization that provides administrative and professional services to the BMCP at no cost.

Also, Richard Heffron and Veronica Ciaruffoli, of the Luzerne County Government Study Commission, gave an overview on the status of the commission.

Rebecca Bria, a staff writer, may be reached at 970-7436.

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The Associated Press

HARRISBURG — Pennsylvania will join other major natural-gas states in requiring the prompt disclosure of production results.

State senators unanimously approved the measure Tuesday, six days after the House did the same. Gov. Ed Rendell is expected to sign it.

State legislators are peeling back the cloak of secrecy just as exploration companies are flocking to Pennsylvania in pursuit of natural gas in the sprawling Marcellus Shale formation.

The measure will require the disclosure of well-specific production data every six months. Currently, a 25-year-old state law requires state regulators to keep oil and gas production data confidential for five years.

Supporters say faster disclosure will help companies harvest the gas and let landowners see whether they are getting the royalties they are owed.

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By CAMILLE FIOTI Times Leader Correspondent

LEHMAN TWP. – Several residents worried about the effects of natural gas drilling attended Monday’s board of supervisors meeting hoping to have their concerns addressed.

In January, a hearing was held to vote on a conditional use application to allow EnCana Gas & Oil Co., which is partnering with Whitmar Exploration Co., to drill a vertical well off Peaceful Valley Road.

At that hearing, the zoning board decided to postpone the vote until Monday’s meeting. Board Chairman Dave Sutton told the residents who attended Monday’s meeting that a vote would again be postponed until the state Ethics Commission has made its ruling, and added the board could not address questions regarding the issue.

The Ethics Commission is checking into a potential conflict of interest involving two of the township’s supervisors. The commission ruling is needed to determine whether they can vote.

EnCana gave the board an extension to vote on the matter by May 1.

Once the Ethics Commission makes its ruling, Sutton said, a special meeting would be held in April to vote on the application and to conduct the Board of Supervisors regular meeting. The date and time will be advertised.

In other business, township engineer Ryan Doughton said the Federal Emergency Management Agency (FEMA) is in the process of redoing the county’s flood maps and is converting them from paper to digital format. He said properties that were once considered in the flood plain might not be and vice versa once the maps are completed.

The board also voted to approve the request for a temporary permit to the Wyoming Valley Striders for a foot race on March 31. The race will begin at 10 a.m. at Penn State Wilkes-Barre.

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By Jen Marckinijmarckini@timesleader.com
Staff Writer

KINGSTON TWP. – A representative of Shaleshock Action Alliance spoke about issues of drilling into the Marcellus Shale at a public meeting on Friday.

The meeting, sponsored by the newly formed group, Luzerne County Citizens for Clean Water, featured a presentation by Andrew Byers, of Ithaca, N.Y.

Gas companies have leased thousands of acres from Benton to Dallas and plan on drilling by “hydro-fracturing,” a high-pressure pumping process that could have detrimental environmental and economic impacts, Byers said.

An estimated 2 million to 9 million gallons of water mixed with chemicals is used per well in fracking, Byers said. Sixty-five of the chemicals are classified as hazardous waste – many causing cancer or birth defects, he said.

According to Byers, products used in natural gas production in Colorado had adverse health effects, including endocrine disruptors.

“This is not waste water,” he said. “This is low-level radioactive fluid.”

Property values have shown to plummet after gas drilling, Byers said, adding that each fracking requires 550 to 2,500 tanker truck trips, which could result in road damage.

In 2005 the gas and oil industry became exempt from the Safe Drinking Water Act. They are not required to comply with federal or local laws.

“We have an industry that is unregulated on a federal level,” Byers said.

About a dozen people are active in the grassroots group that wants to protect its communities, said Audrey Simpson, a member.

A petition to say no to polluted water and unrestricted natural gas drilling in the county was distributed at the evening meeting, which was held at Kingston Township Municipal Building, Shavertown.

The petition asks state legislators to modify state laws to allow restrictions on drilling in populated areas.

State Rep. Phyllis Mundy, who attended the meeting, said she is concerned about the potential harm that could be done as a result of drilling into the Marcellus Shale.

Mundy, D-Kingston, said she and state Rep. Karen Boback, R-Harveys Lake, are working with the chairman of the Environmental Resources and Energy Committee in the House on bills that would provide protection such as buffers around waterways.

“I support a Marcellus Shale severance tax that would be dedicated toward any environmental harm or impact that is caused by the drilling,” Mundy said.

Copyright: Times Leader

KINGSTON TWP. – A public meeting to discuss Marcellus shale drilling issues will be held at 7 p.m. today at the Kingston Township Municipal Building at 180 E. Center Street in Shavertown.

The meeting is sponsored by the newly formed group, Luzerne County Citizens for Clean Water, and will feature a presentation by Andrew Byers, a member of the Shaleshock Action Alliance. The lessons learned from other regions provide a valuable starting point for identifying areas in which local leaders and citizens can anticipate and begin planning for potential changes resulting from the development and extraction of Marcellus shale gas, according to the release.

Parking is in the rear of the building and across the street next to the athletic field.

