Posts Tagged ‘Pennsylvania’

More than a mile beneath parts of Pennsylvania lies a mostly untapped reservoir of natural gas.

Geologists and energy companies have known for decades about the gas in the Marcellus Shale, but only recently have figured out a way to extract it from the thick black rock about 6,000 feet underground.

Now gas drillers are looking to lease local land in an attempt to find and remove the gas, whose value increases as energy prices soar.

In January 2008 leases were being signed for values near $100 per acre. By May that value had increased to over $2000 per acre.

With lease values changing so rapidly, landowners are unsure at what price to accept a lease offer.

Kenneth L. Balliet, a forestry and business management educator with the Penn State Cooperative Extension, recently took a trip to Fort Worth to see the economic impacts of those deposits. He said leases are being signed for $18,000 per acre in areas where production has proven strong.

Though there are only about 20 wells in Pennsylvania so far, Balliet expects local production to eventually rival Texas’ Barnett Shale. He said a gas company confided it plans to spend $1 billion this year in leasing agreements in Pennsylvania.

Northeastern Pennsylvania is Where the Thick Organic-Rich Shale Intervals are Located.

Copyright: Geology.com
Copyright: Timesleader.com

Although signing bonuses generate an enormous amount of interest because they are guaranteed income, royalties can be significantly higher. A royalty is a share of a well’s income. The customary royalty rate is 12.5 percent of the value of gas produced by a well. Higher royalty rates are sometimes paid by aggressive buyers for highly desirable properties.

The royalties paid to eligible property owners from a well yielding over one million cubic feet of natural gas per day can be hundreds of thousands of dollars per year.

If the Marcellus Shale holds up to the optimistic expectations of some natural gas experts, Pennsylvania, Ohio, New York and West Virginia could temporarily have an enormous boost in income that might be sustained for a few decades.
Copyright: Geology.com

Elected official who held hearing in area last week on natural gas drilling says he was responding to pro-energy group attack.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

A state representative says he was unfairly attacked in a press release by a pro-energy group after holding a public hearing in the Back Mountain last week.

State Rep. Camille “Bud” George, majority chair of the House Environmental Resources and Energy Committee, issued a rebuttal Friday, saying that “money and misinformation are the hallmarks of a gas industry attack titled, ‘Rep. George’s Fact-Free Fact-Finding Mission.’”

Energy In Depth sent the press release to media outlets on Thursday, a day after George convened a committee hearing at 1 p.m. in the Lehman Township Municipal Building to hear testimony on the impact of Marcellus Shale drilling and proposed legislation that would put more environmental safeguards in place.

State Rep. Phyllis Mundy, D-Kingston, invited George to have a hearing in her district, where EnCana Gas & Oil USA plans to drill the first natural gas exploratory well in Luzerne County in May or June. The well will be drilled in Lehman Township.

Area residents and lawmakers are concerned for many reasons, including the fact that the drill site would be less than two miles from the Huntsville and Ceaseville reservoirs, which supply drinking water to nearly 100,000 area residents.

Energy In Depth’s press release classified the hearing as a “pep rally staged by anti-energy activists and like-minded public officials in Northeast Pennsylvania.”

“Characterized as a ‘field hearing’ by … George, who held the event as far away as he could from his home in Clearfield County, the forum included representatives from the Sierra Club and Clean Water Action league, as well as testimony from a local podiatrist and someone describing himself as a ‘naturalopathic’ physician. The only thing missing? Anyone in possession of real, genuine facts related to responsible gas exploration in the Commonwealth,” the release stated.

In response, George said the most troubling aspect of “the attack by Energy In Depth, whose members include the Pennsylvania Independent Oil and Gas Association, is its slur of concerned lawmakers and citizens of Northeastern Pennsylvania as anti-energy activists.”

