Posts Tagged ‘energy’

BY STEVE McCONNELL (STAFF WRITER)
Published: June 28, 2010

With the boom in Marcellus Shale natural gas development throughout the region, area educational institutions are growing to keep up with work force demands.

New training, certification and degree programs are being created at local schools to ensure local job skills are tailored to white- and blue-collared job needs related to the natural gas drilling industry.

Already, Lackawanna College and Johnson College in Scranton, Keystone College in LaPlume and the Pennsylvania College of Technology in Williamsport represent the growing trend of educational institutions offering course work and the hands-on training needed to become employable in one of Pennsylvania’s growing industries.

And, college administrators agree the reason for the trend is simple: There’s a demand for it by both the industry and potential workers who want the training and the jobs that come with it.

An industry-financed study conducted by Penn State’s department of energy and mineral engineering, which offers an undergraduate degree in natural gas engineering, expected Marcellus Shale natural gas extraction efforts to create more than 200,000 jobs in the state and have an overall $18 billion economic impact by this year.

“Marcellus Shale is going to be big business,” said Christopher Kucharski, Lackawanna College spokesman. “Problem is there is just nobody trained to handle the positions they want filled.”

It appears a change is under way.

Larry Milliken, director of Lackawanna College’s energy program and a natural gas instructor, just finished guiding the first class of 18 students through its first year of study to earn an associate degree in natural gas technology.

Based at the college’s New Milford campus in the center of the action near gas fields in Susquehanna County, the program is preparing students for well tender jobs – a position that requires monitoring and maintaining natural gas wells during their lengthy production phase.

There is generally one well tender employed for every 20 to 40 natural gas wells, Mr. Milliken said, and the entry-level annual salary is $36,000. Sixteen students have paid internships with natural gas drilling companies this summer in western Pennsylvania, he added.

“The industry has been very supportive of wanting to get (our students) on board,” he said. The college also is hiring three additional instructors this year to accommodate the increase in students who have enrolled in the natural gas technology degree program for the 2010-11 school year.

At Lackawanna College’s new campus in Hawley, college administrators recently announced a new certificate course for fall centered on training accounting assistants, accounting clerks and administrative assistants specifically for the oil and gas industry.

Tracy Brundage, managing director of work force development at Pennsylvania College of Technology, said administrators decided to take the leap into offering natural gas drilling-related courses this year. The decision followed an in-house study that determined growing employment opportunities because of the prevalence of natural gas development under way in the region.

“The jobs are going to be around for a long time,” Ms. Brundage said. “We’re just getting started … to get our arms around what is happening … and how we need to respond.”

Pennsylvania College of Technology has just begun offering training and certification classes in welding specialized for the industry’s infrastructure and commercial driver’s license classes, and has tweaked some of its academic majors – including diesel and electrical technology – to include natural gas drilling-related coursework.

So far, about 350 students have enrolled in the non-degree programs.

The college plans to expand its offerings, perhaps to include training for natural gas well operators and emergency response technicians, Ms. Brundage said.

Keystone College, known for its focus on the liberal arts, is also jumping on board.

Robert Cook, Ph.D., the college’s environmental resource management program coordinator, said the college will be offering a handful of new courses early next year that include mapping underground natural resources tied specifically to natural gas.

The environmental resource management degree, a four-year Bachelor of Science, has had its “highest level of interest this year” in part because of the Marcellus Shale boom and an expectation that jobs will be available for graduates, Dr. Cook said. The degree, which includes environmental law courses, can also prepare a would-be environmental regulator, he added.

“It’s clear energy is going to be an important subject for decades,” said Dr. Cook, a professional geologist. “It’s thrilling to see our discipline become an important skill set.”

Keystone is also hiring a new instructor to teach undergraduate courses within a new natural gas and petroleum resource curriculum that is now under development.

Marie Allison, director of continuing education at Johnson College, said the college will be offering its first class in pipe welding next week tailored to techniques needed by the natural gas industry. The college also will offer a class for advanced welders to prepare for certification in a specific style of welding demanded by the industry.

The college’s welding program had been defunct since 2001, because of declining enrollment, but the multitude of pipes and fittings that will be laid by the industry in the coming years yields greater demand for skilled welders, she said.

“They need welders,” Ms. Allison said. “We want to give someone the fundamentals and give them the opportunity to find a job.”

Contact the writer: smcconnell@timesshamrock.com

View this article here.

Copyright:  The Scranton Times

The economic benefits associated with the responsible and environmentally sound development of the Marcellus Shale’s abundant, clean-burning natural gas reserves are overwhelming. Tens of thousands of good-paying jobs are being created across the Commonweal of Pennsylvania, where Marcellus development has been underway for several years. Hundreds of millions of dollars in tax revenues are being generated to local and state government. And Pennsylvania consumers, who continue to struggle with nearly double-digit unemployment rates, are seeing the benefits of shale gas development in the form of lower energy costs.

However, the story of the Marcellus Shale in New York State is a very different one. You see, in terms of geology, the Marcellus Shale formation is not considerably different in New York than it is in Pennsylvania. The technologies used to safely and effectively reach thesejob-creating resources are the same, too. But environmental regulators there have kept this production off-limits, denying the creation of thousands of jobs and countless other economic benefits to the region, despite the fact that the nation’s first natural gas well was completed in Fredonia, NY in 1821. At the same time, some elected state leaders are also working to implement an even more far-reaching moratorium on shale gas development.

