Posts Tagged ‘USD’

HARRISBURG – As a bill calling for a moratorium on leasing state forest land for natural gas exploration languishes in the Senate, Gov. Ed Rendell announced today that the state Department of Conservation and Natural Resources finalized a lease agreement with Anadarko Petroleum Corp. for 32,896 acres of forest land in Centre, Wyoming and Bradford counties.

In a press release, Rendell said the “responsible natural gas lease agreement” will allow Pennsylvania to meet its need for revenue while fulfilling its obligation to protect Pennsylvania’s natural resources.

Under the agreement, Anadarko has paid the commonwealth $120 million to access 32,896 acres that are surrounded by tracts of land for which drilling companies already hold lease agreements. Because these newly leased tracts can largely be accessed by gas operations on the adjacent tracts, the amount of new state forest surface area that must be disturbed is minimized, according to the press release.

Other than the agreement, the commonwealth will not have to make any additional state forest land available to reach its revenue goals for natural gas drilling in the 2010-11 fiscal year.

“This is a responsible approach that meets our revenue targets and limits the impact of additional natural gas exploration in our state forests,” Rendell said.

“We do not need to expand our drilling footprint in state forest lands to meet our revenue goals, because these parcels are already surrounded by other leased acres,” Governor Rendell said. “They also are within areas leased in the 1970s and 1980s by DCNR, but not all the acreage was drilled because technology wasn’t available to exploit Marcellus Shale deposits.

“In order to develop the acreage, DCNR and Anadarko have agreed to certain provisions to make certain there is minimal impact on the surface. Horizontal drilling technologies allow Anadarko access to most of this acreage from already disturbed areas on their adjoining leased lands.”

The newly leased acres cover 11 tracts in the Moshannon, Sproul and Tiadaghton state forests where Centre, Clinton and Lycoming counties meet.

For 27,185 acres on 10 tracts, Anadarko agreed to pay $4,000 per acre, consistent with the average price paid during DCNR’s January 2010 competitive lease sale. For the remaining 5,711 acres on one tract, the commonwealth will receive $2,000 per acre because the geology underneath is not as promising for gas production.

The lease of the 11 tracts totals about $120 million. DCNR’s January 2010 lease sale generated $128 million-$60 million of that went toward this year’s General Fund budget and the additional $68 million will be applied to a target of $180 million to help balance state budget for the fiscal year that begins July 1, 2010.

“With this agreement negotiated and the money in the bank, we can safely be on board with the moratorium which passed the House and is now in the Senate. If the Senate passes the legislation and it comes to my desk, I will sign it,” Rendell said.

Read more in The Times Leader on Wednesday.

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

EnCana’s hydraulic fracturing has never impacted a water well, spokeswoman says.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

Wendy Wiedenbeck acknowledges that Luzerne County residents might be troubled by the fact that EnCana Oil & Gas (USA) Inc. paid $1.5 million in fines over the past four years.

But Wiedenbeck, the community and public relations adviser for the natural gas company that will begin drilling in the Back Mountain and Red Rock areas this summer, said the company is “committed to responsible development” and today is “a leader in environmental stewardship.”

According to data Wiedenbeck provided at the request of The Times Leader, EnCana was assessed $542,000 on nine fines in 2006; $663,000 on 19 fines in 2007; $306,000 on 19 fines in 2008; and $3,000 on 10 fines in 2009. The data for 2009 is subject to change, she said.

Some Back Mountain residents and elected officials have expressed concern that drilling activities could contaminate water private water wells or the Huntsville and Ceasetown reservoirs.

Wiedenbeck said EnCana has never had an instance in which the company’s hydraulic fracturing process affected a water well.

“In fact, there has never been an instance where the fracking process impacted water wells. We have, however, experienced operational failures, which resulted in regulatory violations and fines. These range from issues with lost circulation during cementing, which resulted in permanent changes to cementing protocols in 2004, to deficiencies with location signage,” she said.

Encana’s violations have ranged a wide gamut, from a $1,000 fine after a contractor’s truck broke down on a mountain road during a restricted time period, preventing parents from picking up their children from a bus stop in 2002, to the largest fine issued by the Colorado Oil & Gas Conservation Commission for allowing gas to migrate into a creek.

