Posts Tagged ‘oil’

State county commissioners association is working to broaden taxing authority.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

Counties, municipalities and school districts aren’t seeing any significant tax revenue related to Marcellus Shale development under current tax law.

But the County Commissioners Association of Pennsylvania is working to change that, lobbying for legislation that would give those governmental bodies property taxing authority on natural gas similar to taxes levied on coal extraction.

“We have to have the assessment law changed. The reason (is that) other minerals are assessed. It’s not fair to the other mineral (extraction companies) and it’s not fair to the rest of the taxpayers who have to pick up the burden of their exemption,” association Executive Director Douglas Hill said of natural gas and oil companies.

Hill said the state Supreme Court in 2002 ruled that counties had no statutory authority to tax oil and gas because state assessment law specifically includes coal but makes no mention of oil or gas.

Since that time, oil and gas interests have been escaping local property taxes, which had been paid in oil and gas-producing counties since at least the early 1900s, according to a position paper released by the association.

“Producers of other minerals such as coal and limestone already pay their fair share of the property tax. Counties support reversing the Supreme Court’s 2002 decision to assure that oil and gas companies contribute their share to the local tax base as well,” the paper states.

Hill said House Bill 10 of 2009, sponsored by state Rep. Bill DeWeese, D-Greene County, would restore property tax assessment authority on oil and gas.

The levy proposed in the bill would apply only to proven wells. “If there’s nothing to be extracted or (the gas) can’t be extracted, then there is no value,” Hill said.

Hill said there is, of course, opposition to the bill from the oil and gas industry. But he pointed out that other oil and gas producing states assess oil and gas extraction. Hill also said that large, multinational companies involved in Marcellus Shale exploration already had payment of such a tax built into their business plans and were surprised to learn that Pennsylvania counties can’t assess natural gas extraction.

Another association position paper points out several ways local communities are impacted by Marcellus Shale exploration that justify taxation.

“Some of the most visible impacts have been to township roads, county bridges and other infrastructure as developers bring drilling rigs, construction equipment and truckloads of water to and from drilling sites. &hellip Hotels might be filled with workers associated with Marcellus, impacting both the tourism industry and the county hotel tax,” according to the paper.

“Workers from out of state and their families have utilized social services such as drug and alcohol treatment and children and youth services. County jails, county probation and law enforcement have been affected. Even county recorder of deeds offices are affected, flooded by title searchers confirming ownership of subsurface rights,” the paper states.

House Bill 10 is still in the House Finance Committee for consideration.

“We’ve been working on getting agreement to move on it. We want to have things in place for a vote in the House and prepare for going to the Senate. We’ve also been working on an introduction of a bill in the senate,” Hill said.

Generally, legislators understand the issue, Hill said, but it “gets confusing at times because they are looking at a state severance tax,” and the county and local taxation issue “gets tied up in all the other issues related to the Marcellus,” he said.

Currently, there are at least five Senate bills and at least 17 House bills pertaining to Marcellus Shale exploration as well as one House bill, two senate bills and a budget proposal from Gov. Ed Rendell that address the imposition of a severance tax, according to information provided by state Sen. Lisa Baker, R-Lehman Township.

In the meantime, county assessors are waiting for some legislative determinations.

Luzerne County Assessor’s Office Director Tony Alu feels pretty confident that legislation eventually will be adopted and that the county will see some tax revenue from natural gas extraction.

Alu said assessors from various counties had been discussing among themselves various taxation formulas that would be most appropriate to tax natural gas extracted.

“We’re waiting on the state to make a determination so that we can all be uniform. &hellip We just want to make sure we’re doing the right thing,” Alu said.

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

Copyright: Times Leader

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

Doug Ayers has never been one to take the easy way out, and his fellow directors on the board of the Lands at Hillside Farms are following his lead.

While much of the land surrounding the Lands at Hillside Farms has been leased for natural gas drilling into the Marcellus Shale a mile below, the board is refusing to lease any part of the nonprofit organization’s 412 acres in Kingston and Jackson townships.

“The easy route would have been to take millions of dollars to fix those greenhouses and the barn roofs and pay off our debt,” Ayers said last week while sitting under some shade trees outside the farm’s dairy store.

“The more honorable route is to work hard and go to the public because the public owns this place, and we expect them to step up to the plate,” he said.

