A cautionary tale for landowners (and governments) looking to lease property. There is a finite window of time when your property is desirable and once that window closes, it may be tough to find a lease.
The village of East Palestine (Columbiana County), OH with 130 acres of village-owned land to lease is finding that out—the hard way:
Why are drilling permits from Range Resources not being approved in Robinson Township (Washington County), PA? You may recall that Robinson is one of seven towns in PA that sued the State of Pennsylvania over Act 13, a new shale drilling law passed in February 2012. Robinson and the other towns object to a provision in Act 13 that replaces the right of local towns to enact zoning restrictions on oil and gas drilling and instead replace local rules with a uniform set of zoning rules from the state (see Lawsuit Filed: PA Towns Sue State over Marcellus Act 13 Law).
Robinson and the other towns went to court over the provision and won their case in the lower courts. The decision was appealed by the state all the way to the PA Supreme Court where a everyone eagerly awaits a decision (see PA Supreme Court Hears Testimony on Act 13 Zoning).
The third shoe has finally dropped (if that’s even a legitimate metaphor!). Obama’s Secretary of Energy, Steven Chu, has resigned. You may recall MDN reported early on that the three Obama cabinet members who most directly affect shale drilling—Chu, EPA chief Lisa Jackson and Dept. of Interior Sec. Ken Salazar were all rumored to be departing a second Obama term (see 3 Top Officials Rumored to be Leaving Obama Administration).
Of the three, Chu was the one rumormongers were most sure about. Yet Jackson was the first to go, and Salazar the second. On Friday, Chu announced he too would depart. His tenure at Energy has been marked by crony capitalism with the government handing out big big money to politically-connected Obama donors—Solyndra being the most famous example. It’s “so long and don’t let the door hit you on the way out” to Sec. Chu…
In what may be the final stretch of four and a half long years to win approval for New York State to begin using the miracle of hydraulic fracturing as has Pennsylvania, Ohio, West Virginia, Texas, Louisiana, Wyoming, Oklahoma, Colorado and so many other states, the New York State Petroleum Council (NYSPC) has launched a new ad campaign aimed at one person: Gov. Andrew Cuomo. Listen and watch the new commercials below.
Last Friday the NYSPC issued this press announcement about the new ad campaign:
Marcellus Shale drilling in Pennsylvania was responsible for just a small fraction of PA’s air pollution in 2011 according to newly released data (the first full year of data we have) from the Dept. of Environmental Protection, and from a private study by Rand Corporation (see below). How much did it contribute? PA’s shale gas industry was responsible for about 4% of total air pollution emitted by all industrial facilities in 2011.
Although the overall numbers are low, that’s not to say there aren’t concerns or things to improve…
Pennsylvania has a big problem with water seeping from abandoned coal mines—the water mixes with minerals from the mine and is highly acidic. Some 300 million gallons of it flow—every day—into Pennsylvania’s waterways, killing off fish and plant life in 4,000 miles of rivers and streams. The PA Dept. of Environmental Protection (DEP) recently launched a plan to encourage shale drillers in the state to use “mine influenced water” (MIW) for drilling and fracking operations. It kills two birds with one stone: it helps to get rid of MIW and it gives drillers a steady source of water for fracking (see PA DEP Finalizes Procedure for Using Acid Mine Water in Fracking).
Just one problem: Drillers are scared to death of “if you touch it, you own it for evermore.” That is, drillers are rightly concerned about liability in this day and age of litigate everything. Who wants to get sued for doing the right thing? What can PA do to reassure drillers to give MIW a shot?
Help may be on the way for Pennsylvania landowners who have leased their land, but not all of their land is part of a “production unit.” PA State Sen. Gene Yaw has introduced legislation what would release the land not in production so it could, theoretically, be leased again, or leased to someone else.
This update from one of our favorite blogs, ShaleEnergyLawBlog:
Speaking at the Marcellus-Utica Midstream conference last week in Pittsburgh, ITG Investment Research analyst Manuj Nikhanj said their research shows there are an astounding 80,000 locations still drillable in the Marcellus Shale, and that the Marcellus is “absolutely massive” and dwarfs the next biggest shale play. How long will it take to full drill the Marcellus? “Decades.”
He also had some interesting analysis on the question of what natural gas price is breakeven for drillers to make a profit:
Range Resources has revised its unproved resource potential—how much recoverable gas they believe they have in the ground for their leased acreage—by a little bit. At the end of 2011, Range estimated their reserves at 47-66 trillion cubic feet. At the end of 2012, they’ve revised it up to 48-68 Tcf. Not a huge jump, but hey, 1 trillion cubic feet of natural gas will heat 1 million homes for 15 years, just to give you some perspective.