Posts Tagged ‘chief executive officer’

DAVID WETHE Bloomberg News

HOUSTON — Halliburton Co. and Schlumberger Ltd., trying to forestall a regulatory crackdown that would cut natural-gas drilling, are developing ways to eliminate the need for chemicals that may taint water supplies near wells.

At risk is hydraulic fracturing, or fracking, a process that unlocked gas deposits in shale formations and drove gains in U.S. production of the fuel. Proposed regulations might slow drilling and add $3 billion a year in costs, a government study found. As one solution, energy companies are researching ways to kill bacteria in fracturing fluids without using harmful biocides.

“The most dangerous part in the shale frack is the biocide,” said Steve Mueller, chief executive officer at Southwestern Energy Co., the biggest producer in the Fayetteville Shale of Arkansas. “That’s the number-one thing the industry is trying to find a way around.”

House and Senate bills introduced in 2009 would force producers to get permits for each well. That and other proposed environmental measures would cut drilling by as much as half and add compliance costs of $75 billion over 25 years, according to the U.S. Energy Department.

Biocides are employed because the watery fluids used to fracture rocks heat up when they’re pumped into the ground at high speed, causing bacteria and mold to multiply, Mueller said. The bacteria grow, inhibiting the flow of gas.

“You basically get a black slime in your lines,” he said. “It just becomes a black ooze of this bacteria that grew very quickly.”

Halliburton said March 9 that it’s testing a process using ultraviolet light to kill bacteria in fracking fluid.

About 80 percent of gas wells drilled in North America, including virtually all of those in the Marcellus Shale in Pennsylvania, are stimulated or fractured in some way, Tim Probert, corporate development chief at Halliburton, said.

“It’s incumbent on the industry to continue to develop tools and technologies that are compatible with minimizing the environmental impact of the stimulation process,” Probert said.

Copyright: Times Leader

Rail cars of sand to be used in Marcellus Shale natural gas extraction get a home.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

DURYEA – Investment spurred by Marcellus Shale natural gas exploration has transformed an antiquated, weed-ridden rail yard just north of Pittston into a state-of-the-art transloading terminal teeming with rail and trucking activity on an almost daily basis.

Over the last year, Reading & Northern Railroad Co. sunk $100,000 into Pittston Yard, laying new track to accommodate 100 new rail cars and constructing a facility to store and hold up to 800 cars of sand to be used in hydraulic fracturing, or “fracking,” operations at Marcellus Shale drill sites throughout Northeastern Pennsylvania, said Reading & Northern President Warren A. Michel.

“The reason for our success is that we are the largest facility in the region capable of handling hundreds of rail cars of sand. We now have 130 (sand) rail cars at the yard and we’ll be expanding substantially over the next six months,” Michel said.

The company rewarded its full-time employees for their work on the project and throughout last year with an extra week of paid vacation this year and a paid trip to their choice of either Disney World; Branson, Mo.; Williamsburg, Va.; London; or a cruise.

“This is our way of saying thank you for a job well done,” company owner and Chief Executive Officer Andrew M. Muller Jr. said in a press release.

Between Reading & Northern and its customers, who are involved in the Marcellus Shale fracking and drilling industries, Michel expects another half-million dollars of investment with the laying of more track, construction of bucket conveyors and four holding silos for the sand, and construction of facilities to handle other aspects of the drilling process, such as pipe delivery and the transportation of brine water from the area.

The upgrade and expansion project began about a year ago after Reading & Northern officials began hearing that drilling companies were challenged with the logistics of transporting and storing significant volumes of sand, pipe, water and other materials, according to a marketing release prepared by Daniel Gilchrist, Reading & Northern vice president of marketing and sales.

After several discussions with Reading & Northern partner Norfolk Southern, company officials believed they could offer substantial benefits to customers, Gilchrist said.

Pittston Yard, formerly Coxton Yard, was built in 1870 by the Lehigh Railroad as a hub to move coal from the region to Eastern markets. And while the yard had had been serving many Reading & Northern customers, it was overgrown with weeds and trees and was underutilized.

Many of the tracks were suitable only to hold empty storage cars, and it was not apparent initially how much track and acreage was actually there and available for use, Gilchrist said.

After showing the site and meeting with several potential customers, Reading & Northern began discussions with D&I Silica and its transload operator, the Myles Group, and developed a plan.

Work began in November with tree removal, clearing of several acres, surfacing of more than 5,200 feet of track and construction of a 600-by-80-foot unloading pad. By Dec. 7, the company had more than 50 loaded rail cars on site ready to be transloaded. The following day, at 3 a.m. in the midst of a snowstorm, the first trucks were loaded with sand for customers.

Because of a number of factors including the Marcellus Shale drilling industry, Reading & Northern has hired 10 new employees over the last two months. The company also recently purchased two new locomotives, 101 rail cars and six miles of short-line track between Monroeton and Towanda, where much of Northeastern Pennsylvania’s Marcellus Shale economic activity is focused, Michel said.

Copyright: Times Leader

N.J. gas firm eyes $300M income

ANDREW MAYKUTH The Philadelphia Inquirer

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

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

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

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

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

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

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

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

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

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

Copyright: Times Leader