Marcellus & Utica Shale Story Links: Fri, Jan 24, 2014

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:

New York

Shah on crucial fracking study
Capital New York
State health commissioner Nirav Shah refused on Tuesday to discuss virtually any aspect of his ongoing study into the long-term health effects of hydraulic fracturing. Last month, Shah had said he would not disclose any new details about his fracking study until after it is completed, and said there was “new data” to consider. Shah would only reveal on Tuesday that he has traveled to California and Texas, among other places he would not name, to study fracking. “I’m waiting to see, as the science evolves, my guidance will evolve,” he said. Shah also declined to identify any of the studies he has said prove the science of fracking is “evolving.” “If you look at the literature, you’ll find 40 from last year alone,” he said, before ignoring further questions from a reporter. Cuomo has said he will decide on whether or not to lift a moratorium on fracking in New York after he has seen the results of Shah’s health study.


Economic development big focus at Belpre Town Talk
Parkersburg News and Sentinel
“Oil and gas is one of the biggest things going on in our area and it’s the ancillary jobs created when that material starts to come out of the ground that we will get the biggest growth from,” Johnson told the crowd. “So far, about $12 billion has come into southeastern Ohio because of this boom.” Oran said the materials from the Marcellus and Utica shale that have brought about this economic growth could help the Kraton facility in a number of ways. “Shale gas can be used to create energy, heating and raw materials to produce more chemicals,” Oran said. “There are projections that shale gas will create millions of jobs in the next five years, but we are lacking in those who are qualified for those positions.” Because of the small number of workers with the experience and training, Kraton and other area industrial plants are working with area schools to train people to fill the demand. “We are partnering together to fix these workforce issues,” Oran said.

Utica Shale Academy charter school planned for eastern Ohio
Columbus Business First
An Ohio county in the heart of the Utica shale play is planning an oil- and gas-oriented charter school. The Southern Local Board of Education in Salineville, a village of about 1,300 in Columbiana County, is moving ahead with an open-enrollment school for grades 9-12, reports the Steubenville Herald-Star. The name: Utica Shale Academy of Ohio. John Wilson, superintendent of Southern Local schools, told the Herald-Star the charter program would strive prepare students for careers in the oil and gas industry while also offering a traditional curriculum. Many of the classes would be taken online with on-site assistance available from teachers.

Shale Revenue Providing Much Needed Cushion For County Coffers
Energy in Depth
Revenue generated from Utica Shale development is helping several counties in eastern Ohio replace infrastructure, erase debt and allow for county workers to receive long deserved raises. The revenue has come from land leases, sales taxes and even copy costs incurred at the county recorder’s office. For the counties of Monroe, Belmont and Carroll, it couldn’t have come at a better time. In BelmontCounty, the county is set to receive $3 million from leasing land to oil and gas producer Rice Energy. The county leased 406 acres of county-owned property for $7,500 an acre in September. According to Commissioners Favede and Coffland, the money will go toward reducing debt, upgrading water and sewer lines, and provide for county employee raises. In addition to the upfront lease bonuses, the county will receive a 20 percent royalty payment when the property is developed. The royalties will help generate a continuous revenue stream for future economic development projects.

Business seeks Middleton’s help in getting its water to drillers
Lisbon Morning Journal News
XL Sand and Gravel owners believe companies are skipping over Middleton Township and going elsewhere for water to use in the oil and gas drilling process. Mike and Kristen Lansberry told township trustees this week XL is losing business because it can’t sell water from its location on Jackman Road. In order to sell water the company must first have a road use maintenance agreement (RUMA) for Carmel Achor and Jackman roads, and the Lansberrys say it’s not fair they have to pay extra for roads they are already paying taxes on. The township previously had a RUMA for Carmel Achor with Chesapeake Energy but it was canceled in September of last year, a year and a half after it was first approved in 2011. It was the first RUMA for Columbiana County at that time and allowed the oil and gas exploration company to use Carmel Achor to transport water from local drilling sites into Pennsylvania. The agreement cancellation was initiated by the company, which claimed the road located between state Routes 170 and 154 was no longer needed for its purposes. Chesapeake began getting water elsewhere.