Recognizing how critical this development is for Upstate New York’s struggling economy, and for our nation’s energy security, Marcellus Shale Coalition (MSC) president Kathryn Klaber joined a broad group of organizations this week in a letter to the State Assembly urging their support to move forward with responsible shale gas development: Here are key highlights from that letter:

We need your support for this compelling economic development opportunity, one that could benefit the State and localities significantly for years to come. We should embrace our State’s ability to bring New York-produced gas to New York customers, and by so doing create new opportunity and prosperity in our own State.

Natural gas is the cleanest fossil fuel known to man – is a solution to reducing our nation’s carbon footprint, and it will greatly improve New York’s and America’s energy independence. … And natural gas is abundant; the Marcellus Shale alone could supply natural gas to the entire United States for 20 years or more.

Based on economic projections in Pennsylvania, where the Marcellus is now being explored, Marcellus Shale development in New York will generate more than $1.4 billion in annual economic impact, based on 300 wells drilled – including more than $100 million in lease payments to landowners, $32 million in state tax revenue and tens of thousands of new jobs over time. In Broome County, a recent study that showed that 2,000 wells would annually generate more than $7.4 billion in economic activity, and nearly $400 million in wages, salaries and benefits. Also, more than $600 million in property tax income and $22 million and $20 million in state and local taxes would be generated. All of this – in just one county.

The folks in New York, especially those along the Southern Tier where Marcellus development would occur, are doing their part to educate, engage and inform the public, and key stakeholders, about the overwhelmingly positive benefits associated with shale gas production and how safe the process actually is. Last night, a group of elected officials, academics, landowners, and energy and labor representatives met in Binghamton to discuss these benefits, and to dispel the myths about the production of shale gas. The Ithaca Journal reports this today under the headline “Meeting touts benefits of tapping into Marcellus Shale”:

According to Syracuse University Earth Sciences professor Don Siegel, these concerns are more myth than reality. “This is the first environmental issue that I’ve thrown my hat into the ring on,” he said. “As a hydrogeologist, I really am almost offended by some of the opposition that’s trying to paint a picture of what groundwater resources are like that is completely wrong.”

“New investments will be made in a region where multimillion — and even multibillion — dollar investments have not been seen to this level in years,” said Broome County Executive Barbara Fiala,” and we can do all this while protecting the environment.”

“Our campus was one of the fastest-growing campuses in the United States, and virtually all of our graduates were going out into very good-paying energy industry jobs,” Drumm said. “The energy industry creates great jobs — lots of jobs — and we were heavily involved in our colleges in training for those jobs.”

Labor unions are also speaking out for responsible shale gas development in New York on behalf of their members. This from a WICZ-TV report:

Local union representatives were on hand as well, supporting the notion that jobs and money are on the coat tails of hydro-fracking.

Alex Barillo of Laborers Local 785 says he’s seen the benefits of drilling south of the border in Pennsylvania, and on the Millenium Pipeline where he says workers have seen a gross income of approximately 35 million dollars.

“That’s $35 million in gross wages that went to local workers right here so that they could have health insurance, they can have retirement, and they could pay their mortgages and so that they can do the things they do every day in their communities,” Barillo said.

We encourage you, your employees, colleagues, businesses associates, friends and family to visit Marcelluscoalition.org/get-involved, and join this fight for a more prosperous economy that leverages these resources into permanent, family-supporting jobs and stable supplies of domestic energy. Becoming a “Friend of Marcellus” will help ensure that you are informed and educated about the opportunities and critical issues surrounding this development, especially as it relates to moving forward with Marcellus development in New York.

Copyright: Marcelluscoalition.org

• “There were a lot of people around here who had a nicer Christmas last year because of the gas busines

• “The greatest economic and clean-energy opportunity of our lifetime

• “This is a good thing for us”

Marcellus Shale creating “family-sustaining jobs”: John Moran Jr., president of Moran Industries, described the arrival of the natural gas industry as “a wonderful thing” that will both create “family-sustaining jobs” and lead people to finally “really believe the clouds (have) parted.” He likened the gas industry to “a blessing from God” and predicted a trickle-down effect and creation of new wealth unlike anything seen here since the long-ago lumber era. Heinz said the gas industry brings to the area “unlimited” business and employment opportunities. (Williamsport Sun-Gazette, 6/23/10)

Responsible Marcellus development benefiting “the mom-and-pops”: “The burst in industrial activity creates new business opportunities and spinoff benefits for established companies, said Marilyn Morgan, president of the Greater Montrose Chamber of Commerce. “We’ve got a lot of entrepreneurs,” she said, including vendors selling food at drilling sites and start-up laundry services cleaning clothes for gas-field workers. “The mom-and-pops are starting to see some economic benefits,” Morgan said. “Restaurants are seeing a difference.” (Towanda Daily-Review, 6/23/10)

Sen. Mary Jo White: Marcellus Shale “the greatest economic, clean-energy opportunity of our lifetime”: “It must be noted that this activity has generated billions of dollars for landowners, including the state, through lease and royalty payments, as well as hundreds of millions of tax dollars through corporate and personal income, sales, fuel and other taxes. … Without question, we must ensure that drilling occurs in a responsible manner. Thanks to increased permitting fees, we now have twice as many permit reviewers and inspectors on the ground than before the Marcellus rush. … The Marcellus Shale presents perhaps the greatest economic and clean-energy opportunity of our lifetime. (Pittsburgh Post-Gazette, 6/23/10)

