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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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    New Energy Company in the Marcellus Shale – PDC Mountaineer

    Reuters (Nov 1):
    Press Release: Petroleum Development Corporation Announces an Appalachian Joint Venture with Lime Rock Partners to Develop the Marcellus Shale Play

    There’s a new drilling company entering the Marcellus Shale region by the name of PDC Mountaineer, LLC. The new company is a joint venture between Petroleum Development Corporation and Lime Rock Partners. Petroleum Development is putting up leased acreage and other assets, and Lime Rock is pumping in cash.

    Read the press release for full details. The purpose of this notice is to let you know there’s a “new” player in town, just in case they come knocking on your door.

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    Millionaire Landowners – In New York State?!

    Crain’s New York Business (Nov 1):
    The new gold rush

    With heavy dollops of anti-drilling sentiment (so the reporter keeps his job), this article is worth a read because of the fountain of good information about economics for landowners in the Marcellus Shale. The theme that runs through it is the story of a truck driver with 120 acres outside of Binghamton, NY who stands to become a millionaire many times over if and when drilling starts to take place in New York. The truck driver, Jeff Decker, is not allowed to divulge the terms of his upcoming lease, but it’s thought to be in the neighborhood of $700,000–and that’s just the signing bonus for his 120 acres. If they drill on his property and he gets, oh say a 20% royalty, he’s easily into millions of dollars.

    This nugget of useful detail from the article:

    An 80-acre swath of the Marcellus can eventually produce $42 million worth of natural gas, says Dean Lowry, president of Fort Worth, Texas-based Llama Horizontal Drilling Technologies. With drilling leases now giving landowners 20% royalties on productive wells, Mr. Decker could become a millionaire several times over.

    Drillers, whose cost to develop an 80-acre parcel is about $4 million, would also prosper. “Fifty percent of the gas could be extracted in the first three or four years,” Mr. Lowry says. “You get your investment back in the first year to 18 months. Then you get seven to nine times your money over the next 20 to 25 years.”

    I would also caution about what’s coming in the way of taxes when drilling finally does start in New York. This rather sobering paragraph from the article:

    In New York the Paterson administration, heeding the cries of landowners and local officials in economically depressed upstate communities, has issued draft regulations to allow it here. Landowners are keen to lease their property. Cash-strapped municipalities are eager to tax the extracted gas. Business groups say drilling would bring jobs and jolt local economies. The state would collect more income tax and, if it imposes one, a tax on gas production.

    You can expect local municipalities to not be able to resist putting their hands into landowners’ pockets to relieve them of some of their new found money. And New York State will undoubtedly not be able to resist either. Politicians are like drug addicts who need an economic “fix”. Just a warning so you’re not surprised when it happens.

    We also have the obligatory couple of paragraphs on “don’t you dare drill in the Catskill watershed” for fears of contaminating New York City’s water supply. The stated reason is this:

    New York is one of five big cities not required by the federal government to filter its water, and revocation of that waiver would necessitate a filtration plant costing $10 billion to $20 billion.

    It seems Crain’s New York Business is a bit behind the eight ball. Chesapeake Energy, the only leaseholder with land in the Catskill watershed, has already said they won’t drill there. Makes no difference, this particular political issue is just too juicy to not use–even if it’s no longer an issue.

    We learn from this article that Hess is New York’s largest energy company, and that Chesapeake Energy and Fortuna Energy are the most active leasing companies (so far) in the Marcellus Shale in New York.

    Overall, some good info in this article, but as always with mainstream media, be sure to read between the lines.

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    Vestal Landowner Group Shops for a Drilling Contract

    Binghamton Press & Sun-Bulletin (Oct 28):
    Vestal landowners offer lease plan for gas drillers

    The Vestal Coaltion, a group of landowners in Broome County, NY, has created a draft lease agreement on behalf of its members and is now shopping it, looking for an energy company to sign the lease. According to the Press & Sun-Bulletin:

    A coalition of Vestal landowners has a deal for you: Roughly $46 million and 20 percent royalties for mineral rights to about 8,000 acres.

