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Updated Study: Marcellus Drilling Economic Benefits in NE PA

Several colleges in northeast Pennsylvania including Keystone College, King’s College, Luzerne County Community College, Misericordia University, Penn State Wilkes-Barre, University of Scranton and Wilkes University belong to, support and form an organization called the Institute for Public Policy and Economic Development. In 2008 the Institute published a study comparing economic and demographic changes of three shale plays in three specific areas of three shale plays: the Barnett, the Fayettville and the Marcellus.

The purpose of the original study was to show what may lie ahead in northeast PA should it follow a similar track to the then far more mature shale plays in the South and Southwest. The Institute has just released an update to the original study in a new report titled “A Review of Changes in Selected Economic & Demographic Indicators in Particular Counties in the Barnett, Fayetteville and Marcellus Shale Play” (embedded below). Wow, what a difference four years makes! The Marcellus in many ways has eclipsed the Barnett and Fayettville and continues to grow. But has that growth translated into good things in northeast PA? That’s the question asked and answered in this latest update by the Institute.

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NE PA Town Welcomes PUC Review of Shale Zoning Ordinances

The Pennsylvania Public Utility Commission (PUC) continues its activity of reviewing local town ordinances for compliance with the new Act 13 Marcellus Shale drilling law. If a town’s ordinances are found to be in violation of the law, they either will have to change their zoning ordinances or risk not receiving their cut of the Marcellus Shale impact fee (i.e. tax) being collected by the state. Checks are due out in December.

Some townships, like South Fayette, are thin-skinned and have a persecution complex over a PUC review (see this MDN story). Other towns, however, take it in stride and when told their laws need fixing, they fix them—like Roaring Brook Township in Lackawanna County, PA.

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Scranton Landfill Wants to Double (Again) Shale Cuttings

The Keystone Sanitary Landfill, located on the borders of Dunmore and Throop, PA (Scranton suburbs) applied to the state Dept. of Environmental Protection (DEP) last December to increase the amount of Marcellus shale cuttings—rock and soil leftover after drilling—from 600 tons to 1,000 tons per day. They also applied to accept “unprocessed” cuttings from drillers (see this MDN story for background).

The permit was granted in early March. Elected officials in Throop fought the increase but eventually dropped their fight from lack of interest and money (see this MDN story). Keystone just filed a new request to double the amount of cuttings again, from 1,000 to 2,000 tons per day. They also want trucks to be allowed to haul it in 24/7.

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Unproductive PA Wells Still Liable for Partial Impact Fee

The price for drilling a Marcellus Shale gas well in Pennsylvania that “misses” and is not economically viable may have just gotten a lot steeper. It looks like the state Public Utility Commission (PUC), charged with collecting and distributing the new impact fee under Act 13, is going to levy the fee on exploratory wells that end up not being productive and plugged.

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Marcellus Shale Gas Coming to Scranton/W-B Customers

UGI Utilities, a regional gas and electric utility provider with offices in Reading and Wilkes-Barre, wants to be the first utility in the Scranton/Wilkes-Barre area to offer their customers natural gas exclusively from the Marcellus Shale. How? UGI’s subsidiary, UGI Energy Services, announced last fall they would spend $150 million to extend the Auburn Gathering Line into Luzerne County. The Auburn pipeline will bring natural gas from wells in Wyoming and Susquehanna counties to Luzerne where UGI has operations and offices.

As part of the extension project, on April 7 UGI made application with the state Department of Environmental Protection (DEP) to build a compressor station in West Wyoming, a small borough in Luzerne County:

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Scranton Suburb Ends Objection to Shale Cuttings at Landfill

Opposition from a local township to a landfill outside of Scranton, PA that sought and was granted a permit to accept more shale cuttings has ended. Keystone Sanitary Landfill, a privately owned and operated municipal solid waste landfill located in Dunmore, PA applied to increase the daily volume of shale cuttings (leftover rock waste from drilling) from 600 to 1,000 tons per day. They also requested the Department of Environmental Protection (DEP) change their permit so they could receive the cuttings in an “unprocessed or unsolidified form” (see this MDN story).

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The Marcellus “Line of Death” in NE PA

Terry Engelder, Penn State geosciences professor and “father of the Marcellus Shale” once coined the term “line of death” for the point where shale stops being productive. He was specifically talking about the coal region in Pennsylvania where once-upon-many-millennia-ago high temperatures that hardened the anthracite coal also “cooked out” methane natural gas from the shale. Geologists and gas companies know the area around the Lackawanna Syncline—a banana-shaped formation that runs through Luzerne and Lackawanna counties—is likely to be devoid of methane, but what they don’t how is how far from the Syncline the line of death will be found.

