Pennsylvania

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    Lackawanna College, PA College of Technology Offer Programs to Train Marcellus-Related Workers

    Colleges in Pennsylvania are adding programs to train workers for Marcellus Shale jobs. And a lot of workers will be required. MDN wrote about the presentation by Larry Michael (Pennsylvania College of Technology, PCT) and James Ladlee (Penn State Cooperative Extension) at the Binghamton Natural Gas Development Summit and their study that says every well drilled translates into 12 full-time jobs. Larry and James helped establish the Marcellus Shale Education & Training Center at PCT in Williamsport, where they are training students for a variety of careers:

    Careers include welders, construction workers, drivers and machine operators and fabricators.Tracy Brundage, [PCT’s] managing director of the Workforce Development and Continuing Education programs, said that as the landscape of the Northern Tier changes, so too do course offerings at the college.

    She said input from energy companies has been influential in the design of 21 new courses.*

    In Scranton, Lackawanna College established an applied science degree in Oil and Gas Production Technology program in December 2008.

    To prepare potential employees for [Marcellus-related gas] jobs, Lackawanna College offers an associate’s degree in natural gas technology and is developing an operating and maintenance degree program in compression technology that could debut next fall.

    In addition, the college will soon start giving accounting students at its Towanda Center the option of customizing their degree to prepare them to work in the accounting side of the natural gas industry.

    Last week, Chesapeake Energy donated $50,000 to help Lackawanna College expand its Natural Gas Technology Program at its New Milford Center campus in Susquehanna County. The college plans to use the money for capital-equipment costs in fitting out their new facilities for the program that began last fall.*

    As drilling in the Marcellus Shale continues to expand in Pennsylvania (and when it finally begins in New York), many thousands of new jobs will need to be filled by local people. And those people will need to be trained. Forward-thinking colleges and technical schools are expanding now to meet the demand.

    *Wilkes-Barre Times Leader (Mar 24) – Some colleges add programs to train workers

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    Enbridge Building a Pipeline from Southern PA Marcellus Shale to Chicago

    Canadian oil and gas pipeline company Enbridge has announced plans to build a pipeline from the Marcellus Shale in Southern PA to the Chicago area.

    From the Enbridge press release*:

    Enbridge Inc. today announced it intends to develop a natural gas liquids (NGL) pipeline from the Marcellus Shale in Southern Pennsylvania and Northern West Virginia to markets in the Midwestern United States.

    The proposed pipeline is currently targeted to deliver into existing NGL infrastructure in the Chicago area including the Aux Sable facility which processes gas from Alliance pipeline and fractionates NGLs from various supply sources. Additional NGL fractionation capacity is available at the plant.

    “The Chicago area has substantial markets to accommodate the large volumes of NGLs that are expected to be associated with future Marcellus production. Other NGL markets, including Ontario, can also be accessed from Chicago utilizing existing infrastructure. This proposed pipeline will provide an excellent long term solution for development of this promising play, as it will enable NGL production to grow unconstrained for many years,” said Stephen J.J. Letwin, Executive Vice President, Gas Transportation & International, Enbridge Inc.

    “Enbridge has extensive knowledge and expertise in the areas of NGL fractionation, transportation and marketing. With this proposed pipeline, we are uniquely positioned to help Marcellus producers obtain greater value for their future NGL production” Mr. Letwin said.

    Enbridge will develop, construct, own and operate the planned NGL pipeline. The Company is currently evaluating various routing and market alternatives and anticipates moving forward with an open season in the second quarter 2010.

    *Enbridge (Mar 22) – Enbridge Announces Plans to Hold Open Season for Proposed Natural Gas Liquids Pipeline from Marcellus Shale to Chicago

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    Binghamton Natural Gas Summit: How Many Jobs Does Drilling (Really) Create?

    Marcellus Shale Workforce Needs Assessment Beyond random speculation, is there really any way to know, scientifically and accurately, just how many drilling-related jobs are being created in the Marcellus Shale? Yes there is! And two of the speakers at the Natural Gas Development Summit held in Binghamton on March 18th at the Regency Hotel, who have extensively studied the issue, laid out their findings for the assembled group.

    The speakers were Larry Michael, Executive Director for Workforce & Economic Development with the Pennsylvania College of Technology (PCT), and James Ladlee, County Extension Director with Penn State Cooperative Extension. Both have put in a great deal of time studying the jobs issue. Larry Michael spent six months on the Marcellus Shale jobs issue as a contributing author of PCT’s Marcellus Shale Workforce Needs Assessment study.