    A group of about 400 property owners signed a lease that would make it attractive for energy companies to do business with them, said Marty Leab, a coalition organizer. They have commissioned Dean Lowry and Llama Horizontal Drilling to find a taker in 90 days or less.

    Specifically, the lease would pay landowners a minimum of $5,750 an acre, plus 20 percent royalties, for a five-year lease of mineral rights, and a three-year extension, according to a copy of the lease obtained by the Press & Sun-Bulletin.

    According to the website for the Vestal Coalition, they’re still accepting new landowner members. Visit their site: www.coalitionconnection.com.

    Also, this tidbit of older news from the article, but still valuable to know:

    The market heated up as natural gas prices rose in spring 2007, and XTO bought mineral rights to land in the Deposit area for about $2,500 an acre. Since then, offers in the region have shot up to between $3,000 and $6,000 an acre and 20 percent royalties

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    Drilling Waste Water Treatment Plant Proposed for Owego

    Binghamton Press & Sun-Bulletin (Oct 28):
    Drilling processor targets Owego site

    From the Oct. 28th Press & Sun-Bulletin:

    A plant to treat waste from the Marcellus Shale is on the drawing board in the Town of Owego.

    Patriot Water Treatment pitched its plans to convert a former car dealership at 936 Taylor Road to a waste water treatment plant for Marcellus drillers at a planning board meeting Tuesday night. The proposal calls for installing holding and processing tanks in the existing building to treat round-the-clock shipments of drilling waste water, according to information from the planning board.

    And this:

    The plan, recommended for approval by the Tioga County Planning Board, estimates traffic from industrial waste haulers would average 96 trucks per day (four per hour), seven days a week. Haulers would use Day Hollow Road, Bodle Hill Road and Taylor Road to access the facility.

    Of course, anything to do with drilling is subtly (and sometimes not so subtly) opposed by the Press & Sun-Bulletin. The thought they want to leave you with is trucks lumbering down your street in the middle of the night hauling nasty chemicals ready to spill out on your front lawn.

    I know I would not want trucks round the clock going by my house–but–actually, they do! I live not a quarter mile from State Route 17 (the future I-86) and the traffic noise, especially from large trucks downshifting on a nearby hill, is 24×7. Traffic, especially if it’s mostly in the daytime, is a fact of commerce.

    Let’s let the good citizens of the Owego Town Board perform their due dilligence and render a decision that is fair to all the citizens of Tioga County. If the proposed location is too close to homes and traffic will be an ongoing disturbance, they should deny the permit. If not, grant it and reap the benfits of more jobs and more tax revenue from a new business in the area.

    I have confidence in our locally elected representatives to make the correct decision in this case.

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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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    First NY DEC Meeting on Proposed Drilling Regulations Held in Sullivan County

    Middletown Times Herald-Record (Oct 29):
    300 folks pack Sullivan fracking forum

    The first scheduled meeting for public comments on the draft Supplemental Generic Environmental Impact Statement (SGEIS) held by the New York DEC happened yesterday in Sullivan County, NY. According to the Middletown Times Herald-Record:

    Most of the speakers in the standing-room-only, mostly anti-drilling crowd of more than 300 at Sullivan County Community College said the proposed Department of Environmental Conservation rules for drilling of the Marcellus shale fall short.

    The anti-drilling standard tactic is to delay drilling in hopes of building support to get it banned altogether. This was evidenced at the meeting. With regard to extending the DEC’s public comment period (which would further delay the start of drilling):

    Paul Rush, deputy commissioner of the New York City Department of Environmental Protection, called for 45 extra days.

    Joe DiPane of Callicoon called for six months, since the shale “has been formed underground for eons,” he said.

    There are two more scheduled meetings, Nov. 10 in New York City and Nov. 12 in the Binghamton area. A third meeting is yet to be arranged in the Elmira area. (See Public Hearings on the New York Draft SGEIS for Marcellus Shale Drilling for details.) Landowners need to attend and make their voices heard!

