Pennsylvania

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    Penn State to Monitor 50 Water Wells to Measure Marcellus Drilling Affects on Water Supplies

    Penn State will monitor water wells in Pennsylvania to see if they are affected by drilling activity. MDN applauds this effort:

    Penn State’s School of Forest Resources along with several Penn State Cooperative Extension county offices have received funding from the Center for Rural Pennsylvania and the Pennsylvania Water Resources Research Center to conduct a research study on the potential impacts of Marcellus gas drilling on rural drinking water supplies.

    The data collected from the study is for research purposes, Penn State officials said.

    About 50 private water wells will be selected for free water testing of 15 water quality parameters. Water samples will be collected by trained Penn State researchers both before and after nearby Marcellus gas well drilling has occurred.

    Interested residents of the southwest region of Pennsylvania can take the eligibility survey here, call Dana Rizzo at 724-837-1402 or e-mail.*

    *Fayette Daily Courier (Apr 12) – Ongoing Penn State study planned on impact of gas drilling

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    Joint Venture Between Reliance Industries and Atlas Energy Worth $3.5 Billion Over 10 Years

    Indian energy giant Reliance Industries Limited (RIL) has entered a joint venture with Atlas Energy (based in Pittsburgh). MDN previously reported on the rumors of an impending deal between the two companies. Reliance, India’s largest energy company and one of the largest energy companies in the world, will get 40 percent (120,000 acres) of Atlas Energy’s Marcellus Shale leases as part of the deal. The terms are a bit complex, but in the end, this is the largest deal to date between energy companies in the Marcellus Shale with a value of $3.5 billion over 10 years:

    Reliance will bear an acquisition cost of $339 million and pay an additional $1.36 billion as capital costs for the development programme over seven and a half years.

    However, the investment would be scaled up to $3.5 billion over the next 10 years, RIL CFO Alok Agarwal said today in Mumbai.

    The acreage will support the drilling of over 3,000 wells with a net resource potential of approximately 13.3 tcfe (5.3 tcfe net to RIL).*

    From the Atlas press statement:

    Atlas Energy, Inc. (“Atlas” or “the Company”) announces today its entry into a joint venture transaction with a wholly owned affiliate of Reliance Industries Limited (“Reliance”), the largest private sector company in India and a global energy leader, pursuant to which Atlas will transfer an interest in its Marcellus Shale position equal to 120,000 net acres in a transaction valued at $1.7 billion. Reliance will pay approximately $340 million in cash upon closing and an additional $1.36 billion in the form of a drilling carry. Atlas will serve as the development operator for the joint venture. Reliance will have the option to operate in certain project areas in the coming years outside of Atlas’ core operating areas of Fayette, Greene, Washington, and Westmoreland Counties in southwestern Pennsylvania.

    Read More “Joint Venture Between Reliance Industries and Atlas Energy Worth $3.5 Billion Over 10 Years”

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    PA Town Proactively Protecting Area Roads from Marcellus Drilling Truck Traffic

    The elected supervisors of Ross Township (Luzerne County, PA) are being proactive about protecting the roads in the township:

    In August, Municipal Solutions of Linden, Pa., visited the township and inspected the construction of the roads to determine weight limits. Supervisors started the process as a proactive measure to protect them from damage that might be caused by heavy trucks carrying Marcellus Shale gas drilling equipment through the township.

    Once weight limits are posted, it would require the gas exploration company to pay for any damages caused by trucks exceeding the weight limit.*

    Seems to MDN this is a common sense precaution that other communities may also want to adopt.

    *Wilkes-Barre Times Leader (Apr 7) – Ross Twp. addressing road protection

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    PA Secretary of Environmental Protection Says Marcellus Wastewater Discharge is Affecting Waterways

    The Pennsylvania Secretary of the Department of Environmental Protection (DEP), John Hanger, released a press statement yesterday expressing concerns over Marcellus drilling wastewater being released into PA waterways.

