Posts Tagged ‘Chesapeake Energy’

Elected official who held hearing in area last week on natural gas drilling says he was responding to pro-energy group attack.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

A state representative says he was unfairly attacked in a press release by a pro-energy group after holding a public hearing in the Back Mountain last week.

State Rep. Camille “Bud” George, majority chair of the House Environmental Resources and Energy Committee, issued a rebuttal Friday, saying that “money and misinformation are the hallmarks of a gas industry attack titled, ‘Rep. George’s Fact-Free Fact-Finding Mission.’”

Energy In Depth sent the press release to media outlets on Thursday, a day after George convened a committee hearing at 1 p.m. in the Lehman Township Municipal Building to hear testimony on the impact of Marcellus Shale drilling and proposed legislation that would put more environmental safeguards in place.

State Rep. Phyllis Mundy, D-Kingston, invited George to have a hearing in her district, where EnCana Gas & Oil USA plans to drill the first natural gas exploratory well in Luzerne County in May or June. The well will be drilled in Lehman Township.

Area residents and lawmakers are concerned for many reasons, including the fact that the drill site would be less than two miles from the Huntsville and Ceaseville reservoirs, which supply drinking water to nearly 100,000 area residents.

Energy In Depth’s press release classified the hearing as a “pep rally staged by anti-energy activists and like-minded public officials in Northeast Pennsylvania.”

“Characterized as a ‘field hearing’ by … George, who held the event as far away as he could from his home in Clearfield County, the forum included representatives from the Sierra Club and Clean Water Action league, as well as testimony from a local podiatrist and someone describing himself as a ‘naturalopathic’ physician. The only thing missing? Anyone in possession of real, genuine facts related to responsible gas exploration in the Commonwealth,” the release stated.

In response, George said the most troubling aspect of “the attack by Energy In Depth, whose members include the Pennsylvania Independent Oil and Gas Association, is its slur of concerned lawmakers and citizens of Northeastern Pennsylvania as anti-energy activists.”

George noted that the committee had a hearing on Feb. 18 in Clearfield County, where the president of the Marcellus Shale Coalition and executives from some of the leading gas companies in Pennsylvania, including Range Resources and Chesapeake Energy, testified. He also participated two weeks ago in a House Democratic Policy Committee hearing in Ebensburg that included testimony from Chief Oil & Gas and Chesapeake. Ebensburg is in the Altoona area.

“The industry has not been an unwanted stranger at hearings,” George said.

Energy In Depth’s press release then listed quotes – pulled from a story in The Times Leader – of people who testified and rebutted them with quotes from gas industry representatives, a state Department of Environmental Protection fact sheet and Gov. Ed Rendell.

Energy In Depth pointed to testimony from Mundy in which she said she supports House Bill 2213 “which would among other things … require full disclosure of the chemicals used in hydraulic fracturing.”

The organization then pointed to a DEP fact sheet which states that drilling companies “must disclose the names of all chemicals to be used and stored at a drilling site … that must be submitted to DEP as part of the permit application process. These plans contain copies of material safety data sheets for all chemicals … This information is on file with DEP and available to landowners, local governments and emergency responders.”

But George said that “full disclosure of the chemicals – not just the trade names – and how they are used is not (now) required.”

“The precise chemical identities and concentrations and how and when they are employed can be crucial to emergency responders and remediation efforts after spills, and is at the crux of efforts to remove the infamous ‘Halliburton Loophole’ that exempts the industry from oversight by the Environmental Protection Agency,” George said.

“The gas industry can bloat campaign coffers with money, buy discredited and ridiculed studies and poison the debate by taking statements out of context. However, its ‘best management practices’ should never be taken at face value to be the best for Pennsylvania,” George 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

By Andrew M. Sederaseder@timesleader.com
Times Leader Staff Writer

The landscape of the state’s northern tier is changing as natural gas drillers set up shop from the Poconos west to Tioga County.

The burgeoning industry also is bringing change to the curricula at some local colleges hoping to capitalize on the need for a skilled and trained work force.

Lackawanna College in Scranton and Pennsylvania College of Technology in Williamsport have launched programs specifically catering to those interested in securing employment in the natural gas and ancillary fields. Other schools, including Johnson College and Keystone College, are investigating courses to prepare students for jobs in the industry.