Marcellus Shale expanding PA’s workforce, small businesses: “According to Heinz, M-I SWACO initially will employ about 20 to 30 people at or working out of the Moran site, but he predicted the numbers will grow. … Among the employment opportunities are skilled positions for field engineers. Those hired locally will be those with both high school and college degrees, who will train before going out to well sites, according to Heinz. (Williamsport Sun-Gazette, 6/23/10)

Congressman Joe Pitts: Marcellus Shale will benefit local companies, “reduce energy costs while improving air quality”: “A Penn State University estimate shows that there is now enough gas in the Marcellus Shale to supply the entire U.S. for more than 14 years. Obviously, the Shale is not going to be tapped all at once and will not be the sole source of gas in the U.S., meaning that wells in Pennsylvania will provide a source of natural for decades. It is estimated that natural gas exploration could lead to more than 100,000 jobs statewide. While Pennsylvania’s 16th Congressional District is not located above the shale,local companies will certainly benefit. … With many Pennsylvanians looking for work we shouldn’t pass up this opportunity to create new jobs. Responsible development of the Marcellus Shale can reduce energy costs while improving air quality. (Pottstown Mercury,6/23/10)

Marcellus Shale generating new jobs, significant revenue for local, regional businesses: “Larry Mostoller’s company moves up to 1 million gallons of water a day for Cabot Oil and Gas Corp. “My company has grown 300 percent in one year.” “I employ 80 percent of my workforce from Susquehanna and Wyoming counties,” he said. “I’m definitely going to go over 100 (employees) this year.” Despite controversy about the economic, environmental and employment impacts of Marcellus Shale natural gas development, the industry generates new jobs and significant revenue for regional businesses. … A recent Penn State University study financed by the gas industry concluded that drilling companies spent $4.5 billion in the state in 2009 and helped create 44,000 jobs. (Citizens Voice, 6/23/10)

Marcellus development helping local school districts, “Taxpayers like the idea”: “A school district in Bradford County is now caught up in the natural gas boom. Towanda Area School District agreed Monday night to a $500,000 gas lease with Chesapeake Energy. … “This is added money that we didn’t have before, new money,” said school board vice president Pete Alesky. … There won’t be big gas drilling rigs on the actual school property. The lease only allows the gas company to drill underneath the land. If the gas company finds gas there, then the school district can make more money by getting 20 percent royalties. “They should get in it. The opportunity is there to get some money and they should get it,” said taxpayer Howard Shaw of Wysox Township. … Taxpayers who talked with Newswatch 16 liked the idea of the district getting the surge of cash. (WNEP-TV, 6/22/10)

Marcellus Shale ‘crop’ sustaining family farms: “Natural gas is a new crop for farmers in many parts of the state. It is harvested thousands of feet below the topsoil. This new revenue it generates has allowed countless farms to stay in business, repair and upgrade their barns and buy new equipment to plant their crops. The lease revenue has saved many farms from development and allowed farmers to invest in modern no-till equipment to farm in a more efficient and environmentally friendly way – both are good for water quality and the environment. (Wilkes-Barre Times Leader LTE, 6/22/10)

Marcellus Shale send rail yards booming, boosting “overall economic development”: “A $500,000 upgrade of the historic rail yard in Fell Twp., which was built in 1825 to help ignite the region’s coal boom, is a good example of the region’s new gas industry’s ability to boost overall economic development and of the growing importance of rail freight to the region. The project will make possible the easy delivery, by rail rather than truck alone, of many of the materials used in the booming Marcellus Shale drilling industry. … The rail yard upgrade is a good example of how to use the gas industry to boost general economic activity. (Scranton Times-Tribune Editorial, 6/22/10)

PA prof.: Marcellus “energy, income, jobs a good thing for us”: “Debate about the economic effect may overlook the impact on the ground, said John Sumansky, Ph.D., an economist at Misericordia University in Dallas. “The burst of energy and income and jobs coming from this spills over to a sector where the economy has been lagging in this region,” Sumansky said. “This is a good thing for us, especially in the fields of transportation and construction.” It is a good thing for Latona Trucking and Excavating Inc., a Pittston company that does well-site preparation and hauls water for Chesapeake. On some days, up to 60 of the company’s 120 employs do gas-related work, said Joseph Latona, company vice president. … “This will probably be our best year ever in business.” (Towanda Daily-Review,6/23/10)

200,000 well-paying jobs will be generated over the next decade: “It is likely, with the continued development of the Pennsylvania Marcellus Shale and the aging of the current natural gas industry workforce, that more than 200,000 well-paying jobs will be generated over the next decade, with an even greater number as drilling activity increases. … There is an immediate need for truck drivers/operators, equipment operators, drillers, rig hands, geologists/geophysical staff, production workers, well tenders, engineers, land agents and more. (PA Business Central, 6/22/10)