    From the DEP website:

    HARRISBURG — High levels of total dissolved solids pollution from natural gas drilling and other sources pose a real threat to Pennsylvania’s streams and rivers, including aquatic life, warned Department of Environmental Protection Secretary John Hanger today.

    “The treating and disposing of gas drilling brine and fracturing wastewater is a significant challenge for the natural gas industry because of its exceptionally high TDS concentrations,” said Hanger. “Marcellus drilling is growing rapidly and our rules must be strengthened now to prevent our waterways from being seriously harmed in the future.”

    Hanger pointed to recent examples where TDS impaired streams and affected major sources of drinking water.

    In 2008 and 2009, TDS levels exceeded drinking water standards along the Monongahela River, which is a major source of drinking water. Drinking water treatment plants do not have the equipment available to remove TDS, so any water polluted with TDS goes into Pennsylvania’s homes and businesses.

    Similarly, in early September 2009, excessive TDS levels led to an environmental disaster that wiped out 26 miles of Dunkard Creek in Greene County, as well as many miles of the creek in West Virginia. These high TDS concentrations, coupled with other factors such as temperature and nutrient concentrations, enabled golden algae to bloom and created an inhospitable environment for aquatic life. The algae released toxins to the water column that literally wiped out aquatic life, including at least 16 species of freshwater mussels and 18 species of fish.

    Dunkard Creek is an example of what can happen if TDS is not controlled, said Hanger, and the loss of this important public resource was an environmental and economic tragedy.

    TDS is a measure of all elements dissolved in water that can include carbonates, chlorides, sulfates, nitrates, sodium, potassium, calcium and magnesium. In addition to natural gas drilling, other sources of TDS include, abandoned mine drainage, agricultural runoff, and discharges from industrial or sewage treatment plants.*

    *DEP Press Release (Apr 6) – PA Must Take Action to Protect Water Resources from Drilling Wastewater, Other Sources of TDS Pollution

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    Proposed New Marcellus Wastewater Treatment Plant Shifts from Athens Township to Tuscarora Township

    After getting turned down by the supervisors in Athens Township, PA, Somerset Regional Water Resources is now planning to build a Marcellus wastewater treatment plant in nearby Tuscarora Township. Both Athens and Tuscarora are located in Bradford County in Northeastern Pennsylvania.

    A search of DEP permit applications confirms that Somerset has applied for a permit to use the former Cornell Manufacturing building (more recently Pendu Manufacturing) just off Route 6 in Tuscarora Township at the intersection of Township Roads 524 and 494. The new name for the facility, as stated in the permit application, is the Tuscarora Township Wastewater Treatment Facility. It is actually in the first phase of the permitting process, having completed the preliminary administrative review and now into what is known as the technical review.*

    Supervisors in Tuscarora have not yet been approached by Somerset to officially request permission to proceed, a step that will have to come soon in the process. If the supervisors approve the facility, it will also require approval from the PA State Department of Environmental Protection, which is estimated to take between 12-18 months.

    If all goes according to plan, the facility will employ about 40 people. It is projected there will be about 180 truck trips in and out of the facility per day once it’s operational.

    *Wyalusing Rocket-Courier (Apr 1) – Gas Well Water Treatment Plant Proposed at Former Cornell Plant in Tuscarora Township

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    Mud Spill at Drilling Site in Central PA Due to Human Error

    There was a mud spillage at a drilling site on Friday, April 2nd in Pennsylvania. The site is located on state-owned land—the Sproul State Forest in north-central Pennsylvania. The drilling was being done by Anadarko. According to reports:

    An estimated 8,000 to 12,000 gallons of mud used by Anadarko E&P Company Inc. for drilling operations overflowed at the well site due to human error, said Daniel Spandoni, spokesman for the Department of Environmental Protection in Williamsport.

    While about half of the mud spilled over the boundary of the well pad, it didn’t spread far enough to contaminate any surface waters, ground water or wetlands in the area, Spandoni said. A contractor began cleanup work Friday night. DEP officials have taken mud samples to determine a proper disposal method.