A veterinarian and chairman of the board of the Lands at Hillside Farms, Ayers said the board agreed “to not engage the gas companies for drilling in the foreseeable future because we don’t consider it safe for the land that we’ve been entrusted with, or safe for our neighbors.”

Chet Mozloom, executive director of the farm, said he “got blitzed over a two- or three-week period with calls from people who must have thought we signed (a lease) for some reason – I don’t know why – and they expressed their disappointment.”

“They were terrified of the impact, and this was before the Clearfield well explosion. They were afraid of Huntsville or Ceasetown (reservoirs) getting destroyed because that’s where their water is coming from,” Mozloom said.

Ayers said the potential for catastrophe is too great to agree to sign a lease.

“The proof is in your newspaper – the reporting that you’re doing on the (oil leak in the) Gulf, on the (gas well) explosion in Clearfield County, the spills in Dimock, the contamination of the well water in Dimock (caused by methane gas migration), the woman in Dimock who flushed her toilet and it blew the back of her house off,” Ayers said.

“And we’re trying to give people food here,” Mozloom added, “so it’s a whole different game if this soil gets ruined. I mean, just imagine Clearfield happening right next to the Huntsville Reservoir. If that happens, it’s over.”

Hillside keeps to mission

It was January 2005 when Ayers met with the Conyngham family, who owned the farm since 1891, to pitch the idea of selling it to the public with a mission to promote organic, sustainable agriculture, resource conservation and historical preservation.

An agreement was struck and the new organization raised about $2 million in private donations and public grants, secured a roughly $2 million loan from Luzerne Bank and bought the farm for $4.058 million last fall.

The plan is to use revenue from self-sustaining micro-enterprises, such as the dairy store, a restaurant serving locally grown fare, a bed and breakfast that would double as a rentable site for private functions, a colonial living-history museum and educational facilities pay off the loan and produce enough revenue to keep the farm operating.

Ayers said the property is one contiguous block of 412 acres including farmland, pasture, more than 36 buildings and 200 acres of forest. “We’re desirable (to the gas companies) because we’re (one) large chunk,” he said.

And while the board of the Lands at Hillside Farms wouldn’t even listen to a proposal from a gas company, the board of another local nonprofit that Ayers helped found 17 years ago did.

Ayers said the board of the North Branch Land Trust, of which he is still a member, was most recently offered a $4,000-per-acre bonus payment and a 20-percent royalty for a non-surface disturbance lease.

“That means no well drilling on the property. The Land Trust will not allow well drilling on the property for sure, and we’re not entertaining any leases now because we’re not comfortable,” Ayers said.

More information needed

Ayers believes the boards of both nonprofits would support more stringent legislation for the gas and oil industry, but he doesn’t believe a proposed 2,500-foot buffer zone between well sites and water sources is adequate because “we’re in an experimental phase. &hellip We don’t know what’s going to happen. It’s all new to the geology of this area.”

In fact, Ayers said, he’d like to see a moratorium on drilling in the Marcellus Shale “until it’s proven to be much, much safer than it is right now.”

Some Land Trust board members are more comfortable with the gas industry than others, Ayers said. So it’s possible that in the future, “if the industry proved itself to be very, very safe and didn’t harm the people downstream and the environment, I think the board may go for that,” he said of allowing horizontal drilling far below the land’s surface. “But not now.”

The Land Trust owns about 700 acres, the majority of which is an approximately 667-acre tract north of Tunkhannock in Wyoming County. The remainder lies in seven other counties, including Luzerne, Sullivan, Susquehanna, Bradford, Wayne, Lackawanna and Columbia.

Ayers said the trust has been offered large amounts of money to lease the large tract because it’s near the Trans-Continental pipeline, “which makes it very desirable to the (gas) companies. They call us regularly,” he said.

Ayers said it would be “tempting” for the board to sign a lease because “all nonprofits need to survive, and &hellip it would allow us to perform our mission better.” He said the board recommends that people considering a gas lease should call the trust “because they’re very educated about it, they know all about this and they would guide them.

“They would prefer that people not drill on their property and do only subsurface drilling if anything. And frankly, they would prefer that the people wait to learn more and allow the industry to mature and prove itself. And they’re exemplifying that by their own decisions regarding the land they own themselves. It’s pretty hard to turn down the amount of money they’re talking about – it’s millions and millions of dollars,” Ayers said.

