Archive for the ‘Pennsylvania Natural Gas Drilling’ Category

Industry reps cite permitting delays; DEP head says issues to be resolved.

DALLAS TWP. – Representatives from every aspect of the state’s burgeoning natural-gas drilling industry met on Tuesday and, though differing on specifics, emphasized that Pennsylvanians stand upon a multibillion-dollar windfall, but only if the state streamlines its permitting process.

The hearing at Misericordia University was organized by the state Senate Republicans’ policy committee to identify potential problems with drilling the Marcellus Shale about a mile underground, but the senators instead were told that many of the problems lie with the state itself.

“Fundamentally, what the industry has said to us is, ‘We need to know what the rules are,’” said Tom Beauduy, the deputy director of the Susquehanna River Basin Commission. The commission oversees water removal from the river basin.

Industry representatives were dire with their characterizations. The industry is experiencing “permitting delays unlike we have ever seen in any other state,” said Wendy Straatmann, president of Ohio-based Exco-North Coast Energy Inc. “Why would I spend so much of our company’s time and resources when I can go to some other state and use the gas and oil manual and follow the regulations?”

Ray Walker, a vice president with Texas-based Range Resources Corp., agreed that an inclusive regulations manual would help companies “put our money into protecting the environment and not paperwork.” He noted that smaller companies are considering drilling here, but won’t if the permitting process remains slow and taxes increase. That could keep development slow, he said.

That’s a prospect that few at the hearing wanted. John Hanger, the acting secretary of the state Department of Environmental Protection, assured that his agency was “working to make sure that gas can be produced and water protected.” Part of the lag has come from a dearth of disposal options for the fluids used to hydraulically fracture the rock, and Hanger said his favored alternative was to find ways for the companies to simply inject them underground.

DEP would need to increase its regulatory force to keep up with the permitting and inspections demand predicted based on industry desires, he said, noting the department has recently requested substantially increasing its well-permitting fees.

Still the Republican senators felt DEP is clamping down too tightly. “When I ran for Senate, I was mad at the state for over-regulating my industry,” said Sen. Mary Jo White, R-Venango County, who had worked for an oil corporation. “I think we’re heading down that road again.”

William Brackett, the managing editor of a newsletter that reports on the Barnett Shale, said gas drilling there “is a prime reason the north Texas economy has only caught a cold and not the flu.”

John Hanger, acting DEP secretary, said part of the lag has come from a dearth of disposal options for the fluids used to hydraulically fracture the rock.

Copyright: Times Leader

Industry reps cite permitting delays; DEP head says issues to be resolved.

DALLAS TWP. – Representatives from every aspect of the state’s burgeoning natural-gas drilling industry met on Tuesday and, though differing on specifics, emphasized that Pennsylvanians stand upon a multibillion-dollar windfall, but only if the state streamlines its permitting process.

The hearing at Misericordia University was organized by the state Senate Republicans’ policy committee to identify potential problems with drilling the Marcellus Shale about a mile underground, but the senators instead were told that many of the problems lie with the state itself.

“Fundamentally, what the industry has said to us is, ‘We need to know what the rules are,’” said Tom Beauduy, the deputy director of the Susquehanna River Basin Commission. The commission oversees water removal from the river basin.

Industry representatives were dire with their characterizations. The industry is experiencing “permitting delays unlike we have ever seen in any other state,” said Wendy Straatmann, president of Ohio-based Exco-North Coast Energy Inc. “Why would I spend so much of our company’s time and resources when I can go to some other state and use the gas and oil manual and follow the regulations?”

Ray Walker, a vice president with Texas-based Range Resources Corp., agreed that an inclusive regulations manual would help companies “put our money into protecting the environment and not paperwork.” He noted that smaller companies are considering drilling here, but won’t if the permitting process remains slow and taxes increase. That could keep development slow, he said.