    The mud is used as a cooling agent in drilling operations. Since the mud that spilled is synthetic-based, it doesn’t contain any diesel fluids as some other agents do, said Spandoni.*

    *Hazelton Standard Speaker (Apr 2) – Mud spill at drilling site contained

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    Six Short-Line Railroads in Central PA Report Business is Up 40 Percent Because of Marcellus Drilling

    MDN previously reported on two short-line railroads that have seen their prospects dramatically improve with Marcellus drilling activity in Pennsylvania—the Wellsboro & Corning Railroad and the Reading & Northern Railroad. You can now add six more short-lines to the list—all of them owned by the North Shore Railroad Company.

    A system of six railroads in northcentral Pennsylvania, including the Lycoming Valley Railroad Co., is enjoying a 40 percent increase in business over last year’s first quarter, said chairman and CEO Richard Robey.

    “We have seen a substantial increase in business related to the Marcellus Shale gas well drilling,” Robey said Wednesday.

    Before that, the recession had sliced the railroads’ business by nearly 20 percent, as it hauled fewer loads of iron and steel products and scrap, food stuffs and plastics to manufacturers, he said.*

    Once again the main product being hauled is sand, which is mixed with water and chemicals and injected into well bores as part of the process to free trapped natural gas from the shale.

    *Charleston Daily Mail (Mar 31) – Railroads booming with Marcellus Shale business

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    PA Oil and Gas Association, Independent Oil and Gas Association Merging into One Organization

    From the press announcement:

    WEXFORD, PA – The Pennsylvania Oil and Gas Association (POGAM) and the Independent Oil and Gas Association of Pennsylvania (IOGA) today announced they have unanimously voted to merge their organizations to create a single, comprehensive trade association representing oil and natural gas interests throughout Pennsylvania.  The new organization, named the Pennsylvania Independent Oil and Gas Association (PIOGA), will represent approximately 700 members, including oil and natural gas producers, drilling contractors and service companies, as well as various professional firms, individuals and royalty owners.

    “The Pennsylvania Independent Oil and Gas Association will draw upon the combined expertise of our independent associations to better serve the needs of our member organizations, which represent the leading oil and natural gas producers working in the Commonwealth,” said PIOGA President and Executive Director Lou D’Amico. “By joining forces as one, unified voice, we will expand our mission to achieve even greater success for our members, including our role as liaison with other associations, companies, government and regulatory agencies to foster proactive communication, regulatory and policy development, work force and safety training, and continued education and growth within all segments of the industry.”

    PIOGA will be based in Wexford, Pa. and will employ a five-person staff, responsible for planning and implementing the association’s mission. In addition, PIOGA’s merged 29-member board will provide oversight, as well as govern the strategic planning and direction of key deliverables, while various committees oversee transportation, safety, environmental, and exploration and production initiatives. PIOGA will host an annual meeting, a large-scale conference and trade show, as well as yearly industry seminars, public educational meetings, and community events.

    “This merger is an important milestone in leveraging the industry’s common goal to operate under a unified framework that advances the responsible exploration and production of both the Marcellus Shale and other oil and gas producing formations throughout the Appalachian Basin,” said current POGAM Chairman Frederick Fesenmyer. “The entire industry is experiencing unprecedented growth, and the importance of a united, cohesive industry and community advocate cannot be overstated.  PIOGA will equally represent all facets of Pennsylvania’s oil and natural gas industry.”

    “We look forward to working closely with other states’ associations to collaborate on key initiatives that advance the industry and ensure the responsible development of our region’s promising domestic energy resources,” said current IOGA Chairman Craig Neal.

    The PIOGA board of directors will meet on April 1 to determine the structure and officers of the new association.