    What follows are MDN’s notes on this informative session. But we won’t make you read to the end for an answer. According to Messrs. Michael and Ladlee’s findings, every well drilled in the Marcellus Shale generates the equivalent of 12 full-time jobs, in perpetuity—for at least 20 years, as long as the well is active. The slightly longer explanation is, there are many people who work for varying periods of time on a well project, but if you add all of their time together, it would work out to 12 people full-time, ongoing, working directly or indirectly on the well project.

    Read More “Binghamton Natural Gas Summit: How Many Jobs Does Drilling (Really) Create?”

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    Hearing to Determine if PA Public Utility Commission has Right to Regulate Private Pipelines

    The Pennsylvania Public Utility Commission (PUC) will hold a hearing on April 22 in Harrisburg, PA to discuss a particularly thorny issue: Does the PUC have the jurisdiction to regulate private pipelines?

    The PUC has the responsibility of regulating pipelines that conduct oil or gas for compensation. That is, a pipeline owner leases space in the pipeline to third parties. In those cases, the law is clear. But what if an energy company builds and maintains its own pipeline and only conducts its own gas through that pipeline? The law is not clear on that matter. Hence the hearing.

    Jennifer Kocher, PUC spokeswoman, said the PUC has regulatory jurisdiction over “public utility pipelines,” defined as pipelines transporting gas or oil within the state for compensation.

    “But if a drilling company uses its own pipelines to transport the gas it produces, then there’s a question about our jurisdiction,” Ms. Kocher said. “We’re looking at that issue, at our safety jurisdiction, safety issues and the role of the PUC.”

    Matt Benson, a spokesman for the Pennsylvania Oil and Gas Association, said the industry trade group hasn’t addressed the pipeline regulation issue and is taking a “wait and see position” on PUC regulation. He said the group, along with gas producers, hopes to be offered an opportunity to testify at the hearing.*

    *Pittsburgh Post-Gazette (Mar 18) – PUC sets hearing on Marcellus shale pipes

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    PA Marcellus Shale Coalition Responds to EPA Plan to “Study” Hydraulic Fracturing

    The following is a press release issued by the Pennsylvania Marcellus Shale Coalition in response to the rogue EPA’s announcement that they will study hydraulic fracturing (again):

    The Marcellus Shale Coalition today issued the following statement regarding a plan by the U.S. Environmental Protection Agency to study hydraulic fracturing:

    “The members of the Marcellus Shale Coalition develop and drill wells in an environmentally responsible manner, including the use of hydraulic fracturing to complete a well for production. Hydraulic fracturing has been an established and proven practice for 60 years in Pennsylvania and around the country, and has been regulated successfully by state agencies. There have been no identified groundwater contamination incidents due to hydraulic fracturing, as noted by the Pennsylvania Department of Environmental Protection, other state regulators and the U.S. Groundwater Protection Council.

    “Similarly, there have not been impacts to surface water sources due to the practice. Water withdrawals in Pennsylvania are highly regulated by state agencies and water commissions, with a typical permitted withdrawal amounting to about one-half of one percent of the average flow of a stream or river.

    “The MSC will provide information and participate as appropriate in EPA’s study. Our industry is confident that an objective evaluation of hydraulic fracturing will reach the same conclusion as other studies – that it is a safe and well-regulated process that is essential to the development of natural gas.”*

    *PA Marcellus Shale Coalition (Mar 18) – MSC Statement on EPA Study of Hydraulic Fracturing

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    Encana Holds Leases for 25K Acres in Luzerne County, Claims Every Well Drilled Creates 120 Jobs

    An article in the Wilkes-Barre Times Leader reveals this interesting information about Encana’s activity in Pennsylvania:

    Encana Oil and Gas Inc. – has leased 25,000 acres of property in Luzerne County. The land is mainly on the north side of Route 118 in Fairmount, Ross, Lake and Lehman townships.

    Encana so far has obtained permits for drilling one well in Lake Township and another in Fairmount Township and is seeking a permit for one in Lehman Township, said company spokesman Doug Hock. Hydrogeological studies are now under way, and officials hope to begin constructing wells by May.

