• | | |

    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

  • | | |

    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’

  • | | |

    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

  • | | | | |

    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

  • | | | | | | |

    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

  • | |

    Chesapeake & Range Resources Peg Value of Their Marcellus Shale Holdings from $36K – $56K per Acre

    Range Resources CEO John Pinkerton said that their holdings in the Marcellus Shale play are worth more than four times the $14,000 per acre that recent deals between energy companies have brought. Chesapeake Energy CEO Aubrey McClendon says his company’s Marcellus Shale holdings are worth $35,900 per acre to the company. With 1.57 million acres leased, that’s an astonishing $53 billion worth of value for Chesapeake!

    If those values are true—and not just hype for investors—that would make the recent deals between Reliance and Atlas Energy ($14,167/acre) and Misui and Anadarko Petroleum ($14,000/acre) real bargains.

    MDN Note: These prices are not the prices energy companies pay landowners to lease land. Lease prices are more in the range of $5,000 per acre recently. Rather, this is the value energy companies say an average acre of Marcellus Shale land will eventually supply in revenue to the company. Not all land is productive, so the number is an average across all leased acreage.

    *Tulsa World/Bloomberg News (Apr 14) – Marcellus Shale assets considered valuable

  • | | |

    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

  • New Pro-Drilling Documentary “Gas Odyssey” Premiers Friday, April 16 in Binghamton, NY

    A pro-drilling documentary is due to premiere Friday, April 16th in Binghamton. Unfortunately MDN will not be able to attend the screening. If others do attend, please let us know what you think! Details below.

    From Red Dragon, Inc.:

    Red Dragon, Inc. is proud to announce the premiere of Gas Odyssey, a documentary film by Aaron Price. The film is about the development of natural gas from the Marcellus Shale in the Southern Tier of New York and Susquehanna County, Pennsylvania.

    Where: West Middle School
    West Middle Avenue
    Binghamton, NY 13905

    When: April 16, 2010

    6:45 pm “Red Carpet”

    7:00 pm Gas Odyssey

    9:00 pm Reception

    Contacts: Aaron Price, Filmmaker
    symphonyrocks@hotmail.com
    607-655-3600

    Carolyn Price, Production Assistant
    hafodytraeth@hotmail.com
    607-655-3600

    News Channel 34 (Apr 14) – Gas Odyssey Premiere Thursday, April 16

  • Big Marcellus Shale Drilling Conference Set to Convene in Pittsburgh May 3-4

    A big confab is due to take place on Marcellus drilling in Pennsylvania in early May. It’s being hosted and sponsored by the Pennsylvania Environmental Council. It looks to have a slate of both pro- and anti-drilling speakers. Cost to attend is $350. More information about the program is available from the PEC website here: www.pecpa.org/marcellus. The official press release is listed below.

    From the official press announcement:

    PITTSBURGH–A “who’s-who” of leaders in Pennsylvania’s burgeoning Marcellus Shale gas industry are set to convene in Pittsburgh next month for what is considered the most comprehensive forum on this topic ever held.

    The Pennsylvania Marcellus Shale Policy Conference, co-sponsored by the Pennsylvania Environmental Council and Duquesne University, will be held on May 3-4 on the campus of Duquesne University. The program already has attracted a VIP lineup of gas industry representatives and government officials from as far away as Texas, Colorado and other parts of the United States, as well as many of Pennsylvania’s highest ranking government officials in the fields of environmental regulation.

    A number of prominent experts and industry officials will address the conference, including:

    • John Hanger, Secretary, Pennsylvania Department of Environmental Protection
    • John Quigley, Acting Secretary, Pennsylvania Department of Conservation and Natural Resources
    • J. Scott Roberts, Deputy Secretary for Mineral Resources Management, Pennsylvania DEP
    • Scott Perry, Director, Bureau of Oil and Gas Management, Pennsylvania DEP
    • Joanne Denworth, Senior Policy Manager, Office of Governor Edward G. Rendell
    • Kathryn Klaber, President, Marcellus Shale Coalition
    • Don Welsh, President, Pennsylvania Environmental Council
    • Nels Johnson, The Nature Conservancy
    • Aaron Ritz, Clean Air Council
    • Kathy Pape, President, Pennsylvania American Water Company
    • David Hess, Former Secretary, Pennsylvania DEP
    • Hannah Wiseman, University of Texas School of Law
    • Jeffrey Jacquet, Cornell Cooperative Extension Marcellus Shale Team
    • David Neslin, Director of Oil and Gas Commission, Colorado Department of Natural Resources
    • James Martin, Chief, Oil and Gas Office, West Virginia DEP
    • Scott Roy, Vice President, Range Resources

    …as well as a number of other Marcellus Shale experts from industry, academia, government and the non-profit sector.

    Read More “Big Marcellus Shale Drilling Conference Set to Convene in Pittsburgh May 3-4”

  • | | |

    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

  • | | |

    Radiation Testing Shows Marcellus Shale Drill Cuttings are Safe for Chemung County, NY Landfill

    Chemung County, NY officials have released a report they commissioned from an independent certified health physicist that show levels of radiation in the Marcellus Shale drill cuttings coming from Pennsylvania Marcellus drilling operations to the Chemung County landfill are “well below” U.S. Environmental Protection Agency standards for radiation.

    The gist of the report is that the soil that the county landfill would accept from Marcellus Shale drilling poses no health threat from radiation, said County Executive Tom Santulli.

    “These people are experts. They made it very clear that this material is less radioactive than the countertops in our houses and soil in our gardens,” Santulli said. “My message is simple—this stuff is not toxic. It’s no more radioactive than the soil in your garden and bricks on your house. All this testing verifies that. This is way below any EPA levels.

    “This would be equivalent to taking dirt from your backyard and using it in landfill,” he said. “It can be used for cover. It’s that safe.”*

    However, the debate still rages. Those opposed to drilling claim there is a significant threat to human health from the drill cuttings. County Executive Santulli says those opposed “have zero credibility” on the matter with no facts to back up their claims.

    For more information on both positions, see the full article in the Star-Gazette.

    *Elmira Star-Gazette (Apr 11) – County study says soil from gas drilling is safe

  • | | | |

    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”