Posts Tagged ‘David Keller’

Firm accused of causing gas infiltration, but it’s unclear if rules knowingly violated.

By Rory Sweeneyrsweeney@timesleader.com
Staff Writer

Cabot Oil & Gas Corp. caused natural gas to infiltrate into at least nine homes in Susquehanna County, according a letter of violation from the state Department of Environmental Protection, but it remains unclear whether Cabot knowingly violated any regulations.

“The more important part of the investigation is still ahead of us,” DEP spokesman Mark Carmon said. “We know where it came from. The two more important things are how did it get there … and more importantly, how do we get it out of the wells.”

The company, however, is not confident in DEP’s findings, according to spokesman Ken Komoroski, believing the letter is “unnecessary” and claims as fact conclusions that haven’t been proven.

The situation has become an example of a statewide issue regarding the unknown consequences of gas drilling. Water contamination concerns have caused environmental agencies, including DEP and the Susquehanna River Basic Commission, to increase their regulation and oversight, hindering drillers’ efforts to secure permits quickly.

The letter cites Cabot for an “unpermitted discharge of natural gas” into state waters, for failure to prevent the discharge and failure to submit certain records on time. Though no financial punishment has been levied, Cabot was told to install gas detectors in nine homes where methane was detected in water wells and to continue providing water to four of those where there’s a safety threat from gas buildup, Carmon said.

“It’s disappointing to have a letter which is, at best, premature directed to the company that it violated environmental standards when that conclusion hasn’t been reached yet,” Komoroski said. “We’re hopeful, and I stress hopeful, that our hydrogeologist will actually be able to determine what caused the natural gas to be in the water. We don’t know that we’ll be able to do that.”

Cabot hit a bump on Jan. 1 in its exploration for natural gas in the Marcellus Shale when the cap exploded off a private water well near one of the company’s drilling sites.

While drilling hasn’t come to Luzerne County yet, companies have expressed interest in properties along its northern border. Fairmount Township Supervisor David Keller said several properties have been leased for years, and hundreds of acres, including his 90, were scheduled to be leased before the economic recession hit the industry. “The economy fell apart before they got the money to us,” he said.

The company and DEP agree that the gas isn’t from Marcellus Shale, a pipeline leak or naturally occurring sources above ground. They also concur that the gas is likely from a gas-laden upper layer of underground Devonian shale, of which the Marcellus Shale is a component but thousands of feet deeper, Carmon said. Marcellus Shale is generally at least 5,000 feet underground, while DEP determined the gas contaminating the water wells came from a shale layer roughly between 1,500 feet and 2,000 feet deep, Carmon said.

The company has cemented the upper Devonian shale layers of several wells, effectively extending the cement seals from the bottom of the water-bearing region, where the seals usually stop, to the bottom of the upper shale layers. The department has been trying to isolate the exact source of gas, seeing whether the extended seals produce a drop in water-contamination levels, Carmon said.

Because the method of contamination hasn’t been determined, Carmon said it’s too early to tell if Cabot knowingly violated regulations. “I’m not aware of anything blatant or anything like that, but, again, we want to know how did it happen,” he said.

Komoroski said the company is concerned about the effect the letter will have on its public image, particularly since it questions many of the department’s conclusions. It believes it filed all drilling reports on time, and that the gas detectors aren’t necessary. In fact, Komoroski said, the product DEP suggested Cabot buy wasn’t even a gas detector.

Cabot plans to meet DEP’s deadline for a response and is also scheduling an in-person meeting, as requested.

Copyright: Times Leader

Bill, 2 Supreme Court decisions could alter how operations are taxed, located.

By Rory Sweeneyrsweeney@timesleader.com
Staff Writer

Three recent state-level actions – a legislative bill and two state Supreme Court decisions – could affect how natural gas wells are sited and taxed. Earlier this week, state Rep. Bill DeWeese, D-Greene County, proposed a bill to tax underground gas deposits by adding their assessed values to property taxes. The driller would pay, and the tax revenue would, for the first year, be used to reduce the municipality’s millage to equal the previous year’s tax revenue. The millage – a dollar tax on every $1,000 of assessed property value – could be increased in subsequent years.

“If a municipality needs the same amount of money as last year, then yes, the millage would go down. But, the reality is they’re probably going to keep ours the same and get more money from them (the drillers),” said Marianne Rexer, a business professor at Wilkes University.

The bill is in response to a 2002 state Supreme Court decision that no law exists to tax natural gas, as there does to tax coal and other minerals.

Stephen Rhoads, president of the Pennsylvania Oil and Gas Association, said the tax wasn’t utilized by many counties before, and “it is a false hope that this is going to bring a revenue stream to counties and school districts any time soon.”

The state Supreme Court ruled in February on two western Pennsylvania cases regarding municipalities’ rights to restrict drilling.

In one case, the court found municipalities can’t control where drilling infrastructure is permitted, as that would interfere with regulations already promulgated in the state Oil and Gas Act.

But they can indicate in which zoning districts drilling may be allowed “in recognition of the unique expertise of municipal governing bodies to designate where different uses should be permitted in a manner that accounts for the community’s development objectives,” the court’s opinion states in the other case.

The ruling might not have much effect in the Northeastern Pennsylvania municipalities of interest to drillers. Many don’t have zoning ordinances, and others, such as Fairmount Township in northwest Luzerne County, want less restrictive ones.

Several landowners have sought drilling leases, township Supervisor David Keller said, and he has no interest in restricting their options. The township now yields to the county’s Planning and Zoning office, but Keller said the township is looking into writing its own zoning ordinance because “it would give us more leeway to let people do more with their property as they see fit.”

Copyright: Times Leader