    “For every well drilled, that creates about 120 jobs, either directly or indirectly…  The bulk of these jobs as we begin operations are done by subcontractors,” Hock said.*

    *Wilkes-Barre Times Leader (Mar 21) – Law, engineering firms will be the first for jobs

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    Chesapeake Drilled 94 Wells in PA in 2009, Plans to Drill 200 Wells in PA in 2010

    An article in the Wilkes-Barre Times Leader reveals this interesting information about Chesapeake Energy’s activity in Pennsylvania:

    Chesapeake Energy has invested significantly in not only leasing land in Pennsylvania, but in doing business with private companies.

    With 94 wells drilled in the state in 2009 and more than 200 additional wells planned for this year, the company has paid subcontractors and vendors in Pennsylvania $269 million since January 2009, company spokesman Rory Sweeney said in an e-mail.*

    *Wilkes-Barre Times Leader (Mar 21) – Law, engineering firms will be the first for jobs

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    Marcellus Shale Drilling – Revival for Short-Line Railroads?

    You can add short-line railroads to the list of businesses that benefit from drilling in the Marcellus Shale. And it’s all because of sand. Drillers like to use a special kind of sand found in the Midwest. They need railroad cars full of the stuff when drilling. The sand aids in the process of opening or “fracking” horizontally drilled wells. And lots of sand means drillers need a way to get it to the drill site. Enter short-line railroads.

    Two years ago Tom Myles purchased the 35-mile Wellsboro & Corning Railroad, not knowing that a drilling boom would be a boom for his company.

    In the two years since Myles took over the Wellsboro & Corning line, cargo traffic has nearly tripled, to 849 railcars last year, the most in its modern history. In a recession, Myles has hired 10 people to transfer sand from the cars into trucks.

    He anticipates that business will nearly double this year, to 1,600 railcars. Almost all of that is sand used in hydraulic fracturing, the process that shatters the dense Marcellus Shale under high pressure to unlock its stores of natural gas.

    “We sold $40 million of sand last year,” O’Neill said. “This is now our primary business.”*

    *The Philadelphia Inquirer (Mar 21) – Marcellus Shale sends short-line railroad booming

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    How Long Will Drilling in the Marcellus Shale Last?

    Nothing lasts forever, as the old cliché goes, and neither will drilling. While we are at the very beginning of what will be a life-changing event for many landowners, a natural question is, How long will it last? How long before the natural gas locked away in the Marcellus is largely mined from the ground?

    One person to address that question is Marty Muggleton, spokesman for The Larson Design Group and TerrAqua Resource Management, a wastewater processor newly permitted to handle flowback from Marcellus drilling operators. At a recent meeting of the Tioga County (PA) Development Corporation Board of Directors, he said:

    Drilling will last about 20 years…and locals should try to use the resulting income wisely. There will be new opportunities for jobs, culture, education, health care and more. Communities just need to plan so those benefits remain when the drillers leave.*

    So there you have it. Once drilling begins, plan to see drilling operators for about 20 years.

    *The Wellsboro Gazette (Mar 17) – Natural gas dominates TCDC agenda

    UPDATE: At the Natural Gas Development Summit held in Binghamton, NY on March 18, one of the speakers also addressed this issue. Larry Michael, Executive Director for Workforce Economic Development at the PA College of Technology, has studied jobs and drilling in the Marcellus extensively. He said while a single well may produce for 15-20 years, the activity of drilling in the various shales in our region will go on for 80-100 years total. It will span several generations, before all shale gas is mined.

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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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    A Novel Approach to Signing New Landowners by Chesapeake Energy in Bradford County, PA

    Forget the landmen, Chesapeake Energy wants to talk directly to landowners and is throwing a “signing party” hoping to convince landowners in Bradford County to show up and sign up at the Wysox Fire Hall on March 20th.

    Chesapeake sent letters to unsigned landowners in Towanda, North Towanda, Wysox, Standing Stone, Monroeton, Asylum, Wyalusing and Herrick, inviting them to the event.

    Chesapeake tells landowners in the letter:

    “Our records indicate that you own certain oil and gas rights that Chesapeake is interested in leasing,” the copy of the letter states. “We will have personnel on hand to discuss with you an offer to lease [the oil and gas rights on] your property that will potentially allow you to share in the royalty pool to be established for wells to be drilled in your area.”*

    The letter offers unsigned landowners a 10-year lease for $5,000 per acre and 20% royalties. By comparison, just last September Chesapeake signed a deal with the Wyoming County Landowners group for $5,750 per acre and 20% royalties. Chesapeake has made an offer to Wysox Township to lease town land for the same terms ($5,750 per acre, 20% royalties). However, in January 2010, Northern Tier Career Center in North Towanda approved a five-year lease with Chesapeake for $6,500 per acre and 20% royalties on the school’s 73 acres.