Ayers – man on mission

Ayers stressed that the trust and the Lands at Hillside Farms are two separate and unrelated entities. “The mission of the Land Trust is to conserve open space. It’s more of a land-related, conservation-related mission. The purpose of this facility – the Lands at Hillside farms – is to teach sustainable ways of life, or, in other words, to help people make decisions that are healthy for them, their community and the world.”

If Ayers could say one thing to area land owners, “love thy neighbor I think is what I would say, and consider them in your decisions, because they won’t be able to leave as easily if a catastrophe were to happen.

“The principles upon which this country was created rely upon giving more than taking. I mean, Aristotle, when he and his gang created democracy 2,500 years ago, said democracy is the best form of government, but it can only exist in the face of virtue. I’m not sure how long democracy can last when people are willing to risk their neighbors’ safety and welfare for money,” Ayers said.

Ayers said he thinks many people in the area are disappointed, and not just because of the ongoing corruption scandal in Luzerne County in which 30 people – including three county judges – have been charged by federal agents over the past 18 months.

Seeing neighbors signing gas leases, Ayers said, “is just another example of how people might get discouraged because they see people being selfish, they see people not caring for one another. How could the government possibly have allowed this to have occurred here without better regulation? It makes no sense,” Ayers said.

“But again, everything that goes wrong is the people’s issue. I mean it’s the people who run this place. It’s easy to say it’s the politicians and the oil companies and everybody else, but the reality is that it’s us. We are the ones responsible for all of this going on. And if we stand around and watch it, then maybe we deserve what we get.”

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

Copyright: Times Leader

A company drilling for natural gas says it is already working with local officials.

STEVE MOCARSKY smocarsky@timesleader.com

Although the community at large hasn’t been privy to it, some local emergency management officials have been working closely with an energy company to draft emergency response plans to address any local natural gas drilling-related catastrophe that might occur.

EnCana Oil & Gas USA is slated to begin drilling a well at a site in Fairmount Township in about a month, and many local residents, officials and emergency responders have become anxious, feeling left-in-the-dark about whether local emergency responders have the equipment, knowledge and protocols in place to handle a drilling-related catastrophe.

But Wendy Wiedenbeck, public and community relations advisor for EnCana, said local firefighters would not be responsible for containing or fighting a gas well fire or gas release at a well site.

“In the event of an incident, local emergency responders will be asked to provide support to our operations personnel who are specially trained to deal with incidents at oil and gas locations,” Wiedenbeck said.

“Should a serious well-control incident occur, such as release of gas or fire, EnCana will look to local emergency responders to provide support while EnCana calls upon well-control experts to assist in addressing such an incident,” she said.

The well-control company EnCana has identified in an Emergency Response Plan submitted to the state Department of Environmental Protection is Wild Well Control in Houston, Texas. A second call would be placed to Cudd Well Control, also in Houston.

“Depending on the severity of the well-control issue, they would respond as soon as possible. In the meantime, the area around the well – the exact area again depends on the well-control issue – would be secured and/or evacuated. This is another example of how Encana and local emergency responders will work together,” Wiedenbeck said.

Wiedenbeck said Encana has experienced well-control incidents in the past, and the risks are inherent in the oil and natural gas industry.

“Our training, systems, and protocols are designed to fit the level risk associated with the activity. Our goal is to minimize the risk and to operate in a safe manner. Safety is our number one priority,” she said.

County office works on plan

Steve Bekanich, coordinator of the Luzerne County Emergency Management Agency, said last week that he has had several conversations with EnCana officials, but a volunteer with the county EMA “has taken the lead for my office. … We are close to completing an emergency response plan.”

Bekanich said Barney Dobinick, who is also the EMA coordinator for Lake Township, is “handling all direct talks with EnCana for ease of operations. He’s briefing me almost on a daily basis. … I’m very comfortable with what Barney has been doing. He’s been a trusted staff member for 20 years.”

Dobinick said a 230-page set of response guidelines is near completion. After meeting with EnCana representatives in mid-June, the plan will be shared with area municipal officials for their approval and made available to the public. Sometime in the next few, a public meeting also will be scheduled to gather input and answer questions.

Until the plan is complete, Dobinick said it would be counter-productive to release any aspects of it until EnCana has reviewed it and possible changes are made.

“If we determine there’s a better way, we’ll amend it. We’re not hiding anything. We just want to have a complete plan in place (before it’s released),” he said.

Bekanich said adjustments can be made even after the plan is disseminated to municipal officials and input is gathered from the public.