That’s a prospect that few at the hearing wanted. John Hanger, the acting secretary of the state Department of Environmental Protection, assured that his agency was “working to make sure that gas can be produced and water protected.” Part of the lag has come from a dearth of disposal options for the fluids used to hydraulically fracture the rock, and Hanger said his favored alternative was to find ways for the companies to simply inject them underground.

DEP would need to increase its regulatory force to keep up with the permitting and inspections demand predicted based on industry desires, he said, noting the department has recently requested substantially increasing its well-permitting fees.

Still the Republican senators felt DEP is clamping down too tightly. “When I ran for Senate, I was mad at the state for over-regulating my industry,” said Sen. Mary Jo White, R-Venango County, who had worked for an oil corporation. “I think we’re heading down that road again.”

William Brackett, the managing editor of a newsletter that reports on the Barnett Shale, said gas drilling there “is a prime reason the north Texas economy has only caught a cold and not the flu.”

John Hanger, acting DEP secretary, said part of the lag has come from a dearth of disposal options for the fluids used to hydraulically fracture the rock.

Copyright: Times Leader



Gas industry officials told state senators in Dallas that cumbersome rules make it difficult to operate.

MICHAEL RUBINKAM Associated Press Writer

DALLAS — Executives of drilling companies exploring a huge untapped reserve of natural gas say the economic windfall expected from the Marcellus Shale may not come to pass if Pennsylvania doesn’t get its regulatory house in order.

Industry officials complained Tuesday about a time-consuming and lengthy permitting process and cumbersome regulations that, on top of plummeting natural gas prices and the credit crisis, is making it difficult for them to operate in Pennsylvania.

“I have great hopes for what the Marcellus Shale play might still hold for Pennsylvania. Unfortunately, my experience to date does not lead me to be very optimistic,” Wendy Straatman, president of Exco-North Coast Energy Inc., told Republican state senators at a hearing in northeastern Pennsylvania.

She said the Akron, Ohio-based company has moved drilling equipment to West Virginia and delayed its plan to transfer a “significant number” of employees into Pennsylvania because of DEP permitting delays that are “unlike anything we have seen in any other state in which we operate.”

Another executive, Scott Rotruck of Oklahoma City-based Chesapeake Energy Corp., the largest natural gas producer in the United States, predicted “ominous” consequences for Marcellus development if Pennsylvania’s regulatory environment doesn’t become more welcoming. He said the permitting process is easier and less costly in other states.

Sympathetic GOP senators pressed acting Environmental Secretary John Hanger for answers, warning that Pennsylvania can’t afford to scare off an industry that has promised to create tens of thousands of new jobs.

The state needs to be “careful we are not killing the goose that’s laying the golden egg,” said Sen. Mary Jo White, R-Venango.

Hanger agreed that regulations need to be streamlined and said his agency is working on it, but added that most applications are processed within 45 days.

“There has to be a smart way to protect what we need to protect, and at the same time (prevent) a delay that really serves no purpose,” he said. “I believe there’s a learning curve here for everyone involved.”

Part of the problem may be a lack of DEP manpower to cope with a record number of natural gas applications. The agency is on track to issue 8,000 permits in 2008, up from 2,000 in 1999, yet staffing in the agency’s oil and gas division has remained stable at about 80. The DEP has proposed to raise fees on drilling companies to pay for additional staff to process applications and inspect wells.

Tuesday’s hearing at Misericordia University was called by the Senate Majority Policy Committee to explore the economic and environmental impact of drilling in the Marcellus, a layer of rock deep underground that experts say holds vast stores of largely untapped natural gas.

Industry executives also opposed a tax on natural gas that the administration of Gov. Ed Rendell has said it is considering.

“New taxes will stymie Marcellus development,” said Ray Walker Jr., vice president of Range Resources Corp., a Texas-based oil and gas company with an office in southwestern Pennsylvania.

Copyright: Times Leader

Senate hearing set for today at Misericordia, symposium Wednesday at Woodlands.

While landowners are imagining the gobs of cash they stand to make from natural-gas drilling in the Marcellus Shale rock layer underlying much of the region, Don Young hopes there’s room to imagine a few other images, such as gas pipelines crisscrossing once-pristine farmland, benzene contaminating groundwater supplies and an industrywide press to tap every inch of lucrative ground.

