Kirkwood NY Landowner Group Actively Negotiating Lease Deal (!)

too much hope is dangerousWhat’s this? Signs of life in moribund New York on the gas leasing front?? Indeed it’s true. MDN was tipped on two bits of news that will be encouraging for some New York landowners. One bit of news is that the Kirkwood, NY Gas Coalition (outskirts of Binghamton, NY, in Broome County) may soon call for a meeting of coalition members. It seems behind the scenes the coalition steering committee has been negotiating a gas lease for members.

The second bit of news is that some NY landowners who live close the border with PA (in the Kirkwood and Windsor areas) have been contacted and asked to sign an agreement to allow seismic testing on their land. We have a copy of a generic contract proposed by the Kirkwood Coalition attorney (embedded below) which he says strikes a better balance for landowners who want to sign such an agreement. Both pieces of news together give a spark of hope for NY landowners. But let’s not go overboard. As Donald Sutherland’s character says in the Hunger Games, a little hope is a good thing, a lot of hope is dangerous…
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NARO-PA Meeting: Marcellus Decline Rates, Utica Shale in PA

The DeclineYesterday kicked off the first day of the annual National Association of Royalty Owners (NARO) Pennsylvania chapter annual convention in State College, PA. There were (at least) two major presentations of consequence at the meeting for landowners in PA in particular, but also for NY and other states too. The first was a presentation by Steve Karabin, CEO of the Rhino Group and Jim Ladlee, associate director with Penn State Marcellus Center for Outreach and Research, on the topic of Marcellus well decline rates. You may recall both Steve and Jim co-authored a new section in the most recent Marcellus and Utica Shale Databook (Volume 3 of the 2013 series). They presented their findings on well decline rates at the meeting yesterday, along with unveiling a new royalty calculator that landowners can use. Read below for their rule-of-thumb numbers all landowners with Marcellus wells can use to estimate royalties.

Second was an intriguing talk by Penn State professor and Marcellus Shale expert Dr. Terry Engelder–only this time he was talking about the Utica Shale in PA. Engelder explained where he believes the Utica may or may not be economically drillable in PA–and why. Interesting stuff. See some of his talk below too…
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ULS Says PVR Marcellus Bankrupted Their Company by Not Paying

Utility Line Services Inc. (ULS), a company that does construction work for utility companies–like digging trenches and laying pipeline–is suing PVR Marcellus Gas Gathering in a Delaware County, PA court. ULS says PVR owes them more than $17.7 million in unpaid invoices and another $7.8 million in lost profits. The lawsuit stems from work done by ULS for PVR in laying 17 miles of pipeline in Lycoming County. Like all lawsuits, this one is a bit complicated, but essentially ULS says PVR slowed and then stopped payments, even though the pipeline was completed and gas now flows through it.

Both companies are pointing the finger at the other saying the other company was responsible for obtaining certain permits, and lack of those permits caused delays and increased costs in overtime and project overruns. Unfortunately PVR’s lack of payments to ULS has bankrupted ULS. They’ve closed their doors, laid off 600 workers and sold their equipment at auction. Not a happy ending. Here’s the story behind the lawsuit just getting under way and expected to run for at least three weeks in Delaware County Common Pleas Court…
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Study Says Each PA Well Creates $5-$10K+ in Road Damages

A new study recently published in the peer reviewed Journal of Infrastructure Systems from a half dozen students and professors, some of them working for RAND Corporation, attempts to answer the question, How much road damage due to truck traffic happens in Pennsylvania–and how much does it cost? The study, titled “Estimating The Consumptive Use Costs of Shale Natural Gas Extraction on Pennsylvania Roadways” (full copy embedded below), was submitted for consideration a year ago–in March 2013. It was accepted by the Journal in November and finally published in their February 2014 issue.

