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    Kinder Morgan Building New Marcellus Shale Pipeline from Pennsylvania to Michigan

    Kinder Morgan, a pipeline and energy storage company, will build a new 250-mile pipeline from Pennsylvania to the Cochin Pipeline in Michigan to move Marcellus Shale gas to processing facilities and markets in the Midwestern U.S. and Canada.

    From the Kinder Morgan press release:

    HOUSTON, April 20, 2010 – Kinder Morgan Energy Partners, L.P. today announced plans to modify and expand the existing Cochin Pipeline system to provide a solution for transporting natural gas liquids (NGL) from the Marcellus Shale Basin to fractionation plants and chemical markets near Sarnia, Ontario, and Chicago, Ill.

    Kinder Morgan plans to build approximately 250 miles of NGL pipeline from the Marcellus Shale Basin in southern Pennsylvania to the Cochin interconnect at Riga, Mich. From Riga, Kinder Morgan anticipates that product will be transported through the existing Cochin Pipeline system to Windsor, Ontario, and then through the Windsor-Sarnia Pipeline to Sarnia. Kinder Morgan also plans to reverse the eastern leg of its Cochin pipeline in order to move NGLs from Riga to the Chicago area, where it expects to build an additional pipeline to connect to existing fractionation facilities and chemical plants.

    “Our proposed pipeline and key existing infrastructure offers NGL producers the quickest and most efficient solution to get their product to the market,” said Don Lindley, vice president of business development for Kinder Morgan’s Products Pipeline group.

    The pipeline will be designed to transport mixed NGLs (Y-grade), as well as purity NGLs such as ethane, and will have an initial throughput capacity of 75,000 barrels per day and can be expanded to handle up to 175,000 barrels per day.

    The recent decision by Canada’s National Energy Board directing the reconnection of the Cochin Pipeline to the Windsor-Sarnia Pipeline will enable Cochin Pipeline shippers to have access to the Sarnia chemical complex. Kinder Morgan anticipates offering transportation from Marcellus to Sarnia for under 14 cents per gallon.

    Kinder Morgan expects to move forward with an open season in the second quarter of 2010.

    Kinder Morgan Press Release (Apr 20) – Kinder Morgan Offers Quick and Efficient Solution to Move Marcellus NGLs to Market

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    A New and Potentially Safer Way to Treat Marcellus Shale Wastewater

    A Pittsburgh startup company formed at the Pittsburgh Allegheny-Singer Research Institute believes it has developed a better solution than current alternatives for treating wastewater from drilling Marcellus Shale gas wells. Frac Biologics Inc. was founded by physicians, so it’s no surprise the technology comes from the medical community:

    “The idea for the company came from our work with biofilms, which are (cell) communities that we try to manipulate or get rid of to treat human disease,” said Christopher Post, a physician and CEO of the 3-month-old company. Other founders are physician William Costerton and Garth Ehrlich. All three are Allegheny-Singer directors.

    Allegheny-Singer researchers found the biofilms love to eat heavy metals, such as strontium, nickel, even uranium. The metals, in effect, fuel the biofilms, Post said.*

    Water used in drilling Marcellus wells often comes out of the well containing small quantities of heavy metals. One of the objections to hydraulic fracturing is that wastewater from drilling eventually needs to be returned to the environment, and if it’s laced with heavy metals it is not safe. If Frac Biologics is successful with their concept, perhaps some of those objections can be addressed.

    *Pittsburgh Tribute-Review (Apr 22) – New company says it can safely handle Marcellus wastewater

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    Atlas Energy/Reliance Industries Pay $192 Million for Leases on 42K Acres in PA Marcellus Shale

    The recently announced joint venture between Atlas Energy and Indian energy giant Reliance Industries (a deal worth $3.5 billion over 10 years) is already bearing fruit. Together they’ve just forked over $192 million to secure leases for more land in Pennsylvania.

    Independent oil and gas company Atlas Energy will buy 42,344 acres in the gas-rich Marcellus shale along with Reliance Industries Ltd (RIL), weeks after the two announced a joint venture.

    The companies will buy the acreage in Fayette, Washington, Indiana, Westmoreland, Armstrong and Clarion Counties of Pennsylvania at an average price of $4,532 per acre.

    Following Wednesday’s deal, the Atlas-RIL joint venture will control about 343,000 Marcellus Shale acres, of which about 206,000 acres are net to Atlas.*

    According to the Atlas Energy website:

    Substantially all of the acreage to be acquired is held by production and is either contiguous with the joint venture’s existing acreage or is in concentrated blocks of acreage. [Atlas] believes that it will be able to drill over 450 horizontal wells on this acquired acreage assuming 1,000 foot spacing between lateral wells.**

    *Hindustan Times/Reuters (Apr 22) – Atlas, RIL to buy more shale acreage for $4,532 per acre

    **Atlas Energy Press Release (Apr 21) – Atlas Energy, Inc. and Reliance Industries Jointly Acquire over 42,000 Additional Acres within Their Core Marcellus Shale Position

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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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    Encana Paying for Water Testing up to One Mile from Proposed Drilling Site in Luzerne County, PA

    To address concerns of area residents, Encana is paying for a baseline water study to be performed for any household up to one mile away from a proposed natural gas well Encana will start drilling in Luzerne County, PA this year:

    EnCana is attempting to establish a baseline for water quality and quantity conditions by requesting property owners participate in a water sampling assessment, which will be collected by Rettew Associates, a third-party environmental-testing firm based in Lancaster.

    Letters were mailed April 8 to landowners located within a mile radius of the well covering Lake and Lehman townships, and Harveys Lake borough.*

    Encana spoke to area residents at a recent meeting in the Lehman Township fire hall to describe the testing procedure and their desire to, “Take every safeguard to not impact your water.”

