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Gastar Exploration’s 42,000 Acres in the Marcellus – No Development Until a Partner is Found

Energy company Gastar Exploration reports the following about their Marcellus commitment in a recent quarterly financial filing:

In the Marcellus Shale we hold approximately 42,000 net acres in northern West Virginia and southwestern Pennsylvania. To date, we have drilled 10 shallow wells, which will allow us to hold the related leases with production. Currently, we are seeking a joint venture partner to help us further develop this play. We do not expect to drill additional shallow wells until we secure a joint venture partner or until natural gas prices improve. We will continue to maintain our leases through renewals, extensions and renegotiations of drilling commitments.

Read the press release: Gastar Exploration Reports Fourth Quarter and Full Year 2008 Financial and Operational Results

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Range Resources Looks for Gas Deposits in Beaver County, PA

The Beaver County & Allegheny Times Online news site reports Range Resources has hired Conquest Seismic Services to vibrate the ground around Hopewell and Independence Townships, located in Beaver County, Pennsylvania (near Pittsburgh).

For now, Range is looking along Route 151, according to Dave Schieck, a geophysicist for Range Resources. But don’t look for production wells for quite a few years:

“We’re looking here, and we’ll be looking in the northern part of Beaver County later on,” Schieck said of a stretch between Zelienople and the Beaver River. “It may be as much as a decade before any extraction takes place here, but I’d bet we’ll see some once the area is ready.”

Read the full article: Company vibrating ground in search of natural gas

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Westmoreland County, PA Supervisors Vote to Approve Drilling on County Land

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

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Times Leader Update on Dimock, PA Water Well Contamination

The Wilkes-Barre Times Leader is following the story of the natural gas-contaminated water wells in Dimock, PA. Overall the article is pretty even-handed in its treatment of the issue and worth a read. In covering “both sides” of the issue, they reveal some of the facts in the case:

The company [Cabot Oil & Gas] and DEP [PA Department of Environmental Protection] agree that the gas isn’t from Marcellus Shale, a pipeline leak or naturally occurring sources above ground. They also concur that the gas is likely from a gas-laden upper layer of underground Devonian shale, of which the Marcellus Shale is a component but thousands of feet deeper, [DEP spokesman Mark] Carmon said. Marcellus Shale is generally at least 5,000 feet underground, while DEP determined the gas contaminating the water wells came from a shale layer roughly between 1,500 feet and 2,000 feet deep, Carmon said.

The company has cemented the upper Devonian shale layers of several wells, effectively extending the cement seals from the bottom of the water-bearing region, where the seals usually stop, to the bottom of the upper shale layers. The department has been trying to isolate the exact source of gas, seeing whether the extended seals produce a drop in water-contamination levels, Carmon said.

Because the method of contamination hasn’t been determined, Carmon said it’s too early to tell if Cabot knowingly violated regulations. “I’m not aware of anything blatant or anything like that, but, again, we want to know how did it happen,” he said.

Other news outlets would do well to follow the Times Leader’s example and get their facts straight before running stories about the Dimock situation.

Read the full article: Consequences of gas drilling still unknown

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Drilling Begins in Somerset County, PA

The Somerset County Daily American newspaper reports drilling by Samson Investment Co. has commenced in the county:

Paul Menhorn is among the very first area landowners to get an in-person look at natural gas drilling operations. A drilling rig is now boring a gas well on his 157-acre dairy farm, which is located a few miles from Berlin.

It was last August when a representative from the Tulsa, Okla.-based firm told Menhorn that they would in fact begin to explore his property. By November, trucks were on the land, moving dirt and preparing the drilling site.

Equipment was shuttled onto his land March 2. A drilling rig now towers over a telephone pole near one of his barns.

According to Menhorn, it’s been life as usual, despite the sudden additions to his farm.

As for noise:

“When they’re drilling you can hear a little chattering, but it’s not bad,” Menhorn said, adding that his sleep has been unaffected by the sounds.

