Statewide PA

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    Six Regulators Police Drilling in Eastern Half of PA

    Wayne Independent (Nov 2):
    Few regulators in place for natural-gas drilling

    At a recent meeting in Preston Township (Pennsylvania), Department of Environmental Protection (DEP) officials talked about their role in inspecting gas drilling operations in the Marcellus Shale. The article attempts to make the case there are far too few inspectors for the growing number of drilling locations. In the eastern half of Pennslvania there are only six DEP officers whose job it is to monitor drilling activity and water supplies. The DEP is requesting three more, but with the recent state budget cuts, the additional positions are not assured.

    There was one bit of interesting information for landowners in Wayne and surrounding counties in the article:

    Although Wayne County has had only two natural gas wells drilled in the past two years, other areas in the region have experienced a rapid proliferation of production sites including in Susquehanna, Bradford, and Tioga counties. Hundreds of drill sites are expected to come online by the end of next year in the eastern office’s jurisdiction.

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    Talisman Energy Expanding in Pennsylvania

    Talisman Energy (Nov 3):
    Press Release: Talisman Energy Reports $838 Million Cash Flow in Third Quarter

    Talisman Energy, an oil and gas drilling company headquartered in Calgary, Alerta (Canada), reports the following in a recent press release:

    The Company has added over 170,000 net acres of high quality land in the Pennsylvania Marcellus and Montney shale plays, investing approximately $570 million, the majority of it subsequent to September 30.

    Production from the Pennsylvania Marcellus shale play was over 50 mmcf/d [million cubic feet per day] at the end of October. A total of 31 gross wells have been drilled year-to-date and a third rig has been added, with plans to move to six rigs by year end.

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    Drilling Permits are “Flying Out the Door” in PA

    Philadelphia Inquirer (Nov 2):
    Editorial: Shale game

    In an editorial, the Philly Inquirer revisits drilling in the Marcellus Shale in Pennsylvania. The editorial is mostly a rehash of old information and the theme is, “New York’s recently proposed drilling regulations are more strict than Pennsylvania’s, we need to get more strict too.”

    But, they also include this bit of detail that’s useful for landowners in PA to know:

    Drilling permits are flying out of DEP’s doors. Through Sept. 30, 1,340 Marcellus permits were issued and 385 wells drilled – more than double the number from last year. And the just-completed state budget requires the Department of Conservation and Natural Resources to raise $60 million by leasing up to 10,000 more acres of public forest land to drillers in the next year, a goal driven by a revenue grab rather than environmental stewardship.

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    M&T Bank Economist Bullish on Drilling in the Marcellus in PA

    Wilkes-Barre Times-Leader (Oct 29):
    Banker: Marcellus Shale to boost region

    M&T Bank economist and Chief Investment Officer James Thorne, Ph.D., addressed a recent meeting of the Greater Wilkes-Barre Chamber of Business and Industry about the impact of drilling in the Marcellus Shale in Northeast Pennsylvania. Among his comments:

    The Marcellus Shale gas play will be “a game changer” for Northeastern Pennsylvania, bringing a “huge economic injection” and making life here very different a decade from now…

    He also said,

    The region will get “a huge shot in the arm” from natural gas drilling. “The economic forecast is very bright.”

    There was also this interesting update about drilling activity in Luzerne County:

    Many landowners in Luzerne County have entered into leases with drillers, but no wells are yet operating in the county.

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    Dunkard Creek Fish Kill Update

    Pittsburgh Post-Gazette (Oct 14):
    Drilling water may be cause of fish kill: DEP points to salty discharge from mine

    Charleston Gazette (Sept 21):
    Consol mine may not be reason for fish dying

    An update on the fish kill in the Dunkard Creek which runs along the Pennsylvania and West Virginia border. As you recall, MDN pointed out that a connection to drilling in the Marcellus Shale for natural gas was tenous at best. A new story in the Pittsburgh Post-Gazette further strengthens that view (although you have to read the article with a discerning eye).

    This new article says the PA Department of Environmental Protection is now pointing the finger of blame (mostly) at an area coal mine. Here’s how the article starts:

    A heretofore undisclosed underground flow of mine pool and methane gas well drilling water into Consol Energy’s Blacksville No. 2 Mine may have contributed to the salty, polluted discharges that caused the massive, month-long fish kill on Dunkard Creek.