And that doesn’t include the Fort Worth, Texas, resident’s concerns about the psychological effects of celebrity-fronted publicity campaigns linking the drilling to patriotism and national security. “It’s Orwellian to see it happening here,” he said. “You’ve got American flags on each well.”

But the leader of Fort Worth Citizens Against Neighborhood Drilling Ordinance hopes the travails that now plague his home above the Barnett Shale are averted in the similar Marcellus Shale. “What you have here in Fort Worth on a grand scale is apathy. People felt, ‘We can’t stop it. It’s too big. It’s big oil,’ ” he explained. “The average busy person, they don’t have time to worry about gas drilling. … They have families, they have lives, they’re struggling, and if you have a few companies handing out money saying, ‘Here’s some money, just forget about it,’ ” they’ll do just that, he said.

Local regulators and educators are already taking steps to avoid those effects, and they’ll take a few more this week. This afternoon, the state Senate Republican’s Policy Committee will meet at Misericordia University to hear testimony from people familiar with dealings in the Barnett Shale on the potential effects awaiting Pennsylvania.

Several of the same speakers will be featured in discussions Wednesday morning at the Woodlands Inn & Resort in Plains Township, as the Joint Urban Studies Center holds a Marcellus Shale Symposium. The public is invited to either presentation, but the symposium has a registration fee.

“We are front and center to the development of this new industry,” said state Sen. Lisa Baker, R-Lehman Township, who requested the hearing. “I think having the hearing here demonstrates, in my judgment, that we’re doing all we can to ensure that our laws and regulations are appropriate and that if we need to make changes,” the legislature is ready to do so.

She said she hopes to get answers to questions she often hears from constituents, including potential downsides to drilling and whether current regulations are enough to curtail them.

According to several of the speakers, Pennsylvania might have a lot of ground to make up before it’s running even with the industry. “I just don’t understand the state’s set-up. Why wouldn’t that be a requirement to disclose how well the wells (are performing)?” asked John Baen, a University of North Texas professor and real-estate expert who has 250 wells on his property in the Barnett Shale. “If it’s all proprietary, then how do we know what the true wealth is?”

Rory Sweeney, a Times Leader staff writer, may be reached at 970-7418.

Copyright: Times Leader

Texans to share their experiences

HUGHESVILLE – As night falls over Beaver Lake Road, work lights gradually accentuate a towering structure visible between the rolling hills. In the middle of a roughly square-acre site, the drilling rig is about halfway through a four-week stay at this rural Lycoming County site.

Soon thereafter, the rig will leave, crews will arrive to tap the natural-gas well, gas will begin being pumped into regional transmission pipelines and Chief Oil & Gas LLC of Dallas, Texas, will begin reaping income.

So will Neil and Louise Barto, though hardly what they say they deserve. They signed over the mineral rights to their nearly 178 acres three years ago for $888.45 and the state-minimum 12.5-percent royalties on the production.

“Everybody made money except us,” Neil Barto said. “Hell yes, it irritates me. … Every time I see somebody from Chief, I tell them I’m not happy about it.”

That’s the sort of cautionary tale the Joint Urban Studies Center is hoping to keep to a minimum in the area by hosting the Marcellus Shale Symposium on Nov. 19 at the Woodlands Inn & Resort in Plains Township. Cost is $30. The symposium will feature experts from the Fort Worth area, which witnessed during the past two decades a historical revolution as the oil and gas industry figured out how to tap gas stores under urban centers.

“The energy companies are used to operating out in rural areas where there’s nothing to bother but some cows and horses and whatnot,” said Will Brackett, the managing editor of the weekly Powell Barnett Shale Newsletter. With people came environmental concerns, landowners organizing to leverage better offers and opposition from those left out of the Barnett Shale windfall.

