Posts Tagged ‘anadarko petroleum corp’

By Laura Legere (Staff Writer)
Published: August 13, 2010

There are no unleased acres left in Pennsylvania’s state forests where Marcellus Shale natural gas drilling sites, pipelines and access roads could be built without damaging environmentally sensitive areas, according to a new analysis by the Department of Conservation and Natural Resources.

Nearly 139,000 acres of state forest have been leased for gas drilling since 2008 and money from those lucrative leases – a total of $354 million – has been used to help balance the last two state budgets.

But DCNR Secretary John Quigley said the era of leasing large parcels of state forests for gas drilling is over.

“We may do some little stuff here and there,” he said, “but in terms of large-scale leasing, we’re done.”

The department’s findings, demonstrated in a series of overlain maps on DCNR’s website, show the forests in northcentral Pennsylvania above the gas-rich Marcellus Shale crowded by leased land, parcels where the state does not own the mineral rights and places where development must be restricted.

Of the 1.5 million acres of state forest underlain by the shale, 700,000 acres have already been leased or the mineral rights under them are controlled by an owner other than the state.

An additional 702,500 acres are in ecologically sensitive areas – places with protected species, forested buffers, old growth or steep slopes. Another 27,500 acres are designated as primitive and remote lands, 49,600 acres were identified through a forest conservation analysis as priority conservation lands, and the last 20,400 acres are so entwined with the other sensitive areas that they cannot be developed without damaging them.

The department began to study the limits of the state forest land that can safely be leased to gas drillers as it developed a series of Marcellus gas leases in 2008 and January and May 2010.

Gas drilling has taken place on state forest land for over six decades, and mineral extraction is one of the forest’s designated uses, along with sustainable timber harvesting, recreation and conservation. But, Mr. Quigley said, “There are limits to how much you can develop the resource and maintain balance. And I think we’re there.”

There are currently about 10 producing Marcellus Shale gas wells in the state forest. The department expects there will be about 6,000 wells on 1,000 separate drilling pads when the resource is fully developed in 15 or 20 years.

The secretary said the prime consideration for any future leasing, “if we do any at all,” will be that drilling or associated activities not disturb the forest’s surface – a possibility with horizontal drilling technology that enables drillers to access the mile-deep shale from adjacent properties.

The impact of the DCNR’s findings is unclear.

Gov. Ed Rendell said earlier this year that no additional forest land will be offered for lease during his tenure, which ends in January, but the department’s findings have no legal bearing on the next administration’s ability to change its forest policy.

A bipartisan group of lawmakers in the House passed a three-year moratorium on new leasing of state forest land for gas drilling in May, but the measure has not been taken up by the Republican-led Senate.

Patrick Henderson, a spokesman for Sen. Mary Jo White, R-21, Franklin, chairwoman of the Senate Environmental Resources and Energy Committee, said he does not sense “at all” an upswell of support among the members of the Senate to pass it.

Mr. Henderson said the department’s findings “carry some weight,” but he said the claim that there is no forest land left for surface gas development is subjective.

“I think different people can conclude if there may be some tracts of land out of 1.5 million that lie within the fairway to lease,” he said.

A $120 million lease deal DCNR reached with Anadarko Petroleum Corp. in May that is expected to have minimal impact on the state forest’s surface could not have been possible if the House’s moratorium bill had been law, he said.

“There’s something to be said for having a fresh set of eyes under the new administration take a look at it and draw their own conclusions.”

Mr. Quigley was optimistic that if future decisions about forest leasing are left to DCNR, his department’s findings will stand.

“The science tells us that we’ve reached the limit,” he said. “The question becomes whether we will face another occasion when economics looms larger.”

ONLINE http://bit.ly/DCNRmaps

Contact the writer: llegere@timesshamrock.com

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Copyright:  The Scranton Times

Governor’s office announced this week a plan to allow Anadarko Petroleum to access 32,896 acres.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

Some state representatives are concerned about Gov. Ed Rendell’s decision to lease nearly 33,000 acres of state forest land to an energy company for natural gas exploration.

