Posts Tagged ‘natural gas producers’

Senate should consider alternative to House’s uncompetitive approach

Canonsburg, Pa. – This evening, the Pennsylvania House of Representatives passed a massive, uncompetitive new tax on the responsible development of clean-burning natural gas from the Marcellus Shale formation, which has helped create nearly 88,000 jobs in Pennsylvania alone as the state’s unemployment rate continues to remain near double-digits. This massive new tax – 39 cents per mcf of natural gas – represents the nation’s highest among shale gas producing states. In fact, this onerous tax on shale gas production is twice as high as West Virginia’s, currently the nation’s highest.

Equally problematic, this enormous tax does not allow for natural gas producers to recover and reinvest the millions of dollars required to produce shale gas from the Marcellus, as virtually every other major shale gas producing state does. Many members of the House of Representatives voted against this massive tax, recognizing the negative impact it would have on job creation and investment in Pennsylvania.

Kathryn Klaber, president and executive director the Marcellus Shale Coalition (MSC), issued this statement following the vote:

“Votes for this misguided, unprecedented tax that narrowly passed this evening, are votes against the job creation and the responsible development of clean-burning domestic natural gas, which is helping to lower energy prices for Pennsylvania consumers and driving down our nation’s dependence on foreign sources of energy.

“We are confident, based on Senator Scarnati’s public comments this evening, that the Senate will remain steadfast in their commitment to realize a competitive climate for growth for this industry, and prosperity for Pennsylvanians.

“To make certain that Pennsylvania’s economy and workforce remain ahead of the curve in the increasingly competitive global economy requires commonsense solutions that encourage capital investment in the Commonwealth. A competitively structured tax in Pennsylvania, that allows for critical capital investment, coupled with smart regulatory and legislative modernizations, is key to ensuring that this historic opportunity is realized in ways that benefit each and every Pennsylvanian.”

NOTE: In a statement, Rep. Dwight Evans (D-Philadelphia), chairman of the House Appropriations Committee, underscored the fact that “We need a tax that is competitive with other shale states.” Rep. Evans adds: “I also recognize the industry will want to weigh in and argue for a tax with a rate and characteristics that allow for capital recovery, a tax it can support as it does in every other state where drilling occurs. These issues are all negotiable.”

BY BORYS KRAWCZENIUK (STAFF WRITER)
Published: July 29, 2010

A provision to require disclosure of all chemicals used in fracturing Marcellus Shale to extract natural gas could wind up as part of the scaled-down national energy bill the U.S. Senate might consider soon.

Sen. Bob Casey said he convinced Senate Majority Leader Harry Reid to fold disclosure provisions of his Fracturing Responsibility and Awareness of Chemicals Act into the energy bill.

“It’s a great breakthrough,” he said. “It’s a substantial step forward. … It gives people information they wouldn’t have otherwise about what’s happening underneath their property.”

Senate leaders are hoping to pass the bill before the summer recess Aug. 6, after realizing they did not have the votes to pass a more comprehensive energy bill. Even if the smaller energy bill gets through the Senate, the House would have to pass it before President Barack Obama can sign it. Neither is assured.

Industry groups said the fracturing chemicals are already well known to the public and state regulators, and further disclosure would harm the development of natural gas.

“We fundamentally believe that regulation of hydraulic fracturing is best addressed at the state level, and we have been unable to reach a consensus with congressional advocates on how this program would be overseen by the federal government,” America’s Natural Gas Alliance said in a statement.

Congress and the federal Environmental Protection Agency are studying whether the chemicals used in hydraulic fracturing of shale contaminate drinking water.

Energy In Depth, an industry group, argues regulation should be left to states, which “have effectively regulated hydraulic fracturing for over 40 years with no confirmed incidents of groundwater contamination associated with (fracturing) activities.”

At public meetings on gas drilling, local residents regularly dispute the claim.

Though the industry argues the chemicals it uses are well known, a Times-Tribune investigation determined that DEP scientists who analyzed spilled fracturing chemicals at a Susquehanna County well site in September found 10 compounds never disclosed on the drilling contractor’s material safety data sheet.

None of the 10 was included in a state Department of Environmental Protection list of chemicals used in fracturing, a list developed by the industry. When DEP posted a new list earlier this month, none of the 10 was on it.

