Posts Tagged ‘Harrisburg’

Today’s Marcellus Shale news includes the Republican dominated Legislature in Harrisburg failing to reach a compromise on major tax and regulatory legislation affecting Marcellus Shale natural gas drilling companies but passing noncontroversial legislation requiring signs to spell out the GPS location of drilling pads and drilling rig sites.  With primary elections only months away, and even the most conservative constituents calling for taxing and regulating of gas drillers  in light of service cuts and local school district tax increases, the Republican Senate and House leaders are calling for Governor Corbett to alter his pro gas industry no tax/no regulation policies and reach a compromise quickly avoiding campaign issues. Additionally, DEP officials announced the proposed construction of two (2) deep well fracking waste water disposal sites in Warren County. Deep well disposal sites recently came under scrutiny after earthquakes near deep well disposal sites occurred in Youngstown, Ohio. Finally, Pennsylvania electric producers are pushing to take advantage of the Marcellus Shale natural gas boom in Pennsylvania and are moving to switch from coal dependent to natural gas dependent electrical generation plants. The electric companies are hoping to lower the cost of electricity for Pennsylvania residential and business consumers. Natural gas drilling industry leaders have predicted this positive development for Pennsylvania consumers for some time.

The (13) trial lawyers at Dougherty Leventhal Price LLP–DLP—PENNSYLVANIA TRUCK ACCIDENT AND AUTO ACCIDENT CATASTROPHIC INJURY LAWYERS—contnue to follow these and other natural gas drilling rig issues in NEPA, Central and elsewhere in Pennsylvania including Lackawanna, Luzerne, Wyoming, Sullivan, Susquehanna, Bradford, Tioga, Potter, Cameron, Clinton and Lycoming Counties.

By Robert Swift (Harrisburg Bureau Chief)
Published: August 25, 2010

HARRISBURG – Opposing parties in a high-profile bid by a gas-pipeline company to gain public utility status are attempting to reach a settlement.

The state Public Utility Commission has suspended hearings into the application by Laser Northeast Gathering LLC to become a regulated utility because of the effort to reach a settlement by Sept. 10, agency spokeswoman Jennifer Kocher said Tuesday.

Laser Northeast plans to build a 30-mile natural gas pipeline from Marcellus Shale exploration areas in Susquehanna County into southern New York, where it will connect to a larger interstate pipeline. The company has a field office in New Milford.

The Silver Lake Association, several individuals and the company have agreed to seek a settlement, Kocher said. Not all parties who filed intervention requests in the case, including some energy firms, have indicated they support a settlement, however.

The pipeline case has drawn attention because of the prospect that Laser Northeast, as a public utility, could exercise the power of eminent domain to acquire private property for the pipeline. Tom Karam, a Laser Northeast principal and Scranton native, has said the company wants to avoid land condemnation.

Under state law, a utility can exercise eminent domain, but a Common Pleas Court judge in a respective county would have to grant that power, Kocher said.

PUC Administrative Law Judge Susan Colwell held a public hearing on the case in June at Great Bend.

If a settlement is reached, it would undergo a review process with a decision by PUC near year’s end.

rswift@timesshamrock.com

View article here.

Copyright:  Citizens Voice

By Robert Swift (Harrisburg Bureau Chief)
Published: August 10, 2010

HARRISBURG – The natural gas industry is lobbying lawmakers to tax natural gas production at a lower rate during a well’s early years of production.

Proposals for a three-tiered well tax, requiring pooling together land parcels for drilling operations and making drilling a permitted use for local zoning are being advanced by the Marcellus Shale Coalition, an industry trade group. A copy of the coalition’s legislative agenda is circulating at the Capitol.

“Together, these policies will help ensure that Marcellus development remains competitive with other shale gas producing states and that critical capital investment will continue to flow into the region,” coalition president Kathryn Klaber said Monday.