    *Wikes-Barre Times-Leader (Apr 21) – Residents worry about gas drillers contaminating water

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    Apartment Rentals, Commercial Property Leasing Benefits from Marcellus Drilling in Wellsboro, PA

    Depending on your viewpoint, one of the benefits (or drawbacks) of an increase in drilling activity is the rise in rental prices for apartments and houses. The borough of Wellsboro in Tioga  County, PA (population about 3,300) is experiencing a real estate boom due to drilling. Prices for apartments around Wellsboro have doubled:

    [Real Estate Agent Victoria] Costanzo says the average rental rate in Wellsboro use to range between $400 to $600 a month. But now with the natural gas companies moving their employees into local areas, they are willing to pay more and rents have doubled.

    The Wellsboro Mayor [Jim Daugherty] says people, who originally were going to sell their homes, are now opting to rent or lease their properties for higher prices.*

    Office space and garages to store equipment are also in high demand, and two area hotels have been sold to drilling companies to house workers.

    *WETM Channel 18 TV (Apr 21) – Rent Prices on Rise in Wellsboro

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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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    Bad News for NY Landowners: DEC Says Drilling Won’t Begin Until Mid-2011

    NY DEC Comm. Pete Grannis MDN does not want to depress and demoralize the good citizen landowners (and drillers) of New York State, but we must share some disheartening news. It seems comments made today by New York Department of Environmental Conservation (DEC) Commissioner Pete Grannis, the man who heads the very agency working on new rules for drilling in New York, indicate drilling in New York State will not begin until spring or summer 2011.

    As part of an Earth Day speech at Onondaga Lake near Syracuse, Grannis made some revealing comments:

    Grannis predicted the DEC will finish drafting regulations that companies will have to follow to receive drilling permits by fall. He said he expects drilling to begin by spring or summer 2011.*

    Why is it bad for landowners and drillers? The longer we go without drilling, the more likely it simply won’t happen at all—ever. In addition, every month that passes with no drilling in New York means thousands of more jobs permanently relocated to other states in the Marcellus Shale, including Pennsylvania and West Virginia, where drilling is already happening. Once drilling companies decide on where to locate their headquarters and branch offices, and once other businesses like wastewater treatment plants and trucking firms get established, they almost never relocate. If those jobs and capital investments go to PA and WV, New York will never see them. A real shame.

    Finally, waiting until 2011 is bad because it means the next governor of New York, likely Andrew Cuomo, will have to sign off before drilling can begin. If Cuomo is elected, it’s not at all clear whether he would be favorable to drilling. In fact, it is likely he will be opposed.

    There’s still time. Landowners and concerned citizens who recognize just how important this is to New York’s future need to make their voices heard loud and clear to their elected representatives—and people like Cuomo need to understand elections may very well hinge on how they come down on the drilling debate.

    It’s time to turn up the heat on the DEC—they’ve had long enough. They are intentionally delaying and stalling for political reasons—not safety reasons.

    *Syracuse Post-Standard (Apr 20) – Environmental Conservation Commissioner Pete Grannis says hydrofracking likely to begin in New York in spring or summer 2011

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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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    Delaware River Basic Commission Continues to Obstruct Drilling in PA

    The Delaware River Basin Commission (DRBC) continues to obstruct drilling in the Marcellus Shale in Pennsylvania. The latest energy company to experience frustrations in dealing with the DRBC is Hess, which holds leases to 126,000 acres in Wayne County, PA:

    “It’s a big issue,” said Gene Linscomb, a Hess Corp. business manager based in Honesdale. “We’re asking them [the DRBC] for input.”*

    The thing is, the DRBC has not approved a single, solitary Marcellus shale operation in the watershed. Not one.

    The commission, a West Trenton, N.J.-based regulatory authority that has jurisdiction over water resources in the 13,539-square-mile Delaware River watershed, has yet to green light a single natural gas production well.*

    Hess has been asking the DRBC, repeatedly, what they want them to do so Hess can begin to drill.

    The [DRBC] has stated it does not intend to be a roadblock to natural gas development – something many Wayne County residents who signed leases do not believe.*

    So what is the DRBC doing? They’ve requested $250,000 to do a study about drilling in the Marcellus Shale in the watershed. They’re hoping to get federal money for the study “late this year.” In other words, they’re not doing anything. If you’re a landowner in the Delaware River Basin, or a drilling company, don’t hold your breath for drilling to begin any time soon.

    *Scranton Times Tribute (Apr 17) – Hess to Wayne County: ‘(We’re) here for the long term’

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    NY Marcellus Shale Drilling Regulations Ready by Fall 2010?

    When will the new Marcellus shale drilling regulations be ready in New York State? That’s the multi-million dollar question for both energy companies and landowners. Pro-drilling groups are pushing for the new regs to be released by early summer, but the New York Department of Environmental Conservation (DEC), the agency tasked with rewriting the regulations, is now making noise about “late summer or early fall.”

    Department of Environmental Conservation Commissioner Alexander “Pete” Grannis, speaking to the state Business Council on Thursday, said the Supplemental Generic Environmental Impact Statement (SGEIS) could be finalized by late summer or early fall, according to media reports.

    The reports also indicated drilling permits could be issued by the end of the year.*

    According to Richard Downey, a landowner and member of the Unatego Area Landowners Association:

    “This is the first time he’s [Grannis] said it and I tend to believe him,” Downey said. “My own opinion is the man has always kept his word and his own schedule.”*

    *Oneonta Daily Star (Apr 19) – Drilling regs could be final by fall

    Also see: Binghamton Press & Sun-Bulletin (Apr 15) – N.Y. review of Marcellus hits snags

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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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    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