George noted that the committee had a hearing on Feb. 18 in Clearfield County, where the president of the Marcellus Shale Coalition and executives from some of the leading gas companies in Pennsylvania, including Range Resources and Chesapeake Energy, testified. He also participated two weeks ago in a House Democratic Policy Committee hearing in Ebensburg that included testimony from Chief Oil & Gas and Chesapeake. Ebensburg is in the Altoona area.

“The industry has not been an unwanted stranger at hearings,” George said.

Energy In Depth’s press release then listed quotes – pulled from a story in The Times Leader – of people who testified and rebutted them with quotes from gas industry representatives, a state Department of Environmental Protection fact sheet and Gov. Ed Rendell.

Energy In Depth pointed to testimony from Mundy in which she said she supports House Bill 2213 “which would among other things … require full disclosure of the chemicals used in hydraulic fracturing.”

The organization then pointed to a DEP fact sheet which states that drilling companies “must disclose the names of all chemicals to be used and stored at a drilling site … that must be submitted to DEP as part of the permit application process. These plans contain copies of material safety data sheets for all chemicals … This information is on file with DEP and available to landowners, local governments and emergency responders.”

But George said that “full disclosure of the chemicals – not just the trade names – and how they are used is not (now) required.”

“The precise chemical identities and concentrations and how and when they are employed can be crucial to emergency responders and remediation efforts after spills, and is at the crux of efforts to remove the infamous ‘Halliburton Loophole’ that exempts the industry from oversight by the Environmental Protection Agency,” George said.

“The gas industry can bloat campaign coffers with money, buy discredited and ridiculed studies and poison the debate by taking statements out of context. However, its ‘best management practices’ should never be taken at face value to be the best for Pennsylvania,” George said.

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

Copyright: Times Leader

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

As energy companies and lease holders extol the benefits and safety of natural gas drilling in the state, and environmentalists and people who live near drilling operations point to chemical spills, water pollution and noise, a congressman last week called for an effort from opposing sides in the energy debate to work together for compromise.

U.S. Rep. Joe Sestak, D-Delaware County, who is running for the U.S. Senate, came to The Peace and Justice Center in Wilkes-Barre on Wednesday to host a forum on Marcellus Shale development.

Panelists included James Shallenberger, a Pennsylvania-licensed geologist and senior project manager at consulting firm Princeton Hydro who spoke on behalf of the gas drilling industry; David T. Messersmith, an extension educator with Penn State Cooperative Extension in Wayne County who is an expert on Marcellus Shale; and Dr. Thomas Jiunta, a Lehman Township resident with a podiatry practice in Kingston who founded Luzerne County Citizens for Clean Water.

“There was a lot of passion in that room. … One side is saying one thing, one side is saying another. I want to be a person who brings people together for a principal compromise, not a compromise of principles,” Sestak said last week in a phone interview.

“I personally believe this is a great economic opportunity for our state, particularly if we are able to benefit by a proper excise tax and if we put the proper protections in place,” Sestak said.

Sestak also said a priority should be enabling community and area colleges to train people for gas industry jobs to ensure Pennsylvanians are getting jobs associated with the drilling industry, rather than leaving energy companies with no choice but to hire experienced people from out-of-state.

Sestak said he learned much about the economic benefits as well as the environmental problems associated with natural gas exploration when he visited several counties in which Marcellus Shale drilling has been ongoing while he was on the campaign trail.

He noted that former Sen. Rick Santorum and Sen. Arlen Specter voted for “the Halliburton Loophole,” which exempts the gas and oil industry from complying with the Safe Water Drinking Act. And he said he supports the “FRAC Act” – Fracturing Responsibility and Awareness of Chemicals Act, which would amend the Safe Drinking Water Act to include the gas and oil industry.

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

Copyright: Times Leader

House committee members hear testimony on impact of gas drilling, proposed environmental safeguards.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

KINGSTON TWP. – Members of the state House of Representatives Environmental Resources and Energy Committee came to the Back Mountain on Wednesday to hear testimony on the impact of Marcellus Shale drilling and proposed legislation that would put additional environmental safeguards in place.