Tax deadline Oct. 1

The coalition’s proposal surfaces with leaders of the House and Senate declaring their intent to pass a state severance tax by Oct. 1 and have it go into effect Jan. 1, 2011. The declaration is part of a state budget package enacted last month. Lawmakers return to session in mid-September with the Marcellus Shale and transportation funding issues competing for attention.

The newest details in the proposal focus on what production would be taxed at lower rates or exempt, an already contentious issue in Harrisburg.

Under the proposal, “high cost” Marcellus Shale wells that go to 5,000 feet or more below the surface to reach deep gas pockets would be taxed at 1.5 percent of market value of gas produced for the first five years, with a five percent tax rate kicking in after that.

So-called marginal Marcellus wells would be taxed at one percent of market value. These are described as wells not capable of producing more than 150,000 cubic feet of gas per day in a month. Wells not capable of producing more than 90,000 cubic feet of gas per day in a month would be exempt from taxes under the proposal.

Shallow gas wells would be exempt from taxes.

Market value would be defined as the amount generated through cash receipts less the cost of dehydrating, treating, compressing and delivering the gas.

As an example of high costs, the coalition cites a provision in state law that requires Marcellus producers to drill down into the Onondaga Layer which underlies the Marcellus Shale formation if the drilling takes place in a coal region. The added cost can amount to $200,000 per well, it states.

The Pennsylvania Budget and Policy Center issued a report recently criticizing tax breaks on new wells as depriving the state of tax revenue during a well’s greatest years of production.

“It would be a severance tax in name only,” said center executive director Sharon Ward.

The industry is seeking a two-sided exemption, with the reduced tax rate at the start and exemption for wells it considers low-producing, said Michael Wood, center research director. A 150,000-cubic-feet threshold is high, he said.

‘Use by right’

In addition, the coalition wants lawmakers to declare drilling a “use by right” in local zoning ordinances. That means drilling would be allowed, without the need for a major review by a local government, as long as it meets the standards specified in an ordinance. A local zoning permit would still be needed, but that would be issued relatively quickly.

This would provide for gas development in an orderly way while allowing municipalities to impose reasonable conditions on land used such as lot size and landscaping and safety features, the coalition said.

“We have problems with that,” said Elam Herr, an official with the Pennsylvania State Association of Township Supervisors. A township can’t exclude drilling under zoning laws, but local officials should be able to say where it takes place and keep it out of areas zoned for residential use, he said.

Other proposals call for providing incentives to convert state and local government and transit vehicles to natural gas fueling and giving priority to tax revenue distribution to host municipalities and counties.

Contact the writer: rswift@timesshamrock.com

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Copyright:  The Daily Review

By Elizabeth Skrapits (Staff Writer)
Published: August 4, 2010

WILKES-BARRE – The Luzerne County Zoning Hearing Board on Tuesday night approved new natural gas wells and a facility for processing the gas, but added safety conditions.

Zoning hearing board members William Harris, Anthony Palischak and Chairman Lawrence Newman unanimously granted Encana Oil & Gas USA Inc. conditional use to drill five natural gas wells in an agricultural zone on the 4-P Realty property on Loyalville Road in Lake Township, as well as a natural gas processing facility that would include a compressor station and a radio tower.

Among the conditions the board imposed, Encana will have to determine whether the county’s emergency responders will be able to handle problems at the site, and to draw up a contingency plan to share with all concerned.

Encana will have to mitigate noise, light and dust at the site, as well as provide a traffic control plan, bond all county and municipal roads, and consider safety measures for school buses, such as having flagmen at bus stops.

The board also granted conditional approval on Encana’s request to drill three wells on the Kent North site at 208 State Route 118 in Fairmount Township, and two wells on the Kent South site at 27 State Route 487 in Fairmount Township.

The commissioners’ meeting room at the courthouse was jammed with people, many of whom expressed opposition to natural gas drilling.

