Posts Tagged ‘gas drilling’

Industry reps cite permitting delays; DEP head says issues to be resolved.

DALLAS TWP. – Representatives from every aspect of the state’s burgeoning natural-gas drilling industry met on Tuesday and, though differing on specifics, emphasized that Pennsylvanians stand upon a multibillion-dollar windfall, but only if the state streamlines its permitting process.

The hearing at Misericordia University was organized by the state Senate Republicans’ policy committee to identify potential problems with drilling the Marcellus Shale about a mile underground, but the senators instead were told that many of the problems lie with the state itself.

“Fundamentally, what the industry has said to us is, ‘We need to know what the rules are,’” said Tom Beauduy, the deputy director of the Susquehanna River Basin Commission. The commission oversees water removal from the river basin.

Industry representatives were dire with their characterizations. The industry is experiencing “permitting delays unlike we have ever seen in any other state,” said Wendy Straatmann, president of Ohio-based Exco-North Coast Energy Inc. “Why would I spend so much of our company’s time and resources when I can go to some other state and use the gas and oil manual and follow the regulations?”

Ray Walker, a vice president with Texas-based Range Resources Corp., agreed that an inclusive regulations manual would help companies “put our money into protecting the environment and not paperwork.” He noted that smaller companies are considering drilling here, but won’t if the permitting process remains slow and taxes increase. That could keep development slow, he said.

That’s a prospect that few at the hearing wanted. John Hanger, the acting secretary of the state Department of Environmental Protection, assured that his agency was “working to make sure that gas can be produced and water protected.” Part of the lag has come from a dearth of disposal options for the fluids used to hydraulically fracture the rock, and Hanger said his favored alternative was to find ways for the companies to simply inject them underground.

DEP would need to increase its regulatory force to keep up with the permitting and inspections demand predicted based on industry desires, he said, noting the department has recently requested substantially increasing its well-permitting fees.

Still the Republican senators felt DEP is clamping down too tightly. “When I ran for Senate, I was mad at the state for over-regulating my industry,” said Sen. Mary Jo White, R-Venango County, who had worked for an oil corporation. “I think we’re heading down that road again.”

William Brackett, the managing editor of a newsletter that reports on the Barnett Shale, said gas drilling there “is a prime reason the north Texas economy has only caught a cold and not the flu.”

John Hanger, acting DEP secretary, said part of the lag has come from a dearth of disposal options for the fluids used to hydraulically fracture the rock.

Copyright: Times Leader

Industry reps cite permitting delays; DEP head says issues to be resolved.

DALLAS TWP. – Representatives from every aspect of the state’s burgeoning natural-gas drilling industry met on Tuesday and, though differing on specifics, emphasized that Pennsylvanians stand upon a multibillion-dollar windfall, but only if the state streamlines its permitting process.

The hearing at Misericordia University was organized by the state Senate Republicans’ policy committee to identify potential problems with drilling the Marcellus Shale about a mile underground, but the senators instead were told that many of the problems lie with the state itself.

“Fundamentally, what the industry has said to us is, ‘We need to know what the rules are,’” said Tom Beauduy, the deputy director of the Susquehanna River Basin Commission. The commission oversees water removal from the river basin.

Industry representatives were dire with their characterizations. The industry is experiencing “permitting delays unlike we have ever seen in any other state,” said Wendy Straatmann, president of Ohio-based Exco-North Coast Energy Inc. “Why would I spend so much of our company’s time and resources when I can go to some other state and use the gas and oil manual and follow the regulations?”

Ray Walker, a vice president with Texas-based Range Resources Corp., agreed that an inclusive regulations manual would help companies “put our money into protecting the environment and not paperwork.” He noted that smaller companies are considering drilling here, but won’t if the permitting process remains slow and taxes increase. That could keep development slow, he said.

That’s a prospect that few at the hearing wanted. John Hanger, the acting secretary of the state Department of Environmental Protection, assured that his agency was “working to make sure that gas can be produced and water protected.” Part of the lag has come from a dearth of disposal options for the fluids used to hydraulically fracture the rock, and Hanger said his favored alternative was to find ways for the companies to simply inject them underground.

DEP would need to increase its regulatory force to keep up with the permitting and inspections demand predicted based on industry desires, he said, noting the department has recently requested substantially increasing its well-permitting fees.

