Posts Tagged ‘Kathryn Klaber’

State DEP chief talks about protecting water supplies in the Marcellus Shale areas.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

HARRISBURG – State Department of Environmental Protection Secretary John Hanger laid down the law to representatives of oil and gas companies drilling in the Marcellus Shale at a meeting he called on Thursday.

More precisely, he laid out two sets of proposed regulations for natural gas drilling procedures and responding to reports of contamination of water supplies – proposed regulations that members of the oil and gas industry helped create.

“There were technical discussions on how to prevent gas migration from (natural gas) well sites to water wells and what to do if migration does occur and how to respond,” Hanger said in an interview from his cell phone as he was riding to Dimock after the meeting in Harrisburg.

Hanger was on his way to an interview with ABC News at the site of a natural gas well that Cabot Oil & Gas capped under DEP order after the regulatory agency determined it was one of three that leaked methane, contaminating the well water supplies of at least 14 households in the rural Susquehanna County village.

“I challenged the industry. … I made it clear that regulations would be enforced,” Hanger said, noting that DEP opened two new field offices in Northeastern Pennsylvania in response to Marcellus Shale development and is doubling its enforcement staff. “I also made it clear we were strengthening the rules,” he said.

DEP spokesman Tom Rathbun said in a separate interview that the new drilling regulations would require specific testing according to standards of the American National Standards Institute on steel casing used in all high-pressure oil and gas wells as well as the use of “oil-field grade” cement in well construction.

Rathbun said the oil and gas industry supports the implementation of those standards, and most companies already employ those practices under best-management practices. The goal is to have all companies comply, and Hanger asked the industry to voluntarily comply immediately, rather than wait until regulations receive all necessary approvals, which are expected in November.

Rathbun said the new regulations are “designed to prevent situations like the one in Dimock.” He said the issue there was incomplete casing – Cabot Oil & Gas didn’t use enough cement in the well construction.

DEP in April banned Cabot from drilling in Pennsylvania until it plugs the three wells determined to be leaking gas. Cabot has already paid a $240,000 fine and must pay $30,000 per month until the company meets its obligations.

Rathbun said one well is capped, and Cabot is currently working to cap a second.

He said most of the discussion at the meeting focused on responding to reports of gas migration into water sources.

Currently, the industry is required to report any suspected or confirmed occurrence of gas migration to DEP. The new regulations would require immediately reporting suspected or confirmed migration to DEP and to emergency responders for the affected municipality.

As chairman of the state Environmental Quality Board, Hanger on Monday will present those proposed regulations to the board for adoption. If approved, they will be sent to the House and the Senate Environmental Resources & Energy Committee.

Each legislative committee will have 30 days to review the proposed regulations before either recommending a vote or sending them to the Independent Regulatory Review Commission, which is composed of administrative law judges. A final approval is required from the state attorney general to ensure they are constitutional.

The whole process can take about six months.

Kathryn Klaber, president and executive director of the Marcellus Shale Coalition, which represents the natural gas production industry, said in a written statement that the coalition is “fully committed” to continue working with government regulators to ensure that the potential of the Marcellus Shale in the state is realized in a safe and responsible way.

“Today’s meeting with DEP represents yet another honest and straightforward discussion about the best practices needed to fully achieve this vision. Positive progress on practices relating to the management of historic and naturally occurring shallow gas, as well as other initiatives related to transparency and well integrity, will help our industry continue to strengthen its safety and environmental record while continuing to create tens of thousands of jobs each year for residents of this state,” Klaber said.

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

Copyright: Times Leader

Pa. is biggest natural gas producer that does not impose some type of tax.

MARC LEVY Associated Press Writer

HARRISBURG — The natural gas industry in one of the nation’s hottest exploration spots is bracing for a political tussle over whether and how Pennsylvania will tax methane from the potentially lucrative Marcellus Shale formation.

An industry trade association, the Marcellus Shale Coalition, said Thursday it wants any discussion of a tax to involve the high cost to drill a shale well and cumbersome state laws that make it costly to operate.

A tax enacted without addressing issues that hamper exploration companies could encourage some to move resources to shale formations in other states, said coalition president Kathryn Klaber.

“What is important is to look at the broad issues, not just a tax, as to how we make this climate best for growth,” Klaber said. “There are a lot of modernization policies that need to be put in place to develop this massive natural resource.”

On Tuesday, Gov. Ed Rendell issued his annual spending plan for the state and renewed his call to enact a tax identical to West Virginia’s: 5 percent on the value of sale, plus 4.7 cents per thousand cubic feet produced.

Rendell projects the tax would produce $180 million in the fiscal year beginning July 1 and increase to nearly $530 million after five years, including 10 percent set aside for local governments.

Rendell wants money to shore up a state treasury that faces a projected $5.6 billion gap in 2011 and 2012 resulting from spiraling public pension costs and the expiration of federal stimulus budget aid.

Pennsylvania is the biggest natural gas producer that does not impose some type of tax on it.

However, the coalition wants to steer talk of a tax to reflect those imposed by shale states, such as Texas, Arkansas and Louisiana. In those states, the tax is discounted initially to allow the exploration companies to recoup a multimillion-dollar investment in each well.

For instance, Texas imposes a 7.5 percent tax but discounts it for 10 years or until the operator recovers 50 percent of the drilling and completion costs. In Arkansas, the state imposes a 5 percent tax on natural gas production but discounts it to 1.5 percent for at least three years.

Last year, Rendell called for the same tax rate on gas. After months of Republican-led opposition, he relented, saying he did not want to hurt an industry in its infancy.

In recent weeks, Rendell has said he believes the industry can afford to pay a tax, and pointed to the heavy influx of cash into Marcellus Shale exploration ventures.

For now, production from the Marcellus Shale is still in the early stages. Fewer than half of the approximately 1,100 wells drilled in Pennsylvania are connected to pipelines that can bring the gas to customers.

Environmental groups and the Pennsylvania State Association of Township Supervisors support a tax. The Senate’s Republican majority has not ruled out the eventual imposition of a tax, although Senate Appropriations Committee Chairman Jake Corman, R-Centre, called it “premature.”

Copyright: Times Leader