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    Chesapeake Energy Decides to Not Drill in Catskill Region of New York

    Albany Times Union (Oct 29):
    Gas company backs off drilling

    There is an important lesson to be learned today: Anti-drilling groups will not be satisfied until there is zero drilling anywhere. This truth is now on full display for all to see. An article in today’s Albany Times Union trumpets the announcement that Chesapeake Energy, sole leaseholder of rights to drill in the Catskill Mountain region of upstate New York (with 5,000 acres), has decided not to drill in that area.

    The Catskill region feeds and contains water resevoirs for New York City. The City is dependent on the water from that region of upstate. This fact is being used as a weapon by anti-drillers to stoke fears that the water supply for nine million people would be poluted if there’s any drilling in or near that area. So Chesapeake decided to remove that objection from the table by announcing they would voluntarily commit to not drilling in the watershed area.

    So what do the anti-drillers do? Rejoice…dancing in the streets…express gratitude to Chesapeake? Not on your life. Here’s their response:

    “One company’s voluntary moratorium on drilling at this point is no substitute for a thorough analysis by the Department of Environmental Conservation and Department of Health to determine the catastrophic potential of drilling into the watershed and in adjacent communities,” said Michael Saucier, a spokesman for the city Department of Environmental Protection.

    And this:

    “We’re calling on Chesapeake Energy to back up this promise by transferring its leases to the city of New York for the price of $1. After the transfer, the state should ban drilling in the New York City watershed,” said Deborah Goldberg, a managing attorney with EarthJustice, an environmental lobbying group.

    And finally, this precious piece of logic:

    “When the gas drilling industry says it won’t drill within the source of drinking water for nine million people, it sends a strong message to state regulators that this activity is inappropriate,” said James L. Simpson, Staff Attorney with Riverkeeper.

    So, don’t do what the anti-drillers want and your Satan himself. Do what they want, and you’re still Satan himself. Let this be a lesson to all drilling companies and landowners: No compromise with the anti-drillers. Their objective is to shut you down permanently. Stick up for your rights. We still (for now) live in a free country with private property rights. Thank God for the Constitution! Exercise your rights before they’re gone.

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    Hess Offering 20% Royalties and Deal Worth $66.5M to Conklin Landowner Group

    Binghamton Press & Sun-Bulletin (Oct 16):
    DEC hearings to allow public comment on natural gas regulations

    In an article about the upcoming hearings being held by the New York DEC about draft drilling regulations, we have this tidbit of interest to landowners negotiating with drilling companies:

    Others are eager for the state to complete its review so Marcellus permits can be issued early in 2010. Among them is Dan Fitzsimmons, an industry supporter and owner of about 180 acres in Conklin, who said extending the comment period would create unnecessary delays.

    “They have to stick with their timetable, or they are going to have a lot of angry residents,” said Fitzsimmons, who leads a coalition of landowners in the towns of Binghamton and Conklin. Hess Corp. has offered the group a deal worth about $66.5 million, plus 20 percent royalties on production.

    We also have this obligatory anti-drilling paragraph from the P&SB anti-drilling writer Tom Wilbur:

    Marcellus development has the potential to produce several thousand wells in Broome County and change the physical and economic landscape. Unlike traditional wells, which are vertical, companies use larger equipment, more water and more chemicals to drill horizontally through bedrock to release gas in the Marcellus.

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    Cabot Resumes Drilling in Susquehanna County, PA

    Binghamton Press & Sun-Bulletin (Oct 16):
    DEP gives Cabot OK to resume gas operations in Pennsylvania

    Cabot Oil & Gas has had several spills of chemicals used in the hydraulic fracturing process at one of their drilling sites in Dimock Township, Pennsylvania. The spills have led to fish dying in the local Stevens Creek. The PA Department of Environmental Protection shut them down for a while and conducted a review. Cabot is now back in business. From the article:

    Cabot Oil & Gas has been given approval to resume work to produce natural gas from the Marcellus Shale after spills in Dimock Township halted certain operations.

    The approval came Friday after DEP officials reviewed Cabot’s plans to limit future problems and respond to emergencies.