Zoning hearing board Solicitor Stephen A. Menn repeatedly stressed that the state Oil and Gas Act does not allow local officials to regulate most aspects of natural gas well drilling, including how it is done and water use and protection.

“In what ways has the Oil and Gas Act tied your hands?” Factoryville resident Patrick Walker asked.

“Health, safety and welfare issues,” Menn said.

Like with methadone clinics and adult entertainment, zoning cannot exclude natural gas drilling, according to Menn.

“Drilling is a legal use. You have to put it somewhere,” Menn said.

The place people should seek change is Harrisburg, in laws passed by the General Assembly.

“I think it is an absolute horror, I think this is a version of fascism, that this power has been taken away from you,” Walker said.

Several residents questioned safety issues, such as the 6,800 additional trucks on the road throughout the well drilling process.

Lake-Lehman Transportation Coordinator Sandy Dobrowolski, speaking on her own behalf, expressed concern about the school buses being on the roads at the same time as the heavy traffic at the site.

Paul Ungvarsky, who lives on Loyalville Road about a mile from the 4-P property, asked if something could be done to ensure trucks don’t speed on the road. Encana Community Relations Adviser Wendy Wiedenbeck said it seemed like a reasonable request.

Ungvarsky also wanted to know what would happen if a property isn’t leased. He said his isn’t.

“If it’s unleased, we cannot drill under it,” Encana Operations Engineer Joel Fox said.

Linster added that Encana has “quite a bit of room to work with” on the 4-P site.

Mike Patrician of Clarks Summit, one of the 4-P property owners, spoke on Encana’s behalf, saying he had talked to five different companies at length about leasing.

“People are not all the same, gas companies are not all the same,” he said. “Encana has a stellar reputation in the industry.”

Gary Ide, who has leased his Lehman Township property, also defended Encana, stating that leaseholders were “extraordinarily impressed” with the company.

But Gene Stilp of Dauphin County, in referencing Patrician’s comment, said: “People are different, companies are different – frack water is pretty much the same.”

eskrapits@citizensvoice.com , 570-821-2072

View article here.

Copyright:  The Citizens Voice 

Callahan brings more than a decade of energy experience to the job, lauded by MSC chairman and president as a “key collaborator” in engaging elected officials and partners

CANONSBURG, Pa. – As Marcellus Shale employers continue to work with policymakers on a comprehensive framework for taking full advantage of the myriad opportunities that natural gas exploration make possible, the Marcellus Shale Coalition (MSC) today announced the addition of a key member to its staff who will be among those serving on the frontlines of that critical and ongoing effort.

Starting this week, David Callahan will serve as MSC’s vice president, a position dually based in Harrisburg and Canonsburg, Pa., but one that will take Mr. Callahan all across the multistate Marcellus region. A native Pennsylvanian, Mr. Callahan has 20 years of experience in the field of government relations, a majority spent representing a number of energy interests, including the Pennsylvania Gas Association (now the Energy Association of Pennsylvania) and the Associated Petroleum Industries of Pennsylvania.

“The safe and steady development of natural gas from the Marcellus Shale represents a once-in-a-lifetime opportunity for shared prosperity across the entire Marcellus,” said Kathryn Klaber, president and executive director of the MSC. “But that vision of the future that will only be realized through engagement and cooperation with policymakers and elected leaders in the region. David’s experience working collaboratively with legislators and regulators alike will serve our members well, and ultimately benefit everyone by advancing a strategy that generates jobs and revenues in the short-term, and the promise of long-term energy security and affordability beyond that.”

“The industry continues to create tens of thousands of jobs each and every year all across the multistate Marcellus region, our membership has continued to expand as well – and so has our strength and expertise,” said Ray Walker, Jr., chairman of the MSC and a senior vice-president for Range Resources. “The addition of David to the growing MSC staff represents a key step forward for this Coalition, and an important resource in our campaign to educate the public about the historic opportunities of the Marcellus, while educating policymakers on the imperative of keeping the Marcellus ahead of the competition curve in the ongoing and aggressive race for talent, equipment and investment.”