Testifying were representatives of two environmental groups, a local physician active in environmental issues and a resident of Dimock Township, Susquehanna County, where the state Department of Environmental Protection ordered a gas company to provide drinking water to residents after their wells were contaminated by methane.

State Rep. Camille “Bud” George, committee majority chairman, said the committee convened at the township municipal building at the invitation of state Rep. Phyllis Mundy, D-Kingston.

Mundy said she requested the hearing because she and many of her constituents “have serious concerns about the potential impact of Marcellus Shale drilling on our streams, our land and especially our drinking water,” noting that a proposed well site is less than two miles from the Huntsville and Ceasetown reservoirs.

Noting the contamination of drinking water in Dimock Township and a recent drilling-related mud spill in Clinton County, Mundy said there was “still time to put safeguards in place to protect the environment and the public health from the negative impacts” of gas drilling.

“That is why I strongly support Chairman George’s House Bill 2213, the Land and Water Protection Act, which would, among other things, require state inspections of well sites during each drilling phase and require full disclosure of the chemicals used in hydraulic fracturing,” she said.

The act would also:

• Extend from 1,000 feet to 2,500 feet the presumed liability of a gas well polluting a water supply.

• Update bonding requirements to cover the costs of decommissioning a well from a $2,500 bond to a $150,000 bond for a Marcellus Shale well and to a $12,000 bond for all other wells.

• Reaffirm that local government may regulate aspects of drilling within traditional powers, such as hours of operation.

Jeff Schmidt, Sierra Club state chapter director, said the club supports the bill and suggested adding some provisions:

• Require a drilling permit applicant to publish in a local newspaper and in the Pennsylvania Bulletin that a permit application was submitted to DEP.

• Require that erosion and sediment control and storm water discharge plans for drill sites be as stringent as requirements for all other earth disturbance activities, and require DEP to offer county conservation districts the opportunity to review those plans and fund the work.

Brady Russell, Eastern Pennsylvania director for Clean Water Action, said the gas industry will “cut corners” if not properly supervised. He made several recommendations, including requiring an inspector – or eco-cop – on each drill site to make sure drillers follow approved plans.

He also suggested requiring drillers to pay for pre- and post-drilling testing of nearby water sources.

Dr. Thomas Jiunta, a podiatrist from Lehman Township, where issuance of a drilling permit is expected to be approved next week, said that since he has been researching Marcellus Shale exploration, he has “gotten a lot of lip service from senators and representatives about how we need to do it right. Before I start, I just want to say that maybe, maybe – and this is the first time I’ve said this word – we need a moratorium to stop it until we get it right.”

Audience members burst into applause and cheers at Jiunta’s suggestion.

After sharing his concerns about an inadequate number of treatment plants capable of removing hazardous chemicals from water used in hydraulic fracturing and risks associated with storing those chemicals underground, Jiunta made several suggestions for the bill.

One is adding a requirement that recovered waste water from the fracturing process be stored in sealed tanks rather than in surface pits that have liners that he said could tear and overflow with heavy rain.

Dimock Township resident Victoria Switzer testified first that a gas company “landman” talked her and her “misinformed, uninformed and na�ve” family into leasing their land for $25 an acre and a 12.5-percent royalty minus transportation cost.

“We now sit in the middle of 63 natural gas wells. In spite of what has gone terribly wrong here, the 2010 plan calls for a doubling of their efforts,” Switzer said.

She said gas drilling has resulted in diminished or contaminated drinking water supplies, destruction of roads and bridges, increased traffic beyond road capacity; decreased air quality, loss of aesthetics and more.

Mundy said she can’t imagine what Switzer is going through.

“How do you like less government – fewer DEP employees, lower taxes, no severance tax? This is what we’ve got; let’s fix it,” Mundy said.

State Rep. Tim Seip, D-Pottsville, said a severance tax on gas extraction is necessary to fund more inspectors and conservation district work. He said the public should lobby their state senators to adopt the bill when it comes before them.