Mr. Casey dismissed the industry criticism.

“That’s why I called it a substantial step forward, if they’re attacking it,” he said. “If they’re feeling that this is giving information to people that they are reluctant to disclose, that’s why I think it’s an important change, and it’s progress on an issue that some would have thought would have taken years to get done.”

Mr. Casey’s legislation would amend the federal Emergency Planning and Community Right-to-Know Act, which requires employers to disclose what hazardous chemicals they use.

The amendments would require:

– Well-drilling operators to disclose to state regulators and the public a list of chemicals used in fracturing, commonly known as fracking. The requirement would cover chemical constituents but not chemical formulas whose manufacturers are allowed by law to keep the formulas secret, according to Mr. Casey’s office.

– Disclosure to be specific to each well.

– Disclosure of secret formulas or chemical constituents to doctors or nurses treating a contamination victim in an emergency.

– An end to thresholds for reporting chemicals normally required by law so all amounts of chemicals are reported.

In an analysis of the legislation, Energy In Depth said it would “chill” investment in innovations in fracturing and place “unrealistic burdens” on natural gas producers by requiring them to disclose secret chemical compounds whose composition they legally can know nothing about.

In an interview, DEP Secretary John Hanger said he welcomed the federal legislation, argued Pennsylvania already requires more disclosure than his bill and believes companies should disclose the volume and mix of chemicals they use in fracking.

Contact the writer: bkrawczeniuk@timesshamrock.com

View article here.

Copyright:  The Scranton Times

• “Business is booming thanks to the lucrative gas drilling industry tapping into the Marcellus Shale”

• Marcellus development “enables those of us who have farms to keep our farms so they can be passed on to our families”

• “Safe and responsible gas development could provide the three counties with much-needed jobs and economic growth”

• WV small business “having a banner year in 2010”

“Marcellus Shale region creating growth of business and industry”: “With the development of the Marcellus Shale region creating growth of business and industry within Bradford County, we feel there is tremendous opportunity for this new hotel. In addition to our locations in State College and Lock Haven, it becomes our third Fairfield Inn and Suites in the region.” (Star-Gazette, 7/14/10)

Marcellus development positively impacting local businesses; WV small business “already is having a banner year”: “Assuming the landowner group agrees to $3,000 per acre, the resulting $79.2 million could have a major impact not only on landowners, but on local businesses. Karen Knight, a partner at Knights Farm Supply in Glen Easton, said her company already is having a banner year in 2010 as both property owners and the drilling companies themselves scramble to acquire heavy equipment and other items. “We have seen a big increase in tractor sales, farm equipment sales, grass seed for reseeding at the drilling sites, straw for reseeding and other items. It’s a better year than 2009 for sure,” she said. “Our counter is swamped every day with residents and representatives from the drilling companies. In fact, our parts and counter people are about done in. We’ve been extremely busy.” (News-Register, 7/18/10)

“Prosperous Plans For Bradford County”: “As gas companies tap into the Marcellus Shale in Bradford County, businesses are looking to cash in on what many now consider a booming local economy. … A once abandoned warehouse is now the home for a trucking company. A hotel — gutted for refurbishing. And a excavator sits in this empty lot ready for its next construction project. One thing is clear in Bradford County — business is booming thanks to the lucrative gas drilling industry tapping into the Marcellus Shale, as thousands of workers and their families flock to the area. “I think there are many small towns across America that would die to have a natural resource that they can sell and revitalize their economy,” said Mike Holt of Red Rose Diner in Towanda. (WBNG-TV, 7/13/10)

Marcellus Shale helping to keep family farms in tact: “Nearly 600 residents attended Wednesday’s day-long DRBC meeting to plead their clashing cases: That drilling is needed not only to produce relatively clean energy but to save economically desperate communities … Landowners like Judy Ahrens of Hanesdale, Pa., argued that they should be able to lease the mineral rights to their land. “It enables those of us who have farms to keep our farms so they can be passed on to our families so they don’t have to be split up and developed,” she said. (Associated Press, 7/15/10)

