Posts Tagged ‘president’

The board is still considering building a second plant.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

HANOVER TWP. – The Wyoming Valley Sanitary Authority board has decided not to treat wastewater from the Marcellus Shale gas-drilling process at its current plant, but is still considering building a second plant for that purpose.

Fred DeSanto, executive director of the authority, informed the state Department of Environmental Protection last week that the board wanted to withdraw an application to revise its current permit to allow treatment of wastewater high in total dissolved solids from gas and oil drilling operations.

After meeting with DEP officials, who explained the requirements the authority would have to meet for a revision, authority officials decided it would be too risky to contract with an energy company to accept 150,000 gallons of wastewater per day and possibly exceed the limits of dissolved solids imposed by DEP, said Robert J. Krehley, the authority’s director of administration and planning.

“We just knew that a good majority of the time, we’d be over the limits,” Krehley said.

DeSanto said the board is waiting to hear from a consultant it hired to look into the feasibility of constructing a stand-alone plant.

John Minora, president of Pennsylvania Northeast Aqua Resources, said his staff is still researching some technical issues, but he expects to make a recommendation to the board at the next meeting on April 20.

Minora said he’ll likely recommend constructing a second plant because it would benefit the authority and ratepayers as well as energy companies; it’s just a matter of working out details based on data he is still waiting to receive.

Disposing of wastewater in Hanover Township would save energy companies in transportation costs, given that the closest treatment plant that can process drilling wastewater is in Williamsport, and the next closest is in Somerset County. The Williamsport plant doesn’t have the capacity for wastewater from all nearby drilling sites, he said.

Minora said a “closed-loop” treatment plant would remove solids from the water; the solids would be disposed of in landfills. The treated drilling water would be high in chloride and diluted with treated water from the authority’s current treatment plant; that blended water could be sold back to drilling companies to re-use in drilling operations.

Given that the current plant would be discharging less treated water into the Susquehanna River because it would be added to the treated drilling water, the authority would in turn discharge less nitrates and phosphates into the river. The authority could then sell credits to other treatment plants that discharge nitrates and phosphates in excess of state limits, Minora said.

The additional revenue could be used to stave off rate increases to customers.

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

Copyright: Times Leader

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

Rail cars of sand to be used in Marcellus Shale natural gas extraction get a home.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

DURYEA – Investment spurred by Marcellus Shale natural gas exploration has transformed an antiquated, weed-ridden rail yard just north of Pittston into a state-of-the-art transloading terminal teeming with rail and trucking activity on an almost daily basis.

Over the last year, Reading & Northern Railroad Co. sunk $100,000 into Pittston Yard, laying new track to accommodate 100 new rail cars and constructing a facility to store and hold up to 800 cars of sand to be used in hydraulic fracturing, or “fracking,” operations at Marcellus Shale drill sites throughout Northeastern Pennsylvania, said Reading & Northern President Warren A. Michel.

“The reason for our success is that we are the largest facility in the region capable of handling hundreds of rail cars of sand. We now have 130 (sand) rail cars at the yard and we’ll be expanding substantially over the next six months,” Michel said.

The company rewarded its full-time employees for their work on the project and throughout last year with an extra week of paid vacation this year and a paid trip to their choice of either Disney World; Branson, Mo.; Williamsburg, Va.; London; or a cruise.

“This is our way of saying thank you for a job well done,” company owner and Chief Executive Officer Andrew M. Muller Jr. said in a press release.

Between Reading & Northern and its customers, who are involved in the Marcellus Shale fracking and drilling industries, Michel expects another half-million dollars of investment with the laying of more track, construction of bucket conveyors and four holding silos for the sand, and construction of facilities to handle other aspects of the drilling process, such as pipe delivery and the transportation of brine water from the area.

The upgrade and expansion project began about a year ago after Reading & Northern officials began hearing that drilling companies were challenged with the logistics of transporting and storing significant volumes of sand, pipe, water and other materials, according to a marketing release prepared by Daniel Gilchrist, Reading & Northern vice president of marketing and sales.

After several discussions with Reading & Northern partner Norfolk Southern, company officials believed they could offer substantial benefits to customers, Gilchrist said.

Pittston Yard, formerly Coxton Yard, was built in 1870 by the Lehigh Railroad as a hub to move coal from the region to Eastern markets. And while the yard had had been serving many Reading & Northern customers, it was overgrown with weeds and trees and was underutilized.