Still the Republican senators felt DEP is clamping down too tightly. “When I ran for Senate, I was mad at the state for over-regulating my industry,” said Sen. Mary Jo White, R-Venango County, who had worked for an oil corporation. “I think we’re heading down that road again.”

William Brackett, the managing editor of a newsletter that reports on the Barnett Shale, said gas drilling there “is a prime reason the north Texas economy has only caught a cold and not the flu.”

John Hanger, acting DEP secretary, said part of the lag has come from a dearth of disposal options for the fluids used to hydraulically fracture the rock.

Copyright: Times Leader



Senate hearing set for today at Misericordia, symposium Wednesday at Woodlands.

While landowners are imagining the gobs of cash they stand to make from natural-gas drilling in the Marcellus Shale rock layer underlying much of the region, Don Young hopes there’s room to imagine a few other images, such as gas pipelines crisscrossing once-pristine farmland, benzene contaminating groundwater supplies and an industrywide press to tap every inch of lucrative ground.

And that doesn’t include the Fort Worth, Texas, resident’s concerns about the psychological effects of celebrity-fronted publicity campaigns linking the drilling to patriotism and national security. “It’s Orwellian to see it happening here,” he said. “You’ve got American flags on each well.”

But the leader of Fort Worth Citizens Against Neighborhood Drilling Ordinance hopes the travails that now plague his home above the Barnett Shale are averted in the similar Marcellus Shale. “What you have here in Fort Worth on a grand scale is apathy. People felt, ‘We can’t stop it. It’s too big. It’s big oil,’ ” he explained. “The average busy person, they don’t have time to worry about gas drilling. … They have families, they have lives, they’re struggling, and if you have a few companies handing out money saying, ‘Here’s some money, just forget about it,’ ” they’ll do just that, he said.

Local regulators and educators are already taking steps to avoid those effects, and they’ll take a few more this week. This afternoon, the state Senate Republican’s Policy Committee will meet at Misericordia University to hear testimony from people familiar with dealings in the Barnett Shale on the potential effects awaiting Pennsylvania.

Several of the same speakers will be featured in discussions Wednesday morning at the Woodlands Inn & Resort in Plains Township, as the Joint Urban Studies Center holds a Marcellus Shale Symposium. The public is invited to either presentation, but the symposium has a registration fee.

“We are front and center to the development of this new industry,” said state Sen. Lisa Baker, R-Lehman Township, who requested the hearing. “I think having the hearing here demonstrates, in my judgment, that we’re doing all we can to ensure that our laws and regulations are appropriate and that if we need to make changes,” the legislature is ready to do so.

She said she hopes to get answers to questions she often hears from constituents, including potential downsides to drilling and whether current regulations are enough to curtail them.

According to several of the speakers, Pennsylvania might have a lot of ground to make up before it’s running even with the industry. “I just don’t understand the state’s set-up. Why wouldn’t that be a requirement to disclose how well the wells (are performing)?” asked John Baen, a University of North Texas professor and real-estate expert who has 250 wells on his property in the Barnett Shale. “If it’s all proprietary, then how do we know what the true wealth is?”

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

Copyright: Times Leader

Agency said Susquehanna River has enough water, but withdrawal timing is key.

WILLIAMSPORT – The Susquehanna River watershed has enough water to supply drilling for natural gas in the Marcellus Shale, members of the Susquehanna River Basin Commission assured at a public hearing on Tuesday.

The trick is to take it when there’s a lot available, and that requires planning.

“It’s not so much the consumptive use,” said Thomas Beauduy, the SRBC’s deputy director.

“It’s when it’s being used. It’s how it’s being used.”

To illustrate the point, Michael Brownell, the commission’s Water Resources Management Division chief, used a local drilling site owned by Chief Oil & Gas LLC as an example.

The site, tucked along rolling ridges east of Hughesville, is permitted for water withdrawal from a creek almost six miles away, meaning the water must be trucked. Water could probably be piped in from a smaller creek about half a mile away, but only in certain seasons when its flow is high enough, Brownell said, which would require forethought.

It’s a matter of submitting the application early, doing the research and picking the right time, he said.

Water use is a major factor for drilling in the shale about a mile underground.