The newspaper article also reports:

The rig on Menhorn’s property could be the first of many. According Samson’s Web site, the company has doubled its work force over the past five years – a sign of growth and production.

The article gives an honest and frank view of what life has been like for the Menhorns since drilling started, along with a talk about the Menhorns’ concern about their water supply and how they approached ensuring there would be no problems with water contamination. The article is well written and worth your time to read all of it.

Read the full article: Drilling company taps Marcellus shale

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Water Technology Magazine Gets it Wrong on Dimock Water Situation

Marcellus Drilling News pointed out the problems in yesterday’s Reuters news story coverage of the contaminated water wells near a drilling site in Dimock, PA (see Reuters News Service Runs Hit Piece on Drilling in Dimock, PA and Cabot Oil & Gas). Exhibit A in how the slanted mainstream media perpetuates lies is Water Technology Online, the website of Water Technology Magazine (owned by EBSCO Industries). An editor at Water Technology saw the Reuters story and unquestioningly, and without research, dashed off a quick article with the headline, “PA residents blame ‘fracking’ for illness,” citing the Reuters piece as its source. The opening two paragraphs say this:

DIMOCK, PA — Families in this northern Pennsylvania rural community and elsewhere are reporting that the gas drilling method known as hydrofracking is tainting their well water and making them and their animals sick, Reuters reported on March 13.

Energy companies are using hydrofracking, also known as “fracking,” to tap the Marcellus Shale formation. During fracking, water mixed with chemicals is pumped into deep wells under pressure to crack rock formation and release trapped natural gas, a process that also contaminates the water. There also is concern about the chemicals used in hydrofracking water, as WaterTech Online® reported.

Without explicitly saying so, and leading readers to the wrong conclusion, the article implies the water wells in Dimock are contaminated with chemicals used in the fracking process, which is not true. The wells have been contaminated with natural gas itself, not with chemicals from fracking. But the Water Technology article makes no mention of that little fact.

Such is how media works. Again, my advice: Read the mainstream media’s coverage of this issue with a critical and questioning eye.

Read the full article: PA residents blame ‘fracking’ for illnesses

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Reuters News Service Runs Hit Piece on Drilling in Dimock, PA and Cabot Oil & Gas

Marcellus Drilling News (MDN) has been following the story of Cabot Oil & Gas and the contamination of a few water wells with natural gas in the Dimock, PA area. The mainstream media, when it looks for stories about gas drilling and the environment, latches on to this particular story because of it’s potential to play at people’s fears about drilling. Reuters is the latest to do so. They just released an article titled, “U.S. energy future hits snag in rural Pennsylvania.” The subhead for one section of the story says: “Water tastes bad, animals lose fur.”

It’s a very slanted story. However, I mention it here because there are several interviews of local residents affected by contamination of their well water by natural gas. We do not look away from potential problems cause by drilling. Here are a few excerpts from the story:

When her children started missing school because of persistent diarrhea and vomiting, Pat Farnelli began to wonder if she and her family were suffering from more than just a classroom bug.

After trying several remedies, she stopped using the water drawn from her well in this rural corner of northeastern Pennsylvania, the forefront of a drilling boom in what may be the biggest U.S. reserve of natural gas.

“I was getting excruciating stomach cramps after drinking the water,” Farnelli said in an interview at her farmhouse, cluttered as a home with eight children would be, while her husband, a night cook at a truck stop, slept on the couch.

“It felt like an appendicitis attack.”

The family, which is poor enough to qualify for government food stamps, began buying bottled water for drinking and cooking. Their illnesses finally ended, and Farnelli found something to blame: natural gas drilling in the township of 1,400 people.

And this:

Ron and Jean Carter suspected there was a leak when the water supply to their trailer home started to taste and smell bad after Cabot started drilling 200 yards (meters) away.

Not wanting to risk the health of a new grandchild living with them, the 70-year-old retirees scraped together $6,500 for a water purification system.

“It was kind of funny that the water was good in July but after they drilled, it wasn’t,” said Ron Carter.