Dobinick did say, however, that local emergency responders would handle some emergencies at well sites, for example, a brush fire, an office trailer or vehicle fire or a hazardous materials spill.

Jack Dodson, emergency management coordinator for Dallas Township and Kunkle fire chief, has said his major concern was having emergency personnel who might have to extract disaster victims from a well-related catastrophe prepared to do so.

Dobinick said there are response guidelines for mass-casualty incidents, getting basic and advanced life support on-scene and implementing a disaster plan for hospitals and medical air transport.

“And depending on the seriousness of an event, it would determine how much, if any, of an area would be evacuated,” Dobinick said.

Off-site also part of concern

Dobinick said he’s more concerned about local responses to off-site incidents, such as the crash of a truck carrying “residual backflow” material, or “frack water” used in the hydraulic fracturing of the Marcellus Shale formation.

He said fire departments would handle the initial stabilization of such an incident and work to prevent contamination of any nearby waterway. A state-certified hazardous material clean-up team would come in if needed to remove the material and any contaminated soil.

Dobinick said he feels “very comfortable” with the guidelines and hopes to have the majority of the document complete by the end of the week. He’s still waiting on some information from the county 911 office and the American Red Cross.

Plus, Bekanich noted that Luzerne County is a member of and has access to the resources of the East Central Pennsylvania Regional Task Force – a seven-county all-hazards task force formed in 1998 along with eight other such task forces in the state in response to terrorist threats.

Bekanich said 48 professionals from Luzerne, Wyoming, Schuylkill, Colombia, Northumberland, Montour and Berks counties attended a training event/exercise last week at the county EMA headquarters and worked on a scenario to determine “how we would bring logistics and resources together for an event such as a catastrophic well failure.”

If a catastrophe did occur, Bekanich said, “it’s not like we would be in this on our own. We have resources and technical expertise from seven other counties to rely on for support.”

Dobinick also said EnCana has commissioned a transportation study and will be sitting down with officials from the Lake-Lehman School District to address any concerns about incidents that could affect school bus routes.

Several area residents have voiced concerns about emergency response and traffic at public meetings over the last few months and have been dissatisfied with information supplied by EnCana.

Company schedules meetings

Wiedenbeck said meetings with stakeholders are scheduled for this week.

“Our goal is to understand how these agencies work together, how our operations impact them and how we can work together to make sure we collectively work together so local emergency responders continue to do the great job they’re already doing,” Widenebeck said.

The purpose of sitting down with Dobinick and others is to determine the capabilities of local responders and “if there are gaps, how do we fill them.”

In some instances, Wiedenbeck said, there might be grants available to purchase emergency response equipment that might be needed – for example, a new radio system.

“Our job is to work together with emergency responders, the recreation district, township supervisors and the school district to understand existing protocols and how those protocols might be impacted if there is an incident. We also need to understand existing resources, identify potential gaps and solutions for addressing the gaps, if any,” Wiedenbeck said.

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

Copyright: Times Leader

That situation could shift, says co-author of study of political donations.

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

While natural gas companies and their related political action committees have given millions of dollars to elected officials throughout Pennsylvania since 2001, the donations have not flowed as heavily into the coffers of politicians serving Luzerne County.

One of the authors of a report that looked at the correlation of campaign contributions and legislation related to the natural gas drilling industry predicted they soon will.

A study released this week by the non-profit organization Pennsylvania Common Cause, takes a look at the link between gas firms and political donations and finds that since 2001, the industry has contributed $2.8 million to political candidates in Pennsylvania.

The study, titled “Deep Drilling, Deep Pockets” also reports that since 2007 the industry has spent $4.2 million to lobby members of the state legislature and the Rendell administration.

“I think part of the industry’s success is cultivating people at the very top,” said James Browning, director of development for Pennsylvania Common Cause and one of two men who put the report together.

The report includes a list of the top 25 recipients of the funding from Jan. 1, 2001 through April of 2010. At the top of the list is state Attorney General Tom Corbett, a Republican candidate for governor. He received $361,207, according to the report. Two previous gubernatorial candidates also made the list – Mike Fisher, who lost his bid in 2002, accepted $98,386, and Lynn Swan, who lost his bid in 2006, took in $351,263. Both men are Republicans.

Gov. Ed Rendell is sixth on the list. The Democrat from Philadelphia has accepted $84,100 in campaign contributions over the past nine and a third years. Current Democratic candidates for governor Dan Onorato, $59,300 and Jack Wagner, $44,550, ranked seventh and 10th respectively.

