Pennsylvania

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    MarkWest Expands Marcellus Shale Gas Processing Capacity in West Virginia & Pennsylvania

    MarkWest Liberty Midstream & Resources—also known as MarkWest Energy—announced today it is expanding its processing and fractionation capacity in the Marcellus Shale in West Virginia (Marshall County) and Pennsylvania (Washington County). What exactly does that mean, and why should landowners care? MarkWest is a “midstream” company, providing processing, storage, transportation and marketing for natural gas. Think of midstream companies as bridges between energy companies that do the drilling, and the large pipelines that deliver natural gas to buyers. Along the way the gas must get from the well to a processor where it’s cleaned up and separated into different products. There are different types of chemical compounds in “natural gas” and impurities must be removed before it’s saleable. MarkWest provides processing, fractionation (a separation process), pipelines, compressor facilities and more.

    The MarkWest announcement means drillers will have more capacity to clean up, transport and market the gas they discover. More capacity expands the market. The MarkWest announcement says they have “reached definitive agreements” which will allow them to expand operations, but it does not say which energy companies those agreements have been made with.

    From the MarkWest press release:

    Read More “MarkWest Expands Marcellus Shale Gas Processing Capacity in West Virginia & Pennsylvania”

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    Range Resources Meets with Murrysville, PA Residents to Discuss Drilling Near Residential Areas

    The Pittsburgh Post-Gazette published a good account of a meeting between Range Resources and residents from the Murrysville (Westmoreland County, PA) area about Range’s plan to drill a Marcellus Shale gas well in that area.

    Range Resources has submitted a plan to drill on a 6.1-acre parcel that is near the intersection of Saltsburg and Logans Ferry roads, an area that is in close proximity to the Murrysville/Plum border, along with the heavily traveled Golden Mile Highway and several business and residential areas.

    A packed audience in the Franklin Regional High School auditorium listened intently, then lathered the Range Resources contingent with questions about how the drilling—scheduled to begin in late 2010 or early 2011—will affect those living in the affected area.*

    Water contamination, truck traffic, road damage and other questions were discussed in a 3-hour session with Range. Read the full article for more.

    *Pittsburg Post-Gazette (Apr 15) – Marcellus shale meeting held

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    PA DEP Takes Aggressive Action Against Cabot Oil & Gas over Dimock Township Methane Contamination

    The Pennsylvania Department of Environmental Protection (DEP) is not happy with what it says is lack of progress on the part of Cabot Oil & Gas in the remediation of methane contamination of water supplies in Dimock Township, PA. The DEP blames Cabot for the methane contamination. Cabot claims they really aren’t at fault and are being unfairly blamed for a naturally occurring phenomenon (migrating natural gas).*

    Today’s consent order from the DEP stipulates that Cabot must:

    • Plug three wells believed to be the source of the migrating methane gas—within 40 days.
    • Install permanent water treatment systems in the affected 14 homes.
    • Pay $30,000 per month in fines, starting in May, until all obligations are met.

    In addition:

    • The DEP is immediately suspending reviews of any pending Cabot permits to drill elsewhere in the entire state.
    • Cabot is barred from drilling any new gas wells in Dimock Township for at least one year.

    From the DEP press release:

    Read More “PA DEP Takes Aggressive Action Against Cabot Oil & Gas over Dimock Township Methane Contamination”

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    Chesapeake Energy’s Permit to Use State Route 1007 in Bradford County Revoked Until Damage is Repaired

    Bradford-County-SR-1007 Chesapeake Energy’s permit to use a PA State Route in Bradford County has been revoked—now a second time—by the Pennsylvania Department of Transportation (PennDOT).

    From the PennDOT press release:

    HARRISBURG, Pa., April 15 — A road use permit issued to Chesapeake Energy Corporation for moving its drilling trucks and other equipment over State Route 1007 in Bradford County was revoked because of the company’s failure to deal with severe damage to the roadway, Transportation Secretary Allen D. Biehler, P.E., announced today.

    Chesapeake was granted a permit to put heavy trucks and equipment on the road, known locally as Spring Hill Road in Tuscarora and Stevens townships. The road normally has a 10-ton weight restriction, and Chesapeake’s permit carried the understanding the company would be responsible for repairs.

    “Chesapeake may not use this route until it makes the required repairs,” Biehler said. “We understand the importance of Marcellus Shale drilling to the region’s economy, but we will remain vigilant in requiring action to keep the roads safe and properly maintained for public use.”

    PennDOT revoked the permit after Chesapeake failed to respond to two notices of unsafe conditions on the roadway. Under the terms of the permit, Chesapeake is to proactively monitor pavement conditions and immediately begin repairs as needed to keep the road safe.

    On March 1, PennDOT revoked Chesapeake’s permit for State Route 1001 in Bradford County for the same reasons. The permit was restored after the road was closed for about one week and the company made the required repairs.

    *PR Newswire (Apr 15) – PennDOT Revokes Road Use Permit for Chesapeake Energy Corporation on State Route 1007 in Bradford County Until Repairs Are Made

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    Lehman Township, PA Approves Encana Plan to Begin Drilling This Summer

    Encana has gotten a green light from the supervisors in Lehman Township (Luzerne County, PA) to begin drilling this summer. The board approved an ordinance allowing the drilling to begin. According to Township Zoning Board Solicitor Jack Haley, the supervisors had little choice:

    According to Haley, all authority to halt drilling operations in any municipality in Pennsylvania lies in the hands of state agencies, not local governments. The township’s rules are “superseded” by the state Oil and Gas Act, he said.

    The state Supreme Court already reviewed two similar cases, he added, and decided the only authority Lehman Township has applies to what roads EnCana can use.*

    As for the motion/ordinance and what it says about the roads:

    [Board of Supervisors Vice Chairman Ray] Iwanowski outlined six conditions to the motion: that EnCana put up $13,540 to maintain Firehouse Road through the total time it is used; EnCana put up $32,192 to maintain Peaceful Valley Road similarly; all traffic related to the drilling traverse on Firehouse Road toward state Route 118; no traffic will go on Old Route 115 in the township (near the school); EnCana provide adequate insurance coverage for the township, and that a legally binding agreement be signed by EnCana holding it to its commitment.*

    *Wilkes-Barre Times Leader (Apr 14) – Lehman Township says yes to gas drilling

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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