Many of the tracks were suitable only to hold empty storage cars, and it was not apparent initially how much track and acreage was actually there and available for use, Gilchrist said.

After showing the site and meeting with several potential customers, Reading & Northern began discussions with D&I Silica and its transload operator, the Myles Group, and developed a plan.

Work began in November with tree removal, clearing of several acres, surfacing of more than 5,200 feet of track and construction of a 600-by-80-foot unloading pad. By Dec. 7, the company had more than 50 loaded rail cars on site ready to be transloaded. The following day, at 3 a.m. in the midst of a snowstorm, the first trucks were loaded with sand for customers.

Because of a number of factors including the Marcellus Shale drilling industry, Reading & Northern has hired 10 new employees over the last two months. The company also recently purchased two new locomotives, 101 rail cars and six miles of short-line track between Monroeton and Towanda, where much of Northeastern Pennsylvania’s Marcellus Shale economic activity is focused, Michel said.

Copyright: Times Leader

Potential for economic plus to area. Williamsport benefits despite no well within 12 miles.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

With most of the nearby Marcellus Shale natural gas production occurring north and west of Luzerne County, the question of whether Greater Wilkes-Barre will benefit with an economic boom or be bypassed remains unanswered.

It depends on a number of factors, including the volume and quality of natural gas that can be harvested in the county.

If prospects are not good here, the proximity of natural gas development in nearby counties could have some impact locally if the infrastructure close to Wilkes-Barre has the most to offer nearby energy companies, drillers and their employees, according to an economic development official in a county that has been reaping the benefits of Marcellus Shale production.

Jason Fink, executive vice president of the Williamsport/Lycoming Chamber of Commerce, said chamber officials began seeing signs of interest in gas production in Lycoming County about two years ago when the appearance of landmen first became noticeable.

Work had begun on five to seven natural gas wells in northern Lycoming County by the end of 2007, according to records from the state Department of Environmental Protection.

By the end of 2008, 13 more wells had been drilled; another 24 followed last year, and four more have been drilled this year.

And although the closest well is about 12 to 15 miles from Williamsport, the city of about 30,000 is seeing “a number of significant areas of development,” Fink said.

A boom hits Williamsport

The first evidence of business development related to the shale came about a year and a half ago with growth in oil field services. Chief Oil & Gas has been operating for well over a year in the county and Anadarko Petroleum Corp. also has had a presence, Fink said.

Precision Drilling set up shop and Weatherford – a mechanical/technological support company for the oil and gas industry – is in the process of developing a 20-acre site in the county, he said.

Industrial Properties Corp., which is operated by the chamber, sold a 24-acre parcel to Halliburton, which is in the process of developing the property and projects the hiring of 250 employees at the site.

Sooner Pipe, which provides casing pipe for Chesapeake Energy and is one of the largest customers of U.S. Steel, just signed a 10-year lease with the Williamsport Regional Airport for a pipe lay-down yard. That project is expected to employ 50 people when operational, Fink said.

The work force at Allison Crane & Rigging – a third-generation family-owned company in Williamsport – grew by more than 50 employees early on in the well construction phase. And Sooner Pipe intends to use local trucking company Woolever Brothers Transportation to haul all of its pipe when the facility is operational, Fink said.

It’s all about infrastructure

Fink said that Williamsport is benefiting from the gas extraction activity, the heart of which is at least 15 to 20 miles northwest and northeast of the city, because it has more to offer than more rural counties to the north.

“They need to have access to certain infrastructure to conduct their business. We have a highway system, housing, hotels, restaurants – everything they need for their employees. Bradford and Tioga are more rural and have very limited hotel space,” Fink said, adding that rail service through Norfolk Southern and a short line and a nearby interstate highway also helps matters.

Bradford County saw 113 wells drilled last year, while Tioga County had 114.

Because of the influx of workers, the city saw demands for home and apartment rentals grow. Developers responded by renovating space above downtown businesses, creating new rental units.

Fink said local unemployment had been hovering around 10 percent, but he’s seen it drop to 9.1 percent lately.

“We’ve been working with the Pennsylvania College of Technology and the local CareerLink office. Really, once more local people are able to gain the skills this industry requires, I think you’ll be able to see a greater economic impact,” he said.