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Supervisor seeking a meeting with Encana Energy Corp. so questions can be fielded.

EILEEN GODIN Times Leader Correspondent

LAKE TWP. – On Wednesday night, supervisors and residents discussed concerns about gas drilling likely to begin in May or June.

A property off Zosh Road, near the border with Lehman Township, will be a future site of a Marcellus Shale gas drilling operation. Supervisors were unsure of the exact acreage of the property.

Supervisor Amy Salansky said the drilling company is Encana Energy Corp., headquartered in Calgary, Canada, working in partnership with WhitMar Exploration Co.

Knowing residents will have many concerns, Salansky said she is trying to arrange a meeting with Encana Energy Corp. so questions can be addressed.

Concerned about gas trucks blocking roads, resident Charles Kohl questioned supervisors on which routes the trucks will be using. Salansky said an official route has not been submitted by Encana. She added the trucks will not be blocking roads.

“During a recent zoning board meeting, possible routes were discussed but nothing was decided,” she said.

Township solicitor Mark McNealis said it is not up to the supervisors to decide which public roads the gas company can and cannot use.

Chairman Lonnie Piatt said supervisors are looking into bonding roads for weight limits. By bonding roads and posting weight limits, the township is protecting roads from damage caused by heavy trucks.

The procedure to bond a road requires an engineer to study the materials in the road makeup and determine how much weight those materials can sustain.

About three quarters of the township roads are dirt and gravel roads. Zosh Road is one of them. Piatt said that currently the gas company would assume responsibility for repairing and maintaining Zosh Road.

Residents within a mile of the site are being advised to get their well water tested. This would provide them with a starting point baseline to measure if contaminants should leak in.

If residents visit Penn State’s Cooperative Extension’s Web site at http://water.cas.psu.edu and click on “Drinking Water,” then “Testing & Protection” and then “Find a Local Water Lab,” they will find a listing by county of accredited water testing laboratories.

The next supervisors’ meeting is scheduled for 7 p.m. April 14 in the municipal building.

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A company has an offer for local people in the natural gas-rich Marcellus Shale area.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

Officials with a company in Western Pennsylvania say landowners in the Marcellus Shale region can benefit by banding together to negotiate natural gas drilling leases with energy companies.

Representatives of Dick Landowners Group will be in the area next week meeting privately with some landowners to discuss the benefits that the group can offer, said company owner Deb Dick.

The group organizes pools for landowners for the marketing of oil and natural gas, working to obtain the maximum protection and secure the best financial success for landowners through power in numbers, competitive bidding and a landowner-friendly contract, Dick said.

Dick said all provisions of the contract negotiated with energy companies are contained in the body of the contract, meaning there are no addendums with confusing details.

“In our contracts, we limit what the gas companies get to a well, a road to the well and one pipeline out,” Dick said.

That leaves landowners with the potential for additional income streams if, for instance, the energy company later wants to build a compressor station or install additional pipelines, she said.

For its work, the group charges landowners a one-time fee of 15 percent of the bonus money the landowner would receive for each acre of land leased to the energy company, Dick said.

The company has successfully leased more than 500,000 acres contained in more than 1,700 individual parcels for landowners, including school districts, churches, attorneys and judges over the past three years, mostly in the western part of the state, she said.

The group incorporated as a limited liability company in Pennsylvania in February, according to the Pennsylvania Department of State.

Before that, the group had been operating as a sole proprietorship, Dick said.

Dick said the group plans to offer group meetings in the area in the future.

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N.J. gas firm eyes $300M income

ANDREW MAYKUTH The Philadelphia Inquirer

A southern New Jersey gas firm that bought a $2 million Marcellus Shale interest in 2008 says it might generate $300 million in income over its lifetime.

South Jersey Industries Inc., the Folsom, N.J., company that owns South Jersey Gas and several nonutility energy businesses, disclosed to analysts that its purchase of mineral rights in northern Pennsylvania could pay off handsomely.

Chief executive officer Edward J. Graham, speaking to analysts about the company’s annual earnings, said two horizontal wells in which South Jersey Industries has a stake will begin producing income this quarter.

He said the gas operator, St. Mary Land & Exploration Co., of Tulsa, Okla., was still tying the wells to a pipeline, but feels “really good about the prospects.”

Two more wells are planned for this year on the 21,000-acre property in McKean County.

In early 2008, South Jersey Industries paid $2 million for an interest in a partnership that owns the deep-gas rights on the property, Stephen Clark, the company’s treasurer, said in an interview. Since then, the value of mineral rights has skyrocketed.

South Jersey Industries estimates that its combined royalties and ownership rights will net 10.25 percent of the value of the gas produced — the company’s share would be about $300 million, based on an average price of $6 per thousand cubic feet.

“It has the opportunity to be very productive for us,” Clark said.

Graham told analysts that it was premature to estimate earnings, which depend upon the number of wells drilled and the price of natural gas. Production could take years, or even decades, to realize.

The estimates illustrate the huge potential in the Marcellus Shale, which lies under much of Pennsylvania and several surrounding states.

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