Marcellus Shale is saving small businesses, allowing folks to have “a nicer Christmas”: “Donald Lockhart sees a big difference over the last two years at his restaurant and gas station in South Montrose along Route 29, a major artery for drilling-related traffic. “We’ve better than tripled our business since last year,” Lockhart said as he sat in a booth in the dining area while a flatbed truck hauling an industrial generator idled outside. “I’m selling more Tastykake than they are in the grocery store.” … “They saved my business by coming here.” … Dozens of small businesses in the Endless Mountains region benefit from gas development, Mostoller said. … “My employees live better because they work in this industry,” Mostoller said. “There were a lot of people around here who had a nicer Christmas last year because of the gas business,” Lockhart said. (Towanda Daily-Review, 6/23/10)

The game-changing resource of the decade: “The extraction of shale natural gas is set to become a major growth industry in the United States. Recently, Amy Myers Jaffa wrote in the Wall Street Journal that natural gas could become “the game-changing resource of the decade.” Already Pennsylvania, West Virginia, Louisiana, and other states are beginning to reap the economic benefits of a natural gas boom. A study by Penn State University predicted that the natural gas industry in Pennsylvania alone will be responsible for the creation of 111,000 jobs and for bringing in an additional $987 million in tax revenue to the state by 2011. Natural gas extraction has been one of few industries growing (without government subsidies) during this recession. (Biggovernment.com Op-Ed, 6/23/10)

Copyright: Marcelluscoalition.org

by Laura Legere (staff writer)
Published: June 20, 2010

One natural gas well has been drilled into the Marcellus Shale in Lackawanna County, but much more development is on the county’s doorstep.

Already more than an eighth of the county’s land has been leased to companies planning to drill in the Marcellus Shale, according to deeds recorded with the county.

The total land leased – about 38,000 acres – amounts to an area roughly twice the size of Scranton.

Those leases carry a soft deadline for drilling: Many of them have a primary term of five or seven years, which means the companies have to make some progress to develop the gas within that time or renegotiate to extend the agreement and risk losing the lease to a competitor.

Because the vast majority of the leases in the county – 816 of them – were recorded in 2008, the incentive for developing the gas is approaching.

The land rush has touched a vast area of the county. Land in 20 of Lackawanna’s 40 municipalities has been leased, with the largest concentration of leases in northern municipalities, including Scott, Benton and Greenfield townships, as well as areas of the Abingtons.

Many of the county’s most prominent farmers, including the Manning, Eckel, Roba and Pallman families, have signed leases.

Although much of the land has been leased outside of the population centers along the Lackawanna Valley, leased parcels are not strictly on farms or in rural areas.

Baptist Bible College leased 114 acres on its South Abington Twp. campus.

The Abington Hill Cemetery Association leased 120 acres in South Abington along the Morgan Highway.

Leases have also been agreed to on land near residential areas. For example, 38 acres have been leased along the 900 and 1000 blocks of Fairview Road in South Abington.

Property owners with leases include private individuals, but also churches, golf courses, businesses and community associations. The Greenfield Township Sewer Authority leased 7.3 acres; the Fleetville Volunteer Fire Company leased 65 acres in Benton.

The Newton Lake Association and the Associates at Chapman Lake, two community associations that own their namesake lakes and the area around them, both signed leases.

Religious organizations have also signed leases, including the Harmony Heart church camp in Scott, a 59-acre parcel in Scott owned by Parker Hill Community Church, the Evangelical Free Bible Church in North Abington Twp., and Community Bible Church in Greenfield.

Three national energy companies, Oklahoma-based Chesapeake Appalachia, Texas-based Exco Resources, and Texas-based Southwestern Energy, hold nearly all of the leases.

The amount of Lackawanna County land leased for gas development surprised even people who have followed the subject closely for years.

Lee Jamison, a leader of the multi-municipal Abington Council of Governments, which has hosted educational events and speakers regarding Marcellus Shale drilling since 2008, did not know the extent of the leasing or its reach to areas outside of the rural northwest of the county.

He said despite educational events and active gas drilling in nearby communities, Lackawanna County municipalities have to do more to follow changing legislation and precedent-setting court cases to prepare for the coming development.

“I still think there’s quite a lack of preparedness on the part of the local municipal officials,” he said. “Often times you get conflicting reports and confusing stories.”

Mr. Jamison, who recently lost in the Republican primary race for state representative in the 114th House District, made Marcellus Shale a central part of his platform.

“Over 90 percent of the people I’ve spoken to are in favor of developing the Marcellus resource,” he said, “but they want it done correctly. With that caveat.”

Mary Felley, the open space coordinator for the Countryside Conservancy and a representative of Dalton in the Scranton-Abingtons Planning Association, said residents and municipal officials are “aware that it’s coming but not quite here.”

“I come to my local borough meetings, and people ask what can we do as a borough to regulate this, and we don’t know,” she said.

Because of unsettled case law regarding what role municipalities can take in regulated drilling, “we’re not getting a whole lot of clear guidance on what we can and cannot do here,” she said. “That’s kind of scary.”

There has also been a dearth of local training specifically targeting municipal officials on preparing for gas development. Even if there were such meetings, “my concern is people may not attend those until there’s a lot more activity in the county,” she said.

“This is the way we’ve evolved apparently: you respond to urgent threats you can see. You don’t respond to slow, impending threats that are over the hill somewhere.”

Contact the writer: llegere@timesshamrock.com

View article here.

