Archive for the ‘Pennsylvania Natural Gas Drilling’ Category

Williamsport, PA – Local residents in Williamsport, Pa. joined area leaders and business owners today for a community discussion focused on natural gas training programs and the impact of workforce development in the region, as well as the industry’s commitment to safe and responsible development of the Marcellus Shale. The Marcellus Shale Coalition (MSC) andAmerica’s Natural Gas Alliance (ANGA) jointly hosted the public event held at the Sooner Pipe headquarters in Williamsport.

State Sen.Gene Yaw, Lycoming County Commissioner Jeff Wheeland, and Williamsport/Lycoming Chamber of Commerce President and CEO Vince Matteo participated in a panel discussion, which offered insight into the economic value the natural gas community brings to the Appalachian region. Other panel members included Larry Michael, executive director of workforce and continuing education at Pennsylvania College of Technology and member of the development team of the comprehensive online recruiting tool ShaleNET, and Mary Wolf, a spokeswoman for Anadarko Petroleum Corporation, a natural gas producer operating in the area.

The Marcellus Shale, one of the largest sources of natural gas in the United States, brought the natural gas industry to Pennsylvania, which has led to a flurry of investment in the region and created economic and job opportunities across the state. The event focused on economic development opportunities for local business, educational programs to build the local workforce, and the industry’s commitment to operating in the interest of the community through safe and responsible development.

“The natural gas community has brought a tremendous boost to our region in economic benefit and employment,” said Matteo. “Pennsylvania has been one of the hardest hit states economically in recent years. The natural gas industry has helped change that by bringing thousands of well-paying jobs to the region, and will continue to bring jobs to our area in the future. We need to start training Pennsylvania now for the natural gas jobs to come.”

Wolf discussed the industry’s commitment to safe and responsible development and to the communities where they operate. As part of this commitment, companies are working alongside community organizations and representatives to ensure environmental safety, maximize job creation and bring an economic boost to the region.

“To be the catalyst for economic development and job creation, chambers of commerce, elected officials, trade associations, educators and natural gas companies must work together to communicate what is needed and valued,” said Wolf.  “By accomplishing this, this next generation can be prepared to lead Pennsylvania’s economic recovery and earn our country’s energy independence.”

This community discussion was the first of three that will be held in Pennsylvania this summer. For more information on this event, and natural gas development opportunities in the state, please visit www.MarcellusCoalition.org and www.FriendsOfNaturalGasPA.com

Posted at: MarcellusCoalition.org

Just a few weeks after the moratorium on new generation horizontal fracking for natural gas ended in New York State, the opposition held its second protest at Governor Cuomo’s office since. In addition, they have been calling the Governor every Monday and are holding another action next Wednesday. Fifty at the first protest (following hundreds two days earlier at Foley Square) at Cuomo’s since the moratorium ended, eighty people at the second, the movement in New York City has not shown to have accepted defeat.

The plan of the Governor and the DEC (Department of Environmental Conservation) is to ban fracking in public parks and forests, and in the New York City and Syracuse watersheds. The resistance in New York City did not in any way shrink; in fact it swelled, treating this deal not as a compromise but as an unequal and potentially insufficient (as regarding major watersheds) deal.

Mayor Bloomberg, who came out in support of the plan, also supports infrastructure that will bring Marcellus Shale gas to New York City. In November he sent a letter to the DRBC (Delaware River Basin Commission) in opposition to fracking in the New York City Watershed specifically, based on a report that he funded known as the Hazen and Sawyer Report.

The natural gas industry tends to defend fracking as a practice over sixty years old (and some companies deny that any contamination of water due to fracking has ever occurred, while Aubrey Mcclendon on 60 Minutes admitted to past accidents). However, the opposition is over new generation-fracking, specifically drilling for gas in shale rock, and using a new mixture of chemicals.

According to David Braun of United for Action, vertical fracking (new generation) is currently happening -since former Governor Paterson issued an executive order last spring- but horizontal fracking, which uses more water and more chemicals, isn’t expected to be able to happen in New York until this following spring. “They’re releasing the final version of the SGEIS,” (supplemental generic environmental impact statement), said Braun, which will serve as a “regulatory structure.” Following the release of this document, says Braun, there will be a 60-day public comment period.