    *Pennsylvania Oil and Gas Association (Mar 30) – Members give unanimous approval to merge PA’s historic, independent oil and gas advocacy groups

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    Delaware River Basin Commission May Become Roadblock for Drilling in Wayne County, PA and Other Watershed Counties

    The City of Philadelphia is voicing their concerns to the Delaware River Basin Commission (DRBC) about Stone Energy’s request to hydraulically fracture two previously drilled wells in Wayne County, PA. Stone has also made a request to the Commission to withdraw up to 700,000 gallons of water from the West Branch of the Lackawaxen River in Mount Pleasant Township for drilling. Philly’s 17-member City Council voted unanimously to ask the DRBC to not approve the drilling permits until an environmental impact study can be done first.

    An environmental impact study, an intensive and time-consuming endeavor, would determine whether natural gas drilling poses a legitimate threat to the Delaware River watershed, a 13,539-square-mile area that encompasses nearly all of Wayne County and is known for its pristine water quality and world-class trout waters.

    Commission spokesman Clarke Rupert said Monday the regulator is considering conducting such a study. A decision on a $250,000 appropriation request by the commission is not expected until late 2010.*

    In addition to permission from the State Department of Environmental Protection, drillers in the Delaware River Basin watershed area also need permission from the DRBC before they can drill. If the DRBC is not going to make a decision about whether or not to spend $250K on a study “until late 2010,” and if that study is a “time-consuming endeavor,” that means Stone’s request to drill will not be approved until sometime in 2011 at the earliest.

    If you’re a landowner (or driller) in Wayne County, or in other counties located in the Delaware River Basin, you may be in for major delays before drilling begins. Let’s hope the DRBC speeds the process along.

    *Water World (Mar 30) – Philadelphia dives in to gas drilling issue in Wayne County

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    PA Marcellus Shale Coalition Responds to Gov. Ed Rendell’s Fibbing

    It seems that someone in Pennsylvania Gov. Ed Rendell’s office is telling fibs about the Marcellus Shale industry (say it ain’t so!). The PA Marcellus Shale Coalition has issued a statement to “set the records straight.” Forthwith:

    CANONSBURG, Pa. – Marcellus Shale Coalition President and Executive Director Kathryn Klaber today issued the following statement in response to claims that the natural gas industry declined a meeting requested by Governor Ed Rendell to discuss state policy issues:

    “It is important that the Marcellus Shale Coalition clarify the record regarding a meeting planned among industry representatives, Gov. Ed Rendell and other groups, scheduled for the morning of January 19, 2010. The industry did not decline the Governor’s request for a meeting. In fact, invited CEOs went one step further and requested that every member company of the MSC’s Executive Committee and their representatives participate in the meeting along with leaders of the Pennsylvania House and Senate in order to make real progress on the opportunity natural gas presents for the Commonwealth. The MSC team was en route to this scheduled meeting when we were notified by the Governor’s office that the meeting had been canceled due to an emergency trip to Haiti that demanded the Governor’s attention. We regret that the meeting didn’t take place, but understand that he needed to make relief in Haiti his priority that day. In addition, we have clearly indicated our willingness to meet with all engaged stakeholders, including Senate and House leadership, to discuss upcoming policy and legislative issues in the Commonwealth. In fact, our industry reiterated this commitment in a February 9 press statement.

    “The Governor has also made reference to public opinion regarding our industry. Our research and observations in the communities where we do business shows that support for our industry continues to grow. Just last week a poll released by a leading Pennsylvania newspaper found that most Pennsylvanians do not support the Governor’s proposed severance tax, which would be the highest in the nation for shale gas producing states. Tens of thousands of Pennsylvanians have become partners in the development of our vast natural gas resources by actively signing leases with natural gas producers. Natural gas producers receive requests daily from interested landowners who have not yet signed a lease. Our industry has paid more than $4 billion to landowners in the form of lease and royalty payments, and those numbers will only increase. Thousands of Pennsylvanians are working in the gas industry today, and workforce development programs are expanding across the Commonwealth. Most importantly for the Governor to observe is the $1 billion in total state and local tax revenue that this still-growing industry will create in 2010.