Copyright: The Scranton Times

NJ-based Delaware River Basin Commission places unnecessary moratorium on Marcellus production, denying economic benefits, jobs to Pennsylvanians

It’s hard to imagine President Kennedy had the denial of jobs and revenue for residents of Pennsylvania in mind when he signed a bill in 1961 creating the Delaware River Basin Commission (DRBC). But nearly a half-century later, the DRBC of today bears little resemblance to the compact established almost five decades ago — one that was put in place to promote economic growth by providing a mechanism for equitable distribution of the Delaware’s waters.

Today, unlike similarly structured, intergovernmental bodies – such as the Susquehanna River Basin Commission (SRBC) – the DRBC is working aggressively to shut down any and all natural gas exploration that may take place, now or in the future, in the eastern portion of the Marcellus Shale.

This week, following the decision last month to ban new shale permits in the area, the West Trenton, N.J.-based organization took additional steps to bring responsible Marcellus Shale natural gas production to a standstill by putting forth a de facto moratorium. How’d it do that? Easy: DRBC simply gave itself the authority to unilaterally freeze exploratory Marcellus production wells in the basin altogether.

Well aware of exactly what’s at stake, the Marcellus Shale Coalition (MSC) wasn’t bashful in telling the Philadelphia Inquirer what it thought of the DRBC decision:

Kathryn Klaber, executive director of the Marcellus Shale Coalition…said extending the temporary ban on new permits to include exploratory wells only added “layers of unnecessary red tape” without any environmental benefit.

“The DRBC’s decision to deny Americans the benefits of clean-burning, job-creating natural gas from the Marcellus Shale is misguided and unfortunate,” she said. New technologies, she added, are reducing the overall water usage and land disturbance.

“At the same time, this production is creating tens of thousands of jobs and delivering affordable, clean-burning energy to struggling families and small businesses. Our hope is that the DRBC will recognize this fact and act accordingly, putting commonsense solutions and policies ahead of agendas,” she said.

Safely producing clean-burning natural gas from the Marcellus Shale in Pennsylvania remainsa powerful job creation engine. In fact, according to a recently updated Penn State University economic impact study, this tightly regulated production is projected to create nearly 212,000 jobs over the next decade.

Many in Pennsylvania understand how important this opportunity is for the Commonwealth, especially in regions of the state facing high unemployment and ongoing economic struggles. And like the MSC, supporters of environmentally safe natural gas production understand how critical it is to get this right, balancing commonsense environmental safeguards with the economic opportunities before us.

Here’s what one northeastern Pennsylvania natural gas advocate told the Associated Pressabout safely developing these abundant, domestic and clean-burning resources near the Delaware River basin:

Energy companies have leased thousands of acres of land in Pennsylvania’s unspoiled northeastern tip, hoping to tap vast stores of gas in a sprawling rock formation — the Marcellus Shale — that some experts believe could become the nation’s most productive gas field.

Plenty of folks like Matoushek are eager for the gas, and the royalty checks, to start flowing — including farmers who see Marcellus money as a way to keep their struggling operations afloat.

“It’s a depressed area,” Matoushek said. “This is going to mean new jobs, real jobs, not government jobs.”

Adding new and unnecessary layers of burdensome regulations and red tape – aimed at halting job-creating Marcellus Shale natural gas production – will not help deliver more affordable supplies of homegrown energy. The DRBC’s shale gas moratorium will not help drive down our dependence on unstable regions of the world to keep our economy fueled, nor will it help create jobs at a time when they’re most needed. Quite the opposite, in fact.

Copyright: Marcelluscoalition.org

By Joe McDonald (Staff Writer)
Published: June 10, 2010

In a ruling with potentially far-reaching consequences in Pennsylvania’s lucrative and burgeoning natural gas industry, a federal judge in Scranton on Wednesday ruled a Susquehanna County landowner can sue Cabot Oil & Gas Corp. on the grounds it fraudulently misled him into a signing a lease at a lowball rate.

The suit, filed by John Kropa, is one of several cases across the state filed by landowners who claim natural gas drilling companies fraudulently induced them to sign leases that locked them into $25-an-acre rates. In a modern-day version of the California gold rush, companies have been rushing to make deals with landowners across Pennsylvania so they can tap into natural gas from the Marcellus Shale, a geological formation that runs under most of the state.

U.S. District Court Judge James M. Munley, in an eight-page memorandum and order, noted Cabot’s agents told Mr. Kropa that the company “would never pay more than $25 per acre for the lease,” yet his “neighbors were apparently paid more than $25 an acre for leases on their property.”

“They relied on this statement and signed the lease, only to discover later that these statements were false and that others had signed far more lucrative deals” with Cabot, Judge Munley said.

Cabot’s representatives also warned that if Mr. Kropa did not sign a lease, then Cabot would take it anyway by negotiating leases with neighbors and “capture the gas,” leaving Mr. Kropa “without a lease or gas on their land,” the memorandum stated.

Mr. Kropa signed an oil and gas lease with the West Virginia company in 2006 and received a $1,275 payment for allowing the company to explore his 51-acre spread in Brooklyn Twp.

Mr. Kropa’s claims are not unique, especially for many of the leases signed before 2008, said attorney Stephen Saunders, a Scranton energy attorney.

“I think the fraud type claims will most likely be significant in cases where individual plaintiffs own larger tracts of land, say more than 100 acres, or situations where small contiguous landowners control significant areas in the aggregate hundreds of acres or more and are litigating as a group,” Mr. Saunders said.