Others on the list include current and former judges, a former lieutenant governor, a candidate this year for that same post, a former candidate for the state House and numerous current members of the General Assembly.

Not one of the seven state House members or four state senators who represent Luzerne County made the top 25 list. In fact, according to records on the Department of State website and those provided by Pennsylvania Common Cause, campaigns for four of the seven House members did not receive one dime from the gas companies. The four are: Jim Wansacz, D-Old Forge; Phyllis Mundy, D-Kingston; Eddie Day Pashinski, D-Wilkes-Barre; and Mike Carroll, D-Avoca.

Rep. Karen Boback, R-Harveys Lake, accepted $250 from Chesapeake Energy Corp. Fed PAC on Oct. 9, 2009. Boback said that money was accepted by mistake and returned two months later. She said it is her policy “not to solicit or accept contributions from oil or gas companies.”

Rep. John Yudichak, D-Plymouth Twp., accepted $250 on April 10, 2008, from the PAC affiliated with Dominion Energy. Rep. Todd A. Eachus, D-Butler Township, accepted $500 from EQT Corp. PAC on July 2, 2009; $500 from EXCO Resources PAC on Oct. 20, 2008; and $250 from Equitable Resources, Inc. PAC on Sept. 30, 2008.

Of the four senators who represent a portion of Luzerne County, Bob Mellow, D-Peckville, took in the most at $3,000. That encompasses eight total donations, four from the Equitable Resources, Inc. Political Involvement Committee totaling $1,750 and four from the NFG PA PAC, affiliated with Seneca Resources, totaling $1,250. He declined comment through a spokeswoman, saying that he had not yet seen the report.

Sen. John Gordner, R-Berwick, accepted three donations of $500 from Dominion PAC. One came in 2004, another in 2006 and the third in 2008. His term does not expire for another two years.

Sen. Ray Musto, D-Pittston Township, accepted $500 from the Marathon Oil Co. Employees PAC on Oct. 20, 2008. Earlier this year, the veteran lawmaker announced he was retiring and not seeking another term in Harrisburg.

Sen. Lisa Baker, R-Lehman Township, accepted three donations at $500 apiece. One came from Cabot Oil and Gas on April 22, 2009; another was from EXCO Resources PAC on Nov. 19, 2008; and on April, 22, 2009, she accepted one from NFG PA PAC.

Browning said that as pressure from the public is placed on officials to tax the industry and approve more regulations, the elected officials at all levels of government, even those in non-leadership positions, will begin to see the money.

“I will predict that as there are more votes and as drilling expands, the money will come,” Browning said.

It will not head to Baker anymore.

The senator, who is seeking her second term in office this year, said, “Because of the sensitivity of the issues revolving around gas drilling, I am not asking for contributions from the gas drilling interests, nor am I accepting them.”

Barry Kauffman, executive director for Pennsylvania Common Cause, said the report illustrates the “power of political money in the governing process.” He said that as discussions about securing access to state forest land for drilling and severance taxes on natural gas production have popped up the past two years, lobbyist and campaign contribution spending have increased. The results have been no taxes have been approved and the state leased state land for drillers.

Baker said that she votes in response to her constituents, not her contributors.

“My legislative decision-making takes into account a variety of factors, but campaign contributions are never one of them. If anyone who contributes believes they are gaining special access or assuring a result, they will be sorely disappointed. That no-connection principle applies irrespective of the size of the contribution,” Baker said.

Andrew M. Seder, a Times Leader staff writer, may be reached at 570-829-7269.

Coyright: Times Leader

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

WATER SUPPLIES IN BERNALILLO COUNTY ARE THREATENED WITH OIL DRILLING

•    Oil and gas drilling may contaminate pristine drinking water aquifers in Bernalillo County.

Oil and gas companies frequently use a technique, hydraulic fracturing or “fracking,” to increase a well’s production of oil and gas. Fracturing fluids, which often contain toxic chemicals, are injected underground into wells at high pressures to crack open an underground formation and allow oil and/or gas to flow more freely. More than 90 percent of oil and gas wells in the United States undergo fracturing.  While a portion of the injected fluids are transferred to aboveground disposal pits, some of the chemicals may remain underground.

•    Drilling has polluted drinking water in New Mexico, Alabama, Colorado, Virginia, West Virginia and Wyoming.