    “All of this positive economic activity for Pennsylvanians is taking place at a time when producers will not recover these significant investments for several more years. This is just the beginning and we must work together to maximize the opportunity for the betterment of all Pennsylvanians.”*

    *Marcellus Shale Coalition (Mar 30) – Marcellus Shale Coalition Releases Statement to Set the Record Straight on January Meeting with Gov. Rendell

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    Citizens Committee in Mt. Pleasant, PA Draft Drilling Ordinances for Their Community

    A citizens committee in Mt. Pleasant Township, PA (Washington County) has developed a draft zoning ordinance that will dictate what drillers in their township can, and cannot, do. From a news article:

    The citizens advisory committee presented a final draft on its proposal for a zoning amendment governing oil and gas activities.

    The committee, headed by Dencil Backus, is made up of about a dozen residents who have studied other zoning ordinances to find suitable regulations that would address the activity in Mt. Pleasant. They have looked at ways to address noise, light, odors and buffers in addition to where certain activity can take place.

    In studying the matter, the committee has taken the approach that gas drilling into the Marcellus Shale should take place but not at the expense of the landowners, township or residents’ quality of life.

    The rough draft still has to be reviewed by the supervisors and solicitor. From there, [Township Supervisor Larry] Grimm said, it will be passed on to the township and Washington County’s planning commissions for their approval.*

    *Pittsburgh Observer-Reporter (Mar 24) – Meeting recap

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    Another Cool Idea from Kane, PA – Turn Old Schools into Marcellus Shale Training Centers

    Must be something in the water in Kane, Pennsylvania. They just keep having great ideas! Not long ago we learned that the Kane Borough Sewer Authority is going sell (for money!) sewer water to drillers in the Marcellus, which will create a nice, new revenue stream for the township. Now they’re talking about possibly converting empty school buildings into training centers for those who will need job training to work in the Marcellus Shale.

    With Kane located in the middle of a key Marcellus Shale gas location, could its vacant schools provide sites for training or other services for the well-drilling bonanza?

    This question was explored Thursday by the Ad Hoc Committee that is looking at options for utilizing the vacant Mt. Jewett Elementary School and the soon-to-be vacant Chestnut Street Elementary School in Kane.

    Dr. Maryann Anderson, superintendent of the Kane Area School District, said the companies involved in drilling Marcellus Shale gas wells “need to have a ready workforce.”

    It was suggested that perhaps the vacant schools in Kane and Mt. Jewett could house training centers for the companies that need workers for various jobs associated with the Marcellus wells.*

    The great ideas just keep coming—from Kane!

    *The Kane Republican (Mar 26) – Could schools provide services for area drilling boom?

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    Another Short-Line Railroad Revived by Marcellus Shale Drilling

    Chalk up the resurrection of another short-line railroad to drilling in the Marcellus Shale. As MDN previously reported, the Wellsboro & Corning Railroad tripled its cargo traffic in just a few short years from drillers who need carloads of sand. We now have word of a rail line brought back from the dead in Luzerne County, PA due to Marcellus drilling activity:

    DURYEA – Investment spurred by Marcellus Shale natural gas exploration has transformed an antiquated, weed-ridden rail yard just north of Pittston into a state-of-the-art transloading terminal teeming with rail and trucking activity on an almost daily basis.

    Over the last year, Reading & Northern Railroad Co. sunk $100,000 into Pittston Yard, laying new track to accommodate 100 new rail cars and constructing a facility to store and hold up to 800 cars of sand to be used in hydraulic fracturing, or “fracking,” operations at Marcellus Shale drill sites throughout Northeastern Pennsylvania, said Reading & Northern President Warren A. Michel.