The commission fined EnCana a record $371,000 after one of the company’s wells leaked into West Divide Creek in Western Colorado in 2004. The seep was found to contain the carcinogenic chemical benzene.

Wiedenbeck said that fine is included in the total assessed in 2006, and the seep resulted from a failure in cementing procedures at the well.

“We made a mistake. We moved too fast. But we worked with the commission to modify and improve the cementing procedure in Colorado. Since then, we’ve drilled hundreds of wells in Colorado without incident. But (the Divide Creek incident) is part of the reason why we’re taking a very thoughtful and measured approach to our operations in Luzerne County,” she said.

Wiedenbeck also pointed to a vast improvement in EnCana’s record related to spills.

In 2009, EnCana had 75 reportable spills totaling 4,036 barrels of material, a volume reduction of 38 percent from 2008 and 87 less than in 2007, she said.

Dave Neslin, executive director of the Colorado Oil & Gas Conservation Commission, said commission staff views EnCana as “a responsible operator.”

Neslin said EnCana’s compliance has improved since the Divide Creek seep, and the company implemented an extensive remediation plan. “Much of the impact has been remediated,” he said.

Neslin said EnCana is one of the largest operators in the state, responsible for nearly 10 percent of the approximately 40,000 active oil and gas wells in the state.

He noted that the company was the first to voluntarily establish a wildlife mitigation program encompassing 44,000 acres to ensure wildlife populations will be protected, and that EnCana won a commission award last year for the company’s Courtesy Matters community outreach program.

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

Copyright: Times Leader

The pursuit of natural gas on county land could endanger area water supplies, one leader says.

RALPH NARDONE Times Leader Correspondent

Opposition to local natural gas drilling continues to boil over. On Saturday, about 100 people gathered to voice their concerns about possible drilling at Moon Lake Park. The 650-acre park had been kicked around as a site with the blessing of county officials who were seeking a way to cash in on the local boom.

Organizers originally intended to conduct a nine hour “rally” there that included food vendors, family activities, music and more but could only meet briefly due to a lack of proper insurance coverage.

Janine Dymond from Harding, member of the Friends of Moon Lake and bike trail enthusiast said the county required by policy $1 million worth of insurance coverage for any large scale event on county property. She said when the group learned about the insurance they decided the estimated $1,300 in premiums to be cost prohibitive.

Still, they gathered to support each other, displaying signs of protest for the prospective drilling plans, and spit vitriol at Commissioner Steve Urban who supports gas drilling there.

Dymond said she personally gathered about 600 signatures on an anti-drilling petition.

“It’s hard not to get involved,” Dymond said.

Dr. Tom Jiunta from Lehman Township, one of the founders of the Gas Drilling Awareness Coalition, said the environmental cons of park drilling far outweigh the economic pros. Because of its proximity to the Ceasetown Dam, the fact most residences use well water and the recent issues concerning ground water pollution, drilling is too risky.

In addition, the amount of diesel fuel exhaust from the truck traffic and drilling machinery belched from a 24-hour industrial project is significant, he said. He spoke to people who have respiratory issues they attribute to drilling.

He said the gas industry often misleads about the actual economic value of drilling to Northeastern Pennsylvania. Most of the jobs produced will be for workers who come from out-of-state, he said. The gas taken locally will be sold in the global market to countries such as China, he added.

When talking about Moon Lake, Jiunta said the beauty of the park should be preserved as well as the health and safety of the residents.

Jean Whitesell from Hunlock Creek and Kathy Hopkins from Ashley, co-workers who visit Moon Lake on a regular basis, expressed their fears the park will become a drilling site. They were fishing with their children.

Whitesell said she was “upset” when she first heard about the drilling plans.

She said she is not opposed to gas drilling as long as it is done where it won’t “hurt anybody.”

Dymond said the Friends of Moon Lake thanked the Sierra Club for its help in fighting the drilling project. She said the group intends to organize a rally sometime in the near future.