Asked if he thought a moratorium was possible in Pennsylvania, George said he thought, “It’s really going to help Pennsylvania if every place where there’s drilling we get this type of attention.”

Copyright: Times Leader

Environmental Resources and Energy hearing Wednesday at Kingston Township building.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

KINGSTON TWP. – Several people with concerns about natural gas drilling in Pennsylvania – and especially in the Back Mountain – are scheduled to testify Wednesday at a public hearing before a state House of Representatives committee.

State Rep. Phyllis Mundy requested and is hosting a hearing of the House Environmental Resources and Energy Committee at the Kingston Township Municipal Building from 1 to 3 p.m.

Mundy, D-Kingston, said she has “grave concerns” that there are inadequate protections in place to protect the environment from drilling associated with the Marcellus Shale formation.

“I don’t think we’re going to be able to stop Marcellus Shale drilling, but we need to make sure it doesn’t leave a legacy like that of coal. An ounce of prevention is worth a pound of cure,” Mundy said on Monday.

She said she believes a proposed drilling site in Lehman Township is “much too close” to the Huntsville and Ceasetown reservoirs, which provide drinking water to many of her constituents.

Committee Majority Chairman Camille “Bud” George notes in a press release that the state Department of Environmental Protection issued more than 1,300 drilling permits in 2009 and more are expected in coming years, yet no study exists on the environmental or human health impacts of gas development in Pennsylvania.

Testimony will be presented about mitigating environmental risks and House Bill 2213 – the Land and Water protection Act introduced by George, D-Clearfield County.

The bill would:

• Require state inspections of wells during each drilling phase.

• Extend to 2,500 feet the presumed liability of a well polluting a water supply; the current radius is 1,000 feet.

• Require full disclosure of chemicals used in the hydraulic fracturing of the gas.

• Update bonding requirements to cover the costs of decommissioning a well. Current regulations call for a $2,500 bond, but the cost to cap a well could range from $12,000 to $150,000 for a deep well, according to George.

Scheduled to testify are Dr. Thomas Jiunta, a local podiatric physician active in environmental causes; Dr. Gere Reisinger, a physician whose 200-acre farm in Wyoming County has been affected by drilling; Victoria Switzer, whose water at her home in Dimock, Susquehanna County, was contaminated after nearby drilling; Brady Russell, eastern Pennsylvania director, Clean Water Action; and Jeff Schmidt, senior director, Sierra Club, Pennsylvania Chapter.

Copyright: Times Leader

Throughout most of its extent, the Marcellus is nearly a mile or more below the surface. These great depths make the Marcellus Formation a very expensive target. Successful wells must yield large volumes of gas to pay for the drilling costs that can easily exceed a million dollars for a traditional vertical well and much more for a horizontal well with hydraulic fracturing.

And rock units are not homogeneous. The gas in the Marcellus Shale is a result of its contained organic content. Logic therefore suggests that the more organic material there is contained in the rock the greater its ability to yield gas. John Harper of the Pennsylvania Geological Survey suggests that the areas with the greatest production potential might be where the net thickness of organic-rich shale within the Marcellus Formation is greatest.

Copyright: Geology.com

DAVID WETHE Bloomberg News

HOUSTON — Halliburton Co. and Schlumberger Ltd., trying to forestall a regulatory crackdown that would cut natural-gas drilling, are developing ways to eliminate the need for chemicals that may taint water supplies near wells.

At risk is hydraulic fracturing, or fracking, a process that unlocked gas deposits in shale formations and drove gains in U.S. production of the fuel. Proposed regulations might slow drilling and add $3 billion a year in costs, a government study found. As one solution, energy companies are researching ways to kill bacteria in fracturing fluids without using harmful biocides.

“The most dangerous part in the shale frack is the biocide,” said Steve Mueller, chief executive officer at Southwestern Energy Co., the biggest producer in the Fayetteville Shale of Arkansas. “That’s the number-one thing the industry is trying to find a way around.”