If Mr. Kropa is successful in proving he was the victim of fraud, he could theoretically renegotiate a new lease, assuming the company still wants the gas under his land.

Judge Munley’s court order also dealt with another volatile issue in the gas drilling business: royalty payments. Mr. Kropa along with other landowers had claimed they were shortchanged by the drilling companies because they were deducing expenses from the royalties.

Judge Munley said that issue had been dealt with by the Pennsylvania Supreme Court, which ruled the royalty agreement was valid under Pennsylvania law.

Contact the writer: jmcdonald@timesshamrock.com

View this article here.

Copyright:  The Scranton Times-Tribune

STEVE MOCARSKY smocarsky@timesleader.com

An attorney and a gas company land man warn that attractive lease offers from energy companies might not always be as generous as they seem.

Kit Akers, lead land man for new ventures at EnCana Oil & Gas, said other natural gas companies could come in throwing around relatively large bonus money offers to Luzerne County landowners if EnCana’s exploratory drilling is successful in Fairmount and Lake townships.

“Sometimes people get blinded by bonus money and aren’t always thinking about protecting themselves in the long run,” Akers said.

Luzerne County landowners might be experiencing bonus envy, considering that gas companies in Susquehanna and Bradford counties are offering $5,000 to $6,000 per-acre bonuses for drilling rights leases while EnCana is offering $2,500.

But Akers said the value of drilling rights in Luzerne County will increase if EnCana’s exploratory drilling is successful.

“Just the very fact that (EnCana’s acquiring state) permitting for the wells made the area more attractive to competition; that alone increases the potential value,” Akers said.

But Akers said landowners should consider more than just the bonuses and royalties offered in exchange for drilling rights.

“The WhitMar (a company EnCana has purchased leases from) lease form is very friendly to landowners. The lease is 14 pages long and loaded with surface protections, generous well location fees and other benefits to landowners. Other leases can be as short as two pages and include none of these protections. People sometimes get blinded by the money offered on the front end for a lease that is not worth as much to them,” Akers said.

Garry Taroli, an attorney with the Wilkes-Barre law firm Rosenn Jenkins & Greenwald, has been representing landowners in lease negotiations for about three years.

“The leases have become more friendly to property owners. With competition comes more benefits from the property owners’ point of view,” he said.

Many newer leases require minimum setbacks from structures and water sources, extra payments for damaged timber, reimbursements for harm to water or land and testing of water before, during and after drilling activities – paid for by the gas company, Taroli said.

Taroli advised that landowners at least have a lease reviewed by an attorney before signing it.

Some leases he’s seen contain language that could be a headache for landowners. While most leases set specific time limits for drilling, one lease he saw allowed a gas company to drill “for so long as gas could have been produced on the property.”

That term, Taroli said, “could be until doomsday.”

Jeffrey Nepa, an attorney with Nepa & McGraw in Carbondale and Clifford, said he’s happy to see property owners communicating on Internet forums to try to stay informed about lease issues.

“It’s nice to see people pooling their resources together to battle against the gas companies,” Nepa said.

“We live in the age of information. … We see that the gas companies are controlling the information. And a lot of times we see them put out misinformation. But at the end of the day, it comes down to caveat emptor – buyer beware.”

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

Copyright: Times Leader

A company drilling for natural gas says it is already working with local officials.

STEVE MOCARSKY smocarsky@timesleader.com

Although the community at large hasn’t been privy to it, some local emergency management officials have been working closely with an energy company to draft emergency response plans to address any local natural gas drilling-related catastrophe that might occur.

EnCana Oil & Gas USA is slated to begin drilling a well at a site in Fairmount Township in about a month, and many local residents, officials and emergency responders have become anxious, feeling left-in-the-dark about whether local emergency responders have the equipment, knowledge and protocols in place to handle a drilling-related catastrophe.

But Wendy Wiedenbeck, public and community relations advisor for EnCana, said local firefighters would not be responsible for containing or fighting a gas well fire or gas release at a well site.

“In the event of an incident, local emergency responders will be asked to provide support to our operations personnel who are specially trained to deal with incidents at oil and gas locations,” Wiedenbeck said.

“Should a serious well-control incident occur, such as release of gas or fire, EnCana will look to local emergency responders to provide support while EnCana calls upon well-control experts to assist in addressing such an incident,” she said.

The well-control company EnCana has identified in an Emergency Response Plan submitted to the state Department of Environmental Protection is Wild Well Control in Houston, Texas. A second call would be placed to Cudd Well Control, also in Houston.

“Depending on the severity of the well-control issue, they would respond as soon as possible. In the meantime, the area around the well – the exact area again depends on the well-control issue – would be secured and/or evacuated. This is another example of how Encana and local emergency responders will work together,” Wiedenbeck said.

Wiedenbeck said Encana has experienced well-control incidents in the past, and the risks are inherent in the oil and natural gas industry.

“Our training, systems, and protocols are designed to fit the level risk associated with the activity. Our goal is to minimize the risk and to operate in a safe manner. Safety is our number one priority,” she said.

County office works on plan

Steve Bekanich, coordinator of the Luzerne County Emergency Management Agency, said last week that he has had several conversations with EnCana officials, but a volunteer with the county EMA “has taken the lead for my office. … We are close to completing an emergency response plan.”

