Major Chesapeake Announcement: Shifting from Dry to Wet Gas

stop pressChesapeake Energy today made a major announcement about a change in their investment and drilling strategy for 2012: they will reduce drilling in “dry” natural gas areas by 50 percent for 2012—to 24 rigs by the end of June from the currently operated 47 rigs. Chesapeake operated 75 dry gas rigs in 2011, so the new level is a 67 percent reduction from last year. Chesapeake will also spend some 70 percent less of their capital budget on dry gas drilling in 2012, down to $0.9 billion (from $3.1 billion in 2011). It’s the lowest capital expenditure they’ve made on drilling in dry gas areas since 2005.

By the end of June, Chesapeake says they will be operating only 12 rigs in the dry gas areas of the Marcellus Shale.

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EPA Starts Water Deliveries in Dimock, PA

The federal Environmental Protection Agency (EPA) is getting itself involved in the ongoing situation in Dimock, PA by delivering water to four households that were affected by methane migration (see MDN’s recent Weekly Update for our view on EPA sticking its nose in). After the EPA told these same families two months ago their water was safe, they reversed course and now say they want to run some water tests themselves, and in the meantime they’ll deliver water to four of eleven families who have refused the Pennsylvania DEP’s settlement of the matter.

The EPA promised water to these same families a few weeks ago and reneged within 24 hours. This time they kept their promise.

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Five States Require Drillers to Use Registry, the national hydraulic fracturing chemical registry where the public can look up information about the chemicals used in hydraulic fracturing on a well-by-well basis, is co-sponsoring a “Let’s Talk About It” meeting in Williamsport, PA this Wednesday (see this page for more details). The meeting runs from 5-7:30 pm and will provide details on how hydraulic fracturing works. Note: via Energy in Depth is currently a sponsor advertising on MDN.

Many drilling companies voluntarily use to disclose the volumes of chemicals and water they use in the process of fracking, and do so for each well they drill. Four states already require drillers within their borders to use You can now add Texas as the fifth state to that list.

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Record-Breaking 19K New Wells to be Fracked in 2012

Hydraulic fracturing, the process used to break apart shale rock deep below the earth’s surface to allow natural gas and oil to flow, will increase in 2012 some 19 percent from last year according to Spears & Associates, a research and consulting company for the worldwide petroleum industry. Almost 19,000 new wells will be fracked in 2012, compared with 16,000 in 2011. Halliburton is the largest U.S. fracking services provider with 18 percent of the market.

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PA Town Buys NG-Powered Recycling Truck, Will Save $8K/Year

Plains Township, located near Wilkes-Barre in Luzerne County, PA, has just become the first municipality in northeastern PA to purchase a recycling truck powered by Marcellus Shale natural gas. Plains has also installed a new natural gas filling station at the town garage.

Is there a natural gas-powered vehicle in your town’s future? With natural gas at $1.50 per gallon vs. diesel fuel at $4 per gallon, just maybe.

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