“Gas drilling not only creates local jobs, but increases the nation’s energy independence”: “Gas drilling not only creates local jobs, but increases the nation’s energy independence, pro-drillers say. “I support gas drilling,” said David Jones, as part of a three-hour public comment period with more than 250 speakers. “I also believe that the industry is being unfairly treated. This process has been delayed for too long. Let’s get the regulations out,” he said, to the jeers of most of the crowd. “We don’t need further studies. The process should move forward.” (Bucks Co. Courier Times, 7/15/10)

Responsible Marcellus development “a win win situation all around”: “Some landowners in Wayne County want natural gas drilling to start and start now. They are upset over a decision to halt drilling by a group watching out for the land and water in the Delaware River Basin. Landowners are ready for the halt on gas drilling to be lifted in Wayne County. “It will help to maintain open space and keep our forest grounds grounded and our farms farming.The influx of cash is desperately needed in the state of Pennsylvania, and particularly in the depressed areas of Wayne County, said Alliance Executive Director Marian Schweighofter. … “The effect this has had is its given us the ability to make a college fund for our family members. We think it’s a win win situation all around, most definitely for the economic ability of Wayne County,” said Schweighofter. (WNEP-TV, 7/13/10)

Marcellus production providing “much-needed jobs and economic growth”: “The bottom line is this: If natural gas drilling has economic benefits for Wayne County and can be conducted safely with people mindful about protecting our natural resource, the Delaware River, then shouldn’t we explore the possibilities? … Mary Beth Wood, WEDCO’s executive director, said it best in stating that the coalition — through pooling resources — can gather the best information available. “Safe and responsible gas development could provide the three counties with much-needed jobs and economic growth,” Wood said. (Wayne Independent Editorial, 7/14/10)

Marcellus economic “ripple effect will benefit everyone”: “The Marcellus shale gas drilling boom drew companies from across the country. More than 100 of them packed the Indiana County Fairgrounds Wednesday. The PA Gas Expo was a job fair, a networking event, and a chance for folks to find out what Marcellus shale gas drilling means in employment for thousands. County Commissioners said they have already noticed hotels and restaurants in Indiana County filling up with gas company workers. They said ripple effect will benefit everyone. “The growth element for the region will not be in just one area, but in many areas. And we need to be prepared for that,” said Rod Ruddock. (WJAC-TV, 7/14/10)

“Is this a golden era for Pennsylvania? Absolutely it is.”: “In a sour economy, the word out of Renda Broadcasting Corp.’s first Pennsylvania Gas Expo was sweet: Now hiring. Several companies at the expo, held Wednesday at the Mack Park fairgrounds, reported thatthey are in a hiring mode as they ramp up operations in the Marcellus shale fields underlying the region. The expo brought together 120 or so natural gas producers, drillers, land brokers, well-service companies, suppliers and job seekers. … “Is this a golden era for Pennsylvania? Absolutely it is,” said Rod Foreman, Vanderra’s director of growth and corporate development, speaking during a panel discussion. (Indiana Gazette, 7/15/10)

Pa. landowner on Marcellus development: “I think it’s a wonderful thing”: “The tiny farming community has struggled to strengthen its economy ever since Mosser Tanning Co. left town in 1961. … So, when a gas company comes and injects millions of dollars into a community that has seen half a century pass by since its industrial backbone collapsed, residents are more than excited. “I think it’s a wonderful thing,” Ms. Race said. “It’s got to help financially; much more taxes, much more money. “We’re going to finish paying our mortgage off.” (Times-Tribune, 7/19/10)

Homeowners getting in on Marcellus Shale benefits: “In this struggling economy homeowners have been coming forward hoping to make a big buck from Marcellus shale natural gas drilling boom. Mary Elwood and her husband own a farm in Saltburg, Indiana County. They already have three gas wells and a lease with PC Explorations. Elwood said it is a very profitable endeavor. She wants to sign a lease with another gas company for Marcellus shale drilling. “We get a nice check four times a year,” said Elwood. (WJAC-TV,7/14/10)

