Posts Tagged ‘David Raven’

A panel offers an update on legislation, which turns out to center on money.

By Rory Sweeney rsweeney@timesleader.com
Staff Writer

BENTON – With interest increasing in drilling for natural gas in the Marcellus Shale, there’s a whole swirl of legislation related to it being considered in Harrisburg, but much of it comes down to money.

“A lot of what goes on in Harrisburg is who’s gonna pay to make the pie and who’s going to get a piece,” said state Rep. Garth Everett, R-Lycoming. “The fight is how we’re going to divide up the pie. … We want to see the Commonwealth get its fair share, but we also don’t want to … go New York on them and drive them away.”

Everett was among two other representatives – Karen Boback, R-Harveys Lake, and David Millard, R-Columbia – who spoke on Thursday evening at a meeting of the Columbia County Landowners Coalition.

A state Department of Environmental Protection official and a Penn State University educator were also on the panel.

Everett described the intention and status of nearly 20 bills throughout the legislature, noting that they fit into four categories: taxation and where the money goes, water protection, access to information and surface-owner rights.

While some likely won’t ever see a vote, Everett said a few will probably pass this session, including a bill that would require companies to release well production information within six months instead of the current five years.

He said a tax on the gas extraction also seems likely “at some point.”

For the most part, the industry received a pass at the meeting, with most comments favorable. One woman suggested companies might underreport the amount of gas they take out and questioned what’s being done to help landowners keep them honest.

Dave Messersmith of Penn State suggested that an addendum to each lease should be the opportunity for an annual audit of the company’s logs.

Robert Yowell, the director of the DEP’s north-central regional office, said the rush to drill in the shale happened so quickly that DEP is still trying to catch up with regulations. Likewise, he said, companies are still becoming acquainted with differences here from where they’re used to drilling.

“When they first came to town, I don’t think they realized how widely our streams fluctuated,” he said.

He added some public perceptions need to be changed – such as the belief that people aren’t naturally exposed to radiation all the time – and that he felt confident that “this can be done safely.”

In response to contamination issues in Dimock Township in Susquehanna County, DEP is upgrading and standardizing its requirements for well casings, Everett said. He added that it’s being suggested the contamination in might have been caused by “odd geology.”

“Every time humans do anything, there’s an impact on the land,” he said. “We just need to balance this right so that we end up with something we’re happy with when we’re done.”

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

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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.

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