Posts Tagged ‘horizontal drilling technologies’

HARRISBURG – As a bill calling for a moratorium on leasing state forest land for natural gas exploration languishes in the Senate, Gov. Ed Rendell announced today that the state Department of Conservation and Natural Resources finalized a lease agreement with Anadarko Petroleum Corp. for 32,896 acres of forest land in Centre, Wyoming and Bradford counties.

In a press release, Rendell said the “responsible natural gas lease agreement” will allow Pennsylvania to meet its need for revenue while fulfilling its obligation to protect Pennsylvania’s natural resources.

Under the agreement, Anadarko has paid the commonwealth $120 million to access 32,896 acres that are surrounded by tracts of land for which drilling companies already hold lease agreements. Because these newly leased tracts can largely be accessed by gas operations on the adjacent tracts, the amount of new state forest surface area that must be disturbed is minimized, according to the press release.

Other than the agreement, the commonwealth will not have to make any additional state forest land available to reach its revenue goals for natural gas drilling in the 2010-11 fiscal year.

“This is a responsible approach that meets our revenue targets and limits the impact of additional natural gas exploration in our state forests,” Rendell said.

“We do not need to expand our drilling footprint in state forest lands to meet our revenue goals, because these parcels are already surrounded by other leased acres,” Governor Rendell said. “They also are within areas leased in the 1970s and 1980s by DCNR, but not all the acreage was drilled because technology wasn’t available to exploit Marcellus Shale deposits.

“In order to develop the acreage, DCNR and Anadarko have agreed to certain provisions to make certain there is minimal impact on the surface. Horizontal drilling technologies allow Anadarko access to most of this acreage from already disturbed areas on their adjoining leased lands.”

The newly leased acres cover 11 tracts in the Moshannon, Sproul and Tiadaghton state forests where Centre, Clinton and Lycoming counties meet.

For 27,185 acres on 10 tracts, Anadarko agreed to pay $4,000 per acre, consistent with the average price paid during DCNR’s January 2010 competitive lease sale. For the remaining 5,711 acres on one tract, the commonwealth will receive $2,000 per acre because the geology underneath is not as promising for gas production.

The lease of the 11 tracts totals about $120 million. DCNR’s January 2010 lease sale generated $128 million-$60 million of that went toward this year’s General Fund budget and the additional $68 million will be applied to a target of $180 million to help balance state budget for the fiscal year that begins July 1, 2010.

“With this agreement negotiated and the money in the bank, we can safely be on board with the moratorium which passed the House and is now in the Senate. If the Senate passes the legislation and it comes to my desk, I will sign it,” Rendell said.

Read more in The Times Leader on Wednesday.

Copyright: Times Leader

Economist from M&T Bank predicts gas drilling will give area “a huge shot in the arm” in next decade.

By Ron Bartizekrbartizek@timesleader.com
Business & Consumer / City Editor

WILKES-BARRE – The Marcellus Shale gas play will be “a game changer” for Northeastern Pennsylvania, bringing a “huge economic injection” and making life here very different a decade from now, an economist said Wednesday.

James E. Thorne, Ph.D., chief investment officer of equities for M&T Bank, told members of the Greater Wilkes-Barre Chamber of Business and Industry during a luncheon talk at the Westmoreland Club that the region will get “a huge shot in the arm” from natural gas drilling. “The economic forecast is very bright.”

Gas drilling has boomed in the Northern Tier of Pennsylvania since horizontal drilling technologies using pressurized liquids have made it financially feasible for companies to drill into the Marcellus Shale, a layer of gas-laden rock that runs about a mile underground from New York into Virginia.

Many landowners in Luzerne County have entered into leases with drillers, but no wells are yet operating in the county.

Thorne said the future direction of the national economy is less clear while emphasizing that the United States has a history of adapting to changing times. He cited the push into science and technology in the late 1950s after the Soviet Union launched the Sputnik satellite as an example.

As at that time, “there’s got to be a new industry created” that the U.S. can lead the world in, Thorne said, suggesting “green” technology may be the logical successor to space exploration and the Internet. The current economic problems, he said, were made worse by a diversion of resources to consumption and housing, which do not increase productivity.

Export-led, resources and infrastructure industries need to be the immediate focus, Thorne said, adding that additional government spending to rebuild and repair aging domestic

The present weakness of the dollar is necessary, Thorne said, to give American exporters the opportunity to expand their markets. But in the long run “the solution is to create inflation.

“The dollar is a reflection of economic growth; we benefit from a weak dollar.”

“We’re going to enter an adjustment period,” Thorne said, that could be several years long. But he said there’s reason to be optimistic about the outcome.

“We’ve done this before. I’m hugely bullish on the American economy,” he said.

Copyright: Times Leader

Authorities allowed the company to resume work after corrective actions.

By Rory Sweeneyrsweeney@timesleader.com
Staff Writer

The state Department of Environmental Protection announced on Thursday that it has fined Cabot Oil and Gas $56,000 for three polluting spills at one of its natural gas drilling sites in Susquehanna County.

The fine comes a little more than a month after the spills, which all occurred within a week of each other at the Heitsman well in Dimock Township and totaled about 8,400 gallons of fluids. Some of the liquid, which was a mix of mostly water and a gel that facilitates the drilling process, drained into an adjacent wetlands and Stevens Creek.

“The department presented a number to us and we thought under the circumstances that it was appropriate and not something that we wanted to fight about,” said Ken Komoroski, Cabot spokesman. “We’re just going to move forward.”

Within a few days of the spill, DEP ordered Cabot to halt hydraulic fracturing – the process that caused the spills – and submit an engineering analysis about what went wrong and how it will be avoided in the future.

Cabot’s report said the failure was caused by pressure surges and that significant elevation differences between where the liquid was stored and where it was being pumped to contributed to the problem.

The report includes a list of corrective actions that Cabot has agreed to take, among them providing better containment and pressure-regulating valves for sites where elevation is a factor.

DEP approved the report on Oct. 16 and allowed Cabot to resume “fracking.” The process forces water, sand and a mix of chemicals into the rock layer that contains the gas, causing fractures that release the gas up the well.

Gas drilling has boomed in the Northern Tier since fracking and horizontal drilling technologies have made it financially feasible for companies to drill into the Marcellus Shale, a layer of gas-laden rock that runs about a mile underground from New York into Virginia.

Copyright: Times Leader