Justice: Energy Will Dominate the Docket
The Intelligencer/Wheeling News-Register
Ohio Supreme Court Justice Judith French predicts energy-related cases will dominate the court’s docket in years to come. Lower courts are already seeing large numbers of filings regarding property ownership and mineral rights, and French said the majority of these cases will proceed through appellate courts to the Ohio Supreme Court. “I think just energy in general will dominate the court docket once those cases get started,” she said. “In this part of the state, it’s about oil and gas. But in the western part of the state, it’s about wind. … The environmental issues could also come our way.”


Discord runs deep on new drilling rules
Pittsburgh Post-Gazette
Four members of the Department of Environmental Protection presided over a divided house Wednesday night at Washington & Jefferson College. Every five minutes, either the left side of the room or the right would break into applause at the first southwestern Pennsylvania public hearing of the agency’s proposed new oil and gas regulations. Citizens who felt the regulations don’t go far enough to control the shale gas industry in Pennsylvania outnumbered industry supporters at the meeting organized by the DEP’s Environmental Quality Board. The regulations are lengthy, but the same sections caught the attention of gas companies and their opponents. Among them is a provision dealing with companies’ responsibility to remediate water impacted by their activities.

Fracking: Do the Economics Justify the Risks?
[email protected]
In an effort to illuminate some of the nuances of this energy debate, the Penn Wharton Public Policy Initiative recently held a seminar titled, “Fracking, Environmental Policy, and Economic Growth,” moderated by Sarah Light, a professor of legal studies and business ethics at Wharton. The other participants were: Kathryn Klaber, former CEO of the Marcellus Shale Coalition, the largest organization representing companies involved in Pennsylvania’s natural gas drilling boom; Scott Perry, deputy secretary at the office of oil and gas management at the Pennsylvania Department of Environmental Protection (DEP), and Trevor Penning, director of the Center of Excellence in Environmental Toxicology at the University of Pennsylvania Perelman School of Medicine. There are many concerns about the impact of hydraulic fracturing on public health, safety and the environment, Light noted at the beginning of the discussion. That is not surprising given that fracking involves the high-pressure injection of water and chemicals into the ground to split shale rock apart to release the hydrocarbon sources that had been locked inside. “The rhetoric is heated on both sides,” Light said. “Not only is there disagreement about policy choices, but there is also sometimes disagreement about the facts underlying those policy choices.”

Sustainable shale group ‘has a tough road’
Upstream Magazine
A collaboration between green groups and energy companies is expected to face an uphill battle in getting operators in the Marcellus shale to sign up for voluntary certification in sustainable shale development, according to a report. The Pittsburgh-based Centre for Sustainable Shale Development (CSSD), which launched in March last year, began accepting applications for certification this week. The standards, which would be voluntarily adhered to, consist of 15 strict criteria deemed crucial for limiting the environmental impact of unconventional oil and gas development in the Appalachian basin. But most top Marcellus producers have indicated an unwillingness to volunteer for certification, the Pittsburgh Tribune Review reported. Cabot Oil & Gas is among the major Marcellus players that are unlikely to seek compliance with CSSD’s standards.

What’s in a name? Addresses for drilling sites include tall men and dead pigs
StateImpact Pennsylvania
If you’re walking in Sproul State Forest and come upon a brown sign with white lettering that reads, “Little Texas Lane”, you can safely assume the path leads to a Marcellus Shale gas well. That’s because a two-year-old law requires Marcellus sites to have official addresses and clear signage. It’s an effort to improve safety, so first responders will know exactly where to go in the event of an emergency. The state Department of Conservation and Natural Resources (DCNR) has had to come up with new names for previously unnamed state forest roads and access-ways to gas pad sites. Some of them are mundane– like Pad Eight Lane and Pad Ten Lane– both home to an Exco gas wells. Others have more character. Anadarko Petroleum has addresses at Little Texas Lane, Texaco Lane, Artesian Well Lane, Tall Man Lane, and Dead Pig Lane.