And if people in trouble is not enough to convince you how bad drilling is, bring on the animal stories:

Tim and Debbie Maye, a truck driver and post office worker who have three teenage children, have been cooking and drinking only bottled water since their well water turned brown in November after Cabot started drilling.

But she can’t afford bottled water for her animals. Her cats have been losing fur and projectile vomiting because they lick drips from the spigot that carries water from their well. Her three horses — one of which is losing its hair — drink as much as 50 gallons a day.

“I tell my husband, ‘I’m going out to poison the horses,'” she said.

I feel for these people and would not want to be in their shoes, that’s for sure. As stated before on this site, Cabot and the PA Department of Environmental Protection still have not figured out how Cabot may have caused the contamination. But let’s be clear: The contamination is natural gas, it is not contamination with chemicals that Cabot uses to fracture the hole. That’s why stories like this one from Reuters are nothing short of journalistic malpractice. Immediately following the story of hair falling off the horses, we get this paragraph:

Chemical Brew

Environmental groups fear energy companies are contaminating water supplies by using a toxic mix of chemicals that are forced deep into the rock along with water and sand to release the natural gas. The process is called hydrofracturing, or “fracking” in industry jargon.

This is not only misleading, but a lie to combine one issue (natural gas contamination of water) with another (chemical contamination of water). The people whose stories are featured are not suffering from chemical poisoning, their water supply has been contaminated with naturally occurring natural gas, likely (but not yet proven) to have crept in due to Cabot’s drilling activities in the area.

Such is the misleading mainstream media. Cast a careful and critical eye on the stories you read and listen to!

Read the full article: U.S. energy future hits snag in rural Pennsylvania

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Texas Billionaire George Mitchell is Betting on the Marcellus in PA

According to the Forth Worth, TX Star-Telegram:

George P. Mitchell, the billionaire who pioneered development of shale gas in the Barnett formation of North Texas, is betting that the Marcellus Shale of Pennsylvania will be similarly prolific.

The 89-year-old oilman…said he expects Marcellus to be a “big boom” to Pennsylvania, birthplace of the U.S. oil industry. The natural gas prospect may stretch across about half the state, he said.

“Pennsylvania looks like a hell of a play, and I can’t understand how in 150 years we found it just now,” Mitchell said Wednesday in an interview at his office in downtown Houston. “Pennsylvania is a tough play right now, but I think in my geological opinion, it has tremendous potential.”

The article also says that Mitchell is providing backing for Alta Resources to drill in the Marcellus. Alta is right now investing in 45,000 acres in the Marcellus region.

Read the full article: Barnett Shale pioneer now betting on Pennsylvania shale

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Oil & Gas Industry Issues Statement on Proposed Local Property Tax

Below is a joint press release issued by the Independent Oil & Gas Association of Pennsylvania and the Pennsylvania Oil & Gas Association about the ridiculous legislation proposed by PA Democrats.

PITTSBURGH, March 9 — The Independent Oil & Gas Association of Pennsylvania and The Pennsylvania Oil & Gas Association today released the following joint statement in response to Rep. Bill DeWeese’s proposed legislation to impose an oil and gas property tax at the local level. A more thorough evaluation of this proposal will be conducted in the coming days.

“The natural gas and crude oil industry has sustained the economic base of many rural Western Pennsylvania communities for more than 100 years, and with the prospect of the Marcellus Shale, it is the brightest spot in the Commonwealth for job growth and economic development. Yet before we even begin to develop the Marcellus Shale, state and local governments are anxious to tax it, potentially jeopardizing its growth in the process and hundreds if not thousands of Pennsylvania jobs. Tens of thousands of Pennsylvanians are currently employed by the oil and gas industry and contribute significant revenues to local taxing authorities. The potential for many new jobs as drilling activity increases will only add to these benefits.

“We strongly believe the legislature wants Pennsylvania to be a leader in the development of this important energy source. The Marcellus Shale could provide an economic boost for the Commonwealth for many generations, but not if it is prohibited from developing through a hastily imposed property tax.