Environmentalists stress that fracking breaks up methane from shale into above aquifers; the “frack fluid” could spill into waterways, and that the waste water can’t be disposed of safely in New York. The industry stresses that it will create thousands of domestic jobs and burns cleaner than other fossil fuels. Green jobs, efficiency and renewable energy often aren’t mentioned in the debate, but when they are, are told from very different points of view. New York State recently passed an On-Bill Financing Law to create thousands of green jobs, but relies on awareness of property owners.
Posted at: Exaimner.com

“Officials from 15 states have recently testified that groundwater contamination from the hydraulic fracturing procedure is not known to have occurred despite the procedure’s widespread use in many wells over several decades.” (New York State SGEIS)

See the Energy in Depth compilation of testimonies here.

Pennsylvania’s gain vs. New York’s missed opportunity.

The following article is from the July 21 Wall Street Journal

Politicians wringing their hands over how to create more jobs might study the shale boom along the New York and Pennsylvania border. It’s a case study in one state embracing economic opportunity, while the other has let environmental politics trump development.

The Marcellus shale formation—65 million acres running through Ohio, West Virginia, western Pennsylvania and southern New York—offers one of the biggest natural gas opportunities. Former Pennsylvania Governor Ed Rendell, a Democrat, recognized that potential and set up a regulatory framework to encourage and monitor natural gas drilling, a strategy continued by Republican Tom Corbett.

More than 2,000 wells have been drilled in the Keystone State since 2008, and gas production surged to 81 billion cubic feet in 2009 from five billion in 2007. A new Manhattan Institute report by University of Wyoming professor Timothy Considine estimates that a typical Marcellus well generates some $2.8 million in direct economic benefits from natural gas company purchases; $1.2 million in indirect benefits from companies engaged along the supply chain; another $1.5 million from workers spending their wages, or landowners spending their royalty payments; plus $2 million in federal, state and local taxes. Oh, and 62 jobs.

Statistics from Pennsylvania bear this out. The state Department of Labor and Industry reports that Marcellus drilling has created 72,000 jobs between the fourth quarter of 2009 and the first quarter of 2011. The average wage for jobs in core Marcellus shale industries is about $73,000, or some $27,000 more than the average for all industries.

The Pennsylvania Department of Revenue says drillers have paid more than $1 billion in state taxes since 2006—and the numbers are swelling. In 2011′s first quarter, 857 oil and gas companies and affiliates paid $238 million in capital stock and foreign franchise taxes, corporate income taxes, sales taxes and employer withholding. This exceeds by some $20 million the total payments in 2010.

The revenue department also identified some $214 million in personal income taxes paid since 2006 that can be attributed to Marcellus shale lease payments to individuals, royalty income and asset sales. And all of this with no evidence of significant environmental harm.

***

Then there’s New York. The state holds as much as 20% of the estimated Marcellus shale reserves, but green activists have raised fears about the drilling technique known as hydraulic fracturing and convinced politicians to enact what is effectively a moratorium.

The Manhattan Institute study shows that a quick end to the moratorium would generate more than $11.4 billion in economic output from 2011 to 2020, 15,000 to 18,000 new jobs, and $1.4 billion in new state and local tax revenue. These are conservative estimates based on a limited area of drilling. If drilling were allowed in the New York City watershed—which Governor Andrew Cuomo is so far rejecting—as well as in the state’s Utica shale formation, the economic gains would be five times larger.

Consider New York’s Broome County, which borders Pennsylvania and from which you can spot nearby rigs. The county seat of Binghamton ought to be a hub for shale commerce, but instead its population is falling as its young people leave for jobs elsewhere.

A study commissioned by the county in 2009 found that Broome could support up to 4,000 wells, but drilling even half that number would create some $400 million in wages, salaries and benefits; $605 million in property income from rents, royalties and dividends, and some $43 million in state and local tax revenue.