House and Senate bills introduced in 2009 would force producers to get permits for each well. That and other proposed environmental measures would cut drilling by as much as half and add compliance costs of $75 billion over 25 years, according to the U.S. Energy Department.

Biocides are employed because the watery fluids used to fracture rocks heat up when they’re pumped into the ground at high speed, causing bacteria and mold to multiply, Mueller said. The bacteria grow, inhibiting the flow of gas.

“You basically get a black slime in your lines,” he said. “It just becomes a black ooze of this bacteria that grew very quickly.”

Halliburton said March 9 that it’s testing a process using ultraviolet light to kill bacteria in fracking fluid.

About 80 percent of gas wells drilled in North America, including virtually all of those in the Marcellus Shale in Pennsylvania, are stimulated or fractured in some way, Tim Probert, corporate development chief at Halliburton, said.

“It’s incumbent on the industry to continue to develop tools and technologies that are compatible with minimizing the environmental impact of the stimulation process,” Probert said.

Copyright: Times Leader

(Source: Pittsburgh Post-Gazette) tracking By Pittsburgh Post-Gazette

Mar. 24–The discovery and development of the Marcellus shale natural gas deposits has been big news in Pennsylvania and neighboring states for several reasons.

One is the massive energy resource it represents. Another is the jump in jobs it could create. A third is the tax revenue that might be reaped. And one more is the concern that widespread drilling poses for the environment.

That worry covers a range of issues, but a major one to catch the eye of the Environmental Protection Agency is “fracking,” the hydraulic fracturing technology that breaks the rock deep in the ground to release the gas. The process injects millions of gallons of water mixed with chemicals and sand under great pressure into a gas well to crack the shale. How should drillers best dispose of this water?

While fracking has been used for decades at shallow depths, the EPA said last Thursday it would do a $1.9 million study of the potential adverse effects of the process at a mile or more underground. The EPA wants to gauge the impact on water quality and public health — and that makes this money well spent.

In Pennsylvania alone, 2,500 drilling permits were issued by the state for Marcellus shale gas wells between 2007 and 2009, with another 5,000 expected this year. The Marcellus Shale Coalition, a trade group, says 1,100 Marcellus shale wells have been drilled so far, as a way to get to some of the estimated 363 trillion cubic feet of natural gas.

While the coalition and others in the industry say they are committed to ensuring a safe approach to treatment and disposal of wastewater due to fracking, it’s good to know the EPA study will provide an objective, scientific view on how well they are doing.

It’s unfortunate the study could take two years to complete, but Americans should be willing to sacrifice speed for thoroughness on a question that involves community health.

—–

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Copyright (c) 2010, Pittsburgh Post-Gazette

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

The landscape of the state’s northern tier is changing as natural gas drillers set up shop from the Poconos west to Tioga County.

The burgeoning industry also is bringing change to the curricula at some local colleges hoping to capitalize on the need for a skilled and trained work force.

Lackawanna College in Scranton and Pennsylvania College of Technology in Williamsport have launched programs specifically catering to those interested in securing employment in the natural gas and ancillary fields. Other schools, including Johnson College and Keystone College, are investigating courses to prepare students for jobs in the industry.

When the industry made initial steps to move in to the region, Lackawanna College got in on the ground floor.

“Our goal was to try to find a niche where we could train people for jobs they could find here,” said Larry D. Milliken, director of energy programs at the college. The school, with input from the industry, created an applied science degree in Oil and Gas Production Technology program in December 2008.

The school asked Milliken, a former gas company employee with a background as an economic geologist who lives in Dunmore, to help with the program.

He sees great potential for the field and the creation of jobs, as companies look to tap into the gas supplies within the Marcellus Shale, a layer of gas-laden rock about a mile underground across most of Pennsylvania.

“I’m not sure most people realize the magnitude of what the Marcellus can mean and do for the state. … It’s going to be a huge game changer in Pennsylvania.”