Rendell’s office on Tuesday announced that Anadarko Petroleum Corp. has paid the commonwealth $120 million to access 32,896 acres of state forest through a natural gas lease agreement with the state Department of Conservation and Natural Resources.

Prior to a presentation on the state Department of Environmental Protection’s role in regulating natural gas drilling that she attended Tuesday at Misericordia University, state Rep. Phyllis Mundy said she was disappointed to learn of the lease transaction.

“The areas that could responsibly be leased in state forests are already under lease. Why don’t they go ahead and drill there? We don’t need additional drilling, certainly not until we look into whether this is the really sensitive habitat that DCNR said it was when we discussed it,” Mundy, D-Kingston, said.

But Mundy later qualified her comments, saying they were dependent on whether leasing that acreage was previously factored as revenue in this year’s state budget. “I’m really not clear on what 32,000 acres that was,” she said.

Rendell’s press release on Tuesday did not clearly specify whether revenue from this most recent lease agreement had previously been factored into the state budget. DCNR had leased about 32,000 acres of state forest land to Anadarko in January for $128 million.

Mundy co-sponsored legislation to impose a moratorium on leasing state forest land for natural gas exploration. House Bill 2235 passed in the House and is before the state Senate.

State Rep. Karen Boback, R-Harveys Lake, who also attended the presentation at Misericordia and voted in favor of the moratorium, said she too had a problem with the lease if the revenue had not been previously included in the state budget.

Both representatives have been outspoken in their concern about potentially harmful effects of natural gas drilling on the environment and have been advocating for stronger laws and regulations to protect public heath and safety and drinking water supplies from potential contamination from gas drilling accidents.

DCNR Press Secretary Chris Novak said Wednesday the specific amount of acreage wasn’t included in this year’s budget or specified in Rendell’s 2010-11 proposal, but legislators had agreed during negotiations for this year’s budget that $180 million for the 2010-11 budget would come from oil and gas leases.

Novak said Rendell had a target of $60 million in revenue from leasing out the 32,000 acres of forest in January, but realized $128 million. That extra $68 million would be applied to the 2010-11 budget, she said.

DCNR also leased 74,000 acres of forest for natural gas exploration in September 2008. A total of 725,000 acres of the state’s 2.2 million acres of forest land has been leased for gas drilling, Novak said.

In addition to the up-front lease payments, which are considered rent for the first year of the leases, the state will receive 18 percent royalties on all natural gas produced on the land for the leases signed this month and in January. The royalty for the September 2008 lease is 16 percent.

Rent for the second through fifth years drops to $20 per acre and then increases to $35 per acre for year six and beyond, Novak said.

Novak said DCNR looked at whether important habitat for rare or endangered species and recreational use would be impacted when designing the leases. She said leases for each of the 11 tracts specify areas that cannot be disturbed by drilling.

She estimated that because of new horizontal drilling techniques and the fact that the newly leased land is surrounded by land that had been leased previously, only a minimal amount of newly leased land – probably about 300 acres total – will be impacted by drilling activities.

Anadarko spokesman Matt Carmichael would not estimate how much land would be disturbed because it was too early in the development phase.

“It’s our hope and desire to disturb as little surface area as possible,” Carmichael said.

Anadarko has drilled about 15 wells on state forest land to date, he said.

Novak said that prior to drilling activities and after the drilling is complete and wellheads are installed, the public will have full access to the leased land.

Mundy and Boback were not available for comment Wednesday after Novak responded to questions related to state budget revenue and the disturbance of sensitive state forest habitat.

Copyright: Times Leader

MARC LEVY Associated Press Writer

HARRISBURG — Gov. Ed Rendell says the cash-strapped state government is leasing more public forest land to a company that wants to drill for natural gas in the vast Marcellus Shale reserve.

As a result, Rendell said Tuesday he will support legislation to temporarily halt additional leasing of state forest land for gas drilling.

Rendell says Houston-based Anadarko Petroleum Corp. has agreed to pay Pennsylvania $120 million for the right to drill on 33,000 acres in northcentral Pennsylvania.

The company owns the rights to surrounding tracts. The additional land is considered “disturbed” because it has been leased for shallow gas drilling in previous decades, although no drilling is actively occurring.