Filling county coffers: Marcellus “lease, permit fees good for tens of thousands of dollars”: “The governmental fees related to natural gas drilling that industry officials have been dangling as a cash carrot of sorts to local officials are starting to add up in Luzerne County. A review of county Zoning Office records revealed that just on Wednesday, the office took in $4,450 in permit fees for the construction of a natural gas metering station on property owned by Thomas Raskiewicz near Mossville and Hartman roads in Fairmount Township. … Butthe big winner among county offices to date – as far as revenue associated with natural gas drilling – is the Office of the Recorder of Deeds. (Times-Leader, 7/19/10)

Copyright: Marcelluscoalition.org

Marcellus producers express commitment to working with lawmakers on comprehensive tax, regulatory and legislative plan for the future

CANONSBURG, Pa. – Earlier today, Gov. Ed Rendell signed a budget plan for 2010-2011 that recognizes the critical contributions that natural gas producers are making in Pennsylvania. The new budget, the product of months of hard work by members of the General Assembly, does not include new taxes on Marcellus Shale employers – but does include a commitment by our elected leaders to conduct a comprehensive evaluation of how best to seize on the opportunities of the Marcellus in the future, and do so in a manner that benefits all Pennsylvanians.

Subsequent to the governor’s signing today, Marcellus Shale Coalition (MSC) president and executive director Kathryn Klaber issued the following statement in strong support of the plan:

“Today’s announcement represents a positive step forward. The MSC has said from the start that it was going to take more than hard work and favorable geology to leverage the once-in-a-lifetime opportunity of the Marcellus into jobs, revenue and long-term energy affordability for all Pennsylvanians.

“To do this, and do it right, we need an updated and modernized regulatory and legislative framework, and a fair tax strategy that keeps our state ahead of the curve in attracting the investment needed to bring these resources to the surface. Today, Pennsylvania announced its intention to compete for these opportunities. And we are pleased to have played a role in working with the legislature to get this process started on the right path.

“MSC members will continue to be key participants in this iterative, ongoing process, working alongside the General Assembly, the Administration and stakeholders across the Commonwealth to put our state in the best possible position to seize on the extraordinary opportunities of the Marcellus. And when it comes to that objective, there’s nothing more important than having a tax, regulatory and legislative framework in place that’s collaborative in its approach, and comprehensive in its design. Today’s agreement moves us one step closer toward the realization of such a plan.”

NOTE: As reported last week in the Towanda Daily Review, Bradford County currently ranks among the top job-producing counties in the state – a surge in employment that’s directly tied to the responsible development of the Marcellus Shale in the area. All told, Bradford Co. added more than 2,000 workers to the job rolls over the past 12 months, even as more than 60 other counties in Pennsylvania experienced a loss in jobs over that time.

Copyright: Marcelluscoalition.org

By MURRAY EVANS Associated Press Writer

OKLAHOMA CITY — Chesapeake Energy Corp. said Monday it plans to raise about $5 billion over the next two years in an effort to expand its investment in oil and natural gas liquids and to reduce its debt.

Oklahoma City-based Chesapeake announced a “strategic and financial plan” that includes the sale of up to a 20 percent equity interest in its Chesapeake Appalachia LLC subsidiary to investors within the next three to 12 months. Chesapeake is a key driller in the Appalachian Basin, with 24 operating rigs in the Marcellus Shale natural gas play.

Chesapeake also announced a private placement of $600 million of a new series of convertible preferred stock to investors in Asia. The investors, Maju Investments (Mauritius) Pte Ltd. and Hampton Asset Holding Ltd., will have an option for up to $500 million more shares within the next 30 days.

Of the $5 billion to be raised, Chesapeake said it plans to use $3.5 billion to pay off its debt and $1.5 billion to focus on drilling for oil and natural gas liquids.

Chesapeake also is looking at negotiating various joint ventures as part of its plan, which the company said is ultimately designed to achieve an investment grade rating for its debt securities.

Chesapeake is one of the top independent natural gas producers in the U.S. but has gradually expanded its oil and natural gas liquids portfolio in recent months. Company spokesman Jim Gipson said natural gas accounted for about 90 percent of Chesapeake’s production in the first quarter of 2010, down from 93 percent a year ago.

Chesapeake’s CEO Aubrey McClendon has spoken in recent weeks about the company’s interest in expanding its oil and natural gas liquids production, noting that oil prices are rising while the cost of natural gas is stagnant. Crude oil rose $1.69 to $76.80 per barrel Monday on the New York Mercantile Exchange while natural gas rose 15.5 cents to $4.170 per 1,000 cubic feet.