Companies use an innovative horizontal drilling and hydraulic fracturing process that’s succeeded in similar gas-containing formations in Texas. Each fracturing process can use as much as four million gallons of water. Only about half of that is recovered, Beauduy said.

And while the commission is interested in recycling and reusing water, he acknowledged that every use is assumed to be a complete loss of the water from the watershed so that any recovery is seen as a bonus.

That said, both SRBC representatives noted that, in the aggregate, water withdrawal for well drilling would equal perhaps 28 million gallons per day, which is about half as much as PPL Corp.’s nuclear Susquehanna Steam Electric Station in Salem Township.

The hearing, which was meant to discuss proposed SRBC regulation changes, brought out concerns from both the industry and residents.

Potter County Commissioner Paul Heimel, who was representing the County Commissioners Association of Pennsylvania, noted two concerns.

First, that the chemicals used in the fracturing process haven’t been identified, and second, that it was unclear if the industry would be allowed to withdraw water during drought conditions.

Scott Blauvelt of East Resources, Inc. represented the Marcellus Shale Committee, which is made up of 28 members of regional gas and oil associations.

Copyright: Times Leader

Gas-drilling firm increased original request tenfold.

After it received approval to withdraw about 2 million gallons of water daily from the Susquehanna River, Chesapeake Energy Corp. is trying to increase that allowance roughly tenfold.

The Susquehanna River Basin Commission approved the original allowance in September, but Chesapeake applied earlier this week for a modification of the approval to allow withdrawing 20 million gallons each day.

The approval is only for natural-gas drilling in eight counties in New York and 15 counties in Pennsylvania, including Luzerne.

Chesapeake did not immediately return a request for comment.

Whether the request is approved remains to be seen.

“They can request however much, but that doesn’t mean that’s what the commissioners would ultimately approve,” SRBC spokeswoman Susan Obleski said. “We have gotten a few others (requests for withdrawal increases) … but certainly no increase like this.”

The increase seems to be to allow multiple well drillings each day, she said. New techniques, called hydrofracturing, have made it economical to attempt extracting gas from Marcellus shale deposits deep underground, but the drilling is heavily water intensive, requiring millions of gallons for each “fracing” process.

She noted the SRBC is considering changing its rules so that each well pad would require a withdrawal permit instead of one for the company’s entire leased area.

The commission is scheduled to vote on the issue in December. The public can comment on the increase request or rule changes by e-mailing the commission or by attending public meetings.

If you go

The Susquehanna River Basin Commission is holding a public meeting at 7 p.m. on Oct. 21 at Lycoming College’s Academic Center’s Lecture Hall, Room D001, on Mulberry Street in Williamsport. Notice of attendance or submission of testimony should be sent to Richard Cairo at rcairo@srbc.net.

Copyright: Times Leader

Expert advises landowners to have groundwater tested before gas drilling begins.

In the rush to sign leases to drill for natural gas, some fear that dollar signs might blur landowners’ considerations of other important issues, like protecting groundwater.

But landowners are unlikely to notice most major threats to water quality, and the problems they do notice, according to Bryan Swistock, a water specialist with Penn State University, have more to do with landowner oversights than driller mistakes.

“Most of the real health concerns in water you wouldn’t even notice,” he said. “The vast majority of the complaints turn out to be something else (other than contamination from drilling), so it’s really important that people take a look at their water supply and make sure they’re not causing their own problems.”

He noted that problems often occur from faulty residential wells or other outside factors, but landowners attribute it to the drilling. Natural gas drilling sites are cropping up in the region as companies rush to tap the Marcellus shale, a layer of rock about a mile below the surface that industry experts believe is trapping billions of dollars in natural gas.

Swistock, who has done most of his research with shallow wells in western Pennsylvania instead of the deep shale wells, stressed the importance of getting water tested for a baseline before giving drillers the green light. “It’s very difficult to show that anything’s been done to your water unless you can show it was good before,” he said.

He suggested watching for sedimentation, particularly due to construction and ground disturbance, as well as metals like barium and iron showing up in groundwater.

“It’s not common, but it can happen from time to time,” he said. “If it’s going to happen, most likely it’s going to happen right around the gas well.”

Just as important are concerns over the quantity of water used, where it comes from and where it goes. The innovative horizontal drilling method used to tap the shale requires millions of gallons of water, and industry watchers like Swistock are concerned that the region lacks the treatment facilities necessary to process the tainted water that results.