Mr. Callahan, currently a resident of Mechanicsburg, Pa., earned his undergraduate degree from Indiana University of Pennsylvania, and his master’s from Syracuse University’s Maxwell School of Citizenship and Public Affairs.

Copyright: Marcelluscoalition.org

Gas drilling incident in western Pennsylvania linked to firm’s corner-cutting tactics.

From staff and wire reports

HARRISBURG – Rig workers’ inexcusable failure to use a second set of pressure-control devices while preparing to connect a natural gas well to a pipeline led to the well’s blowout in western Pennsylvania last month, a consultant’s report said Tuesday.

State regulators, who hired the consultant, quickly ordered all drilling operators to adhere to a set of safety standards designed to prevent another such incident.

“I don’t know any company that would cut corners like this on this kind of well,” said consultant John Vittitow, a Texas-based petroleum engineer.

The company, Houston-based EOG Resources Inc., has used this same tactic on other wells in Pennsylvania, Vittitow said.

“I don’t think they’ll use it again,” he added.

Meanwhile, state Environmental Protection Secretary John Hanger warned that another such incident could mean the end of EOG’s business in Pennsylvania, and insisted state regulations don’t allow EOG’s tactics.

EOG and its contractor, C.C. Forbes Co. of Texas, were given maximum fines of more than $400,000 combined and ordered to take corrective actions, but were allowed to resume all activities in Pennsylvania on Tuesday after a 40-day suspension of well-finishing work.

EOG operates nearly 300 wells in Pennsylvania.

The blowout happened late June 3 on the grounds of a hunting club in Clearfield County where EOG is drilling a number of wells.

For 16 hours, explosive gas and briny wastewater shot into the air before specialists brought it under control.

Hanger insisted Tuesday that existing regulations do not allow EOG’s tactics because they require companies to obey accepted industry safety standards.

Most companies obey those, he said, but a letter sent Tuesday would lay out in detail what is expected of them.

Gary L. Smith, EOG’s vice president and general manager in Pittsburgh stated in an e-mailed that company officials “sincerely regret that the well-control issue took place.”

Since that time, Smith said, EOG has worked with the DEP to resolve all issues, will implement the new operational procedures outlined in the letter to gas well operators and looks forward to resuming activities.

Marcellus Shale Coalition president and executive director Kathryn Klaber said the new regulations DEP put forth “have already been incorporated by many of our members as part of their regular wellsite operations.”

State Rep. Phyllis Mundy, who is leading the charge for a moratorium on gas drilling in the state, said the $400,000 in fines and 40-day suspension “seems like a pittance … for what was clearly an inexcusable lack of proper procedure to care for the environment and their workers.”

Mundy, D-Kingston, said the incident “reinforces the need to hit the pause button with a moratorium. With this kind of activity, there will always be accidents.

“But with proper laws, regulations, best practice guidelines and inspections in place, we could prevent many of them and be much better prepared to deal with them when they do occur. Those things are not in place at this time, yet we continue to issue new permits. We are simply not prepared to either prevent or react to these incidents.”

Hanger said his agency would redouble its inspection activity with more emphasis on well-finishing work.

Copyright: Times Leader

HARRISBURG – Untrained personnel and the failure to use proper well control procedures were the principal causes of a June 3 natural gas well blowout in Clearfield County, according to an independent investigation that was released today by the state Department of Environmental Protection.

DEP Secretary John Hanger said the blowout, which allowed natural gas and wastewater to escape from the well uncontrollably for 16 hours, was the result of failures by the well’s operator, EOG Resources. The company and its contractor, C.C. Forbes LLC, lost control of the well while performing post-fracturing well cleanout activities.

