Industrywide Issues

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    Landowner Pipeline Group Forms in Northeast PA

    Some Susquehanna and Wyoming County, PA landowners are forming a group to force drilling and pipeline companies to “behave responsibly” with installation and operation of new pipelines as more and more Marcellus Shale gas wells are drilled and go online in Northeast PA. The group wants to arm landowners with information about their rights when negotiating “right-of-way” agreements for pipelines.

    Excerpts from an article in today’s WC Press Examiner:

    The Lemon Township Pipeline Group has been meeting for months and its members are looking at a range of easement and right-of-way agreements that leaseholders need to consider as more and more drilling companies come into the area looking to get the gas from the Marcellus shale to market.

    Such issues as price, nature, location, type, pipeline depth below surface, installation, road repair, pressure, timetable, abandonment, rights, restrictions and environmental responsibilities are among the many issues that individuals need to consider.*

    An email address is given for those interested in joining or finding out more: pipelinerowinfo@yahoo.com.

    *Wyoming County Press Examiner (Mar 17) – Landowners’ pipeline group forms

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    Kane Borough Sewer Authority Making Money from Selling Effluent to Marcellus Shale Driller

    Kane Borough Sewer Authority in McKean County, Pennsylvania is planning to sell (sell!) sewer effluent to Seneca Resources for drilling gas wells. Seneca is the oil and gas drilling division of National Fuel Gas Company. Effluent is the treated water discharged from sewage treatment plants.

    According to a report given by Phil Lingenfelter, the foreman for the [Kane Borough] sewage treatment plants, more than 700,000 gallons of effluent is discharged daily from the two plants in “dry weather.”

    Jim Salvamoser, chairman of the five-member authority, endorses the plan to sell the effluent to Seneca Resources.

    “I think it’s a good idea,” Salvamoser said Monday. “It may give us a good source of revenue.”

    Lingenfelter said he still is talking with Seneca about the proposal. He said a price for the effluent has not been set. He said the state Department of Environmental Protection (DEP) has been made aware of the proposal and has not ruled against the effluent sale.

    “DEP thinks it’s a great idea,” he told the authority.*

    Seneca has already drilled one gas well in the area and is now drilling another, with plans to drill more wells in the near future.

    There are many municipal sewage treatment facilities located throughout the northeast and mid-Atlantic in the Marcellus Shale. Perhaps some other enterprising managers can tap this new revenue source for their cities and towns.

    *Kane Republican (Mar 16) – Kane plans to sell sewer effluent for well drilling

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    Drilling in the PA Marcellus Shale Sets Blistering Pace in 2010, On Course for $7 Billion Investment

    The Philadelphia Inquirer has an excellent roundup of drilling activity in the Marcellus Shale, with a listing of the top 20 active energy companies in the PA Marcellus Shale. Well worth reading and bookmarking!

    The article starts with this:

    So far in 2010, natural gas exploration companies have broken ground on three Marcellus Shale wells in Pennsylvania every day, triple the pace of a year ago.

    The Marcellus Shale Coalition, the industry trade group, estimates that up to 1,750 wells will be drilled this year, up from 763 last year.

    At $4 million a well, that’s a $7 billion investment – not counting land-acquisition costs or royalties on gas produced.*

    New York needs to wake up NOW. Marcellus Shale drilling is here to stay, especially in Pennsylvania. It’s having a huge impact on jobs, investments and taxes. New York could use an extra $7 billion in investment right about now!

    *Philadelphia Inquirer (Mar 14) – Gas Drilling Going Deep

  • Number of Gas Drilling Rigs in U.S. Up 11 Weeks in a Row, New One-Year High

    According to oil services firm Baker Hughes, the number of rigs drilling for natural gas in the U.S. is now at a one-year high of 927 active rigs. That number includes all three types of drilling: directional, vertical and horizontal. The number also includes all gas drilling in the U.S., not just the Marcellus Shale. Still, it is encouraging and the trend has been up 11 weeks in a row.