In an attempt to educate landowners about these water issues, Swistock has been holding seminars through the Penn State Cooperative Extension. One is scheduled for 7 p.m. to 9 p.m. Oct. 14 at Lake-Lehman High School.

“It’s funny. You can pretty much divide the people who attend these things into two groups,” Swistock said. Those who stand to profit off the drilling generally attend but don’t get too agitated, he said. Those who won’t profit but stand to be affected by any problems do get agitated. “It’s a natural reaction. If you’re going to make money from something you’re more willing to put up with it.”

Still, Swistock noted, with all the problems, the problems with natural gas drilling are a far cry from those associated with past energy extraction activities in this region. “It certainly pales in comparison to coal mining,” he said.

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

Copyright: Times Leader

HARRISBURG, Pa. (AP) _ Five out-of-state companies are the high bidders for the right to drill for natural gas on more than 74,000 acres in Pennsylvania’s state forests.

The high bidders were among 17 companies that competed for the drilling rights over a potentially lucrative natural-gas formation known the Marcellus Shale. The 18 tracts that were put out to bid by the state forestry agency are located in Tioga and Lycoming counties in north-central Pennsylvania.

All together, the high bids total about $190 million.

Three of the companies are from Texas and two are from New York.

Copyright 2008 The Associated Press.

Posted at: Times Leader

The Associated Press
HARRISBURG — Despite opposition from environmentalists, the Rendell administration will give exploration companies thirsty to capitalize on sky-high natural gas prices new territory to drill in Pennsylvania’s state forests.

Read more Natural Gas Leases – Marcellus Shale articles

The state Department of Conservation and Natural Resources said it is ending a five-year-old moratorium on allowing new shallow wells, and that it will auction the rights to drill on an additional 75,000 acres of state forest land for the first time since 2002.

If successful in the bidding that will take place later this year, the exploration companies will be able to take a shot at two deep gas reservoirs, the Marcellus Shale formation, about 6,000 to 8,000 feet underground, and the Trenton-Black River, which is more than 10,000 feet deep.

Both are thought to contain large quantities of natural gas, and have drawn the interest of exploration companies from Texas to Canada that have asked for access to all of Pennsylvania’s 2.1 million acres of state forests.

Much of the land to be leased is in north-central Pennsylvania, and department officials argue that the deeper wells, spaced farther apart, inflict less forest damage than shallow wells, which are typically drilled closer together.

New shallow wells may only be drilled if gas is found during the development of deeper gas fields, officials said.

“We’re very excited about the opportunity,” said Stephen W. Rhoads, the president of the Pennsylvania Oil and Gas Association, “We just wish it were larger; 75,000 acres is not a whole lot of land.”

Jeff Schmidt, who directs the Pennsylvania chapter of the Sierra Club, said the department gave in to pressure from oil and gas company lobbyists, as well as legislators sympathetic to the industry.

“These are publicly owned lands and we don’t believe the average citizen supports turning over these lands to the oil and gas industry,” Schmidt said.

“We just wish it were larger; 75,000 acres is not a whole lot of land.”

Stephen W. Rhoads
Pa. Oil and Gas Association

Copyright: Times Leader

By Tom Veneskytvenesky@timesleader.com
Sports Reporter

Private landowners aren’t the only group being eyed by natural gas companies as potential lease partners.

Companies are also targeting two of the largest landowners in the region – the Pennsylvania Game Commission and state Department of Conservation and Natural Resources, hoping to develop the vast gas deposits they suspect sit below the surface.

Officials with both agencies say interest in their property – which totals thousands of acres in the region — is extremely high. Royalties and payments that companies are willing to offer to lease the land are also high, but that doesn’t mean the agencies are ready to sign on the dotted line.

Both agencies control their own destinies on those properties where they own the surface and subsurface mineral rights. When some of the properties were purchased years ago, the seller held onto the mineral rights. But on those state game lands where the Pennsylvania Game Commission owns the gas rights, numerous drilling companies have contacted the agency about its property in the northeast. The attempts have been aggressive, according to Mike DiMatteo, a geologist with the Game Commission’s oil, gas and mineral recovery program.