John Baen, a real estate professor at the University of North Texas, said he’s in a unique position to comment on the Marcellus because he used to fish in the Susquehanna River growing up as a boy, but also watched 9,000 wells be drilled in five Texas counties within seven years. “We had a lot of people who said, ‘Not in my back yard,’ then we had a lot of people who said, ‘Well maybe,’ and people who said, ‘Drill every square foot,’” he said.

Brackett noted that people who hadn’t finished high school were landing $50,000-per-year jobs, making it difficult for other industries to keep workers. As the companies struck more and more hydrocarbon gold, they offered leases to ever more landowners, who began organizing and using the Internet to publicize offers. Bidding wars erupted, with offers at $25,000 per acre and 25-percent royalties on production. “It got to be, I’d have to say, surreal around here,” he said. “Last year, if you went to a party, everyone was talking about the Barnett Shale.”

One of the most important steps to expanding exploitation of the shale is placating objectors, Baen said.

“I have a theory that everyone should be a stakeholder, and everybody should win,” he said. “It might take some pretty big changes in some of your laws up there to have everybody benefit.”

He noted that Texas has no state income tax, but that every mineral-rights owner pays a severance tax that has left the state with an $11-billion overabundance.

Both Brackett and Baen agree Pennsylvania and its citizens stand to benefit extensively from the advances made in Fort Worth in recent years, but only if the state refocuses its mineral-rights policies from coal to gas and oil.

“I’m calling it the Jewel of the Northeast,” Baen said, but “will it be allowed to be developed? And it may not.”

If the state legislature doesn’t act quickly, he predicted the economic benefit could be delayed up to five years.

Copyright: Times Leader

ALBANY, N.Y.

Marcellus Shale gets upgraded sevenfold

A geologist says the Marcellus Shale region of the Appalachians could yield seven times as much natural gas as he earlier estimated, meaning it could meet the entire nation’s natural gas needs for at least 14 years.

Penn State University geoscientist Terry Engelder says in a phone interview Monday that he now estimates 363 trillion cubic feet of natural gas could be recovered from the 31-million-acre core area of the Marcellus region, which includes southern New York, Pennsylvania, West Virginia and eastern Ohio.

Engelder and geologist Gary Nash of the State University of New York at Fredonia touched off a gas rush in the region last January with their study estimating that the Marcellus could yield as much as 50 trillion cubic feet of natural gas.

LANCASTER, Pa.

Man gets 2 DUIs in five-hour period

Police say a central Pennsylvania man was arrested on drunken driving charges twice in less than six hours.

Michael Hufford’s first arrest came just before 11 a.m. Sunday. Police say his car hit the back of a stopped vehicle in Manheim Township, Lancaster County.

Hufford was arrested for suspected DUI. After he was processed, he was released to his girlfriend.

Hufford was arrested again just before 4 p.m. Police say the second accident happened after he turned left in front of another vehicle.

The 50-year-old was arraigned by a magisterial district judge after the second crash. Police say he was sent to Lancaster County Prison.

YORK, Pa.

Man kills wife, toddler and then himself

A suburban York man killed his wife and 2-year-old son before committing suicide inside their home, police said Monday.

John D. Goodman, 39, did not leave a note before he shot his wife, Julia, multiple times and shot their son, Langon, early Sunday morning, said Spring Garden Township Chief George Swartz.

Swartz said investigators were still trying to determine what happened and why. He said there is no evidence that the couple was divorcing or that any protective orders were in place.

York County Coroner Barry Bloss Sr. told the York Dispatch that John Goodman may have been recently laid off from his job as a surveyor in Lancaster. Bloss also said his office would try to confirm reports that 39-year-old Julia Goodman was pregnant.

The Goodmans had lived in the neighborhood near York Hospital since 2003, and before that they lived elsewhere in Spring Garden Township.

ERIE, Pa.

Freight-train death perplexes coroner

A Pennsylvania coroner is hoping toxicology tests and more investigation will help him figure out why a man was killed by a passing freight train.

Erie County Coroner Lyell Cook says the body of 23-year-old Timothy Villa, of Erie, was found near the CSX railroad tracks in the city Sunday about 2 a.m.