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    Make Your Voice Heard on the Proposed NY Drilling Regulations

    In addition to attending the hearings previously mentioned (see Public Hearings on the New York Draft SGEIS for Marcellus Shale Drilling), if you’re a landowner in New York, you can also make your voice heard about the new regulations in the following ways:

    (1) Leave a comment on the specially created form on the DEC website: www.dec.ny.gov/cfmx/extapps/SGEISComments/

    (2) Send an e-mail to: dmnsgeis@gw.dec.state.ny.us

    (3) Write a letter to:
    Attn: dSGEIS Comments
    Bureau of Oil & Gas Regulation
    NYSDEC Division of Mineral Resources
    625 Broadway, Third Floor
    Albany, NY 12233-6500

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    Public Hearings on the New York Draft SGEIS for Marcellus Shale Drilling

    New York Dept. of Environmental Conservation (Oct 13):
    Press Release: DEC Schedules Public Hearings on Marcellus Shale Drilling Draft SGEIS

    Landowners will want to attend the public hearings being held by the New York DEC on the draft regulations for drilling in the Marcellus Shale. The regulations are called the Supplemental Generic Environmental Impact Statement (SGEIS). Why attend? To educate yourself on the regulations, and (if you’re so inclined), to offer your comments of support. You can be sure the anti-drillers will be out and vocal–so you need to be out and vocal too if you’re interested in ever seeing drilling commence in New York State. Here are the dates for hearings so far:

    • Wednesday, Oct. 28, Sullivan County Community College, E Building, Seelig Theater, 112 College Rd., Loch Sheldrake, NY 12759.
    • Tuesday, Nov. 10, Stuyvesant High School, High School Auditorium, 345 Chambers Street, New York, NY 10282.
    • Thursday, Nov. 12, Chenango Valley High School, High School Auditorium, 221 Chenango Bridge Rd., Chenango Bridge, NY 13901.
    • Elmira – Corning, TBD.

    The doors will open at 6 p.m. for individual questions and speaker sign up (first come, first called for commenting on the record). The public comment session will start at 7 p.m. Check the DEC web site for possible changes in time or location.

    From the press release:

    DEC staff will be available prior to the start of each session to answer individual questions about the format and contents of the draft SGEIS. The following procedures will guide the public hearings:

    • To accommodate as many people as possible, there will be a five-minute limit on oral presentations.
    • Speakers may supplement their oral presentations with written comments. Written and oral comments receive equal consideration.
    • Formal presentations (PowerPoint, etc.) cannot be accommodated.
    • Individuals intending to speak will be required to sign-in upon arrival and will be called in the order registered.

    To view (or download) the 809-page draft SGEIS, go to this page: www.dec.ny.gov/energy/58440.html

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    Binghamton Regional Sustainability Coalition Presents One-Sided Argurments

    WBNG-TV Action News (Oct 18):
    Drilling Effects for Tioga County

    A short segment on Channel 12 “Action News” starts out like this:

    An environmentalist weighs the pro’s and con’s of tapping into the Marcellus Shale in the Southern Tier. Chair of the Binghamton Regional Sustainability Coalition, Chris Burger, spoke at the Tioga Trails café in Owego tonight.

    I think it was more like just the “cons” of drilling were covered. Channel 12 needs to put a little more “action” into their Action News. The BRSC is dead set against–and actively opposes–drilling in the Marcellus Shale. Know who your opponents are folks. Don’t fall for the lie that they’re presenting “fair and balanced environmental viewpoints” on the topic of drilling. They are not.

    See for yourself: Binghamton Regional Sustainability Coalition.

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    Fortuna and Hess Royalty & Signing Bonus Numbers

    Elmira Star-Gazette (Oct 17):
    Slow down in gas drilling activity allows chance for consideration

    A generally anti-drilling “article” by the business writer for the Elimra Star-Gazette. But he includes some helpful and interesting information for landowners:

    I’m also watching how Fortuna and Hess are slugging it out for leasing rights in the counties to our east. What started here as a 12.5 percent production royalty and signing bonuses of a few hundred dollars per acre has morphed into the 20 percent royalty figure and signing bonuses of several thousand dollars per acre being offered in Broome and the surrounding counties on either side of the border.

    Landowners and landowner groups take notice! Be sure you’re getting the best prices you can from your contracts.