    MDN has not seen a copy of the full letter, but a commenter on The Daily Review website states the Chesapeake letter was sent to landowners with less than 3 acres of land. Landowners with small parcels do not have as much negotiating clout as larger landowners or groups. Even so, MDN cautions landowners about just showing up and signing up. While it may be a good deal, the devil is in the details of a contract. There is no substitute for having a contract reviewed by legal counsel before signing. Landowner groups (who retain legal counsel) are often the best way to ensure your interests as a landowner are protected. If you cannot find a landowner group to join, make sure you retain a good lawyer with experience in mineral rights leases.

    Go enjoy the free coffee and donuts, but be careful about signing anything on the spot.

    *Towanda The Daily Review (Mar 17) – Chesapeake to hold lease-signing event for Towanda-area landholders

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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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    PVR Midstream Building New Pipeline and Compression Facilities in Wyoming County, PA

    From a Penn Virginia Resource Partners press release issued today:

    The midstream division of Penn Virginia Resource Partners, L.P. (NYSE: PVR), PVR Midstream, announced today that it has entered into an agreement to construct and operate gas gathering pipelines and compression facilities servicing a private firm’s Marcellus Shale natural gas production in Wyoming County, Pennsylvania.

    PVR Midstream will construct a 12-inch gathering pipeline and compression facilities with 25 million cubic feet (MMcf) per day of throughput capacity. This system is expected to become operational during the second quarter of 2010, with the potential for additional system extensions.

    PVR Midstream’s 2010 capital investment in this system is anticipated to range from $6 to $7 million, with potential future system extensions costing up to $10 million. PVR Midstream expects its investment to be accretive to distributable cash flow once the system is operational.

    See the full press release (Mar 16): Penn Virginia Resource Partners, L.P. Announces Gathering and Compression Agreement with Private Producer in the Marcellus Shale

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    Energy Companies in PA Must Now Disclose Gas Well Production Numbers Every Six Months

    Faster disclosure of gas well production data is coming to Pennsylvania. On Tuesday, March 16 the PA Senate passed a bill already passed by the PA House that would force drilling companies to disclose gas well production data every six months. The existing law, passed 25 years ago, allows drillers to keep production numbers secret for five years. No more. Gov. Ed Rendell has said he will sign the new measure into law.

    What does it mean for landowners in PA? You’ll now have access to the numbers to ensure your royalty payments are timely—and accurate.

    For more, see: Binghamton Press & Sun-Bulletin (Mar 16) – Pa. to reveal drillers’ secrets in gas shale rush

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    Talisman Energy Will Invest $1 Billion in PA Marcellus Shale, Opening Regional Office near Pittsburgh

    Talisman Energy (headquartered in Calgary, Canada) says it will invest $1 billion in Pennsylvania’s Marcellus Shale.

    Part of that investment is the creating of a regional office in Cranberry Township, in Butler County, PA. The new office will employ 125 people by the end of 2010. And Talisman is looking to hire:

    The company is in the process of recruiting and hiring geologists, landsmen, regulatory and legal experts, among others. It will relocate 35 from its New York office and 15 from the Calgary headquarters, and hire the rest.*

    Although Talisman’s 214,000 net acres in the Marcellus Shale are in northeastern Pennsylvania, the company decided to locate its regional office near Pittsburgh.

    *Pittsburgh Business Times (Mar 12) – Talisman Energy opening office north of Pittsburgh

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    Chief Oil & Gas Drilling Wells in Dauphin and Somerset Counties, PA

    Chief Oil & Gas (based in Dallas), is in the process of drilling wells in Jefferson Township in Dauphin County, and Addison Township in Somerset County, both in Pennsylvania. According to a Chief spokesman, if those wells do well, it “could lead to large-scale development in the region.” Chief owns the rights to 580,000 acres across the entire Marcellus Shale area.

    For more details on Chief and a recent meeting they held for area residents, see:
    Somerset Daily American (Mar 11) – Gas reps seek community support