When the industry made initial steps to move in to the region, Lackawanna College got in on the ground floor.

“Our goal was to try to find a niche where we could train people for jobs they could find here,” said Larry D. Milliken, director of energy programs at the college. The school, with input from the industry, created an applied science degree in Oil and Gas Production Technology program in December 2008.

The school asked Milliken, a former gas company employee with a background as an economic geologist who lives in Dunmore, to help with the program.

He sees great potential for the field and the creation of jobs, as companies look to tap into the gas supplies within the Marcellus Shale, a layer of gas-laden rock about a mile underground across most of Pennsylvania.

“I’m not sure most people realize the magnitude of what the Marcellus can mean and do for the state. … It’s going to be a huge game changer in Pennsylvania.”

Milliken said he sees hundreds of immediate jobs and the potential for thousands more as a result of gas drilling.

As an example, he said one well tender will be needed for every 20 wells that come on line. This year alone, he said, more than 1,000 wells are anticipated to be drilled and that number should double next year. This will mean 50 to 100 new well-tender jobs will be created every year for the next 20 years, he projects.

To prepare potential employees for those jobs, Lackawanna College offers an associate’s degree in natural gas technology and is developing an operating and maintenance degree program in compression technology that could debut next fall.

In addition, the college will soon start giving accounting students at its Towanda Center the option of customizing their degree to prepare them to work in the accounting side of the natural gas industry, Milliken said.

Milliken said Lackawanna relied heavily on curricula and course work offered by established programs at Western Wyoming Community College in Rock Springs, Wyo.; North Central Texas College in Gainesville, Texas, and Navarro College in Corsicana, Texas. Using that material, Lackawanna created an outline for its own potential programs and sent it to 10 gas companies “for feedback and modifications before settling in on our own curriculum.”

At the moment, the Pennsylvania College of Technology in Williamsport is the only other place to get industry-specific training. The school has partnered with the Penn State Cooperative Extension to create The Marcellus Shale Education & Training Center.

Opened in 2008, the center will identify the industry’s work force needs and respond with education tracks that train people for those jobs. Careers include welders, construction workers, drivers and machine operators and fabricators.Tracy Brundage, the school’s managing director of the Workforce Development and Continuing Education programs, said that as the landscape of the Northern Tier changes, so too do course offerings at the college.

She said input from energy companies has been influential in the design of 21 new courses, including those through the Fit 4 Natural Gas program developed by work force development boards in more than a dozen Northern Tier counties using Pennsylvania Department of Labor and Industry funds.

Officials from Lackawanna College also lauded the affiliations and assistance offered by gas companies.

“They’ve been very active,” Milliken said.

Last week, Chesapeake Energy donated $50,000 to help Lackawanna College expand its Natural Gas Technology Program at its New Milford Center campus in Susquehanna County. The college plans to use the money for capital-equipment costs in fitting out their new facilities for the program that began last fall.

“We’ve been an eager partner in these efforts,” said Brian Grove, director of corporate development for Chesapeake Energy.

Milliken said that in the short time the program’s been up and running at Lackawanna, the partnership has seen tremendous interest from potential students and positive feedback from the industry.

The companies reflected praise for the two-way-street relationship it has with the local schools.

Grove said “crafting an effective educational infrastructure will benefit the community far beyond its borders by equipping locals with skills they can market within the industry. A highly skilled work force is critical to our success as a company and the community’s long-term economic success as well.”

Brundage said that while the program at Penn Tech is still “in its infancy,” she, too, feels confident that the college’s programs have progressed nicely in a short period of time. “I think we’ve positioned ourselves pretty well with the industry. We’re not going to be able to meet all of their needs but we can help with a lot of them,” Brundage said.

So far 65 students have taken a course, including 14 who have completed welding courses. One course was created specifically at the request of the gas industry.

“They told us what they need as far as some of the welding components, so we aligned some things internally to meet those needs,” Brundage said.

Wendy J. Wiedenbeck, a spokeswoman for Denver-based EnCana Oil and Gas, said it’s too early to discuss her company’s needs because it is still in the exploratory stages. The company is looking at drilling specifically in Luzerne County.

“If we are successful and determine we would like to develop additional wells in the area, an important first step will be to understand what work-force development programs already exist in the area and how the curriculum aligns with business needs,” she said.

“New curriculum and training programs often come into existence after we’ve been operating in an area for some time,” Wiedenbeck added. “They evolve from the relationships we build along the way and are very much the result of a collaborative approach. In areas where we have established operations, we’ve collaborated with local colleges to create or build upon programs that help community members build the skills needed to compete for industry jobs.”

Andrew M. Seder, a Times Leader staff writer, may be reached at 570-829-7269.

Copyright: Times Leader

75 percent of gas production workforce composed of unskilled, semi-skilled jobs.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

If natural gas production from the Marcellus Shale is as successful as energy companies and landowners hope, the companies likely will need to hire more employees to man wells, perform testing for and oversee the drilling of new ones and monitor their operations.

“The jobs associated with natural gas drilling are well-paying jobs,” said Doug Hock, spokesman for Calgary-based Encana Energy, which has its U.S. headquarters in Denver, Colo.

Salaries even for less-skilled positions generally range between $60,000 and $70,000, Hock said.

The types of company jobs that usually become available when drilling operations are successful include drilling engineers, geologists and geophysicists and permitting experts. Pumpers, employees who check wells on a regular basis for proper operation, will be needed after more wells are drilled, Hock said.

Other positions with energy companies include experts in land negotiations and in community relations, he said.

Rory Sweeney, spokesman for Chesapeake Energy, said the Oklahoma City, Okla.-based company currently has 1,032 employees working in Pennsylvania, up from 215 in January 2009.

Local employment

As far as local employment, Sweeney said 168 employees report to local offices, “but we have more than 1,000 statewide and most of them are working rigs in NEPA.”

Types of workers expected to be hired include welders, rig hands, production workers, engineers, drilling and land technicians, pipeline field staff, construction field staff, administrative support and dozens of other occupations.

Last summer, the Marcellus Shale Education and Training Center at the Pennsylvania College of Technology conducted a Marcellus Shale Workforce Needs Assessment study that looked at potential workforce needs in two tiers of Pennsylvania counties – the northern tier, which borders Luzerne County to the north, and the central tier, which borders Luzerne County to the west.

The northern tier includes Wyoming, Sullivan, Susquehanna, Bradford and Tioga counties; the central tier includes Clinton, Centre, Columbia, Montour, Northumberland, Union, Snyder, Lycoming and Mifflin counties.

The study found that the direct workforce needed to drill a single well in the Marcellus Shale region is comprised of more than 410 individuals working in nearly 150 different occupations. The total hours worked by these individuals are the equivalent of 11.53 full-time, direct jobs over the course of a year.

The study notes that nearly all of these jobs are required only while wells are being drilled.

By comparison, 0.17 long-term, full-time jobs associated with the production phase of development are created for each well drilled in a given field. While comprising a very small percentage of the overall workforce, these long-term jobs compound every year as more wells are drilled. For example, if 100 wells were drilled each year for 10 years, 17 production jobs would be created each year, according to the study.

The study found the majority of occupations in the direct workforce were unskilled or semi-skilled jobs including heavy equipment operation, CDL truck operation, general labor, pipefitters and a variety of office-related occupations. These occupations account for about 75 percent of the workforce.

Learn on the job

Industry representatives, survey respondents and additional research indicated that most of these occupations require no formal post-secondary education, and only a few, such as CDL, welding and X-ray, require a specialized license or trade certification.

However, nearly all of them require the skills and knowledge unique to the natural gas industry, which are best learned through experience. Workers within all occupations of the natural gas industry are additionally prized for their hard work ethic and willingness to work very long hours in unfavorable conditions, the study found.

The majority of the remaining 25 percent of workers are in occupations that are white collar in nature, including foremen, supervisors, paralegals, Realtors, engineers and geological scientists.

Larry Milliken, director of Energy Programs at Lackawanna College, said that industry wide, jobs in the gas and oil drilling industry pay about 20 percent better than the same types of jobs in other industries.