Milliken said he sees hundreds of immediate jobs and the potential for thousands more as a result of gas drilling.

As an example, he said one well tender will be needed for every 20 wells that come on line. This year alone, he said, more than 1,000 wells are anticipated to be drilled and that number should double next year. This will mean 50 to 100 new well-tender jobs will be created every year for the next 20 years, he projects.

To prepare potential employees for those jobs, Lackawanna College offers an associate’s degree in natural gas technology and is developing an operating and maintenance degree program in compression technology that could debut next fall.

In addition, the college will soon start giving accounting students at its Towanda Center the option of customizing their degree to prepare them to work in the accounting side of the natural gas industry, Milliken said.

Milliken said Lackawanna relied heavily on curricula and course work offered by established programs at Western Wyoming Community College in Rock Springs, Wyo.; North Central Texas College in Gainesville, Texas, and Navarro College in Corsicana, Texas. Using that material, Lackawanna created an outline for its own potential programs and sent it to 10 gas companies “for feedback and modifications before settling in on our own curriculum.”

At the moment, the Pennsylvania College of Technology in Williamsport is the only other place to get industry-specific training. The school has partnered with the Penn State Cooperative Extension to create The Marcellus Shale Education & Training Center.

Opened in 2008, the center will identify the industry’s work force needs and respond with education tracks that train people for those jobs. Careers include welders, construction workers, drivers and machine operators and fabricators.Tracy Brundage, the school’s managing director of the Workforce Development and Continuing Education programs, said that as the landscape of the Northern Tier changes, so too do course offerings at the college.

She said input from energy companies has been influential in the design of 21 new courses, including those through the Fit 4 Natural Gas program developed by work force development boards in more than a dozen Northern Tier counties using Pennsylvania Department of Labor and Industry funds.

Officials from Lackawanna College also lauded the affiliations and assistance offered by gas companies.

“They’ve been very active,” Milliken said.

Last week, Chesapeake Energy donated $50,000 to help Lackawanna College expand its Natural Gas Technology Program at its New Milford Center campus in Susquehanna County. The college plans to use the money for capital-equipment costs in fitting out their new facilities for the program that began last fall.

“We’ve been an eager partner in these efforts,” said Brian Grove, director of corporate development for Chesapeake Energy.

Milliken said that in the short time the program’s been up and running at Lackawanna, the partnership has seen tremendous interest from potential students and positive feedback from the industry.

The companies reflected praise for the two-way-street relationship it has with the local schools.

Grove said “crafting an effective educational infrastructure will benefit the community far beyond its borders by equipping locals with skills they can market within the industry. A highly skilled work force is critical to our success as a company and the community’s long-term economic success as well.”

Brundage said that while the program at Penn Tech is still “in its infancy,” she, too, feels confident that the college’s programs have progressed nicely in a short period of time. “I think we’ve positioned ourselves pretty well with the industry. We’re not going to be able to meet all of their needs but we can help with a lot of them,” Brundage said.

So far 65 students have taken a course, including 14 who have completed welding courses. One course was created specifically at the request of the gas industry.

“They told us what they need as far as some of the welding components, so we aligned some things internally to meet those needs,” Brundage said.

Wendy J. Wiedenbeck, a spokeswoman for Denver-based EnCana Oil and Gas, said it’s too early to discuss her company’s needs because it is still in the exploratory stages. The company is looking at drilling specifically in Luzerne County.

“If we are successful and determine we would like to develop additional wells in the area, an important first step will be to understand what work-force development programs already exist in the area and how the curriculum aligns with business needs,” she said.

“New curriculum and training programs often come into existence after we’ve been operating in an area for some time,” Wiedenbeck added. “They evolve from the relationships we build along the way and are very much the result of a collaborative approach. In areas where we have established operations, we’ve collaborated with local colleges to create or build upon programs that help community members build the skills needed to compete for industry jobs.”

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

Copyright: Times Leader