The Broome analysis pointed to Texas, where Chesapeake Energy paid Dallas Fort Worth International Airport $180 million for drilling rights on 18,000 acres of airport property—$10,000 per acre. The airport receives a 25% royalty on the natural gas produced by airport wells—more than $28 million in fiscal 2008. The study also noted the boon that rising oil and gas property values have been to Texas landowners, tax authorities and school districts.

***

Governor Cuomo has said he wants to lift New York’s moratorium, and the state’s recently released draft rules are a step forward. But they must still undergo legal review and a public comment period that could bar New York drilling for the rest of this year, if not longer. New York will also still ban drilling in about 15% of the state’s portion of the Marcellus and impose more onerous rules than other states on private property drilling. Such bows toward the obsessions of rich, big-city greens explain why parts of upstate New York are the new Appalachia.

As they look across their northern border, Pennsylvanians can be forgiven for thinking of New Yorkers the way Abba Eban once described the Palestinians: They never miss an opportunity to miss an opportunity.

A new study out of Penn State finds that the new gas drilling industry in Pennsylvania is generating tremendous benefits for the entire state.  The study notes a significant increase in tax revenues and job opportunities spurred by gas drilling throughout the Commonwealth.  Opponents of gas drilling note that the study was funded by the gas industry and fails to take into account environmental concerns.  The twelve lawyers at DLP continue to monitor the gas drilling industry for gas drilling accidents, gas drilling injuries and death, tractor trailer,truck accidents in Pennsylvania and other serious accident matters.

The dramatic increase in natural gas production from unconventional formations such as Pennsylvania’s Marcellus Shale, has driven down natural gas prices while crude oil prices have soared.

Cheaper natural gas could fuel policy shift

By Andrew Maykuth
Inquirer Staff Writer
Since the federal government deregulated natural gas prices in the 1980s, the prices of crude oil and natural gas have moved more or less in tandem.
But in the last three years, the prices have become unhinged. One reason is the dramatic increase in natural gas production from unconventional formations such as Pennsylvania’s Marcellus Shale, which has driven down natural gas prices while crude oil prices have soared.

When the two fossil fuels are compared on the basis of energy equivalency, natural gas is a bargain compared with oil. A dollar spent on natural gas buys more than three times the energy that a dollar spent on crude oil buys.
The U.S. Energy Information Administration believes the disparity could last for decades.

“We think we will have relatively reasonable natural gas prices over the long term,” said Philip Budzik, an analyst with the EIA. “That looks good to me because I use natural gas at home and I’m happy I don’t have to pay oil prices.”
The natural gas discount has more implications than a bonus for homeowners considering a switch from heating oil.

The price disparity is fueling a debate over whether the government should encourage electricity generators to accelerate the switch from coal to natural gas. And T. Boone Pickens, the Texas oilman, is lobbying Congress to subsidize converting vehicles to natural gas fuel.

Some believe that new demand for natural gas will invariably drive up prices.
“I suspect volatility will continue, and that the oil-vs.-natural gas price relationship will eventually move back to normal,” said Donald B. Marron, director of the Urban-Brookings Tax Policy Center in Washington.

A few skeptics doubt the shale-gas supply is as robust as advertised – whether it could be an Enron-like Ponzi scheme, as a New York Times article implied recently.

But shale-gas production continues to go up, defying the skeptics.
Shale gas will account for 25 percent of the nation’s natural gas supply by the end of this year, up from 2 percent a decade ago, according to the EIA. And a Pennsylvania State University study released this week reported that Marcellus production, which is still in its infancy, is outpacing last year’s estimates by 30 percent.

“The idea that shale gas is a flash in the pan is simply incorrect,” Kenneth Medlock III, a Rice University researcher, said this week after the release of a Rice study that called shale gas “perhaps the most intriguing development in global energy markets in recent memory.”

There is more to the pricing dynamic than shale gas.
Two decades ago, when oil and gas traded more synchronously, electricity producers were able to arbitrage the price difference by switching to the cheaper fuel. Fuel switching kept the prices relatively close.