Residents have reported changes in water quality or quantity following fracturing operations of gas wells.  Here is one homeowner’s account:
Laura Amos, her husband Larry and daughter Lauren live south of Silt in western Colorado.  “We were among the first in our area to have natural gas drilling on our property.  In May 2001 while fracturing four wells on our neighbors’ property (less than 1000 feet from our house) the gas well operator “blew up” our water well.  Fracturing opened a connection between our water well and the gas well, sending the cap of our water well flying and blowing our water into the air like a geyser at Yellowstone. Immediately our water turned gray, had a horrible smell, and bubbled like 7-Up…”

•    Oil and gas drilling wastes water

Oil and gas drilling in the arid west wastes billions of gallons of water and may have potentially devastating economic and environmental impacts for affected communities in the long-term.  Discharging ground water can deplete freshwater aquifers, lower the water table, and dry up the drinking water wells of homeowners and agriculture users.  The water discharged from oil and gas wells is highly saline. This water can permanently change chemical composition of soils, reducing soil, air and water permeability and thereby decreasing native plant and irrigated crop productivity.

•    The oil and gas industry has exemptions from two major laws established to protect the nation’s water—the Clean Water Act and the Safe Drinking Water Act.

The Clean Water Act is our bedrock law that protects American rivers, streams, lakes, wetlands, and other waterways from pollution. These surface waters are often sources of drinking water for people and livestock.  The Safe Drinking Water Act (SDWA) was enacted to protect public drinking water supplies as well as their sources. This Act authorizes health-based standards for drinking water to protect against both naturally occurring and man-made contaminants.

The Safe Drinking Water Act’s Underground Injection Control program protects current and future underground sources of drinking water by regulating the injection of industrial, municipal, and other fluids into groundwater, including the siting, construction, operation, maintenance, monitoring, testing, and closing of underground injection sites.  Unfortunately, the oil and gas industry is exempt from crucial provisions of the Safe Drinking Water Act intended to protect our drinking water.

•    The New Mexico Oil Conservation Division has detected and documented more than 700 incidents of groundwater contamination from oil and gas facilities across the state.

Prior to 1990, only 39 orders were issued against oil and gas companies for contaminating groundwater; since 1990, 705 documented groundwater incidents related to the oil and gas industry have been recorded in New Mexico.

For a PDF version of this fact sheet, click here

For More Information:
www.OGAP.org

Copyright:

New Energy Economy

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

WILKES-BARRE – A representative of a trade association for the oil and natural gas industry defended her members’ record on environmental issues Tuesday during a meeting with The Times Leader editorial board.

Sara Banaszak, senior economist with the American Petroleum Institute in Washington, D.C., also shared her perspectives on federal regulation and state taxation of the industry.

Banaszak indicated she understands concerns that residents of the region might have, given the legacy of coal barons profiting from the region’s anthracite, disappearing with their profits, and leaving future generations to deal with stripping pits, mine subsidence, acidic streams and lung disease.

“From the industry perspective, no accident and no amount of pollution is acceptable. It’s not sustainable for the industry. If I’m polluting your water, I know I’m going to be tossed out of town in two minutes, so it’s not in my interest,” Banaszak said.

Banaszak said any industrial process can be dangerous, “and anything we do has impacts on the earth. So what we’re trying to do is continuously and on an ongoing basis employ best knowledge, best practices and the technological development and the regulation needed to make sure that we’re getting the best that we can. And the best that we can has to be clean water. We have to have clean water,” she said.

Banaszak said many people don’t realize there is already regulation in place to protect Pennsylvania from water pollution.

“Even if I get a lease, I’m not going to drill a well or even move equipment onto that site until I’ve presented to the state of Pennsylvania a well drilling plan, and a well drilling plan has a water management plan attached to it,” she said.

Much concern has been raised about “fracking” – the hydraulic fracturing of rock to release natural gas.

Banaszak said fracking has been used in the industry since the 1940s. And when the Safe Drinking Water Act was passed in 1974, the U.S. Environmental Protection Agency found it unnecessary to regulate because it wasn’t threatening drinking water. The manner in which it was being managed at the state level was sufficient to protect drinking water, she said.

Banaszak said problems with the completion of drilling and cementing of wells or poor management of fracking fluid on the surface led to pollution of groundwater, not the fracking process itself. She said more oversight is needed for those practices.