    Notice the confusing language that talks about “methane gas well drilling.” It leads you to believe the problem is about gas drilling, perhaps even hydrofracturing. It is not. Later on we get this:

    [The PA DEP] requested that the U.S. Environmental Protection Agency revoke the federal deep well injection permit that allows Consol to dispose of coalbed methane drilling waste water…

    So the waste water, IF it is the cause, comes from coal mining, not natural gas hydrofracturing. We need to be very clear about that. Blacksville No. 2 is a coal mine–there is no drilling for natural gas at that location. The PA DEP is saying that discharges from the coal mine into the creek “may have contributed” to the fish kill. Consol is vigorously denying the connection.

    So what is the connection to drilling in the Marcellus? A fantastical story. Here’s another paragraph, deep in this article:

    The Pennsylvania DEP said that algae — which may have “hitchhiked” to the Mason-Dixon Line on drilling rigs brought up from Texas to work in the Marcellus shale gas fields in Pennsylvania and West Virginia — was able to flourish in a brackish Dunkard Creek because of the high levels of dissolved solids and chlorides discharged into the stream by Consol’s treatment facility.

    There you have it. Nasty coal miners weakened Dunkard Creek, and nasty gas drillers drove trucks from Texas to the area and those little algae devils had the nerve to hitchhike along and jump into the Creek right where it was weakened and cause this problem. Go figure.

    Oh, one more little wrinkle in this story, that comes from the Charleston Gazette:

    West Virginia environmental officials now say a nearby coal mine may not be the only reason fish are dying in Dunkard Creek.

    Department of Environmental Protection officials say more dead fish have been found in the creek, but more than a mile upstream from Consol Energy’s Blacksville No. 2 mine.

    So, more than a mile upstream from where the coal mine discharges into Dunkard Creek they found dead fish. If the “weakened” water was downstream and the algae flourish in weakened water, how might that have somehow traveled upstream? Oh wait, I’m using logic instead of blind eco-nut belief…what was I thinking??

    Bottom line: I’m not categorically saying the coal mine plays no role, nor that hitchhiking algae plays no role. I am saying before we declare such things to be the case, let’s investigate and use some SCIENCE instead of blind and biased beliefs to declare a combination of coal and natural gas mining as the cause.

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    Pennsylvania Budget Almost There – With No Drilling Tax

    Philadelphia Inquirer (Oct 9):
    Pa. budget pieces start to fall into place

    With a state budget still not adopted, and now over 100 days late, Pennsylvania is finally about there. The good news for drillers…no severance tax this year:

    Also not in the package is a tax that some lawmakers had wanted to impose on natural-gas drilling in the vast formation known as the Marcellus Shale.

    Republicans in the Senate – and later Rendell – opposed starting such a tax this year, arguing that it would stunt drillers in an industry still in its infancy in the state.

    Kudos to the Republican Senate for protecting landowners’ money.

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    Philadelphia Inquirer – In a Snit Over Rendell Aide

    Philadelphia Inquirer (Oct 8):
    Editorial: Drilling for friends

    A snarky editorial with a snarky title from the lefties at the Philadelphia Inquirer. Actually has me laughing with a smile on my face. 🙂 The self-righteous anti-drillers are outraged that a top Democrat has defected from government to work for industry–in this case an aide to Gov. Rendell who was the governor’s point man on drilling in the Marcellus in Pennsylvania. He’s gone to work for (gasp), an energy company that’s drilling in PA. The anti-drillers see it as a betrayal and hint there may have been payoffs involved. For shame! Payoffs in the Rendell administration? Say it ain’t so. Shocking, I tell ya.

    Anyway, MDN finds it very amusing that the Inquirer never says a peep when top Democrats defect (either at the state level or federal level) to take high paying jobs with lobbying firms. It seems only people like Karl Rove (who left the Bush White House to work for Fox News), and people on the right deserve their righteous indignation. Oh, and Democrats who flip and start to work for “the other side.”

    Like a said, puts a smile on my face.

