Waaaaay back in March 2009, when MDN was still in it’s blog infancy, we told you that Westmoreland County, PA supervisors had voted to lease land at the Beaver Run Reservoir to Dominion to drill five Marcellus Shale wells (see Westmoreland County, PA Supervisors Vote to Approve Drilling on County Land). The reservoir provides drinking water to some 60,000+ customers in five southwestern PA counties. What! Marcellus wells next to–even under–a fresh water reservoir? Say it ain’t so!! But it is, and it’s worked out so well (with NO water contamination issues), that over the years those initial five wells have sprouted to become 37 wells with more on the way. The wells at Beaver Run Reservoir are raising so much money for the county they’ve hired a “drilling auditor” to keep track of royalty revenues, which this year will exceed $6 million…
MDN previously told you about a lawsuit from landowners who sit atop the Brinker Gas Storage Field in Columbiana County, OH (see this MDN story). Columbia Gas Transmission owns the rights to the hollowed out cavern in the Berea Sandstone known as the Brinker field—a place where they store natural gas for later use. The question or issue is whether or not the landowners have the right to drill under the Brinker, in the Utica Shale, or whether that right belongs to Columbia.
Landowners atop another gas storage field, the North Canton Gas Storage Field in Stark County, OH, have now filed a lawsuit for the same reason. In North Canton the storage field is leased by Dominion East Ohio (a division of Dominion) and CNX Gas (a division of CONSOL Energy). Dominion and CNX claim it’s their right to drill under the storage field—the landowners believe they forfeited the right to drill years ago.
Two West Virginia colleges received $100,000 ($50K each) in grant money from the Dominion Foundation to be used for hands-on oil and natural gas training. WV Gov. Earl Ray Tomblin presented the money in a ceremony on Thursday.
The press release from Gov. Tomblin’s office:
Dominion Resources, the third-largest public utility in the U.S., held its annual shareholder’s meeting in Pittsburgh on Tuesday where president & CEO Thomas Farrell announced plans to expand natural gas pipeline and processing projects in every state where there is Marcellus and Utica Shale.
Ten company-endorsed candidates were voted on and approved for the board of directors. But six shareholder proposals, largely anti-drilling in sentiment, were voted down:
In March 2009, the Westmoreland (PA) County Board of Supervisors voted to lease Municipal Authority property near the Beaver Run Reservoir for shale gas drilling to Dominion Resources. The original plan was to drill five wells (see this MDN story). Two years later, there are 13 working wells on the property with plans for another 14 wells. More importantly, testing done of the water in the reservoir and streams that flow into it show (gasp), there’s been no affect on the water from Marcellus drilling.
Last September, Dominion Resources filed an application with the Department of Energy (DOE) to begin exporting liquefied natural gas from its Cove Point terminal in Maryland—up to 1 billion cubic feet of gas per day (see this MDN story). Dominion Resources CEO Thomas Farrell said last Friday he believes the permit will be issued later this year.
One of the strongest arguments in favor of drilling for Marcellus and other shale gas in the U.S. is that it provides a cheap alternative fuel for Americans—a “home grown” energy source that benefits everyone. It’s a simple and undeniable fact: Cheap energy translates into economic prosperity for all citizens. Cheap energy makes it easier for businesses to produce goods and services, and that means jobs.
Energy companies often make the “cheap domestic energy” argument when talking about the benefits of shale gas drilling—rightfully so. But when those same companies then start exporting natural gas, well, it’s a tad hypocritical. Exporting leads to less supplies here at home, and less supplies means higher prices. Energy companies will argue we have more than enough—an excess of natural gas—and by exporting they create more jobs here at home. But others (like MDN) are not so sure that argument holds up, especially for a nascent industry with huge potential to transform the energy picture here at home.
Highlights from the CONSOL Energy quarterly earnings report as it touches on their operations in the Marcellus Shale:
On March 15, CONSOL Energy announced a $3.475 billion acquisition of the Appalachian gas exploration and production business of Dominion Resources. We expect to close the transaction tomorrow. The assets include approximately 1 trillion cubic feet of proved reserves and approximately 500,000 acres of Marcellus Shale. Additional assets include an overriding royalty interest from farm-outs, 300,000 acres of Huron Shale, and extensive Utica Shale acreage.
On March 22, CONSOL Energy announced its intention to acquire the approximately 25 million shares of CNX Gas that it does not already own for $38.25 per share. We commenced the tender offer on April 28. As previously announced, T.Rowe Price has already agreed to tender the 9.47 million shares held for its investment advisory clients into the offer at the offer price of $38.25 per share.
During the quarter, CNX Gas achieved record initial production from one of its latest Marcellus Shale wells. Well GH 2B CV, has averaged 5.0 MMcf per day for the first 47 days of production. It peaked at 5.7 MMcf per day. This well has a lateral of 2,300 feet.*
Not to be outdone by MarkWest’s recent announcement about expanding their processing and fractionation facilities in the Marcellus Shale, Dominion has announced they too have big plans for expansion in the Marcellus Shale, including converting transmission pipeline TL-404—running through Ohio and West Virginia—into a “wet gas service” line. Dominion’s plans also include building new processing facilities in West Virginia.
CONSOL Energy of Pittsburgh today announced it is buying the Appalachian exploration and production operation of Dominion Resources. Dominion’s Marcellus Shale drilling operations are part of the transaction. CONSOL is paying $3.475 billion in cash.
Dominion currently has leases on approximately 500,000 acres in the Marcellus Shale. Added to CONSOL’s existing 250,000 acres (which belong to CNX Gas, another CONSOL company), the new total acreage controlled by CONSOL will be 750,000. Dominion’s large Marcellus acreage was one of the key attractions for CONSOL.
The total acreage CONSOL is buying from Dominion for both oil and gas totals 1.46 million acres, along with 9,000 active oil and gas wells. Dominion’s operation was once part of John D. Rockefeller’s Standard Oil company.
CONSOL will add 193 employees from Dominion’s Appalachian operation to its own payroll when the deal closes, which is expected to happen at the end of April.
For more details, see the press release:
CONSOL Energy to Acquire Dominion’s Appalachian E&P Business for $3.475 Billion In Cash
On Thursday, March 12, the board of supervisors for Westmoreland County (Pennsylvania) voted to let drilling commence on an area of county-owned land. According to the Valley News Dispatch:
The board approved five natural gas wells to be drilled on Municipal Authority of Westmoreland County property near the Beaver Run Reservoir.
James McKinstry of Dominion Exploration detailed plans for the wells to be drilled into the Marcellus Shale in an area bordered by Fox Road, Walker Road and Route 286.
Resident John Doyle asked if drinking water in the reservoir will be protected, particularly from material such as disposable brine. McKinstry said waste, such as brine, will be trucked away. There is a site in Indiana County that accepts brine.
McKinstry added that the state Department of Environmental Protection regulations must be followed.
Supervisors unanimously granted the request, attaching conditions such as submitting a plot plan, posting 24-hour emergency numbers and keeping roads passable at all times.
Dominion feels the wells can be built in about seven or eight months once approval is granted.
Full article: Washington Township hopes for state sewerage dollars