Statewide PA

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    EQT has Already Drilled 21 Wells in PA Marcellus Shale in 2010 – On Track for 100 Wells This Year

    Even though the price of natural gas worldwide is down, EQT Corp saw a big jump in net income (ie profits) largely due to their large increase in gas production in the Marcellus Shale formation in Pennsylvania. In a Pittsburgh Tribune-Review article we learn this about their drilling activities:

    EQT drilled 21 horizontal wells in the Marcellus formation in the first quarter, and plans to drill 100 such wells this year, at an average cost of $3.3 million to $3.5 million per well.*

    If EQT drills 100 wells in PA in 2010, that’s a $330-$350 million investment in PA with all of the jobs that kind of investment creates.

    *Pittsburgh Tribute-Review (Apr 28) – EQT tallies $88.1 million 1Q profit

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    Speakers at Marcellus Midstream Conference: Infrastructure Critical to Future Success

    According to speakers at today’s Marcellus Midstream Conference and Exhibition in Pittsburgh, infrastructure will be play a key role, and if not ramped up quickly, may create problems for drillers in the Pennsylvania Marcellus Shale.

    “The opportunity for Marcellus Shale production growth can be overwhelmed by a lack of infrastructure,” said Scott Soler, managing director of Houston-based private equity firm Quantum Energy Partners.

    Soler said an estimated $10 billion must be spent on pipelines, processing and storage facilities within five years to keep up with projected production.*

    Bentek Energy, also presenting at the conference, said the industry has announced or already begun more than 30 pipeline projects, including new pipelines or expansion of existing pipelines.

    MDN recently reported on new processing, fractionation and storage facilities announced by both Dominion and MarkWest. Infrastructure will play a key role in drilling in the Marcellus for years to come.

    *Pittsburg Tribune-Review (Apr 21) – Marcellus Shale infrastructure inadequate, energy exec says

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    Dominion Expands Marcellus Shale Gas Processing Capacity, Plans to Convert & Expand Ohio-WV Pipeline

    Not to be outdone by MarkWest’s recent announcement about expanding their processing and fractionation facilities in the Marcellus Shale, Dominion has announced they too have big plans for expansion in the Marcellus Shale, including converting transmission pipeline TL-404—running through Ohio and West Virginia—into a “wet gas service” line. Dominion’s plans also include building new processing facilities in West Virginia.
    Read More “Dominion Expands Marcellus Shale Gas Processing Capacity, Plans to Convert & Expand Ohio-WV Pipeline”

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    PA DEP Secretary John Hanger Summons Marcellus Shale Drilling Companies to a May Meeting

    PA DEP Sec. John Hanger The PA Department of Environmental Protection (DEP) is summoning all Marcellus gas drillers operating in Pennsylvania to meeting. MDN wouldn’t exactly use the term “mandatory attendance required” to describe the meeting, but reading between the lines it certainly seems that way.

    MDN welcomes the DEP keeping a close eye on drillers, especially in the aftermath of Dimock. However, the tone of the press release is confrontational and bullyish, rather than collaborative and respectful.

    From the official DEP summons press release:

    HARRISBURG—Department of Environmental [Protection] Secretary John Hanger announced today that he has called a meeting of oil and gas companies with permits to drill in the Marcellus Shale to discuss what steps the industry must take to prevent gas migrating from wells and polluting Pennsylvania’s natural resources, which can create a public safety risk.

    The meeting will be held on May 13 in Harrisburg.

    “The Department of Environmental Protection has a constitutional and statutory obligation to protect Pennsylvania’s environment. That right is not for sale and is not subject to compromise,” said Hanger.

    “Drilling for natural gas beneath our soil can be done responsibly without putting the citizens of Pennsylvania, their property or livelihoods at risk,” added Hanger. “I am urging the industry to come and discuss how to effectively and safely prevent gas migration, protect our natural resources, and ensure that what happened to the residents of Dimock Township, Susquehanna County, does not happen elsewhere.”

    Last week, DEP took further action against Cabot Oil & Gas Inc. after it failed to address migrating gas discovered in 2009 from drilling operations that contaminated groundwater and the drinking water supplies of 14 homes in the region.

    “Gas migration is unacceptable and the department is taking every precaution necessary to address this issue to protect our citizens and their communities,”   Hanger added. “In addition to increased oversight, the department has proposed tougher regulations to meet the growing demand and new drilling technologies including improving well construction standards to protect from gas migration.”

    PA DEP Press Release (Apr 20) – DEP to Meet With Drilling Companies to Discuss Ways to Prevent Dangerous Gas Migration Situations, Safeguard Homes, Water Supplies

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    Opinion: How the AP and Other Media Outlets “Wag the Dog” Against Drilling in the Marcellus Shale

    Google News Search "Louis Matoushek" MDN notes with some amusement how news is manufactured—and is thankful blogs are around to help set the story straight. Case in point: A few days ago the Associated Press ran a single story about the “raging debate” over gas drilling in Northeast Pennsylvania. While the drilling debate is certainly ongoing, and there are plenty of people on both sides of the debate, the AP story would have us believe the forces of good (people against drilling) are rising up in overwhelming numbers to oppose the forces of evil (the nasty energy companies who want to rape and pillage the unspoiled landscape, along with the greedy landowners who enable them).

    That single AP anti-drilling story was picked up by no less than 250 media outlets, including large city newspapers, television stations and everything down to small town newspapers—all in the course of two days. One would have to be blind to miss the coverage and not think, “Maybe there are a lot of people opposed to drilling after all!” And all from a single story run again and again and again.

    The AP story starts this way:

    A few hundred yards from Louis Matoushek’s Wayne County farmhouse is a well that could soon produce not only natural gas, but a drilling boom in the wild and scenic Delaware River watershed.

    Energy companies have leased thousands of acres of land in Pennsylvania’s unspoiled northeastern tip, hoping to tap vast stores of gas in a sprawling rock formation—the Marcellus shale—that some experts believe could become the nation’s most productive gas field.*

    But wait, it’s not enough that the villainous drilling companies want to spoil the unspoiled land in PA. While that argument will sway some readers, let’s throw in the thing that works every time, the one thing that will magically turn everyone against drilling: Water.

    Standing in the way is a loose coalition of sporting groups, conservationists and anti-drilling neighbors. They contend that large-scale gas exploration so close to crucial waterways will threaten drinking water, ruin a renowned wild trout fishery, wreck property values, and transform a rural area popular with tourists into an industrial zone with constant noise and truck traffic.

    Both sides are furiously lobbying the Delaware River Basin Commission, the powerful federal-interstate compact agency that monitors water supplies for 15 million people, including half the population of New York City. The commission has jurisdiction because the drilling process will require withdrawing huge amounts of water from the watershed’s streams and rivers and because of the potential for groundwater pollution.*

    PA learns fast. They look over the border at New York where City politicians bleat about the New York City watershed as if drillers are about to poison the water supply of the entire City, and say, “Hey, if it works for them, maybe it will work for us.” And so, the shrill voices in PA have found their argument: Drilling pollutes water. Run the story (i.e. lie) enough times and after a while people will believe it.

    Don’t fall for the lie. And landowners: Make your voices heard!

    *Pittsburgh Tribute-Review/AP (Apr 19) – Gas-drilling foes fear for local water supplies

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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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    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 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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    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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    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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    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

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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