“Around here, there are an awful lot of jobs in the $9- to $14-per-hour range. Jobs in the oil and gas industry tend to start in the $18-per-hour range and go up from there,” Milliken said.

A petroleum engineer might earn $40,000 to $45,000 teaching at a college or university, but working in the field for a gas or oil company, the engineer could make close to $90,000, he said.

The average technician in the natural gas industry can expect to earn about $30 per hour, which equates to an annual salary of about $60,000. A starting technician with a two-year degree can expect to earn $18 to $20 to start, amounting to a salary near $40,000, Milliken said.

In gas production growth areas, employees with at least associate’s degrees would tend to progress up the employment ladder “faster than someone off the street,” Milliken said.

Sweeney said Chesapeake has a variety of recruiting events, such as a drill-rig worker recruiting event this week through PA CareerLink, and a job fair in Towanda in October that attracted more than 1,000 applicants.

Chesapeake also employs a Scranton-based professional recruiting firm to recruit local employees for NOMAC, Chesapeake’s wholly owned drilling subsidiary.

Company officials plan to build a residential and training facility in Bradford County this year to serve as quarters for out-of-town employees and as NOMAC’s Eastern U.S. Training Facility, which will help the company train workers, Sweeney said.

Coming tomorrow: Schools gear up to train Marcellus Shale workers.

Copyright: Times Leader

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.

Copyright: Times Leader

Tunkhannock expecting $439,975 check in March from Chesapeake Energy.

By Rory Sweeneyrsweeney@timesleader.com
Staff Writer

Tunkhannock Township in Wyoming County announced this week it received the signed agreement for its gas-drilling lease with Chesapeake Energy for about 76 acres of public land.

The up-front bonus check for $439,975 is expected in early March.

The township board had signed the lease in October, but the process was delayed because of municipal regulatory requirements.

“We were part of the Wyoming County land group, but we had to put it out for bid being a municipality,” said Judy Gingher, the township’s secretary.

The bid stipulated, however, that the winning bidder had to have at least 1,000 acres already leased in the township, and no one entered a bid.

The township received $5,762 per acre, which was $12 per acre more than for private landowners, Gingher said. The township currently has no plans for the money.

“They’re looking possibly just to invest it,” Gingher said.

Gingher said there were minor community concerns about surface-drilling activity because much of the land is in the township’s 42.5-acre Lazy Brook Park, which hosts a variety of community functions.

The land might be off limits to surface activity because of building-setback requirements and deed restrictions.

Much of it was purchased in 2006 through hazardous flood mitigation buyouts, which carry emergency management agency restrictions that prohibit permanent structures.

Township Solicitor Paul Litwin was unsure if drilling would be considered a restriction, though, because the drilling infrastructure is temporary and the resulting well pad likely wouldn’t impede flood flow, which is the purpose of the restrictions.

Structures are permissible “as long as you don’t increase the flood height with the structure, and a pad would basically be flat once you put the structure in,” he said.

“The question we’ll have to resolve if they want to put a pad there is that a permanent structure, and we’ll have to look at that if and when they want to do that. … They haven’t applied yet, so we haven’t looked at it yet. … My guess is it probably would not be considered permanent.”

Brian Grove, the director of corporate development at Chesapeake, declined to comment on the lease or plans for the property.

Copyright: Times Leader

On WVIA show, members of industry admit not telling public about methods.

By Rory Sweeneyrsweeney@timesleader.com
Staff Writer

PITTSTON TWP. – Members of the gas-drilling industry acknowledged on Thursday evening a failure to inform the public about their procedures, and the audience at the WVIA call-in show reminded them of that often.

Viewers of the “State of Pennsylvania” program repeatedly questioned – through the Internet, phone calls and in person – potentials for polluting, environmental justice issues and the industry’s willingness to abide by regulations.

There were even sporadic bursts of applause when in-house questions touched on contentious issues. “I don’t want it (Marcellus Shale drilling) in Luzerne County,” said Audrey Simpson of Shavertown “Take a trip up to Dimock (Township in Susquehanna County) and see what the hell is happening to those people up there.”

There, methane contamination in 13 wells is being attributed to gas-drilling activities. Those affected have brought a lawsuit against the local driller, Cabot Oil and Gas.

A Cabot representative was not among the panel.