“Some of them came in and drew a circle from Tioga County down to Centre and over to Wayne and Pike,” DiMatteo said. “They are interested in leasing large areas.”

And the Game Commission is interested in what they have to offer … with conditions.

DiMatteo said the presence of the Marcellus shale layer under the surface of Northeastern Pennsylvania is believed to hold significant deposits of natural gas. The companies want the gas, which is at a record high price, but they need the land to access the layer of shale thousands of feet below the surface.

State Department of Environmental Protection spokesman Mark Carmon said his office has issued less than a half dozen permits for gas drilling in the Northeast and most of the interest is in Susquehanna, Wayne and Wyoming counties.

Despite the high interest, the Game Commission has so far entered into one lease agreement in the Northeast (State Game Lands 123 in Bradford County). DiMatteo said two more agreements are in the works and they are looking at more.

He added it’s too early to tell how much revenue natural gas wells would generate for the agency because the process is in the exploratory stage.

Game Commission spokesman Jerry Feaser said the agency receives an average of $2 million to $3 million a year, up significantly from an annual average of $300,000 a couple years ago. Most of that revenue is generated from active wells in the southwest and north central parts of the state.

“There hasn’t been enough development in the Marcellus formation yet to know what a typical well will produce. The companies are pretty tight-lipped about what’s there, so it’s hard to put a dollar value on the potential reserve,” DiMatteo said.

Based on the agency’s experience with wells drilled on game lands in other areas, they know what to include in a lease to protect wildlife and habitat. The agency prefers companies utilize existing timber and maintenance roads to access their wells, and areas such as wetlands, unique habitats and places holding threatened or endangered species are avoided.

Before a lease is signed, the agency conducts a resource recovery questionnaire of the game lands to assess the pros and cons. Leases typically last for five years or as long as the well is producing.

“In some areas we find we can’t take a risk with the habitat, so we won’t have any activity there,” DiMatteo said.

When the well is taken out of production, it must be capped and the area and access road must be seeded as a wildlife food plot or used as forest cover.

Like the Game Commission, the DCNR is open to the prospect of natural gas drilling on its property – just not right now. According to Teddy Borawski, minerals section chief with the Bureau of Forestry, the agency isn’t entering into any lease agreements until it completes an internal study on the matter.

The agency has wells operating from past lease agreements, and when it determines which properties it wants to make available for additional leases they will be put out for bids.

“There’s a very large amount of interest in state forest and state park land in the northeast,” Borawski said.

State park lands are off limits to gas drilling because the practice would conflict with the recreational use of the property, he added.

Borawski said leases entered into with his agency carry the strongest environmental stipulations in the state. They include a stringent environmental review, an exceedance of DEP regulations, safeguards against surface and groundwater contamination and significant setbacks from streams.

State forest and state game lands are attractive to gas companies because it is more efficient to lease large, contiguous blocks of land. Stephen Rhoads, president of the Pennsylvania Oil and Gas Association, said drilling goes as deep as 8,000 feet and extends horizontally several thousand feet, which can cover a few acres. Companies also conduct seismic exploration before they drill, and a large area is needed for the research.

Rhoads criticized DCNR’s move to wait to enter into lease agreements, because it benefited financially from the practice in the past.

“The impact of oil and gas development on the surface is trivial. There is no chronic environmental impact,” he said. “There is a more significant impact to DCNR putting wind turbines on their ridge tops.”

While DCNCR continues to study the matter, DiMatteo said the Game Commission may be ready to seek more bids in the next few months. To wait for the price of gas to increase, he said, is too much of a risk because the Marcellus formation may prove not to be profitable once drilling commences.

“These wells could be a boom or a bust. We’re willing to listen and explore, but we’ll approach it with caution,” Feaser said.

Properties breakdown

Mike DiMatteo said most of the interest in gas drilling has been for Game Lands located in Bradford, Pike, Sullivan, Susquehanna, Wayne and Wyoming counties. Here is a breakdown of how much property the Game Commission owns in those counties:

Bradford County: 53,429 acres

Columbia County: 21,532 acres

Pike County: 24,467 acres

Sullivan County: 57,752 acres

Susquehanna County: 14,358 acres

Wayne County: 20,637 acres

Tom Venesky, a Times Leader outdoors writer, can be reached at 829-7230

Copyright: Times Leader