Copyright: Times Leader

By ANDREW MAYKUTH The Philadelphia Inquirer

The state Department of Conservation and Natural Resources signed a $6.15 million agreement Monday with Chesapeake Energy Corp., giving the company the right to drill the Marcellus Shale under a seven-mile stretch of the Susquehanna River in Bradford County.

Under the lease, which applies to 1,500 acres of river between Towanda and the Wyoming County line, Chesapeake is permitted to access the shale with wells drilled on either side of the river. No well bores will penetrate the river itself.

Horizontal-drilling technology makes drilling for gas beneath the waterway feasible. With wells that reach laterally for thousands of feet, operators can capture gas under a large area from a remote location.

The state Department of Environmental Protection says that under-river gas exploration poses no more risk than any of the 1,400 other wells drilled into the Marcellus formation, which is a mile below the surface. The lease is separate from the state’s offering in January of 32,000 acres of state forests, which generated $128.5 million to help close the state budget gap.

The $6.15 million raised by the Susquehanna River lease will help keep open 24 state parks that had been threatened with closure because of the budget crisis, said Christina Novak, DCNR spokeswoman.

DCNR’s Susquehanna River lease may conjure memories of the 1959 Knox Mine disaster in the Port Griffith section of Jenkins Township, when the Susquehanna broke through a coal mine that was dug just below the river bottom. A dozen miners died in the flood.

Geologists say subsidence is not an issue with gas exploration. The well bores are only a few inches in diameter.

Copyright: Times Leader

National Science Foundation gives funds to Pennsylvania College of Technology.

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

The National Science Foundation has awarded a $294,689 grant to Pennsylvania College of Technology to be used for educating and training high school students for careers in the Marcellus Shale natural gas industry.

According to a release from U.S. Rep. Chris Carney, the award is the first in a continuing $882,134 grant that the foundation anticipates awarding to the Williamsport-based college over the next three years. It will provide funding to develop state-of-the-art, college-level curriculum for many of the nearly 150 occupations related to natural gas extraction.

“The Marcellus Shale formation represents a tremendous opportunity for job growth in clean-energy technology,” said Carney, D-Dimock Township. “This grant from the NSF will help the residents of our region cultivate the skills necessary to work at the forefront of the industry, and on one of the most significant natural resource reservoirs in the nation.”

The courses primarily target secondary students from 23 school districts in central and northern Pennsylvania seeking a head start on college credit through dual-enrollment programs.

“These students will be able to take courses in high school and start college with some credits under their belts,” said Larry Michael, the executive director for work force and economic development at Pennsylvania College of Technology. “The program provides educational pathways for high school students to make a smoother transition and have a leg up for careers in development of the Marcellus Shale.”

Lackawanna College also offers Marcellus Shale-related course offerings, many at its New Milford campus in Susquehanna County. The college was not in the running for funding from the NSF, said Larry Milliken, Natural Gas Technology Program director at Lackawanna College. He said those kinds of grants often go to research facilities, like Penn College.

Lackawanna College has received some funding recently for its gas education program.

Chesapeake Energy, which is one of the major gas drillers operating in Northeastern Pennsylvania, made a $50,000 donation to Lackawanna College to be used for equipment in training students enrolled in the Gas Tech Program.

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

Copyright: Times Leader

Mauri Rapp Abington Journal Correspondent

Sir Francis Bacon once said “Knowledge is power.” To that famous quote, Calvin Tillman adds “Once you know, you can’t not know.”

Tillman, the mayor of DISH, Texas, was one of four panelists in attendance at “Impacts of Gas Drilling and Your Community,” a Marcellus Shale drilling information seminar held April 29 at the Clark Summit fire hall. DISH, a town of fewer than 200 residents located approximately 25 miles from the Dallas/Fort Worth metroplex, garnered national attention after changing its name from Clark in exchange for free cable television service for ten years from DISH Network.

DISH has also attracted another kind of attention: the eye of natural gas companies drilling in the Barnett Shale region, a natural gas field which stretches approximately 5,000 square miles across the state of Texas. Tillman called DISH the “Grand Central Station” of the Barnett Shale play, with 11 compressor stations, three metering stations and more than 20 natural gas pipelines located within less than two square miles.