In a production update issued last week, Chesapeake said it is trying to identify more supplies of oil and natural gas liquids.

Copyright: Times Leader

People are wondering just what EnCana will bring to Marcellus Shale drilling.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

Edward Buda had been dealing with representatives of Whitmar Exploration Co. for about two years since he, his late brother and sister-in-law negotiated a lease with the company for natural gas drilling on their Fairmount Township property.

Now, there’s a new player in the mix, since Whitmar announced a partnership with EnCana Oil & Gas (USA) Inc. in November for a joint venture in drilling and development of the Marcellus Shale in Luzerne and Columbia counties.

Like others in the Back Mountain, Sweet Valley and Red Rock areas, Buda is a bit wary of the Denver-based energy company.

“We did business with Whitmar. How (Encana is) going to be, I don’t know. How they honor the contract, that’s to be seen. I still don’t know much about them,” said Buda, 75, who lives in Ross Township.

Buda’s brother Walter and Walter’s wife Eleanor signed a fairly simple three-page lease with Whitmar in February 2009, a month before Walter died. Eleanor passed away in November, Edward said, and he became the new lease holder just as EnCana came into the picture.

Now, EnCana wants to lease Edward’s property in Ross Township, but he isn’t too impressed with the $1,000-per-acre offer. And the 16-page lease proposal that has undergone many revisions is written in legalese, he said.

“They wanted to put a drill pad on my property (in Ross Township). I said I want to wait and see what happens in Red Rock (section of Fairmount Township). Everybody’s waiting to see whether it’s going to be a gusher or a fiasco in Red Rock,” Edward said.

Wendy Wiedenbeck, a public and community relations adviser for EnCana, said the well on Buda’s property and a second well planned for a Lake Township property owned by township Supervisor Amy Salansky and her husband, Paul, are exploratory ventures.

If those wells produce an acceptable amount of natural gas, EnCana will develop a plan for expanded drilling operations in the area, Wiedenbeck said. Drilling is expected to begin in July on Buda’s property and gas production should start by October. Clearing of an access road to the site began last week.

Company has won honors

For the past few months, Wiedenbeck has been the face of EnCana locally, arranging and attending meetings with people who live or own property within a mile of the planned drilling sites as well as attending meetings with local groups concerned about drilling activity in their communities.

A self-described “Army wife” with two sons – one in first grade, the other a senior in college, Wiedenbeck has lived in Colorado since 1989 and has been working in community/public relations since the early 1990s. She’s been with EnCana for five years.

“They’re a cultural fit for me. I believe they truly believe in responsible development,” Wiedenbeck said of her employer.

To prove her point, Wiedenbeck provided a long list of awards EnCana has received over the past few years. Just a few include:

• The 2008 U.S. Environmental Protection Agency Natural Gas STAR award, recognizing outstanding efforts to measure, report and reduce methane emissions;

• Interstate Oil & Gas Conservation Commission Chairman’s Stewardship Awards, recognizing exemplary efforts in environmental stewardship by the oil and natural gas industry;

• The 2009 Colorado Oil & Gas Conservation Commission Award for Courtesy Matters program in the Denver-Julesburg Basin surrounding Erie, Colo.

“Courtesy Matters” is EnCana’s community engagement program that brings EnCana staff and third-party contractors together with the community to discuss the nuisance issues associated with company operations,” Wiedenbeck said.

“Courtesy Matters creates a working environment where open and ongoing dialog are paramount. Discussions generally include concerns with traffic, noise and dust associated with our operations,” she said.

Community investment vital

Marty Ostholthoff, community development director for Erie, Colo., said in a teleconference that EnCana is one of four major energy companies drilling in the Denver-Julesburg Basin, the others being Noble Energy Inc., Kerr-McGee Corp. and Anadarko Petroleum Corp.

Fred Diehl, assistant town administrator in Erie, said he would be remiss if he didn’t point out “how far ahead of the other operators EnCana is” when it comes to community investment.