“There is never a good time to slap unnecessary taxes on job-creating industries, but with the current state of the global economy any new taxes will certainly stunt economic growth and send a bad signal to the business community. The price of natural gas sold for $13.105 per Mcf just last July and is now selling at $3.87 per Mcf. At the same time, the number of national onshore natural gas drilling rigs stood at 1,306 last September and has since fallen to 917 with more rigs expected to drop in the coming weeks and months.

“History has shown that crude oil and natural gas drilling does not place a burden on local services that needs to be made up with new taxes. Even still, companies investing in Pennsylvania Marcellus Shale development have and will continue to work with local officials to minimize impacts and address and/or provide compensation for any impacts caused by operations. For instance, the industry has invested millions of dollars across the Commonwealth in constructing new roads — at no cost to taxpayers or local governments.

“Repairs to roads are made at the expense of the drilling company and insured through bonding arrangements; frequently resulting in better roads than what existed prior to drilling. Drilling places no burden on counties, which would collect a large share of an imposed property tax.

“Pennsylvania is blessed with rich natural resources, including a potentially large natural gas field in the Marcellus Shale. Although the associations strongly oppose new forms of taxation, especially while the development of the Marcellus Shale is in its infancy, the industry remains willing to work with the legislature on issues to promote the development of the resource.”

About IOGA-PA

The Independent Oil and Gas Association of Pennsylvania (IOGA) is the principal non-profit trade association representing Pennsylvania’s Independent oil and natural gas producers, marketers, service companies and related businesses.

About POGAM

The Pennsylvania Oil & Gas Association is the non-profit trade association of the Commonwealth’s independent oil and gas producers. The association promotes the general welfare of Pennsylvania’s crude oil and natural gas exploration and production industry. The association and its members are committed to the economical and environmentally responsible development, production and use of the Commonwealth’s crude oil and natural gas resources.

About MSC

Formed in 2008, the Marcellus Shale committee represents the oil and gas industry in Pennsylvania on matters pertaining to the acquisition, exploration, drilling, and development of the Marcellus Shale natural gas resource and provides a unified voice before all state, county, and local government or regulatory bodies. The committee, sponsored jointly by the Pennsylvania Oil and Gas Association and the Independent Oil and Gas Association of Pennsylvania, includes independent producers with historical expertise in the Pennsylvania oil and gas fields and national companies dedicated to bringing their industry experience and resources to achieve common goals.

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PA Democrats Trying to Tax Natural Gas Still in the Ground

The tax-you-to-death Democrats in Pennsylvania are like big spending Democrats everywhere: They lie about who new taxes will affect, and their appetite to get their hands on YOUR money is insatiable. Case in point from the Pittsburgh Tribune-Review:

HARRISBURG — Natural gas from the vast Marcellus Shale reserve will be taxed under the ground and when it is extracted, if Democratic lawmakers and the governor have their way.

Fifty-four of 67 counties would be able to levy real estate taxes on the underground value of natural gas and oil under a bill proposed Monday by House Majority Whip Bill DeWeese, D-Greene County.

Of course, taxing natural gas deposits in the ground is not enough (never mind how you can even come close to calculating the size of a deposit before you pump it out), let’s tax it when it comes out too:

Gov. Ed Rendell last month proposed a state severance tax on extracted natural gas. Rep. Bud George, D-Clearfield County, is expected to propose the severance tax in legislation.

Here comes lie Number One: “It’s for the children.”

Forty-five of the poorest school districts would benefit from levying a real estate tax on natural gas, said Timothy Allwein, an official with the Pennsylvania School Boards Association, one of several groups that joined DeWeese at a news conference.

And lie Number Two: “It won’t affect the landowner.”

DeWeese said the real estate tax on natural gas would hit developers and drillers, not landowners and farmers.

And lie Number Three: “It’ll keep your taxes low.”