In fact, the only driller there was Chesapeake Energy, represented by David Spigelmyer, the vice president of government relations for Chesapeake’s Eastern Division. The company has defended the industry by itself at several similar public-input meetings.

Early on during the hour-long program, the vehemence was foreshadowed by Gary Byron, a former state Department of Environmental Protection official and the president of Dux Head Environmental Services, a consulting firm for the drilling industry.

“The industry and the DEP don’t agree on a lot, but the one thing they do agree on,” he said, is that information has lagged behind drilling activity so much that “there are a lot of misconceptions about the industry.”

He added that many of the companies need to be educated about regulatory methods in Pennsylvania. “They want to comply,” he said.

Bruce Bonnice, who has worked for several resource-conservation groups but also leased his land to Carrizo Oil and Gas and now consults for them, likened the risks to everyday transportation. “I’m not sure I’m going to have a car accident every time I get in my car, but I still travel,” he said.

Spigelmyer noted plans for taxing the industry are premature because the Marcellus hasn’t yet shown it’s worth refocusing capital from other gas shales in southern states. He added that regulatory overhead would further stunt that process.

Copyright: Times Leader

EnCana Corp. will work with WhitMar Exploration Co. in seeking gas in the Marcellus Shale in the region.

By Rory Sweeneyrsweeney@timesleader.com
Staff Writer

EnCana Corp., perhaps the largest natural-gas producer in North America, has chosen Luzerne County as its entry point into the Marcellus Shale, thanks to an exploratory agreement with WhitMar Exploration Co.

WhitMar, a Denver-based exploratory company, has already leased about 25,000 acres in Columbia and Luzerne counties, including in Fairmount, Ross, Lake, Dallas, Lehman, Jackson, Huntington, Union, Hunlock and the northwest corner of Plymouth townships.

However, it doesn’t have the resources to develop the entire leasehold, so it went looking for a partner. It found EnCana, a Calgary-based company with U.S. headquarters in Denver that produced 1.4 trillion cubic feet of natural gas in 2008, according to its Web site. For comparison, Chesapeake Energy, another industry leader with a local presence, produced 839.5 billion cubic feet that year, according to its 2008 annual report.

Spokesman Doug Hock said EnCana has no other interest in the Marcellus Shale, a ribbon of gas-laden rock about a mile underground that stretches from upstate New York into Virginia but centers on Pennsylvania.

The agreement, however, only commits EnCana to the two exploratory wells WhitMar has agreed in its leases to create, Hock said. “Further activity will really depend on the results of the first two wells,” he said. “The first couple wells that we’re drilling are really to prove it up and ensure that we have viable program there.”

Both wells, while exploratory, will also be put into production, he said, though it’s unclear where pipelines will be installed to connect the wells to regional gas lines.

The deal gives EnCana 75 percent interest in the leasehold and control as the operator, according to WhitMar spokesman Brad Shepard. “Being an exploration company, we’re a small company,” he said. “At least in the Marcellus, we get a partner to develop it with.”

He said there were several companies interested, but that EnCana was “the best fit” thanks to similar interests in testing, drilling and size of the project.

Both companies are also interested in increasing the acreage in the leasehold, he said. Within the area the current lease encompasses, there are perhaps 25,000 to 30,000 acres that aren’t leased, Shepard said. “What we’re trying to do now is basically trying to infill all the land that we have now,” he said.

According to Hock, EnCana, whose business is currently 80 percent gas production, is in the process of splitting the company into two “pure plays” to “enhance the value” of each: EnCana, which would focus entirely on gas, and Cenovus Energy Inc. to oversee its oil-sands operations in Canada.

“We’re in that process right now,” Hock said. “The deal is expected to close at the end of the month.”

EnCana slid on the New York Stock Exchange this week, from $59.40 per share on Monday to $56.11 on Friday.

Both companies are also interested in increasing the acreage in the leasehold.

Copyright: Times Leader

Luzerne County property owners hope to have their own deal by year’s end.

By Rory Sweeneyrsweeney@timesleader.com
Staff Writer

Lease signing begins today for members of the Wyoming County Landowners group who have accepted a gas-drilling offer from Chesapeake Energy.