Bekanich said Barney Dobinick, who is also the EMA coordinator for Lake Township, is “handling all direct talks with EnCana for ease of operations. He’s briefing me almost on a daily basis. … I’m very comfortable with what Barney has been doing. He’s been a trusted staff member for 20 years.”

Dobinick said a 230-page set of response guidelines is near completion. After meeting with EnCana representatives in mid-June, the plan will be shared with area municipal officials for their approval and made available to the public. Sometime in the next few, a public meeting also will be scheduled to gather input and answer questions.

Until the plan is complete, Dobinick said it would be counter-productive to release any aspects of it until EnCana has reviewed it and possible changes are made.

“If we determine there’s a better way, we’ll amend it. We’re not hiding anything. We just want to have a complete plan in place (before it’s released),” he said.

Bekanich said adjustments can be made even after the plan is disseminated to municipal officials and input is gathered from the public.

Dobinick did say, however, that local emergency responders would handle some emergencies at well sites, for example, a brush fire, an office trailer or vehicle fire or a hazardous materials spill.

Jack Dodson, emergency management coordinator for Dallas Township and Kunkle fire chief, has said his major concern was having emergency personnel who might have to extract disaster victims from a well-related catastrophe prepared to do so.

Dobinick said there are response guidelines for mass-casualty incidents, getting basic and advanced life support on-scene and implementing a disaster plan for hospitals and medical air transport.

“And depending on the seriousness of an event, it would determine how much, if any, of an area would be evacuated,” Dobinick said.

Off-site also part of concern

Dobinick said he’s more concerned about local responses to off-site incidents, such as the crash of a truck carrying “residual backflow” material, or “frack water” used in the hydraulic fracturing of the Marcellus Shale formation.

He said fire departments would handle the initial stabilization of such an incident and work to prevent contamination of any nearby waterway. A state-certified hazardous material clean-up team would come in if needed to remove the material and any contaminated soil.

Dobinick said he feels “very comfortable” with the guidelines and hopes to have the majority of the document complete by the end of the week. He’s still waiting on some information from the county 911 office and the American Red Cross.

Plus, Bekanich noted that Luzerne County is a member of and has access to the resources of the East Central Pennsylvania Regional Task Force – a seven-county all-hazards task force formed in 1998 along with eight other such task forces in the state in response to terrorist threats.

Bekanich said 48 professionals from Luzerne, Wyoming, Schuylkill, Colombia, Northumberland, Montour and Berks counties attended a training event/exercise last week at the county EMA headquarters and worked on a scenario to determine “how we would bring logistics and resources together for an event such as a catastrophic well failure.”

If a catastrophe did occur, Bekanich said, “it’s not like we would be in this on our own. We have resources and technical expertise from seven other counties to rely on for support.”

Dobinick also said EnCana has commissioned a transportation study and will be sitting down with officials from the Lake-Lehman School District to address any concerns about incidents that could affect school bus routes.

Several area residents have voiced concerns about emergency response and traffic at public meetings over the last few months and have been dissatisfied with information supplied by EnCana.

Company schedules meetings

Wiedenbeck said meetings with stakeholders are scheduled for this week.

“Our goal is to understand how these agencies work together, how our operations impact them and how we can work together to make sure we collectively work together so local emergency responders continue to do the great job they’re already doing,” Widenebeck said.

The purpose of sitting down with Dobinick and others is to determine the capabilities of local responders and “if there are gaps, how do we fill them.”

In some instances, Wiedenbeck said, there might be grants available to purchase emergency response equipment that might be needed – for example, a new radio system.

“Our job is to work together with emergency responders, the recreation district, township supervisors and the school district to understand existing protocols and how those protocols might be impacted if there is an incident. We also need to understand existing resources, identify potential gaps and solutions for addressing the gaps, if any,” Wiedenbeck said.

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

Copyright: Times Leader

PSU report touts job growth, increased taxes; planned severance tax a concern. Others say study inflates benefits.

STEVE MOCARSKY smocarsky@timesleader.com

Development of the Marcellus Shale has the potential to create more than 200,000 jobs in Pennsylvania during the next 10 years, according to an update to a Penn State University study released on Monday.

The report warned, however, that imposing a state severance tax on the natural gas industry, as Gov. Ed Rendell has proposed, could induce energy companies to redirect their investments to other shale “plays” in the United States. Plays refers to natural gas development in other shale developments.

If that happened, any revenues gained from a severance tax could be offset by losses in sales taxes and income taxes resulting from lower drilling activity and natural gas production as producers shift their capital spending to other shale plays.

Some, however, have expressed doubt about the impact of a severance tax and claims and assumptions about economic benefits and job growth in the report.

The update, commissioned by the Marcellus Shale Coalition, was conducted by professors with the university’s Department of Energy and Mineral Engineering. It supplements a study the department released last July.

The updated study also states that during just the next 18 months, gas drilling activities are expected to create more than $1.8 billion in state and local tax revenues.

“At a time when more than half-a-million people in Pennsylvania are currently out of work, the release of this updated report from Penn State … confirms the critical role that responsible energy development in the commonwealth can play in substantially, perhaps even permanently, reversing that trend,” Kathryn Klaber, president and executive director of the Marcellus Shale Coalition, said in a press release.