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    Fair and Balanced Column on Drilling in Philly Inquirer

    Philadelphia Inquirer (Oct 8):
    Daniel Rubin: Hard to extract consensus on natural gas

    A very fair and balanced piece by Philadelphia Inquirer columnist Daniel Rubin. In fact, a delight to read with some very good information. Mr. Rubin recently attended a meeting hosted by the League of Women Voters, who had invited people on both sides of the drilling issue to speak. On the pro-drilling side was Stephen Rhoads, chief lobbyist for the state’s oil and gas industry. Rhoads shared some excellent information, including how much taxing extraction in Pennsylvania would actually raise ($26 million this year), and how many active natural gas wells there are in PA (329 hydrofactured gas wells right now). He also said the gas industry will provide 174,000 jobs in PA at an average salary of $60,000 per year. Be sure to read this article.

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    Range Announces Management Additions and Bank Borrowing Base Reaffirmation

    Press Release from Range Resources (Oct 7):
    Range Announces Management Additions and Bank Borrowing Base Reaffirmation

    FORT WORTH, TEXAS – Range Resources Corporation announced today that it has hired Joseph H. Frantz, Jr. as Vice President of Engineering and K. Scott Roy as Vice President of Government and Regulatory Affairs for the Marcellus Shale Division located in Pittsburgh, Pennsylvania.

    Mr. Frantz brings more than 26 years of petroleum engineering experience with Texaco, S.A. Holditch & Associates and Schlumberger. Recently, Mr. Frantz led Schlumberger’s shale evaluation team for various emerging shale formations, including the Barnett, Fayetteville and Marcellus. Mr. Frantz has extensive experience working in the Appalachian Basin, and he has performed studies on topics ranging from reservoir simulations to hydraulic fracture optimization. He holds a bachelor’s degree in Petroleum and Natural Gas Engineering from Penn State University.

    Mr. Roy previously served as Executive Deputy Chief of Staff in the Office of the Governor of the Commonwealth of Pennsylvania. He has spent more than 17 years in public service in various positions, including key roles in both the Rendell and Ridge administrations and acting as the Governor’s liaison to various regulatory and environmental agencies. Mr. Roy earned his bachelor’s degree from Allegheny College and his juris doctorate from the Dickinson School of Law at Penn State University.

    Range also announced that at its regularly scheduled review, the Range bank group unanimously reaffirmed the Company’s $1.5 billion borrowing base effective September 30, 2009. Range elected to retain the existing $1.25 billion commitment amount, which provides in excess of $800 million in available liquidity. There were no changes to the interest rate, repayment terms or number of banks in the credit facility.

    Range’s Chairman and CEO, John H. Pinkerton, commented, “We are extremely pleased to announce these two new management additions to our Marcellus Shale team. Both Joe and Scott are Pennsylvania natives, who will report to Ray Walker in our Pittsburgh Marcellus Shale Division. Joe Frantz will head up our technical evaluation, not only of the Marcellus, but also for the other Appalachian shale formations. His extensive technical background in shale reservoir evaluations and optimized completion techniques is a key addition to our technical team. As the pioneer of the Marcellus Shale play, we fully understand the importance of forging a strong partnership among public, regulatory and industry interests to ensure that the development of the Marcellus Shale is accomplished in a responsible way. The addition of Scott Roy reflects Range’s commitment to being a good steward of Pennsylvania’s resources. Lastly, the unanimous affirmation of our borrowing base by our bank group reflects our low-cost structure, high-margin asset base and strong financial position. We are well positioned to continue to execute our plan of low-cost, consistent per share growth.”

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    Top Rendell aide quits to join gas driller

    Philadelphia Inquirer (Oct 7):
    Top Rendell aide quits to join gas driller

    An interesting bit of news: A top aide to Gov. Ed Rendell is stepping down to take a job in the drilling industry:

    K. Scott Roy is stepping down as the $146,000-a-year executive deputy chief of staff to Rendell to become vice president for government relations and regulatory affairs for Range Resources Corp., a Texas-based company with a major drilling stake in Pennsylvania.

    And another bit of interesting news found in this article is that Gov. Rendell wants to forego an extraction tax–for now (although the Democrats in the legislature are still trying to get a tax passed for this year):

    [Rendell’s call for an extraction tax] changed Aug. 31. In a move that took even some of his top aides by surprise, Rendell said at a news briefing that he was giving up his push for the tax this year.