Cook says the investigation indicates Villa may have left a Halloween party shortly before he was struck and killed by the train. An autopsy Sunday confirmed the man died of massive trauma.

Cook says police are trying to contact the train’s crew. Cook is waiting for toxicology tests on Villa’s body before ruling whether the death was an accident, but says it does not appear to be foul play.

Copyright: Times Leader

Insiders say price declines and credit issues are limiting lease bids and bonus payment offers.

The natural-gas windfall seems to have dried up – at least for now.

Commodity price declines, disappearing credit worthiness and companies transitioning to produce gas from the lands they’ve leased have combined to limit lease bids and reduce bonus payment offers.

“Not only are we noticing it, there’s no argument that’s not happening,” said Jack Sordoni, who owns the Wilkes-Barre-based fossil-fuel drilling company Homeland Energy Ventures LLC and is negotiating leases for local landowners.

Though he’s recently inked leases in Fairmount Township with $2,850 per acre up-front bonuses, he said he’s also recently had similar offers in the same area fall to $2,000 per acre. Other sources are reporting offers dropping back to pre-summer levels of several hundred dollars.

Part of the cause for the change, he noted, is that some large companies have dropped out of the leasing competition because prices have fallen and the credit crisis has hampered their ability to take on short-term debt.

“I would suspect, not being an economist, that they would have pretty far reaching” effects, he said. “The ones who are signing aren’t competing with as many players, so the prices aren’t going to be as high.”

The companies say the clock is ticking on beginning work on existing leases, so they’re focusing on filling out the gaps in the territories they’ve already locked up.

“We have moved from the lease acquisition phase to the development phase,” Chesapeake Energy spokesman Matt Sheppard wrote in an e-mail. “We are leasing strategically to support our existing leasehold.”

Sheppard said that for Chief Oil & Gas and many companies “it is more of a shift to moving dollars into drilling and development” instead of continuing to build leasehold in unproven areas.

Chief Oil & Gas spokeswoman Kristi Gittins wrote in an e-mail: “A lot of acreage has been leased. As drilling begins and areas prove out, leasing should pick up.”

Sordoni said that in the business “a lot of times we call that ‘going operational,’ and think for many of them, that’s true.”

With drilling and production increasing, natural gas prices have dropped about 50 percent in the past half year, he noted.

“This was a gold rush at the beginning. It was a frantic pace. Companies were scrambling. The pullback of the commodity prices has certainly led to a slowdown,” he said.

But there are some positive indications for unsigned properties. For example, companies have already shown indications of ramping up production in the region.

Gittins said Chief will soon have four rigs in the region, including one made specially for maneuvering in the hilly Appalachian region, and two more by early 2009.

First, the gas isn’t going anywhere. Horizontal drilling only allows vertical fracturing of rock, and it’s illegal to drill beyond the leased boundaries. So the rule of capture – which allows gas or oil to be collected from a rock fracture that crosses a lease boundary – doesn’t apply.

Secondly, companies have already shown indications of ramping up production in the region.

Gittins said Chief will soon have four rigs in the region, including one made specially for maneuvering in the hilly Appalachian region, and two more by early 2009.

Chesapeake is predicting it will need much more water for its drilling operations before the 2012 expiration of its current permit with the Susquehanna River Basin Commission. While the company isn’t asking to change its permit to withdraw 5 million gallons daily from the river, it is asking to expand how much water it can use each day from 5 million gallons to roughly 20 million gallons.

Copyright: Times Leader

By MARC LEVY Associated Press Writer

HARRISBURG, Pa. (AP) _ The land agents, geologists and drilling crews rushing after the Marcellus Shale are raising something besides the natural gas they’re seeking: Talk of a natural gas tax.

Thanks to a state Supreme Court decision six years ago, Pennsylvania is now one of the biggest natural-gas producing states — if not the biggest — that does not tax the methane sucked from beneath its ground.