The folks doing the research are smart–members of the American Society of Civil Engineers–we don’t dispute their credentials. What did they find? Using estimates of how many truck trips it takes to drill a well from data collected by the New York Dept. of Environmental Conservation (yes, NY data where there is no shale drilling), the authors estimate that for more frequently traveled state and local roads in PA the damage amounts to an average of $5,000 to $10,000 per well drilled. If you include less-traveled rural roads, that number jumps to $13,000 to $23,000 per well average…
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WV Commerce Sec Burdette Praises Odebrecht/Antero, Warns Drillers

Aside from WV Gov. Earl Ray Tomblin, no one in West Virginia has been more dedicated, more focused and more committed to finding an ethane cracker plant for the state than WV Commerce Secretary Keith Burdette. MDN has stories going back years that mention Burdette and his quest for a cracker (just one example: WV’s Burdette Still in Hunt for Ethane Cracker Plant). We think it’s a fair statement to say without Burdette, the Odebrecht cracker plant project would not have happened. Our hat is off to Keith and the marvelous work he’s done for the state.

Yesterday Keith delivered a rousing speech at the Marcellus to Manufacturing Ethane Development Conference at the Charleston Civic Center. We have a transcript of his speech below. In it, Keith acknowledges the contributions of Odebrecht’s David Peebles in making this project happen. He also praises Antero Resources for their bold and brave commitment to providing half of the ethane for the new cracker plant. Finally, Keith sounds a word of warning to other drillers that are signing agreements to ship ethane out of the northeast region. He believes they may want to reconsider. The northeast has enough ethane for “a dozen crackers” if so much of it wasn’t heading to the Gulf Coast or Canada via pipeline…
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Man Camps Spring Up in Marshall County, WV Near Drill Sites

Housing for workers is always an issue when a lot of drilling comes to town. Even if rig workers are not from out of state, more times than not, they are from another area in the state being drilled. That is, they’re still “out of towners” and they need a place to stay. Sometimes drillers will rent hotel rooms for workers. Sometimes RV parks fill up. And sometimes local apartment rentals go through the roof, creating a “crisis” for welfare slugs who need to rent a decent place to live while they don’t work (see New Study Claims Housing Crisis in NE PA from Gas Drilling).

Enter the man camp. Or as it’s called in Marshall County, WV, the “labor camp.” Labor camp sounds like something from North Korea or the old Putin-style Soviet Union. At any rate, labor camps are springing up in Marshall County, WV to handle some of the need for workers to have a place to stay while working on rigs that move from place to place…
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17-Mile Gas Pipeline in Steuben County, NY Makes Progress

Empire Pipeline, a subsidiary of National Fuel Gas Company (which also owns driller Seneca Resources) is asking the Federal Energy Regulatory Commission (FERC) for approval on a new 17-mile pipeline in Steuben County, NY. The project is called the Tuscorara Lateral Project and will cost a projected $43 million. The pipeline will connect a gas storage field and compressor station in Tuscarora, NY (also owned by National Fuel Gas) with the existing Empire Pipeline network–a network that stretches from Buffalo to Syracuse and down to Corning. This “little” piece of pipeline will open up much needed extra volumes of natural gas for Upstate New Yorkers.

Empire/National Fuel is now negotiating with landowners to run the pipe under their property. They hope to begin building later this year and have the pipeline in service in November 2015. Below is a story about the project, the reason for it, the jobs it will create, and finally a copy of a presentation given last year at a special open house with full details…
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Noble Energy Donates $250K to WV Community College Program

Noble Energy certainly live up to it’s name of “noble.” Earlier this week Noble announced a $250,000 one-time gift to the West Virginia Community College’s new Appalachian Petroleum Technology Training Center. The Center offers one-year certifications and two-year degrees in petroleum technology–just one of 14 programs in the country like it. MDN previously wrote about the new program in May 2013 (see New Appalachian Petroleum Technology Training Center in WV). Graduates coming from the program have the ability to earn between $60,000-$100,000 per year–starting! It’s a fabulous program and Noble has really stepped up to the plate to ensure the program not only survives, but thrives–so kudos to Noble.

Here’s the announcement from the Community and Technical College System of West Virginia (WVCTCS):
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