Banaszak said gas companies don’t want to reveal formulas for fracking fluids because they are proprietary. But the industry doesn’t oppose disclosing the proprietary information to state regulators, local authorities and hospitals if the information is kept confidential, she said.

Banaszak said making the EPA responsible for oversight of fracking would require the agency to develop a new oversight program or dramatically overhaul its program regulating underground use of fluids.

A complete overhaul would be a slow process, taking six months to two years to develop a proposal, plus more time for advertising, public comment and developing draft and final plans.

“That’s why there’s so much concern. It’s not a simple matter just to say, oh, we’re just asking under federal law for the disclosure of chemicals,” she said.

Regarding concerns about fracking depleting water supplies, Banaszak said that even at double the peak drilling level in the Barnett Shale in Texas, which is 10 times greater than Marcellus drilling was in 2009, water use would represent only half of what is used for recreational purposes in Pennsylvania, such as golf course and ski slope maintenance.

As for economics, Banaszak said imposing a severance tax on natural gas production could actually hamper economic development.

Although the Marcellus Shale is the second-largest natural gas field in the world, she said other sources are available to investors. She said it seems natural to assume that the state could gain more revenue through taxing natural gas production, but the issue can be counter-intuitive.

“If you impose a tax, you get less investment and the government could see less net revenues. … If you let the situation go, the amount of government revenue you collect could actually be more,” she said.

The pipeline infrastructure in the Northeast is old and difficult to tap, requiring much investment. In West Virginia, where taxes there are 10 percent higher, “you see dramatically low investment,” Banaszak said.

Copyright: Times Leader

Industry may pay to upgrade plants that handle waste water from process.

By Rory Sweeneyrsweeney@timesleader.com
Staff Writer

The state is contending with a multibillion-dollar water-treatment problem, and the growing gas-drilling industry might be part of the solution.

A roughly $7.2 billion deficit exists for repairing or upgrading waste-water treatment facilities in the state, according to a task force created by Gov. Ed Rendell to solve water-infrastructure issues. Gas companies might help defray that cost as more wells are drilled because the companies will need treatment facilities for waste water.

The process to drill gas and oil wells, called hydraulic fracturing or simply “fracing,” involves shooting sand and water down a well to fracture the rock containing the oil or gas.

The contaminated water is separated out and can be stored and reused, but must eventually be treated. The state Department of Environmental Protection categorizes it as industrial waste, agency spokesman Mark Carmon said.

In western Pennsylvania, where many shallow wells exist, privately operated treatment facilities handle such waste, but none has so far in the northeast area, said Stephen Rhoads, president of the Pennsylvania Oil & Gas Association.

Exploring the Marcellus Shale, which runs from upstate New York into Virginia, including the northern edge of Luzerne County, generally requires far more water than shallow wells because the wells can be 8,000 feet deep

Companies working in this region have reused the water in multiple wells and then shipped it to the facilities out west, Rhoads said, but “obviously, moving it across the state with the fuel prices the way they are, is not economically” viable. The water can also be injected deep into the ground, but no one has sought such a permit in this region, Carmon said.

That leaves sending the water to public facilities, but since many of them are already near or at capacity, the industry is considering paying to upgrade plants. About 30 of the largest regional treatment facilities have been notified by DEP that they might be approached with the idea and that they’d first need to modify their liquid discharge permits and receive approval from the agency, Carmon said.

The idea hasn’t escaped the gas companies.

“We’ve talked about that in various areas throughout the state,” said Rodney Waller, of Range Resources Corp. “We’re investigating that, but … there’s nothing on the horizon.”

Upcoming events

• 10:30 a.m. today the state Department of Environmental Protection, Department of Conservation and Natural Resources, Pennsylvania Fish and Boat Commission, Susquehanna and Delaware river basin commissions, and county conservation districts are meeting in Harrisburg with industry members to discuss environmental regulations.

• 7 p.m. June 23 the Penn State Cooperative Extension is holding a gas-lease workshop for landowners at the Lake-Lehman High School.

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

Copyright: Times Leader

75 percent of gas production workforce composed of unskilled, semi-skilled jobs.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

If natural gas production from the Marcellus Shale is as successful as energy companies and landowners hope, the companies likely will need to hire more employees to man wells, perform testing for and oversee the drilling of new ones and monitor their operations.

“The jobs associated with natural gas drilling are well-paying jobs,” said Doug Hock, spokesman for Calgary-based Encana Energy, which has its U.S. headquarters in Denver, Colo.