David Coder, chairman of the County Commissioners Association of Pennsylvania, said the revenue would be used to lower property taxes or prevent the rise of property taxes.

Really? You think energy companies will not adjust their lease terms and royalties to account for this rape of their profits? Do you really think any single locality in PA will either hold the line, or reduce your property taxes, if this legislation is passed? Come on. Don’t fall for the same, tired old lies trotted out by the Democrats!

Here’s what will happen: If the Democrats in PA pass this legislation, energy companies will stop expanding and drilling in PA and instead go to New York, Ohio, West Virginia and other Marcellus locations. If you’re a landowner living in PA, make some noise with your state representatives about this issue before it’s too late.

Read the full article: Bill revives tax on gas, oil underground (Pittsburgh Times-Review)

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Cabot Oil & Gas Served with “Notice of Violation” in Dimock, PA

The latest development in the unfolding story of several local water wells contaminated by very deep Devonian natural gas in Dimock, PA, is that the local drilling company, Cabot Oil & Gas, has been served by the PA Department of Environmental Protection with a “Notice of Violation.” What does that mean? According to an article in the Binghamton Press & Sun-Bulletin:

While tapping gas from the Marcellus Shale formation, the company has violated the state’s Oil and Gas Act and Clean Stream Laws, the notice states. Both of those regulations protect drinking water supplies from natural gas hazards.

Gas from Cabot drilling operations has migrated into an aquifer providing water for local residents, the DEP has determined. More than a dozen wells proving water to homes along and near Carter Road have been affected. Four have been taken offline and others have been vented.

Not only that, but the Notice also says Cabot has not provided “timely” records of drilling to the DEP. It seems the paper-pushers are in a snit at the DEP. This is not to make light of the serious issue that a dozen homes have been affected, with four of them requiring water to be trucked in. The truth is, neither the DEP nor Cabot still understands how this has happened. Yes, you drill down into the earth for natural gas and it’s no surprise you find it, especially in the Marcellus! However, the kind of natural gas that is “contaminating” the water aquifer in Dimock is from the very very deep Devonian layer, far below where Cabot is drilling. Makes sense that Cabot somehow caused this, but let’s figure how and why, shall we? Before the finger pointing starts in earnest?

As Cabot points out, the DEP’s assessment that Cabot is 100% to blame is premature at this stage. Cabot has been completely above board and transparent throughout the process.

Read the full article: Pa. finds gas-drilling firm in violation (Binghamton Press & Sun-Bulletin)


Download the Notice of Violation (112 KB)

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Range Resources Hands Out $1.2M in Royalty Checks in PA

Breaking news, this just in from the Wilkes Barre Times-Leader:

A leading company drilling on the Marcellus Shale natural gas formation in Pennsylvania says it handed out nearly $1.2 million in royalty checks last week.

Range Resources Corp. spokesman Matt Pitzarella said Monday the distribution is the first significant royalty the company has paid from its 120-plus Marcellus shale wells.

People in the exploration industry say they haven’t yet heard of such a large distribution of royalties from Marcellus shale gas wells in Pennsylvania.

The money went to 31 landowners who have wells on or near their land and live near Range’s gas-processing plant about 20 miles south of Pittsburgh.

Read the article: Marcellus shale wells royalty checks go out (Wilkes Barre Times-Leader)

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Cabot Oil’s Actions Help Lower Gas Levels in PA Water Wells

Several local water wells near the drilling operations of Cabot Oil in Dimock, Pennsylvania have been contaminated with natural gas. According to the Binghamton Press & Sun-Bulletin, somehow (no one yet knows exactly how), Cabot penetrated the very deep Devonian geological formation that released the gas into an aquifer that feeds local drinking wells in a small area near one of Cabot’s drilling sites. Four area homes have been affected to the point they need fresh water trucked in.

Cabot has been completely transparent through the entire process and is paying for the water needed by the four homes. Cabot has worked closely with the Pennsylvania Department of Environmental Protection to investigate and remediate the problem.