Pennsylvania Lawmakers Denied Legal Standing in Act 13 Case
NGI’s Shale Daily
The Pennsylvania Supreme Court on Tuesday denied two leading Republican state lawmakers a chance to argue as interested parties in favor of the General Assembly’s role in passing comprehensive oil and gas legislation into law in 2012. The high court said neither demonstrated legal standing in the case, which struck down parts of Act 13 and remanded others to a lower court. Pennsylvania State Senate President Pro Tempore Joseph Scarnati and state House Speaker Samuel Smith had waited nearly two years for a decision concerning an appeal they filed with the high court after a lower court ruled that they had no standing in the case.

Murrysville Council wants referendum vote on park drilling
Pittsburgh Tribune-Review
The fate of Marcellus shale drilling under Murrysville Community Park will be in the voters’ hands this fall. On Wednesday, Murrysville Council discussed a proposed lease for the oil and gas rights at the park. However, officials plan to ask residents to ultimately make the decision. Council will ask residents to petition for a referendum to be placed on the November ballot that would have voters decide if the municipality should sell the gas rights to the highest bidder. Officials from Huntley and Huntley, a Monroeville-based drilling company, have approached municipal leaders about leasing the gas rights under the 262-acre park but have not made a formal offer, said Mike Hillebrand, vice president and chief operating officer at Huntley. “We’ve been in discussions for several years to determine interest,” Hillebrand said. “We’ve thrown some concepts around, for economics, to see if it’s even advancable.”

CGG completes three-year Marcellus Shale multi-client program
CGG announced that it has extended its data library of shale acreage in the United States by completing a vast three-year multi-client 3D land seismic program targeting the Marcellus Shale Fairway. The Marcellus Shale is considered to be a leading shale play for future natural gas exploration and production in the United States. CGG conducted the 1,566-square-mile program in six phases in Lycoming, Tioga, Clinton, Centre and Clearfield Counties in Central Pennsylvania. It is believed to be the largest combined onshore seismic survey ever acquired in the continental United States. As the terrain in Central Pennsylvania gradually became more rugged and mountainous, CGG switched from deploying the Sercel 428XL cable acquisition system to using the Sercel UNITE® wireless acquisition system to acquire the complex seismic program. By the end of 2014 all six phases will be merged together to offer a seamless data set processed with state-of-the-art interpolation and migration techniques over the entire program. Currently this data set is available over the Lycoming II and Brookside portions of the survey.

Natural Gas Industry Copes With The Cold
WNEP Channel 16 – Scranton
Natural gas drilling sites and well pads in our area operate 24 hours a day, 7 days a week no matter what the weather is. That means many workers on the job in temperatures near zero, trying to keep equipment running, and millions of gallons of water from freezing. We met up with workers from Cabot Oil and Gas in Susquehanna County. While homes many miles away use natural gas for heat, workers there in Susquehanna County are on the job nonstop through the bitter cold to continue getting that gas. “Once it gets down close to zero and the negative temperatures, you add the wind in with that, that’s when we really have to take precautionary measures,” said Chad Gorman of GasSearch Drilling Services. “It presents all sorts of challenges on the drilling rigs,” said Mike Bail.


Proposed fracking in national forest meets broad opposition
Merced Sun-Star
The headwaters of the Potomac River rise amid the hills and hollows of George Washington National Forest in Virginia. Small creeks dart past oak, white pine and hickory, become streams that nourish farmland and towns, and create a river that courses through two states and the nation’s capital. About 4 million people depend on that water. For decades, the U.S. Forest Service identified preserving its purity as the top priority for the national forest. Now, the agency is considering allowing George Washington to become the first national forest to permit high-volume hydraulic fracturing, or fracking. The million-acre forest sits on the eastern edge of the Marcellus shale formation, whose vast deposits of natural gas have touched off a drilling bonanza in Pennsylvania and West Virginia. All across the country, fracking’s risks and rewards have splintered communities. But the potential risk to George Washington National Forest’s water has drawn widespread opposition, including from most of the towns and counties nearby, members of Virginia’s congressional delegation and Washington’s mayor. The oil industry says any natural gas could be extracted with little harm to the national forest and its waters.