Still, a bill to halt new leasing of state forest land for drilling appears unlikely to pass the Senate.

Copyright: Times Leader

HARRISBURG – As a bill calling for a moratorium on leasing state forest land for natural gas exploration languishes in the Senate, Gov. Ed Rendell announced today that the state Department of Conservation and Natural Resources finalized a lease agreement with Anadarko Petroleum Corp. for 32,896 acres of forest land in Centre, Wyoming and Bradford counties.

In a press release, Rendell said the “responsible natural gas lease agreement” will allow Pennsylvania to meet its need for revenue while fulfilling its obligation to protect Pennsylvania’s natural resources.

Under the agreement, Anadarko has paid the commonwealth $120 million to access 32,896 acres that are surrounded by tracts of land for which drilling companies already hold lease agreements. Because these newly leased tracts can largely be accessed by gas operations on the adjacent tracts, the amount of new state forest surface area that must be disturbed is minimized, according to the press release.

Other than the agreement, the commonwealth will not have to make any additional state forest land available to reach its revenue goals for natural gas drilling in the 2010-11 fiscal year.

“This is a responsible approach that meets our revenue targets and limits the impact of additional natural gas exploration in our state forests,” Rendell said.

“We do not need to expand our drilling footprint in state forest lands to meet our revenue goals, because these parcels are already surrounded by other leased acres,” Governor Rendell said. “They also are within areas leased in the 1970s and 1980s by DCNR, but not all the acreage was drilled because technology wasn’t available to exploit Marcellus Shale deposits.

“In order to develop the acreage, DCNR and Anadarko have agreed to certain provisions to make certain there is minimal impact on the surface. Horizontal drilling technologies allow Anadarko access to most of this acreage from already disturbed areas on their adjoining leased lands.”

The newly leased acres cover 11 tracts in the Moshannon, Sproul and Tiadaghton state forests where Centre, Clinton and Lycoming counties meet.

For 27,185 acres on 10 tracts, Anadarko agreed to pay $4,000 per acre, consistent with the average price paid during DCNR’s January 2010 competitive lease sale. For the remaining 5,711 acres on one tract, the commonwealth will receive $2,000 per acre because the geology underneath is not as promising for gas production.

The lease of the 11 tracts totals about $120 million. DCNR’s January 2010 lease sale generated $128 million-$60 million of that went toward this year’s General Fund budget and the additional $68 million will be applied to a target of $180 million to help balance state budget for the fiscal year that begins July 1, 2010.

“With this agreement negotiated and the money in the bank, we can safely be on board with the moratorium which passed the House and is now in the Senate. If the Senate passes the legislation and it comes to my desk, I will sign it,” Rendell said.

Read more in The Times Leader on Wednesday.

Copyright: Times Leader

People are wondering just what EnCana will bring to Marcellus Shale drilling.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

Edward Buda had been dealing with representatives of Whitmar Exploration Co. for about two years since he, his late brother and sister-in-law negotiated a lease with the company for natural gas drilling on their Fairmount Township property.

Now, there’s a new player in the mix, since Whitmar announced a partnership with EnCana Oil & Gas (USA) Inc. in November for a joint venture in drilling and development of the Marcellus Shale in Luzerne and Columbia counties.

Like others in the Back Mountain, Sweet Valley and Red Rock areas, Buda is a bit wary of the Denver-based energy company.

“We did business with Whitmar. How (Encana is) going to be, I don’t know. How they honor the contract, that’s to be seen. I still don’t know much about them,” said Buda, 75, who lives in Ross Township.

Buda’s brother Walter and Walter’s wife Eleanor signed a fairly simple three-page lease with Whitmar in February 2009, a month before Walter died. Eleanor passed away in November, Edward said, and he became the new lease holder just as EnCana came into the picture.

Now, EnCana wants to lease Edward’s property in Ross Township, but he isn’t too impressed with the $1,000-per-acre offer. And the 16-page lease proposal that has undergone many revisions is written in legalese, he said.