The P&SB article dutifully reports “both sides” of the drilling issue, with an obvious slant against drilling by throwing in a few fear-factor paragraphs. Kudos to Cabot for taking responsibility and for working hard to understand why this happened in the first place, with an eye toward preventing it from happening again.

Read the full P&SB article: Cabot says gas levels in water drop

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PA Gov. Ed Rendell Justifies New Tax on Marcellus Shale Drilling

In a Times-Tribune editorial about Pennsylvania’s impending budget deficit, which is now projected to be $2.3 billion, Gov. Ed Rendell is quoted saying a proposed tax on drilling in the Marcellus Shale won’t be more “severe” than in other states:

The governor is ready to propose a first-time severance tax on natural gas produced at the wells being sunk across the Marcellus Shale formation.

“The industry is used to paying severance taxes,” he said. “Our tax will not be more severe than other places.”

Scranton Times-Tribune: Feds could ease pain for states

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PA DEP Advises Venting Water Wells in Dimock Twp, But Source of Gas Still Unknown

Four water wells in Dimock Township, PA have been found to have high levels of natural gas, and the Pennsylvania Department of Environmental Protection is advising area home owners to vent their water wells.

Following an explosion Jan. 1 that shattered an 8-foot cement well cover, four wells with unacceptable levels of natural gas have been taken off-line in the township.

In the past few days, letters and fact sheets were sent to about 20 homeowners south of Montrose, Pa., alerting them to the dangers of gas trapped in wells and encouraging them to vent them, said Pennsylvania Department of Environmental Protection spokesman Mark Carmon.

Meanwhile, DEP officials are analyzing tests from about 20 homes in the area to determine whether the gas found in the wells is from natural ground conditions or a byproduct of drilling operations by Cabot Oil & Gas. The Houston-based energy company is drilling dozens of wells more than a mile deep to tap the gas-rich Marcellus Shale formation.

The question is not so much as whether or not there are high levels of natural gas seeping into some area wells so much as why, and from what source is it coming? Terry Engelder, a Penn State University geoscientist says this:

“The rock formations in and around the area carry a lot of fractures with them,” he said. “There is a slim possibility that if a company like Cabot came along, man-made fractures in the Marcellus could connect up with other fractures in more shallow units.”

A more likely scenario, he said, is gas from natural sources has been moving through shallow soils for some time, and residents are now just beginning to notice.

Press & Sun-Bulletin: Natural gas in water wells has N.Y. officials on alert – Pennsylvania homeowners notified of dangers

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Former PA Rep Dan Surra Appointed to “Protect Interests” of Non-Landowners in Marcellus Shale Drilling

Pennsylvania Gov. Ed Rendell has violated his own hiring freeze and appointed an ally, former Democrat State Representative Dan Surra, as senior adviser on the Pennsylvania Wilds to DCNR (Department of Conservation and Natural Resources) Secretary Michael DiBerardinis. The position pays $95,000 per year and includes “protecting interests” with regard to Marcellus Shale drilling.

In his new position, one of Surra’s responsibilities will be to focus on protecting the interests of recreationists and sportsmen as Marcellus Shale drilling expands.

“The Marcellus Shale gas deposits represent an enormous economic opportunity for the state if done correctly,” [State Rep. Camille “Bud”] George [D-Houtzdale] said. “I think Dan Surra will do a bang-up job in the position. His work with me on the House Environmental Resources and Energy Committee dovetails perfectly for this position. He’s a sportsman who is also well versed on mineral extraction.”

And this comment from State Sen. Mary Jo White, R-Oil City:

“I don’t know enough about the PA Wilds to know if this particular job is needed. My understanding from the governor is that Mr. Surra will be doing work regarding the Marcellus Shale natural gas development,” White said. “This is an important economic opportunity for Pennsylvania, so to that end I am hopeful that he is successful in working with all affected parties.”

Courier-Express/Tri-County: Lawmakers react to ex-Rep. Surra’s $95,000/year new job