Would it work in Wilkes-Barre area?

“I would think Wilkes-Barre would have the same opportunities if they find gas in volumes in areas proximate to Wilkes-Barre. And the Wilkes-Barre area understands the positive side as well as the pitfalls of the acquisition of natural resources for energy purposes,” Fink said.

Todd Vonderheid, president of the Greater Wilkes-Barre Chamber of Business and Industry, agrees.

“There’s certainly an opportunity to be captured for the region. Several things have already happened,” Vonderheid said.

Vonderheid noted that several suppliers and vendors to the gas-and-oil industry already are locating in the region and hiring locally.

“We’re trying to facilitate that and make the process as easy as possible. We’re working with energy company officials to better learn what those supply opportunities might be,” Vonderheid said, adding that representatives of Chesapeake and EnCana energy companies sit on the chamber board of directors.

Vonderheid said a presentation for chamber members on Marcellus Shale opportunities, the gas extraction process, environmental issues and the possible economic impact is in the works.

Copyright: Times Leader

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

Drilling for natural gas in the Marcellus Shale that underlies much of Northeastern Pennsylvania is expected to create hundreds to thousands of jobs, depending on who’s doing the projections, and have other widespread economic effects.

Some of those new work opportunities will be with the drilling and gas companies, but others are expected to be with subcontracted services, from land surveying and engineering to hauling and construction. Legal and banking services also will be needed.

Chesapeake Energy has invested significantly in not only leasing land in Pennsylvania, but in doing business with private companies.

With 94 wells drilled in the state in 2009 and more than 200 additional wells planned for this year, the company has paid subcontractors and vendors in Pennsylvania $269 million since January 2009, company spokesman Rory Sweeney said in an e-mail.

Among the first employers to see the effects of natural gas exploration are law, surveying and engineering firms.

“We are seeing an increase in our business volume,” said Mark Van Loon, a partner with Rosenn Jenkins & Greenwald, a law firm with offices in Scranton, Wilkes-Barre and Hazleton.

“We’ve represented quite a few people in relation to the Marcellus Shale and land leases in Luzerne County, north to the New York border, and east and west from there in Susquehanna, Bradford, Luzerne and Lackawanna counties. There have been some in Wayne County, but not as much,” Van Loon said.

Lease holders also will also need to protect their financial assets, and that’s where banks come into the picture.

David Raven, president and chief executive officer of Pennstar Bank, said the financial institution is seeing a significant increase in business related to Marcellus Shale at branches in Susquehanna County.

“It’s specific to folks who receive lease (bonus) payments and eventually will receive royalties on the gas that’s produced,” Raven said.

In addition to landowners who want to protect their rights while negotiating the most lucrative deals, firms and individuals that enter into large contracts with the gas and drilling companies – engineers, construction firms, suppliers and haulers, for example – will want to have those contracts vetted before signing, according to Van Loon.

“If somebody has a contract that’s large enough, they’re likely to have it reviewed by their legal counsel because it involves too much risk for them not to. And there could be contractual disputes in relation to the delivery or performance of services,” he said.

Van Loon said his firm has five attorneys actively working on oil and gas lease issues, but at this point the partners have not seen the need to hire additional staff.

That’s not the case with Borton Lawson, an engineering firm based in Plains Township that also has offices in Bethlehem, State College and, as of two months ago because of the business generated by the Marcellus shale, in Wexford – a town in Pittsburgh’s northern suburbs.

Chris Borton, company president, has referred to the Pittsburgh area as “the heart of the gas and oil industry” in the region.

Last year, Borton Lawson laid off some of its survey crew workers as companies hurt by the recession cut back on land development. But over the last six months, the firm has hired six to eight people – including several surveyors – for jobs directly related to the Marcellus Shale.

And the company is looking for 13 more employees right now to fill positions such as environmental engineers and scientists, an electrical engineer, an automation engineer and a mechanical engineer.

Salaries for those jobs range from $40,000 to $80,000 depending on the type of job and experience of the employee, Borton said.

Borton said his firm is working with five natural gas companies in Northeastern Pennsylvania. The company will open a satellite office in the borough of Towanda, the county seat of Bradford County, on April 15 because of the extensive natural gas exploration and drilling in that area.