Salaries even for less-skilled positions generally range between $60,000 and $70,000, Hock said.

The types of company jobs that usually become available when drilling operations are successful include drilling engineers, geologists and geophysicists and permitting experts. Pumpers, employees who check wells on a regular basis for proper operation, will be needed after more wells are drilled, Hock said.

Other positions with energy companies include experts in land negotiations and in community relations, he said.

Rory Sweeney, spokesman for Chesapeake Energy, said the Oklahoma City, Okla.-based company currently has 1,032 employees working in Pennsylvania, up from 215 in January 2009.

Local employment

As far as local employment, Sweeney said 168 employees report to local offices, “but we have more than 1,000 statewide and most of them are working rigs in NEPA.”

Types of workers expected to be hired include welders, rig hands, production workers, engineers, drilling and land technicians, pipeline field staff, construction field staff, administrative support and dozens of other occupations.

Last summer, the Marcellus Shale Education and Training Center at the Pennsylvania College of Technology conducted a Marcellus Shale Workforce Needs Assessment study that looked at potential workforce needs in two tiers of Pennsylvania counties – the northern tier, which borders Luzerne County to the north, and the central tier, which borders Luzerne County to the west.

The northern tier includes Wyoming, Sullivan, Susquehanna, Bradford and Tioga counties; the central tier includes Clinton, Centre, Columbia, Montour, Northumberland, Union, Snyder, Lycoming and Mifflin counties.

The study found that the direct workforce needed to drill a single well in the Marcellus Shale region is comprised of more than 410 individuals working in nearly 150 different occupations. The total hours worked by these individuals are the equivalent of 11.53 full-time, direct jobs over the course of a year.

The study notes that nearly all of these jobs are required only while wells are being drilled.

By comparison, 0.17 long-term, full-time jobs associated with the production phase of development are created for each well drilled in a given field. While comprising a very small percentage of the overall workforce, these long-term jobs compound every year as more wells are drilled. For example, if 100 wells were drilled each year for 10 years, 17 production jobs would be created each year, according to the study.

The study found the majority of occupations in the direct workforce were unskilled or semi-skilled jobs including heavy equipment operation, CDL truck operation, general labor, pipefitters and a variety of office-related occupations. These occupations account for about 75 percent of the workforce.

Learn on the job

Industry representatives, survey respondents and additional research indicated that most of these occupations require no formal post-secondary education, and only a few, such as CDL, welding and X-ray, require a specialized license or trade certification.

However, nearly all of them require the skills and knowledge unique to the natural gas industry, which are best learned through experience. Workers within all occupations of the natural gas industry are additionally prized for their hard work ethic and willingness to work very long hours in unfavorable conditions, the study found.

The majority of the remaining 25 percent of workers are in occupations that are white collar in nature, including foremen, supervisors, paralegals, Realtors, engineers and geological scientists.

Larry Milliken, director of Energy Programs at Lackawanna College, said that industry wide, jobs in the gas and oil drilling industry pay about 20 percent better than the same types of jobs in other industries.

“Around here, there are an awful lot of jobs in the $9- to $14-per-hour range. Jobs in the oil and gas industry tend to start in the $18-per-hour range and go up from there,” Milliken said.

A petroleum engineer might earn $40,000 to $45,000 teaching at a college or university, but working in the field for a gas or oil company, the engineer could make close to $90,000, he said.

The average technician in the natural gas industry can expect to earn about $30 per hour, which equates to an annual salary of about $60,000. A starting technician with a two-year degree can expect to earn $18 to $20 to start, amounting to a salary near $40,000, Milliken said.

In gas production growth areas, employees with at least associate’s degrees would tend to progress up the employment ladder “faster than someone off the street,” Milliken said.

Sweeney said Chesapeake has a variety of recruiting events, such as a drill-rig worker recruiting event this week through PA CareerLink, and a job fair in Towanda in October that attracted more than 1,000 applicants.

Chesapeake also employs a Scranton-based professional recruiting firm to recruit local employees for NOMAC, Chesapeake’s wholly owned drilling subsidiary.

Company officials plan to build a residential and training facility in Bradford County this year to serve as quarters for out-of-town employees and as NOMAC’s Eastern U.S. Training Facility, which will help the company train workers, Sweeney said.

Coming tomorrow: Schools gear up to train Marcellus Shale workers.

Copyright: Times Leader