“They wanted to put a drill pad on my property (in Ross Township). I said I want to wait and see what happens in Red Rock (section of Fairmount Township). Everybody’s waiting to see whether it’s going to be a gusher or a fiasco in Red Rock,” Edward said.

Wendy Wiedenbeck, a public and community relations adviser for EnCana, said the well on Buda’s property and a second well planned for a Lake Township property owned by township Supervisor Amy Salansky and her husband, Paul, are exploratory ventures.

If those wells produce an acceptable amount of natural gas, EnCana will develop a plan for expanded drilling operations in the area, Wiedenbeck said. Drilling is expected to begin in July on Buda’s property and gas production should start by October. Clearing of an access road to the site began last week.

Company has won honors

For the past few months, Wiedenbeck has been the face of EnCana locally, arranging and attending meetings with people who live or own property within a mile of the planned drilling sites as well as attending meetings with local groups concerned about drilling activity in their communities.

A self-described “Army wife” with two sons – one in first grade, the other a senior in college, Wiedenbeck has lived in Colorado since 1989 and has been working in community/public relations since the early 1990s. She’s been with EnCana for five years.

“They’re a cultural fit for me. I believe they truly believe in responsible development,” Wiedenbeck said of her employer.

To prove her point, Wiedenbeck provided a long list of awards EnCana has received over the past few years. Just a few include:

• The 2008 U.S. Environmental Protection Agency Natural Gas STAR award, recognizing outstanding efforts to measure, report and reduce methane emissions;

• Interstate Oil & Gas Conservation Commission Chairman’s Stewardship Awards, recognizing exemplary efforts in environmental stewardship by the oil and natural gas industry;

• The 2009 Colorado Oil & Gas Conservation Commission Award for Courtesy Matters program in the Denver-Julesburg Basin surrounding Erie, Colo.

“Courtesy Matters” is EnCana’s community engagement program that brings EnCana staff and third-party contractors together with the community to discuss the nuisance issues associated with company operations,” Wiedenbeck said.

“Courtesy Matters creates a working environment where open and ongoing dialog are paramount. Discussions generally include concerns with traffic, noise and dust associated with our operations,” she said.

Community investment vital

Marty Ostholthoff, community development director for Erie, Colo., said in a teleconference that EnCana is one of four major energy companies drilling in the Denver-Julesburg Basin, the others being Noble Energy Inc., Kerr-McGee Corp. and Anadarko Petroleum Corp.

Fred Diehl, assistant town administrator in Erie, said he would be remiss if he didn’t point out “how far ahead of the other operators EnCana is” when it comes to community investment.

Diehl said he mentioned to Wiedenbeck that officials wanted to install solar panels on a new community center being built, and EnCana donated $250,000 to make that happen. A month ago, the company donated $175,000 for eco-friendly lighting at community ball fields.

“It’s not a requirement that they make notifications to our residents (about drilling activities or problems), but they do. It’s not a requirement that they make financial investments into our community, but they do,” Ostholthoff said.

Of course, there’s a downside to the presence of the drilling companies in the suburban area, which lies in one of the largest natural gas fields in the country, Diehl said.

“These things are still loud,” he said of the drilling rigs. “People come into our offices complaining, ‘We can’t sleep.’ But we worked with the operators to put up hay bales and cargo trailers to minimize the noise. The only good thing is, (the drilling is) temporary.”

As far as addressing concerns of residents, Diehl said all of the companies seem willing and responsive. “If they’re not, one of them can give the whole industry a black eye,” Diehl said.

Wiedenbeck said EnCana will have a toll-free number posted at its drilling sites that people can call to report concerns. Callers who choose the Pennsylvania prompt will be automatically directed to her office or cell phone. An operations phone number also will be established, she said.

And while EnCana will hire someone locally to help with community relations efforts, Wiedenbeck said she will continue to be “that face” for the community. She has spent about half her time in Pennsylvania since EnCana partnered with Whitmar, sometimes bringing her youngest son, Sammy, on trips here.

“He loves Pennsylvania,” she said.

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

Copyright: Times Leader

Potential for economic plus to area. Williamsport benefits despite no well within 12 miles.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

With most of the nearby Marcellus Shale natural gas production occurring north and west of Luzerne County, the question of whether Greater Wilkes-Barre will benefit with an economic boom or be bypassed remains unanswered.