County drilling near

One of the gas companies – Encana Oil and Gas Inc. – has leased 25,000 acres of property in Luzerne County. The land is mainly on the north side of Route 118 in Fairmount, Ross, Lake and Lehman townships.

Encana so far has obtained permits for drilling one well in Lake Township and another in Fairmount Township and is seeking a permit for one in Lehman Township, said company spokesman Doug Hock. Hydrogeological studies are now under way, and officials hope to begin constructing wells by May.

“For every well drilled, that creates about 120 jobs, either directly or indirectly. … The bulk of these jobs as we begin operations are done by subcontractors,” Hock said.

Subcontracted work includes water haulers, truck drivers, construction crews for well pad grading and construction and rig hands after the wells are built. Local average wages could see a boost, given that salaries even for less skilled positions range from $60,000 and $70,000, he said.

Hock said Encana prefers to hire local contractors, “but it’s not always possible because of the skills available in the labor market.”

He couldn’t predict how many new jobs will be generated by Encana operations because officials won’t know how many additional wells – if any – might be drilled until they see the results of natural gas production from the first two or three.

“By the end of 2010, we’ll have an idea if we have a good program, something that’s economically viable that we can continue to develop,” Hock said.

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

Copyright: Times Leader

Nearly $2 million will be allocated for a look at environmental results.

STEVE GELSI MarketWatch

NEW YORK — The U.S. Environmental Protection Agency said Thursday it will conduct a massive study to investigate any potential adverse impact of hydraulic fracturing to extract natural gas, as the energy industry moves to boost domestic natural gas supplies.

The effort comes as part of a move by government officials and academics to grapple with an expected increase in the decades-old practice of extracting natural gas by injecting water and fracturing rock, a practice known as fracking.

In Northeastern Pennsylvania, drilling is proceeding in the Marcellus Shale, a layer of bedrock containing natural gas.

“There are concerns that hydraulic fracturing may impact ground water and surface water quality in ways that threaten human health and the environment,” the EPA said Thursday.

The agency said it’s reallocating $1.9 million to help pay for a “comprehensive, peer-reviewed” study. Regina Hopper, president of industry group America’s Natural Gas Alliance, said the EPA study will help affirm the safety of fracking.

“Hydraulic fracturing has been refined and improved over the past 60 years and has been used safely on more than one million U.S. wells,” Hopper said in a prepared statement. While hydraulic fracturing usually takes place far underground, well below aquifers for domestic water supplies, it also produces wastewater which must be treated on site or trucked off for disposal.

Last month, the House Energy and Commerce Committee launched an investigation into the potential impact and said it would like to see more information on the chemicals used in fracturing liquid.

“Hydraulic fracturing could help us unlock vast domestic natural gas reserves once thought unattainable, strengthening America’s energy independence and reducing carbon emissions,” said Chairman Henry Waxman, D-Calif. “As we use this technology in more parts of the country on a much larger scale, we must ensure that we are not creating new environmental and public health problems.”

Copyright: Times Leader

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

MARC LEVY Associated Press Writer

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Copyright: Times Leader

On WVIA show, members of industry admit not telling public about methods.

By Rory Sweeneyrsweeney@timesleader.com
Staff Writer

PITTSTON TWP. – Members of the gas-drilling industry acknowledged on Thursday evening a failure to inform the public about their procedures, and the audience at the WVIA call-in show reminded them of that often.

Viewers of the “State of Pennsylvania” program repeatedly questioned – through the Internet, phone calls and in person – potentials for polluting, environmental justice issues and the industry’s willingness to abide by regulations.

There were even sporadic bursts of applause when in-house questions touched on contentious issues. “I don’t want it (Marcellus Shale drilling) in Luzerne County,” said Audrey Simpson of Shavertown “Take a trip up to Dimock (Township in Susquehanna County) and see what the hell is happening to those people up there.”

There, methane contamination in 13 wells is being attributed to gas-drilling activities. Those affected have brought a lawsuit against the local driller, Cabot Oil and Gas.

A Cabot representative was not among the panel.

In fact, the only driller there was Chesapeake Energy, represented by David Spigelmyer, the vice president of government relations for Chesapeake’s Eastern Division. The company has defended the industry by itself at several similar public-input meetings.

Early on during the hour-long program, the vehemence was foreshadowed by Gary Byron, a former state Department of Environmental Protection official and the president of Dux Head Environmental Services, a consulting firm for the drilling industry.