But oil no longer is used to generate electricity – mostly it’s a transportation fuel. If natural gas is used in vehicles, it could drive up its price.
Natural gas prices are also based upon mostly a domestic market, while crude oil is governed by worldwide demand, including emerging economies.
Crude oil markets are influenced by traders who regard the commodity almost like a currency, said Ananthan Thangavel, managing director of Lakshmi Capital Management in Beverly Hills and author of a commodity newsletter.
“Natural gas, when you look at trading activity, is much more based on supply-and-demand characteristics than crude oil,” he said.

Not everyone is enamored of proposals to increase demand for natural gas by encouraging its use as a motor fuel.

George Biltz, a vice president of Dow Chemical Co., told the U.S. Senate Energy and Natural Resources Committee on Tuesday the abundance of natural gas could be a “game changer” for American petrochemical manufacturers that use natural gas as a raw material. But only if the price stays low.
He encouraged Congress to “exercise extreme caution” about jumping on the Pickens bandwagon. Using natural gas to make chemicals creates more economic value.

“U.S. manufacturers provide the highest value-add of any sector,” he said. “Using natural gas to make petrochemicals results in eight times the value over simply combusting it.”

From the Philadelphia Inquirer
July 22, 2011

Pennsylvania Fire Academy Continues to Deliver Training Developed in Partnership with PIOGA Safety Committee

WEXFORD, Pa. (Oct. 18) –  The Pennsylvania Independent Oil and Gas Association (PIOGA) today announced the commitment of an additional  $25,000 to support the  Pennsylvania Fire Academy’s Marcellus Shale Resources and Training program, a joint effort of industry, the State Fire Commissioners’ office and emergency responders around the Commonwealth.

Through the group’s collective expertise, the program has already prepared more than 3,000 emergency responders for oilfield events in areas where Marcellus Shale gas development is taking place in the Commonwealth.

“I am pleased PIOGA is committed to the safety of Pennsylvania’s first responders. These funds will ensure that we can continue with the training program developed last fall through a partnership with the Marcellus Industry,’’ State Fire Commissioner Ed Mann said. “The training provides a basic understanding of the potential hazards first responders could face in the event of such an emergency.’’

PIOGA President and Executive Director Louis D. D’Amico said his organization’s safety committee will continue to provide the subject matter knowledge and experience needed to maintain the most up-to-date curriculum for drill site safety and emergency response training.

“Consistent with our industry partners, PIOGA continues to place safety as its number one priority.  The growing expanse of Marcellus development, along with the corresponding increase in Pennsylvanians working in and around drilling sites, means emergency preparedness and stringent safety policies must be engrained in every facet of our operations,” D’Amico stated.

“As we share best practices to create the most advanced emergency response procedures in the industry, we must also share in making the wise investment necessary to keep the Pennsylvania’s Fire Academy’s program intact.  I encourage all of our industry colleagues to contribute to this proven and much-needed initiative,” he added.

PIOGA safety committee members worked with professional firefighters and emergency personnel to create the first of several training modules on different response scenarios at drilling locations.   The committee continues to work with those organizations to allow the program to keep pace with new developments in the industry.

To learn more or schedule training – go to “Well Site Emergency for First Responders” training atwww.osfc.state.pa.us

Two drilling rig issues in Pennsylvania continue to work their way through government and legal channels.  The Governor’s special commission has recommended a Drilling Impact fee of some sort for gas companies in Pennsylvania.  Also, it has been reported that a second landfill in Lackawanna County will be accepting drill rig waste products.  The twelve lawyers at DLP continue to represent victims of serious trucking accidents, drilling rig accident and other major injury claims.

Gushers highlight gas potential of Pa.’s Marcellus Shale; drillers boost production estimates

ALLENTOWN, Pa. (AP) — Two unexpected gushers in northeastern Pennsylvania are helping to illustrate the enormous potential of the Marcellus Shale natural gas field.

Each of the Cabot Oil & Gas Corp. wells in Susquehanna County is capable of producing 30 million cubic feet per day — believed to be a record for the Marcellus and enough gas to supply nearly 1,000 homes for a year. The landowners attached to the wells, who leased the well access, numbering fewer than 25, are splitting hundreds of thousands of dollars in monthly royalties.

“There was definitely excitement among the team that planned out these wells and executed their completion,” said Cabot spokesman George Stark.