We now have another plugged well that helps indicate where shale is unproductive—this one in Sugarloaf Township in neighboring Columbia County:

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Scranton Landfill Request for More Shale Cuttings Approved

Exactly one month ago MDN reported that Keystone Sanitary Landfill, a privately owned and operated municipal solid waste landfill located in Dunmore, PA (a Scranton suburb), had applied to increase the daily volume of shale cuttings (leftover rock waste from drilling) from 600 to 1,000 tons per day. They also requested from the Department of Environmental Protection (DEP) a change so they could receive the cuttings in an “unprocessed or unsolidified form” (see this MDN story).

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Southwestern Gives Away CNG Chevy Tahoe to Promote Marcellus

There are over 100,000 compressed natural gas (CNG) vehicles on U.S. roadways, and roughly 400 CNG filling stations. Add one more CNG vehicle to that number in South Abington Township in Lackawanna County, PA—given away as a prize to promote CNG awareness.

The price to fill it up? How does $2 per gallon (gasoline equivalent) sound?

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How Much Revenue will NE PA Counties Get from Impact Fee?

Pennsylvania’s northeastern counties stand to bring in millions of new revenue this year under the impact fee that Gov. Corbett is soon due to sign. Once the legislation is signed, county governments will have 60 days to decide whether or not to adopt an ordinance adopting the new fee structure, along with the restrictions it imposes on a county’s ability to regulate drilling via zoning (see this MDN story). Each county is allowed to keep 60 percent of the total impact fee collected. The other 40 percent? That goes to the state. The 40 percent is the “spread the wealth around” compromise lawmakers needed to strike in order to pass the legislation.

Here’s a rundown on how much in new revenue northeastern PA counties stand to collect in direct fees, the 60 percent portion:

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NE PA Town Votes to Prohibit Drilling, Approve Wind Farms

Officials in Spring Brook Township (Lackawanna County), PA voted last night to prohibit shale gas drilling in half of the township while at the same time they approved designated areas for commercial wind farms. Those same officials acknowledged their vote to ban gas drilling may be meaningless under the newly passed Marcellus drilling state law about to be signed by Gov. Corbett, but they went ahead and voted anyway, having worked a year-and-a-half on the new zoning changes.

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Scranton Landfill Applies for Permit to Mill Marcellus Cuttings

For years, the Keystone Sanitary Landfill, a privately owned and operated municipal solid waste landfill located in Dunmore, PA (a Scranton suburb) has accepted already-processed cuttings, or rock waste, from Marcellus Shale drillers. The landfill filed a permit application in December with the state Department of Environmental Protection (DEP) that would allow it to accept unprocessed cuttings—cuttings in a non-solid form—and mix it with a lime-based material to solidify it. The process of mixing it is called milling.

The landfill uses milled cuttings as a soil replacement to cover the landfill at the end of each day.

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Passenger Increase at WB/Scranton Airport from Gas Drilling

There are many positive economic effects from shale gas drilling on nearby communities. Hotels and motels are some of the first to feel the effects, and restaurants. Grocery stores see an increase, as well as stores that sell clothes and shoes and other supplies. Short-line railroads also see a pickup in business from hauling materials, especially sand.

You can also add airports to the list of those organization that see a positive impact from shale gas drilling. The latest example: the Wilkes-Barre/Scranton International Airport has seen an uptick in passengers in the past year, due to Marcellus Shale gas drilling.

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PA Town Takes Innovative Approach in Drilling Oversight

Instead of trying to regulate Marcellus drilling inside municipal borders, Benton Township (Lackawanna County), PA took a different approach when Southwestern Energy recently drilled an exploratory well. Benton hired an independent engineer to monitor drilling and construction of the well. According to township officials, the process has been “an ‘unequivocal’ success.”

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Benton Twp Supervisors Back Down on Exploratory Well

Rather than pay legal fees to defend their legislation, the supervisors in Benton Township (Lackawanna County), PA voted Wednesday to change the language of their legislation restricting the drilling of an exploratory well by Southwestern Energy. The supervisors voted to grant Southwestern the right to drill the exploratory well back in June, but slapped 18 specific (and costly) conditions on the project, making it unfeasible according to Southwestern who challenged 11 of the 18 conditions. The supervisors changed 9 of those 11 yesterday.

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