Tillman described to the 150-plus people in attendance April 29 the impact natural gas drilling has had on his town. To date, the Barnett Shale play has added approximately $8 to $10 billion and 100,000 jobs to the Texas economy, Tillman said. The industry has also added toxic chemicals to DISH’s air, he said. A study performed in August 2009 by Wolf Eagle Environmental showed that the air contained high concentrations of carcinogens and neurotoxins. Tillman continues to advocate for the town’s population, and on April 22 the Texas Commission on Environmental Quality installed a continuous air monitor in DISH. “I believe more testing should be done,” he said.

The mayor has relayed his story to audiences in the Marcellus Shale region during the past several months. Tillman said he is not against the industry and believes in working with it to get things done, but feels that citizens and communities should go into leases with their eyes open. He said that certain measures, such as green technologies, declaration of areas such as schools and parks off limits to drilling, and a separation between the DEP regulating and permitting bodies could help make the industry safer. Tillman also spoke in favor of a severance tax for Pennsylvania. “I hate to break it to you, but the oil and gas industry came into Pennsylvania and picked your pockets,” Tillman said. “You need to have a severance tax to pay for roads, to pay for environmental issues, to pay for more DEP workers.”

Putting a personal face on the Marcellus Shale play was Victoria Switzer, a natural gas lessor from Dimock Township who said she wished she knew when she signed her lease what she knows now. “We’ve all heard the glories of the natural gas industry,” Switzer said. “I’m not going to dispute some of those things, but I’m going to show you what comes with the package deal.”

Switzer said that for the past couple of years, she has been living in a gas field with 63 wells located within nine square miles, the closest one 710 feet from her own home. Twenty-four of those wells have had violations, said Switzer. She now conducts what she calls “Victoria’s Toxic Tours” for citizens, journalists and public officials interested in seeing the impact natural gas drilling has had in her township. “You need to know what is coming your way,” she told the audience.

Panelist Paul Lumia, executive director of North Branch Land Trust, provided tips for those who decide to lease to natural gas drillers, including getting to know one’s gas man and remaining vigilant in reporting suspected violations to DEP. Lumia also encourages the crowd to pressure policymakers into decisions that preserve the environment. “Don’t just assume that your neighbors will do it,” Lumia said. “Protecting our land is up to us.”

Also on hand was George E. Turner, a professional geologist with more than 20 years of experience with groundwater and water testing. Turner advised those considering natural gas leasing to get their water tested beforehand. “This gives you legal proof in case your water is contaminated,” he said.

Scott Perry, deputy director of the DEP Bureau of Oil and Gas Management, was on hand to answer questions from the audience.

Copyright: Times Leader

By Rory Sweeneyrsweeney@timesleader.com
Staff Writer

The yearlong wait was worth it for Wyoming County landowners who didn’t get a chance to sign a gas lease last year.

In a deal with Chesapeake Energy announced on Tuesday, they’ll receive almost double the bonus offered previously and an additional bump in the royalties they keep. The five-year deal offers $5,750 per acre immediately as a sign-up bonus, 20 percent royalties and a multiyear extension option.

The Wyoming County landowners group represents about 37,000 acres that haven’t been leased yet, and if all property owners sign up, the deal, in bonus money alone, is worth about $212.75 million.

Chesapeake officials were hoping to have a lease signing this week, but the landowners don’t think that will be possible logistically, group secretary Chip Lines-Burgess said. “The one question that comes up is, ‘What happens if we’re on vacation next week when this comes about?’ ”

After months of relative silence on leasing in the Marcellus Shale, a layer of gas-laden rock about mile underground that centers on northern Pennsylvania, interest is again heating up.

The agreement is somewhat bittersweet for members of the group who leased last year before the financial crash with Colorado-based Citrus Energy.

Lines-Burgess’s 42 acres in Meshoppen were among those roughly 35,000 acres. They received a $2,850-per-acre bonus, minus consultant payments, for a five-year lease with 17-percent royalties. If the lands aren’t drilled within five years, there are two one-year extensions each for $1,000 per acre.