Drilling companies knew the Marcellus held a lot of gas. They just had to figure out a way to get it out, and they say they’re getting better at it all the time.

The result is that the Marcellus, a rock formation beneath Pennsylvania, New York, West Virginia and Ohio, has turned out to be an even more prolific source of gas than anyone anticipated. Energy firms are boosting their production targets, not only because new wells are coming on line but also because they’re managing to coax more gas from each well.

Operators say they have a greater understanding of the complicated geology of the Marcellus, allowing them to land their drill bits in the sweet spot of the formation. They’re drilling horizontally at greater distances, giving them access to more of the gas locked within the rock. And they’re tweaking how they break apart the shale.

“It’s like batting practice,” said Matt Pitzarella, spokesman for Range Resources Corp. “The more you swing the bat, the better you get.”

Fort Worth, Texas-based Range has boosted its estimate of the amount of natural gas it will ultimately be able to harvest from its Marcellus Shale wells, telling investors this month that it plans to triple production to 600 million cubic feet per day by the end of 2012.

Another major player, Chesapeake Energy Corp., has likewise reported a dramatic increase in expected well production. Early on, the Oklahoma City-based driller predicted that each well would yield 3.5 billion cubic feet of gas over its life span. That amount has since doubled, to more than 7 billion cubic feet, and continues to go up.

“Growing confidence in reserve quality is a major reason why many of the largest, most-successful, domestic and international energy companies are heavily investing in the Marcellus and other American shale plays,” said Jeff Fisher, Chesapeake’s senior vice president of production.

Indeed, major oil companies like Chevron Corp., Exxon Mobil Corp. and Royal Dutch Shell PLC have placed multibillion-dollar bets on the Marcellus, a 400-million-year-old rock formation that geologists say holds the nation’s largest reservoir of natural gas and perhaps the second-largest in the world.

To unlock the shale’s riches, drillers combine horizontal drilling with hydraulic fracturing, a technique known as fracking that pumps millions of gallons of water, along with sand and chemicals, into the well to creature fissures in the rock and allow natural gas to flow up. Fracking has raised environmental concerns, and the U.S. Environmental Protection Agency is studying its impact on groundwater. The industry insists the process is environmentally safe.

The technology has unleashed a drilling frenzy in Pennsylvania — where more than 3,300 Marcellus wells have been sunk the past few years — and accounts for a twelvefold increase in U.S. shale gas production since 2000. Gas harvested from the Marcellus and other shale fields around the country — including the Barnett Shale in Texas and the Haynesville Shale in Louisiana — now represents a quarter of total U.S. natural gas production.

The new Cabot wells help illustrate why boosters believe the gas field could help steer U.S. energy policy for decades to come. They were also a nice bit of good news for Cabot, the Houston-based driller that endured two years of bad publicity after state regulators accused it of polluting water supplies in Dimock Township, Susquehanna County.

The wells — also located in Dimock — are “producing like gushers,” exulted Stark, the Cabot spokesman, helping to push the company’s daily production above 400 million cubic feet per day.

Like other drillers, Cabot has steadily increased the horizontal length of its wells, from an average of 2,100 feet in 2008 to 3,600 feet last year. It has seen a corresponding increase in capacity.

Capacity, though, does not always translate to production.

Cabot’s wells, and Marcellus wells in general, are not running at full tilt, mainly because the infrastructure required to take the gas from wellhead to market is not yet fully in place. An oversupply of natural gas and the availability of crews to fracture the wells are other limiting factors.

“We certainly have had to manage our pace of drilling with the installation of pipeline infrastructure and demand in the market,” Chesapeake’s Fisher said in a statement. “While some delays in production startups are common in the early phase of these large-scale plays, the industry is working hard to build the infrastructure that will enable Marcellus reserves to get to market for decades to come.”

The Marcellus isn’t the only shale formation in Pennsylvania that energy companies have their eye on. Drillers are just beginning to explore the gas-bearing Utica and Upper Devonian formations. The Utica is deeper that the Marcellus, and the Upper Devonian is shallower.

“It’s triple the resource potential under the same plot of land,” said Kevin Cabla, an energy analyst at Raymond James & Associates.

Posted at: Yahoo.com