Diehl said he mentioned to Wiedenbeck that officials wanted to install solar panels on a new community center being built, and EnCana donated $250,000 to make that happen. A month ago, the company donated $175,000 for eco-friendly lighting at community ball fields.

“It’s not a requirement that they make notifications to our residents (about drilling activities or problems), but they do. It’s not a requirement that they make financial investments into our community, but they do,” Ostholthoff said.

Of course, there’s a downside to the presence of the drilling companies in the suburban area, which lies in one of the largest natural gas fields in the country, Diehl said.

“These things are still loud,” he said of the drilling rigs. “People come into our offices complaining, ‘We can’t sleep.’ But we worked with the operators to put up hay bales and cargo trailers to minimize the noise. The only good thing is, (the drilling is) temporary.”

As far as addressing concerns of residents, Diehl said all of the companies seem willing and responsive. “If they’re not, one of them can give the whole industry a black eye,” Diehl said.

Wiedenbeck said EnCana will have a toll-free number posted at its drilling sites that people can call to report concerns. Callers who choose the Pennsylvania prompt will be automatically directed to her office or cell phone. An operations phone number also will be established, she said.

And while EnCana will hire someone locally to help with community relations efforts, Wiedenbeck said she will continue to be “that face” for the community. She has spent about half her time in Pennsylvania since EnCana partnered with Whitmar, sometimes bringing her youngest son, Sammy, on trips here.

“He loves Pennsylvania,” she said.

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

Copyright: Times Leader

After ’08 deal dies, Wyoming County Landowners expect Chesapeake Energy deal.

By Rory Sweeneyrsweeney@timesleader.com
Staff Writer

A year after the financial meltdown sank a lucrative gas-lease offer, the Wyoming County Landowners group has come to terms with another company, Chesapeake Energy, for what is expected to be a record deal.

Neither side has released details yet, but Chip Lines-Burgess, secretary of the landowners’ group, expected an announcement late Tuesday evening.

“No one in the region has seen this amount of money,” she said. “We’re excited about the offer we have received, and it’s going to be a huge impact for our entire region financially. … Hopefully, it comes to fruition. … This is what we’ve been striving for the last year and a half.”

She added that lease signings could come as soon as a facility is secured that is large enough to hold the expected 600 to 800 landowners involved.

The group is composed of roughly 37,000 acres in Wyoming, Bradford, Susquehanna, Sullivan and Lackawanna counties. A minimal amount of Luzerne County acreage is also involved, Lines-Burgess said.

Only those who have recently re-signed are currently members, she said, though other members can re-join by filling out paperwork on the group’s Web site. New members also might be considered, though Lines-Burgess was unsure what the demarcations will be. She also noted that while current Lackawanna County members will remain in, it’s unclear if new landowners from that county will be accepted.

In August 2008, the group made headlines by signing a lease with Colorado-based Citrus Energy, but the worldwide financial crisis caused the deal to fall through quickly. Ironically, Citrus was chosen after it beat an original offer from Chesapeake.

The landowners regrouped quickly and began aggressively courting companies, creating a solicitous Web site and attending two industry expos. Most members chipped in $30 to cover various expenses, including creating their own roughly 40-page lease with items worked in that are usually left for individual landowners to add or subtract as addendums.

“We knew that we wanted a company that could afford to buy 37,000 acres … that could not only buy us, but drill us,” Lines-Burgess said. “In order to do that, we knew we had to go for the cream of the crop. … Within the last month, it has just heated up tremendously.”

Chesapeake is one of the largest natural-gas producers in the country and the largest leaseholder in the Marcellus Shale, a layer of gas-laden rock about a mile underground that’s centered on northern Pennsylvania.

Lines-Burgess said Marty L. Byrd, the vice president for land in Chesapeake’s Eastern Division, flew into the region Monday evening to meet with members of the landowners’ group Tuesday morning. He is expected to meet with the group’s core membership today, and leases could be signed by the end of the month, she said.

“There was a little give and take all the way around,” she said, citing the company’s requirement of an increased drilling-unit size. The group estimates about 100 well pads will be created throughout the entire acreage.

TO LEARN MORE

To join the landowners’ group, read its lease and find other information about the group, go to its Web site at: www.pamarcellusshale.com

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

Copyright: Times Leader