The signings could foreshadow what other local landowners are hoping comes to them soon. The South West Ross Township Property Group and Columbia County Land Owners Coalition confirmed on Friday that they, too, are in talks with Chesapeake.

The Columbia group, which represents roughly 80,000 acres in Columbia, Luzerne, Sullivan and Lycoming counties, hopes to complete a deal before the end of the year, according to an e-mail sent out to its membership.

The Ross Township group, which includes roughly 10,000 acres around Ross Township, is affiliated with the Columbia group, but also making its own discussions with Chesapeake, said Ken Long, a member of the group’s executive committee.

Group leaders expect monetary terms to be similar to the one Chesapeake offered to the Wyoming group: a five-year lease at 20-percent royalties, plus a $5,750-per-acre sign-up bonus. It includes a five-year option Chesapeake could exercise for another $5,750 per acre.

But other recent events with drillers locally could foreshadow what landowner hope to never see. The state Department of Environmental Protection issued a notice of violation to Cabot Oil and Gas Corp. for a gas spill earlier this week and ordered the company to cease hydraulic fracturing in Susquehanna County until it had completed a comprehensive engineering assessment and updated its pollution-prevention plans.

The company is currently drilling seven new wells in the county that will require fracking, which forces water, sand and chemicals into the gas-laden Marcellus Shale to fracture the rock and release the gas.

The company has 21 days to complete the assessment and 14 days to update the plan. Once it’s approved, the company will have 21 days to implement the plan.

The situation is one that landowners like the Wyoming group hope to avert with their in-depth leases. The group has been split alphabetically for this weekend’s signing. Those with surnames beginning with “A” through “L” should show up between 9 a.m. and 7 p.m. on Saturday at the American Legion Post 510 in the village of Black Walnut on U.S. Route 6 between Laceyville and Meshoppen. Everyone else is assigned to between 10 a.m. and 4 p.m. on Sunday. Those who can’t make their assigned day may show up on the other one.

Landowners who can’t make either day should be receiving an e-mail with documents that need to be signed and mailed to Chesapeake. The $1,000-per-acre initial payment will be sent by mail.

On the Web

To sign up property for a gas lease: http://forms.askchesapeake.com/landowner

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

Copyright: Times Leader

Landowners in Wyoming County get some good protections, attorney says.

By Rory Sweeneyrsweeney@timesleader.com
Staff Writer

The lease that Chesapeake Energy is offering to Wyoming County Landowners group members is clearly a compromise between landowners and the company, according to an experienced gas-law attorney, but includes “many of the protections that we like to see for landowners are built into this lease.”

Dale Tice, an attorney with Williamsport-based Greevy and Associates who has clients in the Wyoming group, characterized the wording in the lease offer as “very competitive with the leases we’ve seen.”

Tice, whose office has gained somewhat of an expertise in gas law since companies began descending on Lycoming County a few years ago, said he usually disapproves of a five-year re-leasing option being available to companies, but noted that it’s “understandable” why Chesapeake would want that because it’s leasing so much land that it will take years to explore the whole area.

He also said that the $20-per-year fee paid if a well is shut off to eliminate production during a bad market “is as good as they’re going to do.”

While Tice declined to identify negatives in the lease and cautioned that his comments shouldn’t be construed as legal advice, he noted several positives: including in-depth wording to limit production-unit sizes, termination of the lease on land that isn’t part of a production unit, the company’s responsibility to pay property-tax rollbacks on Clean and Green properties and mutual written agreement on placement for wells, pipelines and other infrastructure. Additionally, he said, the lease requires that all infrastructure sited on a property must be tied into gas production at the property.

“There’s always somewhat of a question there because, although the gas company and the landowner must mutually agree in writing as to the location, the gas companies always add some language that says lessors can’t be unreasonable” about siting infrastructure, he said.

Though there is no specific reference to siting waste-deposit wells on the properties, “sometimes,” he said, “if they (landowners) don’t give them (drilling companies) the right, they don’t need to take it out, so to speak.”

The lease is “clearly the product of extensive dialogue between the parties,” Tice said. “I think this does a good job of striking a compromise where the landowner has a lot of good protections worked into it.”

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

Copyright: Times Leader