    “The reason for our success is that we are the largest facility in the region capable of handling hundreds of rail cars of sand. We now have 130 (sand) rail cars at the yard and we’ll be expanding substantially over the next six months,” Michel said.*

    *Wilkes-Barre Times Leader (Mar 26) – Old Duryea railroad yard taking on new life

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    Newfield Exploration Set to Drill 10 Wells in Wayne County, PA This Summer

    Drilling is coming to Wayne County, Pennsylvania this summer according to officials with Newfield Exploration. They are waiting for approvals from regulators to begin drilling up to 10 exploration wells. If those wells show promising results, they will likely be turned into full production wells.

    A Houston-based natural gas production company is laying the groundwork to fulfill its promise to drill up to 10 exploration wells in northern Wayne County this summer, with permits now trickling into the state Department of Environmental Protection.

    Newfield Exploration Co., which partnered with international oil and gas production firm Hess Corp. to develop a 140,000-acre leasehold in Wayne and Susquehanna counties, recently filed for its first four natural gas drilling permits in Damascus and Manchester Twps.

    The company has three pending drilling permits in Damascus Twp. [Wayne County] and one pending permit in Manchester Twp. [York County], according to state environmental regulator records. These permits, filed in late February and March, are on track to be approved by late April or May.*

    *The Scranton Times Tribune (Mar 24) – Gas driller seeks permits for Wayne County wells

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    SRBC Fines Southwestern Energy $50K for Lack of Proper Approvals

    Although the details are somewhat slim in the newspaper account, the known facts are that Southwestern Energy started construction on a well conductor pipe at a site in Wyalusing Township (Bradford County, PA) in early January, before the Susquehanna River Basin Commission (SRBC) had given its approval for said construction—something required by law. So the SRBC slapped them with a fine:

    Under a settlement agreement between Southwestern and the commission, which was approved by both sides, Southwestern was required to make a $50,000 “payment in lieu of a penalty” to the commission.*

    MDN firmly believes drilling companies need to be responsible and follow the rules, especially since the issue of drilling has been so distorted by anti-drilling propaganda. On the other hand, was this just an oversight on Southwestern’s part? Did someone not get the paperwork filed properly? Who knows. It does seem to be a case of “Simon Says” or “Mother May I?” Since the SRBC didn’t give the go-ahead, Southwestern was fined. Now that the paperwork is filed, have they gone ahead with construction at the site? Did the SRBC find any problems with the application once it was reviewed?

    So, is SRBC’s action vigilant oversight of the public interest? Or a shakedown? You decide.

    *Towanda Daily Review (Mar 24) – Southwestern Energy fined $50,000 for violation in Wyalusing Township

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    Breaking News: PA Supreme Court Rules Against Landowner Seeking to Invalidate Lease

    Last year, Susquehanna County landowner Herbert Kilmer sued ElexCo Land Services Inc. and Southwestern Energy Production to invalidate his lease. The reason? He said that by deducting drilling costs from his royalty payments, his payments fell below Pennsylvania’s law that a minimum one-eighth share of royalties are guaranteed to the landowner. A Susquehanna County judge ruled against the landowner and in favor of the energy companies. Other people started filing lawsuits, so the energy companies asked the PA Supreme Court to take up the matter. The Supremes did, and today they also ruled in favor of the energy companies:

    Pennsylvania’s high court sided Wednesday with the natural gas industry in a dispute with landowners who had sought to invalidate the leases they signed before the Marcellus Shale rush intensified and drove up land values.

    In a 6-0 decision, the Supreme Court upheld a Susquehanna County judge’s ruling that validated lease agreements that subtract drilling costs from the calculation of landowners’ natural gas royalties.

    Justice Max Baer, who wrote the court’s decision, noted that the term “royalty” and the method of calculating a one-eighth share is not defined by the state’s Guaranteed Minimum Royalty Act. However, he cited various texts on the industry that say a royalty is paid from the net amount remaining after deduction of certain production and well development costs.*

    This case will now force similar pending cases to be settled or dismissed. Landowners beware: (1) There is no such thing as a “standard” contract, and (2) Always have an attorney review a lease agreement first.

    *BND.com (Mar 24) – Pa. justices side with gas industry over landowner