“Yes, sure, it’s a tough pill to swallow … but who knew?” she said. “If it goes a year down the road, it might go to God only knows what, or it may not. … You just have to make a decision that when you sign on the dotted line, (you’re) happy.”

She said her family was able to pay off their farm. She remained on as secretary, as did other members of the group’s core committee, because “we just felt it was our … duty to make sure this happened.”

“Our county consists of a lot of people in their golden years. … We have a lot of people who have a lot of acreage and needed something. If this wonderful lease brings those people more comfort in their golden years … that’s the ultimate,” she said. “Their grandchildren, with this, won’t have to worry about what’s in this lease.”

The deal comes as groups in Susquehanna County are signing similar leases and about a month after the Northern Wayne Property Owners Alliance signed perhaps the first lease in the state with 20-percent royalties.

The South West Ross Township Property Group held a members-only meeting on Tuesday night, and member Ken Long acknowledged that the group is “in negotiations with a major gas company” and that “the monetary offers are in the ballpark of what” the Wyoming County landowners received.

He declined to confirm or deny that the company is Chesapeake.

It’s unclear what caused offers to rise so much so fast, but there are theories. “There’s been a lot of discussion about that,” said Lines-Burgess, who speculated that it might be a reaction to potential legislation that would affect leasing rights.

“We just don’t know what they (gas companies) are seeing. … Obviously, they have a plan, and we’re part of it,” she said.

Long said he believed the education efforts of land groups helped. “I would say that a lot of the efforts of the groups that have formed … are kind of paying dividends now. I think we’ve raised the standards of the leases, and we’re starting to see the increases in the bonus payment and royalties,” he said, adding that companies might be scrambling to get a foothold in the shale as more and more of the land is leased.

Copyright: Times Leader

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

SCRANTON – U.S. Sen. Robert Casey wants the U.S. Environmental Protection Agency to investigate and respond to groundwater contamination that the state has linked to a natural gas well in Susquehanna County.

In a letter to EPA administrator Lisa Jackson, Casey noted that natural gas drilling in the Marcellus Shale region has led to job creation, strengthened the state economy and reduced dependence on foreign oil.

However, Casey writes, “the highly variable and unpredictable nature” of hydraulic fracturing (fracking) “that can lead to the contamination of drinking water is of great concern.” He noted the gas and oil industry is exempt from complying with the federal Safe Drinking Water Act.

Casey said there are many reasons for requesting EPA involvement, including recent incidents in the state that “raise the question of whether the necessary steps have been taken to protect Pennsylvania families and communities against the detrimental side effects of drilling.”

He pointed to methane gas infiltration into private water wells in Dimock Township and noted that several wells have exploded because of a suspected buildup of natural gas.

Casey said the state Department of Environmental Protection fined Cabot Oil & Gas Corp. $240,000, ordered the plugging of three natural gas wells believed to be the source of the contamination, prohibited Cabot from drilling in the vicinity for one year and required Cabot to install permanent water treatment systems in affected homes.

Casey also noted that, according to DEP, between 6,000 and 8,000 gallons of fracking fluid leaked from a pipe at a drill site and contaminated the surrounding area and a wetland in Susquehanna County in two separate spills on the same day in September 2009 – one in the afternoon that leaked 25 to 50 barrels of fluid, another in the evening that leaked 140 barrels.

“I commend DEP for taking action, but I remain concerned that the current status of federal and state oversight of gas drilling may be inadequate” to protect families living near drilling sites, Casey wrote.

The senator asked for a meeting with appropriate EPA officials to discuss natural gas drilling and whether the agency could investigate water and environmental contamination. He said he hopes Science Advisory Board officials would also attend the meeting to discuss the scope, timing and methodology of a congressionally mandated study the EPA has launched on hydraulic fracturing.

An EPA spokeswoman said officials are reviewing Casey’s letter and expect to respond in the near future.