    For more details on the recent numbers, see this article:
    Reuters (Mar 12) – US natural gas rig count up for 11th straight week

    For more data on rig counts, including downloadable spreadsheets & PDF files, see:
    Baker Hughes – Investor Relations – Rig Counts

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    New Marcellus Wastewater Treatment Plant Set to Open in Westmoreland County, PA

    The Pennsylvania State Department of Environmental Protection has issued a permit for a new Marcellus drilling wastewater treatment facility to begin operations in April in western PA.

    Stephen Frobouck, a partner in Reserve Environmental Services Inc., said the treatment facility at the former American Video Glass plant in East Huntingdon, Westmoreland County, is ready for operations to begin in April.

    "We will have the capacity to handle (water from) 500 to 600 wells a year," Frobouck said Friday, declining to say how much the firm paid to prepare the plant for its new use.*

    *Pittsburgh Tribune-Review (Mar 13) – Plant near New Stanton to treat gas wastewater

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    PA Gas Compressor Facility Causing Grief for Some Neighbors

    In states where drilling is now happening, particularly Pennsylvania, there appears to be issues with some (not all) compressor stations used to pump gas from local wells to nearby processing facilities. One such station is located in Mount Pleasant Township in Washington County, PA. Mount Pleasant is the location of the very first horizontal gas well drilled in the Marcellus.

    The compressor station in Mount Pleasant is operated by MarkWest Energy, a company that operates more than 100 other such facilities in the U.S. MarkWest has made application to add a fifth compressor to the facility to meet increasing demand, and some of the nearby neighbors are objecting to the noise, lights and odors that come from the facility. An article in the Pittsburgh Post-Gazette, although taking an anti-drilling tone, exposes the tensions that occur in some locations between compressor operators and the people that live close by. It also highlights the debate over where regulation of these facilities lies—with local municipalities? Or with the state?

    Read the article for more details:
    Pittsburg Post-Gazette (Mar 14) – Neighbors take a stand on noise, odor of gas drilling

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    PA DEP Staffs Up with More Gas Well Inspectors

    The Pennsylvania Department of Environmental Protection is hiring more inspectors for gas and oil wells. Right now there are 125 inspectors statewide. By the summer, an additional 68 will be on board bringing the total to 193 inspectors. Which is a good thing according to the York (PA) Dispatch, which notes:

    In the last year, to cite two examples, inspectors noted that a brine pipeline operated by Range Resources Corp. was spilling production fluids into the ground at Cross Creek Park near Avella, resulting in a $23,500 penalty for the Texas-based company; and Atlas Resources was fined for violations at 13 of its wells in Washington, Fayette and Greene counties.*

    MDN agrees. More inspectors are a good thing. It keeps everyone honest, and reassures the general public that drilling can be done safely.

    *York Dispatch (Mar 10) – Marcellus Shale: Drilling inspectors welcome

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    Morrisville State College Creating New Program to Train Workers for Marcellus Shale Drilling

    SUNY Morrisville Morrisville State College, part of the State University of New York system and located in Morrisville, NY with a satellite campus in Norwich, NY, is looking to launch a program to train workers for drilling in the Marcellus Shale. According to an article in the Norwich, NY Evening Sun we get this interesting comment:

    Many natural gas industry followers are predicting a June release date for the state’s revised hydrofracking regulations. Energy companies and their suppliers have been waiting in the wings for 18 months for the state Department of Environmental Conservation’s Supplemental Generic Environmental Impact Statement to be released.*

    If and when drilling commences starting in June as predicted:

    [I]f it’s anything like what happened when the Marcellus Shale action began heating up two years ago in neighboring Pennsylvania, there will be hundreds of jobs available at well sites within the first 18 months.*

    Initially, Morrisville is looking to create a 2-year program, with the possibility of extending that into a 4-year program. Let’s hope Morrisville has many students in their program, and that those students will have jobs drilling in the Marcellus when they graduate.

    *Norwich Evening Sun (Mar 10) – Morrisville readies to train natural gas drilling workforce

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    AOP Clearwater Plant in WV a Big Success in Treating Marcellus Shale Wastewater

    AOP Clearwater Plant, Fairmont, WV A lesson for Owego and Tioga County, NY from Marion County, West Virginia where a new wastewater treatment plant is a big success. The AOP Clearwater Plant is located just outside of Fairmont.