But momentum is gathering to impose such a tax. The Marcellus Shale — a layer of black rock that holds a vast reservoir of gas — is luring some of the country’s largest gas producers to Pennsylvania, and state government revenues are being waylaid by a worldwide economic malaise.

A spokesman for Gov. Ed Rendell says the administration is looking at the idea of a tax on natural gas, but a decision has not been made. Typically, Rendell does not reveal any tax or revenue proposals until his official budget plan is introduced each February.

Senate Republicans are planning a November hearing at Misericordia University in northeastern Pennsylvania to look at what effect can be expected on local governments if Marcellus Shale production lives up to its potential.

Local officials worry about damage to local roads ill-suited for heavy truck traffic and equipment. School districts could be strained by families of gas company employees moving into town. And some residents are concerned about gas wells disrupting or polluting the water tables from which they draw drinking water.

Legislators must find the fairest way for companies to share those costs, whether by levying a tax or through some other means, said Sen. Jake Corman, R-Centre, the GOP’s policy chairman.

“I do think there is an understanding that some sort of compensation for municipalities is warranted,” Corman said. “We just have to figure out the best way to do that.”

So far, drilling activity is under way on the Marcellus Shale in at least 18 counties, primarily in the northern tier and southwest where the shale is thickest, according to the state Department of Environmental Protection.

Land agents are trooping in and out of county courthouses to research the below-ground mineral rights. At least several million acres above the Marcellus Shale have been leased by companies in West Virginia, New York and Pennsylvania.

Just this week, Range Resources Corp. and a Denver-based gas processor said they have started up Pennsylvania’s first large-scale gas processing plant, about 20 miles south of Pittsburgh.

And CNX Gas Corp. announced that a $6 million horizontal well it drilled in southwest Pennsylvania is producing a respectable 1.2 million cubic feet a day — a rate it expects to improve in coming weeks.

In the opposite corner of Pennsylvania, drilling pads are now visible on Susquehanna County’s farmland, and hotel rooms are booked with land agents and drilling crews.

“It is the talk at the coffee shops, at the local grocery store, the gas station — everybody,” said state Sen. Lisa Baker, R-Luzerne.

Activity is still in the early stages, as exploration companies work to confirm their basic assumptions about the potential of the Marcellus Shale reservoir, and probe for the spots with the greatest promise, analysts say.

Industry representatives say they oppose a tax, and Stephen W. Rhoads, the president of the Pennsylvania Oil and Gas Association, questioned the wisdom of imposing a tax on gas production that is still speculative.

In some natural-gas states, a tax is collected based on a company’s gas production by volume.

But in Pennsylvania, the Supreme Court ruled in 2002 that state law did not allow counties, schools and municipalities to impose a real estate tax based on the value of the subsurface oil and gas rights held by exploration companies.

An appraiser’s study presented last year during a House Finance Committee hearing estimated that the court’s decision had cost Greene, Fayette and Washington counties up to $30 million in county, school and municipal tax revenue.

The state’s county commissioners and school boards support the resumption of some type of taxing authority — although that could mean landowners would get smaller royalty checks.

Regardless, Doug Hill, the executive director of the County Commissioners Association of Pennsylvania, said the matter is one of basic fairness since coal, gravel and limestone are assessed.

“The bottom line is it isn’t a windfall issue,” Hill said. “It’s a tax equity issue.”

___

Marc Levy covers state government for The Associated Press in Harrisburg. He can be reached at mlevy(at)ap.org.

Copyright 2008 The Associated Press.

Companies now are focusing on drilling land that’s already been leased, industry experts say.

The natural-gas windfall seems to have dried up – at least for now.

Commodity price declines, disappearing credit worthiness and companies transitioning to produce gas from the lands they’ve leased have combined to limit lease bids and reduce bonus payment offers.

“Not only are we noticing it, there’s no argument that’s not happening,” said Jack Sordoni, who owns the Wilkes-Barre-based fossil-fuel drilling company Homeland Energy Ventures LLC and is negotiating leases for local landowners.