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

Copyright: Times Leader

Jurisdiction over drilling for natural gas in the Marcellus Shale is subject of hearing.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

HARRISBURG – The chairman of the state Public Utility Commission is confident that Marcellus Shale development will stabilize prices not only of natural gas, but electricity prices as well, and is thrilled the natural gas industry supports the PUC’s oversight of pipeline safety in Pennsylvania.

Commission members on Thursday heard testimony from representatives of the natural gas industry, a federal pipeline safety official, the state consumer advocate and the director of the Pennsylvania Association of Township Supervisors on the commission’s jurisdiction as related to Marcellus Shale development.

“I think everybody is in agreement that this increased gas supply, whether the gas is sold in Pennsylvania or not, is going to have a depressing effect on the wholesale price of gas,” PUC Chairman James H. Cawley said after the hearing.

Irwin “Sonny” Popowsky, of the state Office of Consumer Advocate, testified that the retail and wholesale price level of natural gas “has been on a roller coaster ride for years.”

He said an abundance of natural gas should stabilize and ultimately lower the price of gas and electricity so that it is affected by supply and demand rather than politics in the Middle East.

Commissioner Wayne Gardner said he’s heard that many roads were severely damaged under Chesapeake Energy traffic.
David J. Spigelmyer, vice president of government relations for Chesapeake, said a harsh freeze-thaw season and the fact that many roads were never constructed with proper foundations resulted in the need significant road repairs. But the company is bonded to repair those roads and has hired 23 road contractors in Bradford County to repair them.

David M. Sanko, executive director of the Pennsylvania Association of Township Supervisors, said his concern is that state law requires bonds for roadwork in the amount of $12,500, but it could cost up to $100,000.

Commissioner Robert Powelson asked how the commission can be confident that the “self-policing system (of the gas industry) will work and that safety will be maintained?”

Spigelmyer said the industry has worked closely with the state Department of Environmental Protection to ensure the industry meets state requirements and noted that permit fees that fund inspections climbed from $100 to about $4,000.

Alex Dankanich, general engineer with the U.S. Department of Transportation’s Office of Pipeline Safety, testified that of the 31 states that produce natural gas, only Pennsylvania and Alaska lack the statutory authority to regulate gas gathering pipelines.

Cawley noted that the administration had been pushing for the PUC to obtain inspection authority because the administration doesn’t have the manpower.

Dankanich said the PUC would be reimbursed 80 percent of the cost for inspecting non-Class I pipelines – those surrounded by 10 or fewer homes within 220 yards of a pipeline in a 1-mile stretch. Those lines are exempt from federal inspection.

PUC Vice Chairman Tyrone Christy asked if Pennsylvania should also exempt Class I pipelines from inspection.

Lindsay Sander, a consultant for the Marcellus Shale Coalition, said she was comfortable with the exemption given the low number of Class I problems.

Cawley said the natural gas industry “seems to be bending over backwards to be responsible. But you’ve got to have the rules in place for everybody, including the potential bad apples who are going to try and take shortcuts.”

He said the commission is not trying to economically regulate the gas production industry.

“We’re not going to try and set the rates. We just want safety jurisdiction, whether they’re a public utility or not. And … the industry coalition, which has 170 members, support us adopting the federal standards. … They’ve said that’s fine and they’ve said they’re willing to help pay for it on a per-mile basis,” he said.

Cawley said the commission has submitted proposed statutory language to House and Senate oversight committees related to PUC safety regulation.

“One part of it has already been passed by the House almost unanimously. It would increase fines for violations to the federal level. It would go from $10,000 per day to $100,000 per day and up to $1 million overall. House Bill 1128, that could be the vehicle for getting it done. The Senate could amend it and send it back over or the House could give us this additional legislation, but this is our top legislative priority – pipeline safety,” Cawley said.

He said he also asked the industry for a commitment to use PUC’s certificated trucks for hauling equipment and supplies, “and they’ve committed to that, which is good. We’ve increased carrier enforcement in that area because we discovered that in their haste to get supplies in, they weren’t using PUC certificated carriers.”

“We’ve increased our enforcement, … and now that they know we’re watching, they’ll be more careful about the carriers they use,” Cawley said.

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

Copyright: Times Leader