    According to AOP Clearwater President Louis Bonasso, they have had no problems getting customers from oil and gas drilling companies in the Marcellus Shale. In fact, the trucks are “lining up” at the facility.

    “We are a distillation-crystallization process, available to the oil and gas producing community in the area for clean-up of flow back and production brine waters,” said Bonasso.

    Which means, the contaminated water is brought in on trucks, put through an extensive cleaning process, and pumped back out–as clean water for the oil and gas companies to reuse.

    “We offer a very rapid unload-reload opportunity for trucking companies. Instead of sitting in line, we unload in about 11 minutes and we can reload in about the same time,” said Bonasso.*

    Beside creating 16 jobs and bringing revenue to the county, there is this positive side benefit:

    Through the cleaning process, salt is removed from the contaminated water and is able to be re-used to treat winter roads.

    “All the salt that we produced since the plant started operations in November was sold in Marion County to independent contractors and the city,” explained Bonasso.*

    *The State Journal (Mar 9) – AOP Clearwater Plant Open in Marion County

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    Patriot Water Decides Not to Build Marcellus Wastewater Treatment Plant in Owego, NY

    Last week, Patriot Water LLC withdrew their application to convert a former car dealership on the edge of the Village of Owego, NY (in Tioga County) into a wastewater treatment plant to deal specifically with wastewater from Marcellus Shale drilling in Pennsylvania, and from New York, when drilling finally begins there.

    Each well drilled in the Marcellus will use approximately 3 million gallons of water during the process of hydro fracturing. Much of that water comes back out of the ground and needs to be treated so it can be re-used in drilling. Some of it will be treated and returned to area waterways, which is no different than the local sewage treatment plant. The fluids entering the environment from any wastewater plant must pass rigid tests to ensure no pollution occurs.

    So the news that Patriot Water was planning to build and operate such a plant was good news for the Southern Tier of New York, bringing jobs and tax revenue to Tioga County. But one problem: The proposed site was very close to residential areas. Yes, it is zoned industrial, but it would mean four trucks an hour, 24 hours a day running down residential streets, and local folks didn’t want it. Can’t blame them.

    But! Could Tioga County not have come back with a counter offer? Another location nearby that is not close to residential areas? Was there any kind of effort made at all? It appears not. And so, on March 3, Patriot Water said “no thanks” to Owego and Tioga County.

    MDN recommends Patriot have a look at nearby Broome County, NY. There’s a couple of industrial parks close to Interstates 81 & 86 (NY Route 17) in the Conklin and Kirkwood areas, and those locations have truck traffic all the time. Perhaps the members of the town planning boards in Broome County will actually show up for meetings (unlike the Tioga County Planning Board, five members of whom abrogated their duties by not showing up for a crucial meeting on the Patriot request). Come on over to Broome, Patriot!

    Owego Pennysaver (Mar 3) – Patriot Water, LLC withdraws application for Taylor Road site

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    While Albany Dithers on Marcellus Drilling, Landowner Profits Evaporate

    George Phillips, a Republican candidate for the 22nd Congressional District in New York State, penned a viewpoint article in today’s Binghamton Press & Sun-Bulletin on the topic of drilling in the Marcellus Shale. In short, Mr. Phillips is pro-drilling while the man who currently holds that office, Maurice Hinchey (Democrat) is anti-drilling and supports federal government interference. While the article takes political aim at his opponent, Mr. Phillips makes strong arguments on why drilling should commence—now.

    He closes his article with this:

    But the window of opportunity may be closing. As more areas of the country move forward with plans to develop these types of resources, prices naturally fall as supply increases. This leaves our residents waiting, watching potential profits and opportunities evaporate as others reap these benefits while our government dithers.*

    Ah yes, the dithering officials in Albany. Albany needs to move forward now. Other shale plays are becoming active, and the Pennsylvania Marcellus is red hot. If Albany drags on much longer with their obstruction of drilling, landowners will be the ones who suffer.

    We also hope, along with Mr. Phillips, that the federal government (and Mr. Hinchey) stay out of states’ business.