    He said he changed his mind after meeting with industry executives who convinced him that imposing the tax now would stunt the growth of drilling in the state.

    “We felt we should let the industry get off to a good start, and that surpasses our need for money,” Rendell said Aug. 31. He said he favored starting such a tax next year.

    The article is mostly quoting eco-nut groups moaning about a potential conflict of interest by Mr. Roy’s “sellout” to the drilling industry.

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    PA House budget unlikely to advance

    Pittsburgh Post-Gazette (Oct 3):
    House budget unlikely to advance

    Pennsylvania still has not adopted a budget for the new fiscal year. Part of the wrangling is how to raise taxes to meet the ever growing demand of government to transfer wealth from the producers of society to the non-producers. In PA, the Democrats want to tax natural gas drilling, which of course will take money out of the landowner’s pocket…make no mistake, any tax on drilling will be passed on as an “expense” by the energy companies, reducing royalties to landowners. The Republicans in the PA statehouse are trying to stop it. Make your voice heard if you’re in PA!

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    Toxins tied to fish kill may have hitchhiked: Investigators weigh whether mining equipment is culprit

    Pittsburgh Post-Gazette (Oct 4):
    Toxins tied to fish kill may have hitchhiked: Investigators weigh whether mining equipment is culprit

    A highly speculative and irresponsible article trying to tie an algae buildup along the Pennsylvania-West Virginia border to drilling for natural gas. I would go as far as saying it’s pure fantasy. But that’s what passes for “news” these days. Part of the article ties in completely unrelated news, like the Cabot problems in Northeast PA, with this one–a favorite tactic of people who don’t have a case.

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    Finally Some Common Sense About (Not) Taxing Marcellus Production in Pennsylvania

    Pennsylvania Rep. Dave Reed (Republican, Indiana, PA) “gets it” when it comes to drilling in the Marcellus. Gov. Ed “fast Eddie” Rendell (Democrat), wants to tax drilling in the Marcellus. According to the Indiana Gazette (PA), fast Eddie’s plan calls for:
    Read More “Finally Some Common Sense About (Not) Taxing Marcellus Production in Pennsylvania”

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    Lock Haven University Biology Professor (and Landowner) Recounts Positive Experience with Drilling in the Marcellus

    Lock Haven University (PA) produces a regular online publication called The Hemlock. The current issue, dated March 2009, focuses on drilling in the Marcellus region in Pennsylvania. The issue is quite long with different articles focusing on different aspects of Marcellus drilling. As you can imagine, the articles are mostly negative and “the sky is falling” in nature. Fair enough. They have a viewpoint and wish to air it. Those of us who believe drilling can occur safely, but understand there will be problems along the way, have nothing to fear from the very worst the anti-drilling side can dish out. I rather enjoy reading such articles because I always learn something.

    What do I learn from the opposition? As an example, one of the articles contributed is from a retired state forester–Butch Davey–offering this bit of insight into why he’s against drilling in the Marcellus:

    Reading the children’s book The Lorax by Dr. Seuss to my grandchildren brings home the lesson that we need to carefully conserve the natural resources of Pennsylvania on both private and public land.  It is up to us to start living in a sustainable way so that future generations won’t be saddled with mistakes we made because of a myopic view of natural resource limitations or outright greed.

    There you have it folks. Dr. Seuss, a leading light of environmental knowledge and highly-sought after expert source, is one of Mr. Davey’s inspirations.

    About half way down the issue, amongst the articles recounting the gloom and doom of drilling, are a couple of landowner perspectives. One perspective is from a landowner who purchased his land without purchasing the mineral rights. Doh! When the energy companies show up and drill and you don’t get a dime from it, of course you’re going to be against it and focus on every single shortcoming and ill-effect of drilling (noise, traffic, etc.). Such a perspective is hardly impartial. Lesson to those buying land in the Marcellus: Be sure you purchase the mineral rights–and don’t blame the Realtor for your own stupidity if you don’t purchase the mineral rights, as this person did.