“Last year alone, Marcellus producers paid more than $1.7 billion to landowners across the state, and spent more than $4.5 billion total to make these resources available. By the end of this year, that number is expected to double, and millions of Pennsylvanians will find themselves the direct beneficiaries of that growth,” Klaber said.

The updated study finds that Marcellus development will create more than 111,000 new jobs by 2011, a result of an increase in the number of wells developed from the roughly 1,400 in operation today to 2,200 expected during the next 18 months.

All told, by 2011, this work is expected to deliver nearly $1 billion in annual tax revenue to state and local governments.

In addition to generating tax revenue, natural gas development stimulates the economy in two major ways: business-to-business spending and payments to land owners, the study states.

Exploring, drilling, processing and transporting natural gas requires goods and services from many sectors of the economy, such as construction, trucking, steelmaking and engineering services. Gas companies also pay lease and royalty payments to land owners, who also spend and pay taxes on this income.

In 2009, Marcellus gas producers spent a total of $4.5 billion to develop Marcellus Shale gas resources, drilling 710 wells that year. The writers estimate that this spending added $3.9 billion in value to the economy and generated $389 million in state and local tax revenues, and more than 44,000 jobs.

Based on energy company plans to drill 1,743 wells this year, value-added dollars, tax revenue and jobs creation are expected to approximately double for 2010, according to the report. And by 2015, the numbers are expected to nearly double from this year.

Some question PSU report

While the report paints a rosy economic picture for the state, assuming that no severance tax is imposed, some are leery of assumptions and claims made in the report.

Dick Martin, coordinator of the Pennsylvania Forest Coalition, an alliance of outdoor enthusiasts, landowners, churches and conservation groups, first notes a disclaimer in the study, that Penn State does not guarantee the accuracy or usefulness of the information.

Martin said the study contains some flaws.

While the study states that development costs are higher in the Marcellus Shale than in other shale plays, “the industry itself tells its shareholders that the Marcellus is a low-cost gas deposit,” he said.

“Chesapeake Energy has told its shareholders that it can make a 10 percent return when gas prices are at only $2.59 per thousand cubic feet. Gas price today is $4.08,” Martin said.

Martin also said the study relies on data and assumptions supplied by the gas industry and that it looks only at benefits and not at costs to communities, infrastructure, environment and regulators.

He said the study does not look at data from other states that either imposed or raised severance taxes. He said there is no evidence that severance taxes affect either production or investment in states that impose or raise severance taxes.

Martin pointed to a review by the state Budget and Policy Center of the study Penn State released in July, saying the review is still valid because the update is based on the 2009 report and used the same methodology.

The review claims that the 2009 Penn State report “overplays the positive impacts of increased natural gas production, while minimizing the negative.”

Among other flaws, the report “exaggerates the impact a severance tax would have on development of the Marcellus Shale and overstates what taxes the industry now pays, going so far as to count fishing and hunting license fees paid by those who benefit from the industry as a tax due to industry activity,” the review states.

Also according to the review, the report acknowledges that many drillers will avoid corporate taxes, paying the much lower personal income tax or avoiding taxes altogether through deductions.

The report also “inflates the economic impact of expanded gas production in Pennsylvania to puff up the industry’s economic promise,” the review states.

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

Copyright: Times Leader

A Back Mountain workshop addresses potential problems with Marcellus Shale drilling.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

LEHMAN TWP. – Back Mountain residents who attended a workshop on “Natural Gas Drilling and Drinking Water” on Thursday received a mini education on how to protect their wells from potential contamination by migrating natural gas as well as what two regulator agencies are doing to protect state waterways from the same potential threat.

Bryan Swistock, a water resources extension associate from the Penn State Cooperative Extension, presented an hour-long talk about natural gas exploration in the Marcellus Shale formation, how problems with drilling operations could potentially affect drinking water supplies, and what residents can and should do to protect them.

The program was hosted by the Cooperative Extension, state Sen. Lisa Baker, state Rep. Karen Boback, Back Mountain Community Partnership, the Susquehanna River Basin Commission and the state Department of Environmental Protection.

Swistock said about 41 percent of all private drinking water wells fail at least one water quality test, so it’s smart to test one’s well water regularly even without the threat of natural gas from drilling wells migrating into them.

Swistock said energy companies are required to test all water supplies within 1,000 feet of a drilling site before drilling so they have a baseline to compare test results if there is suspected contamination of a water supply by drilling activity. Some companies, such as EnCana Oil and Gas, which is poised to begin drilling in the Back Mountain in July, test wells within 1 mile of a drill site.

Swistock said residents should make sure the person collecting water samples works for a state-accredited lab. He said he’s talked to several people who told them the person who took samples was the same person who negotiated a land lease with them.

For folks who live outside the area in which the energy company pays for testing but want to play it safe, he said a full round of tests can cost up to $1,000. However, testing for the most common elements associated with Marcellus Shale drilling – methane, chloride, barium and total dissolved solids (TDS) – costs only about $150.

Indicators of water problems include foaming or bubbling water or spurting faucets, salty or metallic tastes, changes in water color or odor and reductions in water quantity or flow.

Also making presentations on Thursday were Michael McDonnell, a water quality specialist with DEP, and Tom Beauduy, deputy director and counsel for the Susquehanna River Basin Commission.

Copyright: Times Leader