    *Binghamton Press & Sun Bulletin (Mar 8th) – Clear way for drilling

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    Skaneateles High School Airs Both Sides of the Marcellus Drilling Debate

    Kudos to the Skaneateles High School Environmental Club for the public meeting they held on hydraulic fracturing on January 23rd at the High School auditorium. Yes, the members of the club are no doubt anti-drilling and they had several speakers who presented the anti-drilling viewpoint. And yes, they showed the biased anti-drilling “documentary” Split Estate.

    But to their credit, the Environmental Club also balanced it with someone who presented the pro-drilling side of the argument. That person was David Palmerton, a geologist and environmental consultant, and someone who’s actually developed oil and gas wells.

    With regard to the likelihood that chemicals used in hydraulic fracturing will pollute water aquifers, Mr. Palmerton said:

    “I can tell you as a geologist that putting water in 7,000 feet down, which is some 6,500 feet below any possible water supply, is not going to reach that water supply,” Palmerton said. “It’s trapped by the pressure of the rock.”

    A question was also raised about what is done with the “frack fluid” once it is reclaimed.

    Palmerton agreed with [Onondaga Nation General Counsel Joseph] Heath’s earlier point that there were not enough facilities to treat the wastewater.

    “But, once it’s clear that oil and gas development can proceed, companies will come in, will develop those facilities,” he said. “There’s a lot of money that’s out there that’s ready to be invested in those facilities.”*

    Some common sense words. Let’s hope the young members of the Environmental Club were listening. Hats off to them for airing both sides.

    *Skaneateles Press (Mar 8th) – Fracking finds supporters, opponents at SHS

  • The Future of Natural Gas is Very Bright… Because of Horizontal Drilling

    Nolan Hart, an author who also works in the horizontal drilling industry, wrote an interesting viewpoint piece on whether, and when, we might see “peak natural gas.” He explains there are many in the drilling industry who believe we have already reached “peak oil,” meaning all of the easily gotten oil has already been extracted and every barrel we extract now is harder to get, involving more elaborate methods to get it.

    But on the subject of peak natural gas, Mr. Hart says this:

    The natural gas paradox is this: In the past decade a technology called horizontal drilling was perfected and now shale rock, which was never before seen as a reservoir of natural gas or oil, is being exploited all across the country. This revolution is going full swing in the United States with areas like the vast Marcellus shale in the Northeast and the Haynesville shale in Louisiana, proving to hold trillions of cubic feet of natural gas.  Even the die hard prophets of peak oil doom are finally waking up to the fact that we have many more years worth of this resource left.

    We suddenly have over a one hundred year supply of natural gas at current consumption rates and that number has been growing by about one decade more each year since 2005. New discoveries such as the Eagle Ford shale in south Texas are adding trillions more cubic feet to the natural gas inventory. So, peak oil, yes. Peak natural gas, no way.*

    Mr. Hart also details how natural gas is a low carbon fossil fuel, producing 1/3 to 2/3 less carbon dioxide than oil or coal when burned. He makes a strong case for switching to natural gas—now.

    We encourage you to read his well written article:
    *Xomba (Mar 3) – How Long Until Peak Natural Gas?

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    MDN Editorial: PA Landowners Need to Continue Opposing a Shale Gas Severance Tax

    The severance tax, like a bad penny, keeps turning up. Pennsylvanians (and eventually New Yorkers) will have to stay vigilant against greedy politicians who can’t help themselves when there’s something nearby that can be taxed. Tax revenues equal money flowing through politicians’ hands, and that equals power. The latest example:

    State Sen. Andy Dinniman, D-19th, of West Whiteland, has introduced legislation that would impose a tax on Marcellus Shale natural gas extraction and use the revenues from that tax to give Pennsylvania homeowners property tax rebates.

    Dinniman said a 5 percent tax on the natural gas from the state’s Marcellus Shale reserves would, by 2014, provide the average homeowner $148 each year in property tax relief.

    “Every election, all the politicians stand up and say, ‘We understand your pain. We understand what’s going on. We will bring property tax reform. We will lower your property taxes,’” Dinniman said. “Well, the answer is beneath our feet. It’s a mile down, but it’s beneath our feet.”