    But, somehow The Hemlock added a pro-drilling perspective! About the only pro-drilling aspect of the entire issue–no doubt their idea of “balance.”  The perspective is offered by Dr. Ralph Harnishfeger, a biology professor at Lock Haven–someone who knows and cares about nature and the environment. He recounts how he and his wife (also a professional biologist) and his neighbors “did it right” by banding together, working out a lease that protects them all and protects the environment, while at the same time allowing drilling on their property. A win/win for everyone. He acknowledges there is always some environmental impact from drilling, but when done right, the negatives can be minimized. Slogging through the entire Hemlock issue is worth it just to read his short contribution. He concludes his perspective with this:

    We believe that energy development can occur responsibly and in a manner consistent with good environmental stewardship. Farmland has been significantly altered by man from what existed prior to the arrival of Europeans on this continent and such change has dramatically improved food production and the resulting quality of life for many humans. This transition has increased habitat for some species and decreased habitat for others. It is unrealistic to expect a return to primeval forest and in the context of our highly altered environment we prefer well-managed and planned land use with the additional protections guaranteed through our lease.

    It seems at its core much of the debate over drilling in the Marcellus, as is the debate for most environmental issues, is a clash of philosophies, as Dr. Harnishfeger alludes to in his summary statement. Many people erroneously believe we can return “nature” to it’s pre-man condition. They view man and his activities on this planet as an infestation rather than as a species with the God-given (or Nature-given, if you’re a non-believer) right to manage the resources around us. It is not only impractical, but idiotic to ignore the energy needs of humans and think we can return to animal skins and clubs and give up electricity, machinery and the many advances of the last 500 years of human-kind. That view is truly unsustainable.

    Does drilling for natural gas impact the environment? Sure does. Do accidents happen along the way? Yes. Do we throw the baby out with the bathwater with respect to drilling because of some negatives? No way! Although The Hemlock issue is long, I encourage you to read it, particularly Dr. Harnishfeger’s contribution (especially if you’re a landowner) so you get some insights into how to “do it right” when it comes to creating a lease for your land.

    Read the issue here: The Hemlock, Volume 2, Issue 6 (March 2009)

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    Centre Daily Times Runs Anti-Marcellus Editorial

    The Centre Daily Times (State College, PA) recently ran an editorial with typical scare-tactic, kindergarten logic, while at the same time supporting the obscene taxation of drilling in the Marcellus in Pennsylvania.

    The editorial recounts how a number of so-called conservation groups have their greedy hands out and want a piece of the pie (my words, not theirs). So in the tortured logic of these groups, they want to tax tax tax the Marcellus. On one hand conservation groups and the Centre Daily Times decry drilling and paint a nightmarish picture of water and noise pollution, road damage, and general malaise. In the next breath they say, “Oh well, if it’s gonna happen, let’s at least grab a piece of the action for ourselves.” It’s thuggish thinking and thuggish behavior. A protection racket–pay to play. And newspapers like the Centre Daily Times fall right in line, along with their Democrat co-conspirators in Pennsylvania state government.

    Perhaps this is a teachable moment? The taxarati (the taxing class), will tell you energy companies will have to pay the tax, and that there’s more than enough money going around that “a little tax won’t hurt anyone,” with the justification that “39 other states do it too.” Wrong. Natural gas prices have come down dramatically in the past 12 months and new exploration is at best a break-even affair at this point.

    Point #1: Drilling will slow or stop. Making drilling more expensive by adding more tax may tip the scales and make it an unprofitable venture, and the drilling will stop. There are already indications that new drilling has slowed throughout the Marcellus.

    Point #2: Landowners will not escape the tax. Do you think energy companies alone will bear the tax? Wrong! Landowners will also be part of this tax. The energy companies will not bear the burden alone. More tax means less in landowners’ pockets.

    Point #3: Consumers will ultimately pay. Do you think corporations simply “live” with making smaller margins of profit? They do not. They pass along increases in higher prices. There truly is no such thing as a tax increase on business that is paid by anyone other than the consumer. It is always the case. You may think you’re “soaking the rich” by increasing taxes on businesses, but those taxes are treated as a cost of business and factored into the price consumers will pay. By taxing business, you have just taxed yourself. Doh!

    Wake up PA, and reject the notion of a severance tax on Marcellus drilling.

    Read the Centre Daily Times editorial: Tax the source of the mess