“The industry and the DEP don’t agree on a lot, but the one thing they do agree on,” he said, is that information has lagged behind drilling activity so much that “there are a lot of misconceptions about the industry.”

He added that many of the companies need to be educated about regulatory methods in Pennsylvania. “They want to comply,” he said.

Bruce Bonnice, who has worked for several resource-conservation groups but also leased his land to Carrizo Oil and Gas and now consults for them, likened the risks to everyday transportation. “I’m not sure I’m going to have a car accident every time I get in my car, but I still travel,” he said.

Spigelmyer noted plans for taxing the industry are premature because the Marcellus hasn’t yet shown it’s worth refocusing capital from other gas shales in southern states. He added that regulatory overhead would further stunt that process.

Copyright: Times Leader

By Rory Sweeneyrsweeney@timesleader.com
Staff Writer

The Wyoming Valley Sanitary Authority is looking to join the ranks of regional sewer authorities profiting from natural gas drilling.

Following Williamsport and Sunbury, where authorities are already treating drilling wastewater, the WVSA is requesting proposals to build a closed-loop pretreatment plant on its land in Hanover Township.

The plant would accept wastewater only within certain pollution parameters, and the treated water would need to be reused for other gas drilling.

Proposals are due by March 29, and the authority hopes to have the plant built within a year, pending necessary permitting.

“I think this thing can get built in seven, eight, nine months or quicker, so again, when will it be permitted?” said John Minora, president of PA NE Aqua Resources, which is consulting on the project.

The plant would be able to treat 800 gallons a minute with a daily flow of 1 million gallons, plus storage and a filling station. The system could utilize any of several techniques that could include separation and disposal of waste in a landfill, evaporation and land application of the minerals or treatment and dilution, Minora said.

Dilution would require the same amount of water, plus about 10 percent more, he said, which would come from the plant’s treated sewage water.

Removing the solids and chemicals is easy, he said, but extracting the dissolved salts is not, which is why dilution might be the most economical option.

“Honestly, we’re open,” he said. “We’ll consider any system that does that job.”

Unlike at Williamsport or Sunbury, however, the resulting Hanover Township water won’t be sent to the existing treatment facility and would need to be purchased by gas companies for use in drilling.

“We want a system that isn’t going to discharge (into a waterway, such as the Susquehanna River), whether or not there’s a byproduct we have to dispose of in another fashion,” he said.

There is an old rail spur at the site that could be reconditioned. Rail is the preferred transportation method, he said, because it’s faster and less disturbing to the community. However, a trucking route is being considered utilizing a second entrance that passes only a few homes, he said.

That route requires the rebuilding of a washed-out bridge.

“We’ve looked at some alternatives, where really the impact on the neighborhood is minimal,” he said.

All proposals require a bid bond of 10 percent of the total bid. Minora declined to offer an estimated cost.

Copyright: Times Leader

Cleaner than coal and cheaper than oil, a 90-year supply is under our feet, experts say.

By MARK WILLIAMSAP Energy Writer

An unlikely source of energy has emerged to meet international demands that the United States do more to fight global warming: It’s cleaner than coal, cheaper than oil and a 90-year supply is under our feet.

It’s natural gas, the same fossil fuel that was in such short supply a decade ago that it was deemed unreliable. It’s now being uncovered at such a rapid pace that its price is near a seven-year low.

Long used to heat half the nation’s homes, it’s becoming the fuel of choice when building new power plants. Someday, it may win wider acceptance as a replacement for gasoline in our cars and trucks.

Natural gas’ abundance and low price come as governments around the world debate how to curtail carbon dioxide and other pollution that contribute to global warming. The likely outcome is a tax on companies that spew excessive greenhouse gases. Utilities and other companies see natural gas as a way to lower emissions — and their costs. Yet politicians aren’t stumping for it.

In June, President Barack Obama lumped natural gas with oil and coal as energy sources the nation must move away from. He touts alternative sources — solar, wind and biofuels derived from corn and other plants. In Congress, the energy debate has focused on finding cleaner coal and saving thousands of mining jobs from West Virginia to Wyoming.