Deep freeze exposes challenges for gas-dependent grid operator
Energy markets were roiled yesterday when the cost of producing electricity in the gas-rich Midwest and mid-Atlantic soared above $1,000 per megawatt-hour for the first time as arctic temperatures squeezed the East Coast. The PJM Interconnection — the grid operator in the heart of the region experiencing the Marcellus Shale boom — blamed escalating natural gas prices in a notice obtained by Greenwire. At issue were spot prices for gas in the mid-Atlantic that surged almost 340 percent to $45 per million British thermal units, while prices in New York City rose more than 780 percent to $120.75 per MMBtu, according to the federal Energy Information Administration. Electricity prices in PJM West, representative of the mid-Atlantic region, reached $857.39 per MWh yesterday by 7 p.m., which normally marks the end of the peak hour. In an effort to keep power plants online, PJM also took the rare step of allowing market participants to sell electricity for more than $1,000 per MWh and surpass a “cap,” and it proposed to reimburse power plants that didn’t qualify for such special treatment.

The Malcontents in the Fracking Opposition Go Off the Rails
Natural Gas Now
Sometimes the claims of fracking opponents are just so bizarre and over the top one can only conclude the movement has gone completely off the rails but that assumes they were once on them. Generally speaking, most fracking opponents are simply malcontents. There are a few sincere folks on the other side with whom I’ve had interesting, even enlightening, conversations but, by and large, they’re just not happy people. Many, too many, in fact, are angry, guilt-ridden and desperate for some sort of validation. Nothing seems to satisfy them. Win or lose, they are always eager to fight the next battle and, perhaps for that reason, seem to take more pleasure in losing than winning. Let me share a couple of examples…

CAP Ignores Oil & Gas Jobs to Claim Oil & Gas Creates Few Jobs
Energy in Depth
Yesterday, the Center for American Progress (CAP) released a “report” claiming that the enormous number of jobs created from oil and gas development are actually “dubious,” arguing that “the industry” has inflated the numbers to make its impact seem larger than it really is. But in order to make that argument, CAP had to twist the facts, and it even revealed some stunning hypocrisy along the way. Right off the bat, the CAP researchers explain that they compared data from a study — compiled for the American Petroleum Institute by PwC — to data from the Bureau of Labor Statistics (BLS). But when the numbers didn’t match up, CAP came to some wild conclusions. From CAP’s report:

Oil & Gas Boom 2014: Creating A Rail Renaissance
One of the significant out-growths of America’s nascent Shale oil and gas boom is the subsidiary booms it is creating in other industries. Businesses that either service the oil and gas industries or rely on its end products as feedstock for products of their own are bringing thousands of jobs back from overseas and investing billions of dollars in new domestic infrastructure. Nowhere has this direct cause and effect been any more apparent than in America’s rail industry, and nowhere is this impact more visible than in the Eagle Ford Shale region, where four major new rail terminals have opened in the last two years. Media coverage of this rail renaissance has focused on increased rail transport of crude oil from areas where the necessary pipeline infrastructure doesn’t yet exist. And rail transport has been a godsend in plays like the Bakken Shale in North Dakota, for that reason, and because of rail’s versatility in being able to route crude oil shipments to any number of market and refining centers.


Europe Nears First Commercial Shale Gas Production in Poland
Europe passed a “major milestone” on the way to starting commercial shale gas production as San Leon (SLE) Energy Plc said testing at one of its Polish wells was successful. Natural gas flowed from the vertical Lewino well in a shale formation in the Baltic Basin in northern Poland at as much as 60,000 cubic feet per day during tests, Dublin-based San Leon, a natural-gas explorer backed by billionaire George Soros and Blackrock Inc., said today in a filing. The company will start drilling a more productive horizontal well no later than July, said Dennis McKee, the chief executive officer of United Oilfield Services Sp. z o.o., which worked on Lewino. Countries including Poland, the U.K., Ukraine and Romania are keen to develop shale gas resources as a way to lower energy costs and reduce imports. Europe must get a grip on energy prices to protect growth and reduce the cost gap with the U.S., where a shale-gas revolution has cut prices, European Union Energy Commissioner Guenther Oettinger told a conference in Berlin on Jan. 21, via a link from Brussels. “We’re confident we can show real commercial flow rates,” San Leon Chairman Oisin Fanning said in a telephone interview from London. “If you can prove the shale play in Poland, it will open up in other countries.”