“The blowout in Clearfield County was caused by EOG Resources and its failure to have proper barriers in place. This incident was preventable and should never have occurred,” said Hanger, who added that EOG Resources has been ordered to take nine corrective actions; C.C. Forbes ordered to take six corrective actions and both companies were fined more than $400,000, collectively.

An EOG representative said the company would issue a press release in response to DEP’s announcement later today.

Following a 40-day suspension of operations in Pennsylvania, EOG Resources and C.C. Forbes were permitted to resume all well completion activities. EOG Resources, formerly known as Enron Oil & Gas Co., operates approximately 297 active wells in Pennsylvania, 139 of which are in the Marcellus Shale formation.

The report was compiled by John Vittitow, whom DEP hired to conduct a thorough and independent investigation into all aspects of EOG’s drilling operation based on his respected reputation in the industry as an experienced petroleum engineer. The investigation was conducted alongside, but independently of, DEP’s investigation.

“Make no mistake, this could have been a catastrophic incident,” Hanger said. “Had the gas blowing out of this well ignited, the human cost would have been tragic, and had an explosion allowed this well to discharge wastewater for days or weeks, the environmental damage would have been significant.”

In light of the investigation’s findings, Hanger said his agency has written each company drilling into the Marcellus Shale to ensure they understand proper well construction and emergency notification procedures. The letter stated that:

• A snubbing unit, which prevents pipes from ejecting uncontrollably from a well, may be used to clean out the composite frac plugs and sand during post-fracturing (post-frac) if coil tubing is not an option.

• A minimum of two pressure barriers should be in place during all post-frac cleanout operations.

• Any blowout preventer equipment should be tested immediately after its installation and before its use. Records of these tests should be kept on file at the well site or with the well site supervisor.

• A sign with DEP’s 24-hour emergency telephone number and local emergency response numbers, including 911 and the county communications center, should be posted prominently at each well site.

• At least one well site supervisor who has a current well control certification from a recognized institution should be on location during post-frac cleanout operations. These certifications should be in possession at all times.

• A remote-controlled, independently powered blowout preventer unit, which allows workers to control what’s happening on the rig at a safe distance, must be located a minimum of 100 feet from the well and operational during all post-frac cleanout operations.

The fines assessed to EOG Resources and C.C. Forbes—for $353,400 and $46,600, respectively—will cover the cost of DEP’s response to the incident and the investigation. In addition to the financial penalties, DEP ordered EOG Resources to implement practices and take nine corrective actions to avoid a repeat of this incident. C.C. Forbes was ordered to implement similar practices and to take six corrective actions.

Copyright: Times Leader

Fair Pooling protects the environment, reduces environmental footprints, and generates more revenue for environmental programs – so why do environmentalists oppose it?

CANONSBURG – When is an environmentalist not an environmentalist? How about when he sends a letter to lawmakers in Harrisburg demanding they reject a proposal that would result in greater efficiency in developing clean-burning natural gas from the Marcellus, far less disturbance to land while doing it, and millions in revenue for state programs to protect and preserve the environment?

Unfortunately, that’s precisely the letter that members of the General Assembly received this week – sent by a coalition of more than 30 groups that claim to support all the things that a Fair Pooling statute in Pennsylvania would make possible (smaller footprints and more revenue, especially), but nonetheless stand in opposition to the adoption of the actual plan.

Of course, virtually every energy-producing state in America has fair pooling protection on the books – and for good reason. Fair pooling allows for “equitable and efficient development of [natural gas] while preventing the drilling of unnecessary wells,” according to Michigan’s Department of Environmental Quality – “at the same time, it protects an owner from having his or her oil and gas drained without compensation.”

The Harvard Law Review agrees: “Pooling is important in the prevention of drilling of unnecessary and uneconomic wells, which will usually result in physical and economic waste.” That line comes from an article on efforts to conserve oil and natural gas published in the Review back in 1952.