    The tax, referred to as a severance tax, would be assessed per cubic foot of gas that is extracted, Dinniman said.*

    It is a bald-faced lie that the money will go for property tax relief. Hopefully the good citizens of PA know that by now. After having been lied to for a generation (lottery money goes to schools, Social Security money stays in its own trust fund, etc.), I am hopeful that people are starting to wise up. A severance tax, if instituted, will go to Harrisburg where it will disappear into politicians’ hands to be used for other “urgent” needs. And everyone knows it.

    Landowners are encouraged to continue to oppose the severance tax, which ultimately comes out of their own royalty checks.

    *The Delaware County Daily Times (Mar 3) – Chesco pol proposes tax on Marcellus Shale gas reserves

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    4,300 Sign Petition to Encourage New York Leaders to Drill Here, Drill Now

    The Independent Oil and Gas Association of New York today issued a press release encouraging landowners to sign their online petition to New York’s governmental leaders to encourage them to move forward—now—with allowing drilling in the Marcellus Shale in New York. Already, more than 4,300 have signed. Landowners who want to add their signatures to the petition can do so here: www.petitiononline.com/YESngNY/petition.html

    —–

    From the press release*:

    Proponents of natural gas exploration petitioned the governor, lawmakers and regulatory agencies and lawmakers to allow drilling to be expanded in New York’s Southern Tier and Western Catskills.

    More than 4,300 people have so far signed an online petition already, which reminds elected officials and regulators that harvesting clean-burning natural gas in New York will heat our homes, spur our economy, reduce our dependence on foreign oil for decades to come and bring thousands of job and billions of dollars to New York.

    The petition, sponsored by the Independent Oil & Gas Association of New York, will remain open to those interested in urging decision-makers to form objective and scientific opinions on whether expanded natural gas exploration is right for New York. It is available at www.marcellusfacts.com.

    “We are very pleased that many so right-minded New Yorkers have spoken up.” said Brad Gill, IOGA of NY executive director. “New York’s leaders have to focus on this tremendous opportunity for our communities and our state, instead being distracted by bad science and misinformation being spread by obstructionists who don’t actually understand our work and history of environmental stewardship.”

    The petition follows a Jan. 25 outdoor rally in Albany, where 700 landowners and supporters raised their voices in support of natural gas extraction through a process known as hydraulic fracturing – or “fracking.” The delegation represented 23 landowner groups and 17,500 families.

    The fracking process will help release natural gas locked in the Marcellus Shale formation by injecting pressurized water, sand chemicals and other ingredients to shatter the rock. It occurs deep underground and far from groundwater and surface water, and it has been performed safely in New York and nationwide for decades.

    IOGA-NY was founded in 1980 to protect, foster and advance the common interests of oil and gas producers, as well as professionals and related industries in the State of New York.

    *readMedia (Mar 3) – More than 4,000 New Yorkers Petition the State to Allow Expanded Natural Gas Exploration

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    Shaleshock Expert Agrees – Hydrofracturing Will Not Hurt You

    Shaleshock Action Alliance, an anti-drilling group, recently sponsored a meeting at Tompkins Cortland Community College in Dryden, NY to discuss the potential negative consequences of horizontal drilling and hydrofracturing (a specific technique used in drilling for natural gas). Shaleshock’s expert speakers for the evening included two chemists and an endocrinologist. One of the chemists was Ron Bishop, a biochemist at SUNY Oneonta and someone who has worked with gas drilling companies and in construction. According to Mr. Bishop:

    “Hydrofracturing is not the boogeyman under the bed; it is not going to hurt you,” Bishop said. “You’re more likely to have problems with transporting the 10 to 30 tons of chemicals to the drilling site.”*

    Mr. Bishop’s concern is with the transportation of chemicals to drilling sites and the potential for accidents and spills. But the thing is, truckloads of the same chemicals go over our interstates every day, and travel down our rail lines every day. It’s true you don’t see trucks carrying these types of chemicals on back roads every day, but with proper precautions, there’s no reason why it can’t be just as safe on our rural roads as it is on our other transportation systems.

    So Shaleshock’s own expert agrees—hydrofracturing is safe. Thanks for your candid honesty Mr. Bishop!

    *Elmira Star-Gazette (Feb 23) – Marcellus Shale: Spills of drilling chemicals worry experts