Though he’s recently inked leases in Fairmount Township with $2,850 per acre up-front bonuses, he said he’s also had this week similar offers in the same area fall to $2,000 per acre. Other sources are reporting offers dropping back to pre-summer levels of several hundred dollars.

Part of the cause for the change, he noted, is that some large companies have dropped out of the leasing competition because prices have fallen and the credit crisis has hampered their ability to take on short-term debt.

“I would suspect, not being an economist, that they would have pretty far reaching” effects, he said. “The ones who are signing aren’t competing with as many players, so the prices aren’t going to be as high.”

The companies say the clock is ticking on beginning work on existing leases, so they’re focusing on filling out the gaps in the territories they’ve already locked up.

“We have moved from the lease acquisition phase to the development phase,” Chesapeake Energy spokesman Matt Sheppard wrote in an e-mail. “We are leasing strategically to support our existing leasehold.”

Sheppard said that for Chief Oil & Gas and many companies “it is more of a shift to moving dollars into drilling and development” instead of continuing to build leasehold in unproven areas.

Chief Oil & Gas spokeswoman Kristi Gittins wrote in an e-mail: “A lot of acreage has been leased. As drilling begins and areas prove out, leasing should pick up.”

With drilling and production increasing, natural gas prices have dropped about 50 percent in the past half year, he noted.

“This was a gold rush at the beginning. It was a frantic pace. Companies were scrambling. The pullback of the commodity prices has certainly led to a slowdown,” he said.

But there are some positive indications for unsigned properties. For example, companies have already shown indications of ramping up production in the region.

Gittins said Chief will soon have four rigs in the region, including one made specially for maneuvering in the hilly Appalachian region, and two more by early 2009.

With drilling and production increasing, natural gas prices have dropped about 50 percent in the past half year.

Copyright: Times Leader

Agency said Susquehanna River has enough water, but withdrawal timing is key.

WILLIAMSPORT – The Susquehanna River watershed has enough water to supply drilling for natural gas in the Marcellus Shale, members of the Susquehanna River Basin Commission assured at a public hearing on Tuesday.

The trick is to take it when there’s a lot available, and that requires planning.

“It’s not so much the consumptive use,” said Thomas Beauduy, the SRBC’s deputy director.

“It’s when it’s being used. It’s how it’s being used.”

To illustrate the point, Michael Brownell, the commission’s Water Resources Management Division chief, used a local drilling site owned by Chief Oil & Gas LLC as an example.

The site, tucked along rolling ridges east of Hughesville, is permitted for water withdrawal from a creek almost six miles away, meaning the water must be trucked. Water could probably be piped in from a smaller creek about half a mile away, but only in certain seasons when its flow is high enough, Brownell said, which would require forethought.

It’s a matter of submitting the application early, doing the research and picking the right time, he said.

Water use is a major factor for drilling in the shale about a mile underground.

Companies use an innovative horizontal drilling and hydraulic fracturing process that’s succeeded in similar gas-containing formations in Texas. Each fracturing process can use as much as four million gallons of water. Only about half of that is recovered, Beauduy said.

And while the commission is interested in recycling and reusing water, he acknowledged that every use is assumed to be a complete loss of the water from the watershed so that any recovery is seen as a bonus.

That said, both SRBC representatives noted that, in the aggregate, water withdrawal for well drilling would equal perhaps 28 million gallons per day, which is about half as much as PPL Corp.’s nuclear Susquehanna Steam Electric Station in Salem Township.

The hearing, which was meant to discuss proposed SRBC regulation changes, brought out concerns from both the industry and residents.

Potter County Commissioner Paul Heimel, who was representing the County Commissioners Association of Pennsylvania, noted two concerns.

First, that the chemicals used in the fracturing process haven’t been identified, and second, that it was unclear if the industry would be allowed to withdraw water during drought conditions.

Scott Blauvelt of East Resources, Inc. represented the Marcellus Shale Committee, which is made up of 28 members of regional gas and oil associations.

Copyright: Times Leader