So if these environmental groups can’t defend their opposition to Fair Pooling onenvironmental grounds, what arguments do they use instead? See below a quick side-by-side of the charges leveled by these groups’ compared with the actual facts of what Fair Pooling is, and what it is not.

The Luzerne County legislator has higher hopes for another bill related to drilling.

By Andrew M. Sederaseder@timesleader.com
Times Leader Staff Writer

State Rep. Phyllis Mundy said her proposal to establish a one-year moratorium on the issuance of new permits for drilling in the Marcellus Shale formation is well intentioned, but she does not believe it has the support of enough of her colleagues to be passed this year.

“The moratorium bill is a long shot,” Mundy, D-Kingston, said on Thursday, responding to questions related to two bills and a resolution she introduced on Wednesday. The three were referred Thursday to the state House Committee on Environmental Resources and Energy.

House Bill 2608 would prohibit natural gas drilling companies that use fracking, or horizontal drilling, from drilling wells within 2,500 feet of a primary source of supply for a community water system, such as a lake or reservoir. The current restriction is only 100 feet.

That bill gained the largest number of cosponsors, including the other six state representatives who serve Luzerne County: Karen Boback, R-Harveys Lake; Mike Carroll, D-Avoca; Eddie Day Pashinski, D-Wilkes-Barre; Todd Eachus, D-Butler Township; Jim Wansacz, D-Old Forge; and John Yudichak, D-Plymouth Township. In total, the bill has 47 cosponsors, and Mundy.

She said that legislation has the best chance of being approved, but it will likely have to be offered as an amendment to another bill.

House Resolution 864, if approved, would urge the U.S. Congress to pass the Fracturing Responsibility and Awareness of Chemicals (FRAC) Act. The resolution urges Congress to repeal a provision in the federal Safe Drinking Water Act, known as the “Halliburton loophole,” that exempts oil and gas drilling industries from restrictions on hydraulic fracturing near drinking water sources.

The act would also require oil and gas industries to disclose all hydraulic fracturing chemicals and chemical constituents currently considered proprietary rights of the company.

That resolution has the support of Mundy and 43 of her colleagues who signed on as cosponsors. Eachus, Pashinski, Wansacz and Boback were the other Luzerne County representatives who signed on as cosponsors.

House Bill 2609 seeks to establish a one-year moratorium on the issuance of new natural gas drilling permits, which Mundy said would give state officials more time to analyze the drilling industry and ensure proper protections are in place and if they’re not, what measures should be enacted.

That bill received the cosponsor support of 18 of Mundy’s colleagues, but of her fellow Luzerne County Caucus members, only Pashinski signed his name as a cosponsor. Two Lackawanna County-based state House members signed on, Kevin Murphy, D-Scranton, and Ed Staback, D-Sturges. They were among a handful of House members who signed their names as cosponsors to all three measures.

Mundy’s opponent in November, Republican Bill Goldsworthy, said the 20-year lawmaker is using Marcellus Shale exploration “to help her re-election campaign.”

“First Ms. Mundy votes to increase spending and pay for it with a new tax on gas drilling, then turns around and calls for that drilling to stop. This is the type of political double-talk that has gotten our state where we are today,” said Goldsworthy in a written statement.

Goldsworthy, the mayor of West Pittston, said he supports gas exploration, as long as it is done in an environmentally responsible manner.

“I do not think a moratorium would pass the House at this point, let alone the Senate. Perhaps a few more disasters will change people’s minds,” Mundy said, continuing to voice frustration with the way things work in Harrisburg that she expressed at a House Transportation Committee field hearing in Scranton two weeks ago. At that time, speaking about the gaping hole in the transportation budget and the state of disrepair of hundreds of roadways and bridges throughout the state, she quipped “We in Pennsylvania don’t do anything unless there’s a crisis.”

In addition to Mundy, Pashinski, Staback and Murphy, only 14 representatives signed their names as cosponsors on all three pieces.

Copyright: Times Leader