Utilities in the U.S. aren’t waiting for Washington to jump on the gas bandwagon. Looming climate legislation has altered the calculus that they use to determine the cheapest way to deliver power. Coal may still be cheaper, but natural gas emits half as much carbon when burned to generate the same amount electricity.

Today, about 27 percent of the nation’s carbon dioxide emissions come from coal-fired power plants, which generate 44 percent of the electricity used in the U.S. Just under 25 percent of power comes from burning natural gas, more than double its share a decade ago but still with room to grow.

But the fuel has to be plentiful and its price stable — and that has not always been the case with natural gas. In the 1990s, factories that wanted to burn gas instead of coal had to install equipment that did both because the gas supply was uncertain and wild price swings were common. In some states, because of feared shortages, homebuilders were told new gas hookups were banned.

It’s a different story today. Energy experts believe that the huge volume of supply now will ease price swings and supply worries.

Gas now trades on futures markets for about $5.50 per 1,000 cubic feet. While that’s up from a recent low of $2.41 in September as the recession reduced demand and storage caverns filled to overflowing, it’s less than half what it was in the summer of 2008 when oil prices surged close to $150 a barrel.

Oil and gas prices trends have since diverged, due to the recession and the growing realization of just how much gas has been discovered in the last three years. That’s thanks to the introduction of horizontal drilling technology that has unlocked stunning amounts of gas in what were before off-limits shale formations. Estimates of total gas reserves have jumped 58 percent from 2004 to 2008, giving the U.S. a 90-year supply at the current usage rate of about 23 trillion cubic feet of year.

The only question is whether enough gas can be delivered at affordable enough prices for these trends to accelerate.

The world’s largest oil company, Exxon Mobil Corp., gave its answer last Monday when it announced a $30 billion deal to acquire XTO Energy Inc. The move will make it the country’s No. 1 producer of natural gas.

Exxon expects to be able to dramatically boost natural gas sales to electric utilities. In fact, CEO Rex Tillerson says that’s why the deal is such a smart investment.

Tillerson says he sees demand for natural gas growing 50 percent by 2030, much of it for electricity generation and running factories. Decisions being made by executives at power companies lend credence to that forecast.

Consider Progress Energy Inc., which scrapped a $2 billion plan this month to add scrubbers needed to reduce sulfur emissions at 4 older coal-fired power plants in North Carolina. Instead, it will phase out those plants and redirect a portion of those funds toward cleaner burning gas-fired plants.

Lloyd Yates, CEO of Progess Energy Carolina, says planners were 99 percent certain that retrofitting plants made sense when they began a review late last year. But then gas prices began falling and the recession prompted gas-turbine makers to slash prices just as global warming pressures intensified.

“Everyone saw it pretty quickly,” he says. Out went coal, in comes gas. “The environmental component of coal is where we see instability.”

Nevada power company NV Energy Inc. canceled plans for a $5 billion coal-fired plant early this year. That came after its homestate senator, Majority Leader Harry Reid, made it clear he would fight to block its approval, and executives’ fears mounted about the costs of meeting future environmental rules.

“It was obvious to us that Congress or the EPA or both were going to act to reduce carbon emissions,” said CEO Michael Yackira, whose utility already gets two-thirds of its electricity from gas-fired units. “Without understanding the economic ramifications, it would have been foolish for us to go forward.”

Even with an expected jump in demand from utilities, gas prices won’t rise much beyond $6.50 per 1,000 cubic feet for years to come, says Ken Medlock, an energy fellow at the James A. Baker III Institute for Public Policy at Rice University in Houston. That tracks an Energy Department estimate made last week.

Such forecasts are based in part on a belief that the recent spurt in gas discoveries may only be the start of a golden age for gas drillers — one that creates wealth that rivals the so-called Gusher Age of the early 20th century, when strikes in Texas created a new class of oil barons.

XTO, the company that Exxon is buying, was one of the pioneers in developing new drilling technologies that allow a single well to descend 9,000 feet and then bore horizontally through shale formations up to 1 1/2 miles away. Water, sand and chemical additives are pumped through these pipes to unlock trillions of cubic feet of natural gas that until recently had been judged unobtainable.

Even with the big increases in reserves they were logging, expansion plans by XTO and its rivals were limited by the debt they took on to finance these projects that can cost as much as $3 million apiece.

Under Exxon, which earned $45.2 billion last year, that barrier has been obliterated.

Copyright: Times Leader