It depends on a number of factors, including the volume and quality of natural gas that can be harvested in the county.

If prospects are not good here, the proximity of natural gas development in nearby counties could have some impact locally if the infrastructure close to Wilkes-Barre has the most to offer nearby energy companies, drillers and their employees, according to an economic development official in a county that has been reaping the benefits of Marcellus Shale production.

Jason Fink, executive vice president of the Williamsport/Lycoming Chamber of Commerce, said chamber officials began seeing signs of interest in gas production in Lycoming County about two years ago when the appearance of landmen first became noticeable.

Work had begun on five to seven natural gas wells in northern Lycoming County by the end of 2007, according to records from the state Department of Environmental Protection.

By the end of 2008, 13 more wells had been drilled; another 24 followed last year, and four more have been drilled this year.

And although the closest well is about 12 to 15 miles from Williamsport, the city of about 30,000 is seeing “a number of significant areas of development,” Fink said.

A boom hits Williamsport

The first evidence of business development related to the shale came about a year and a half ago with growth in oil field services. Chief Oil & Gas has been operating for well over a year in the county and Anadarko Petroleum Corp. also has had a presence, Fink said.

Precision Drilling set up shop and Weatherford – a mechanical/technological support company for the oil and gas industry – is in the process of developing a 20-acre site in the county, he said.

Industrial Properties Corp., which is operated by the chamber, sold a 24-acre parcel to Halliburton, which is in the process of developing the property and projects the hiring of 250 employees at the site.

Sooner Pipe, which provides casing pipe for Chesapeake Energy and is one of the largest customers of U.S. Steel, just signed a 10-year lease with the Williamsport Regional Airport for a pipe lay-down yard. That project is expected to employ 50 people when operational, Fink said.

The work force at Allison Crane & Rigging – a third-generation family-owned company in Williamsport – grew by more than 50 employees early on in the well construction phase. And Sooner Pipe intends to use local trucking company Woolever Brothers Transportation to haul all of its pipe when the facility is operational, Fink said.

It’s all about infrastructure

Fink said that Williamsport is benefiting from the gas extraction activity, the heart of which is at least 15 to 20 miles northwest and northeast of the city, because it has more to offer than more rural counties to the north.

“They need to have access to certain infrastructure to conduct their business. We have a highway system, housing, hotels, restaurants – everything they need for their employees. Bradford and Tioga are more rural and have very limited hotel space,” Fink said, adding that rail service through Norfolk Southern and a short line and a nearby interstate highway also helps matters.

Bradford County saw 113 wells drilled last year, while Tioga County had 114.

Because of the influx of workers, the city saw demands for home and apartment rentals grow. Developers responded by renovating space above downtown businesses, creating new rental units.

Fink said local unemployment had been hovering around 10 percent, but he’s seen it drop to 9.1 percent lately.

“We’ve been working with the Pennsylvania College of Technology and the local CareerLink office. Really, once more local people are able to gain the skills this industry requires, I think you’ll be able to see a greater economic impact,” he said.

Would it work in Wilkes-Barre area?

“I would think Wilkes-Barre would have the same opportunities if they find gas in volumes in areas proximate to Wilkes-Barre. And the Wilkes-Barre area understands the positive side as well as the pitfalls of the acquisition of natural resources for energy purposes,” Fink said.

Todd Vonderheid, president of the Greater Wilkes-Barre Chamber of Business and Industry, agrees.

“There’s certainly an opportunity to be captured for the region. Several things have already happened,” Vonderheid said.

Vonderheid noted that several suppliers and vendors to the gas-and-oil industry already are locating in the region and hiring locally.

“We’re trying to facilitate that and make the process as easy as possible. We’re working with energy company officials to better learn what those supply opportunities might be,” Vonderheid said, adding that representatives of Chesapeake and EnCana energy companies sit on the chamber board of directors.

Vonderheid said a presentation for chamber members on Marcellus Shale opportunities, the gas extraction process, environmental issues and the possible economic impact is in the works.

Copyright: Times Leader