The New York Department of Environmental Conservation (DEC) leased 19,000 acres of state forestland to Chesapeake Energy and Fortuna Energy (now Talisman Energy) in 2006 to allow gas drilling. The deal provided state coffers with $9 million and the promise of 12.5 percent royalties on any gas produced. Those leases are due to expire Nov. 15 of this year, but Chesapeake has let the DEC know it believes the leases for its share (15,472 acres) should be extended, a legal phrase called force majeure, because of the moratorium that has been in place since 2008 on hydraulically fractured gas drilling. In a letter to the DEC, Chesapeake implied they will sue the state to extend the lease agreements if the state does not willingly agree to an extension.
Norse Energy, an Oslo (Norway)-based gas drilling company has just announced they are “betting the farm” on drilling in New York State’s Marcellus and Utica Shales. They’ve even decided to suspend other types of gas drilling favor of New York’s shale gas. Recently, Norse became the first company to file a permit with the state DEC to drill in the Utica Shale once permits start to be issued (see this MDN story).
In response to a study released in May by Duke University showing elevated levels of methane in water wells near active gas wells being drilled, Chesapeake Energy has released its own water testing data. One of the chief criticisms of the Duke study is that baseline measurements were not taken—that is, Duke did not test water wells before active gas drilling took place to eliminate the possibility that methane in those water wells was naturally occurring. Chesapeake has that data for wells close to its active drilling sites. The results are indeed interesting.
Pennsylvania municipalities have found a new market in the Marcellus drilling industry for excess fresh water and for treated sewage wastewater. The going rate they receive, depending on whether it’s fresh water or treated wastewater, is between $2 and $6 per 1,000 gallons. In some cases, the sale of water used in hydraulic fracturing of Marcellus gas wells is netting millions of dollars in extra revenue for state and local organizations.
In a letter to the editor of the Wall Street Journal, Cal Dooley, president and CEO of the American Chemistry Council commented on the critically important (and huge) contribution shale gas drilling is having on the chemical industry in the United States. He said: