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    Texas Billionaire George Mitchell is Betting on the Marcellus in PA

    According to the Forth Worth, TX Star-Telegram:

    George P. Mitchell, the billionaire who pioneered development of shale gas in the Barnett formation of North Texas, is betting that the Marcellus Shale of Pennsylvania will be similarly prolific.

    The 89-year-old oilman…said he expects Marcellus to be a “big boom” to Pennsylvania, birthplace of the U.S. oil industry. The natural gas prospect may stretch across about half the state, he said.

    “Pennsylvania looks like a hell of a play, and I can’t understand how in 150 years we found it just now,” Mitchell said Wednesday in an interview at his office in downtown Houston. “Pennsylvania is a tough play right now, but I think in my geological opinion, it has tremendous potential.”

    The article also says that Mitchell is providing backing for Alta Resources to drill in the Marcellus. Alta is right now investing in 45,000 acres in the Marcellus region.

    Read the full article: Barnett Shale pioneer now betting on Pennsylvania shale

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    Is New York State Understaffed to Handle Marcellus Drilling Activity?

    The Ithaca Journal and Assemblywoman Donna Lupardo (Democrat, Endwell, NY), say that while Pennsylvania has staffed up to handle permits and oversight of drilling activities, New York remains woefully understaffed:

    In Pennsylvania, the Department of Environmental Protection is creating 37 new positions – despite a statewide hiring freeze – to oversee Marcellus production. The positions will be added to Pennsylvania’s Office of Mineral Resources Management, which oversees nearly 600 employees who handle many issues in addition to natural gas production.

    Officials in New York, however, have few answers as to how 19 employees in the Bureau of Oil & Gas Regulation – part of the state’s Department of Environmental Conservation – will be able to handle a rush of permits and intensive drilling activity on this side of the border.

    “Clearly, we are not staffed to do the job,” said Assemblywoman Donna A. Lupardo, D-Endwell.

    Of course the obvious truth is this: New York is not granting any permits to drill right now. So there’s no reason to staff up to high levels just yet. Marcellus Drilling News thinks when New York finally stops dithering over what regulations they’ll impose and get around to granting permits, the state DEC will add more positions. Why pay people to sit on their rear-ends? Oh that’s right, it IS the NY government!

    Read the full article: New York understaffed to handle gas rush

  • Mainstream Media Finally Prints Balanced Article on Drilling in the Marcellus

    Don’t look now, but the Binghamton Press & Sun-Bulletin has actually printed a fair and balanced look at the issue of drilling in the Marcellus Shale deposit! The ‘guest viewpoint’ is written by Robert W. Watson, Ph.D., emeritus associate professor of petroleum and natural gas engineering and environment systems engineering at Pennsylvania State University. Whew! A mouthful.

    Dr. Watson’s article is an excellent and recommended read for landowners and for all sides of the drilling debate. Here are a few excerpts to encourage you to read the whole thing:

    Drilling a Marcellus well is a significant undertaking, but it is not a new undertaking. Some of the drilling technologies used in developing these wells have their roots in Pithole City, Pa. (circa 1865) and Gulf Oil Company’s laboratory research during the 1950s.

    Hydraulic fracturing, a technique to stimulate a well’s productivity, was first observed by South Penn Oil Company at its operations near Clarendon, Pa., during World War II, and was perfected and patented by Standard of Indiana during the late 1940s.

    And on the matter of groundwater contamination by hydraulic fracturing:

    [H]ydraulic fracturing has been misrepresented – even demonized – with many of the concerns having no basis in fact.

    Hydraulic fracturing, in its simplest form, it is the use of a water and sand mixture to create a highly conductive zone where natural gas can more readily flow from the natural gas bearing formation to the wellbore. The additives used are in very small quantities and equally low concentrations. This mixture is introduced to the subject formation via steel pipe grouted in place with cement. The subject formation is nearly a mile below the surface and is separated from the surface by an equal distance of rock. The simple reality is that stimulation using this technique does not impact ground-water bearing zones.

    Head on over to the Press & Sun-Bulletin site and read the article for free before it disappears into the paid archives section.

    Read the full article: Going for the gas – Make room for science and technology in Marcellus debate

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    Oil & Gas Industry Issues Statement on Proposed Local Property Tax

    Below is a joint press release issued by the Independent Oil & Gas Association of Pennsylvania and the Pennsylvania Oil & Gas Association about the ridiculous legislation proposed by PA Democrats.

    PITTSBURGH, March 9 — The Independent Oil & Gas Association of Pennsylvania and The Pennsylvania Oil & Gas Association today released the following joint statement in response to Rep. Bill DeWeese’s proposed legislation to impose an oil and gas property tax at the local level. A more thorough evaluation of this proposal will be conducted in the coming days.

    “The natural gas and crude oil industry has sustained the economic base of many rural Western Pennsylvania communities for more than 100 years, and with the prospect of the Marcellus Shale, it is the brightest spot in the Commonwealth for job growth and economic development. Yet before we even begin to develop the Marcellus Shale, state and local governments are anxious to tax it, potentially jeopardizing its growth in the process and hundreds if not thousands of Pennsylvania jobs. Tens of thousands of Pennsylvanians are currently employed by the oil and gas industry and contribute significant revenues to local taxing authorities. The potential for many new jobs as drilling activity increases will only add to these benefits.

    “We strongly believe the legislature wants Pennsylvania to be a leader in the development of this important energy source. The Marcellus Shale could provide an economic boost for the Commonwealth for many generations, but not if it is prohibited from developing through a hastily imposed property tax.

    “There is never a good time to slap unnecessary taxes on job-creating industries, but with the current state of the global economy any new taxes will certainly stunt economic growth and send a bad signal to the business community. The price of natural gas sold for $13.105 per Mcf just last July and is now selling at $3.87 per Mcf. At the same time, the number of national onshore natural gas drilling rigs stood at 1,306 last September and has since fallen to 917 with more rigs expected to drop in the coming weeks and months.

    “History has shown that crude oil and natural gas drilling does not place a burden on local services that needs to be made up with new taxes. Even still, companies investing in Pennsylvania Marcellus Shale development have and will continue to work with local officials to minimize impacts and address and/or provide compensation for any impacts caused by operations. For instance, the industry has invested millions of dollars across the Commonwealth in constructing new roads — at no cost to taxpayers or local governments.

    “Repairs to roads are made at the expense of the drilling company and insured through bonding arrangements; frequently resulting in better roads than what existed prior to drilling. Drilling places no burden on counties, which would collect a large share of an imposed property tax.

    “Pennsylvania is blessed with rich natural resources, including a potentially large natural gas field in the Marcellus Shale. Although the associations strongly oppose new forms of taxation, especially while the development of the Marcellus Shale is in its infancy, the industry remains willing to work with the legislature on issues to promote the development of the resource.”

    About IOGA-PA

    The Independent Oil and Gas Association of Pennsylvania (IOGA) is the principal non-profit trade association representing Pennsylvania’s Independent oil and natural gas producers, marketers, service companies and related businesses.

    About POGAM

    The Pennsylvania Oil & Gas Association is the non-profit trade association of the Commonwealth’s independent oil and gas producers. The association promotes the general welfare of Pennsylvania’s crude oil and natural gas exploration and production industry. The association and its members are committed to the economical and environmentally responsible development, production and use of the Commonwealth’s crude oil and natural gas resources.

    About MSC

    Formed in 2008, the Marcellus Shale committee represents the oil and gas industry in Pennsylvania on matters pertaining to the acquisition, exploration, drilling, and development of the Marcellus Shale natural gas resource and provides a unified voice before all state, county, and local government or regulatory bodies. The committee, sponsored jointly by the Pennsylvania Oil and Gas Association and the Independent Oil and Gas Association of Pennsylvania, includes independent producers with historical expertise in the Pennsylvania oil and gas fields and national companies dedicated to bringing their industry experience and resources to achieve common goals.

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    PA Democrats Trying to Tax Natural Gas Still in the Ground

    The tax-you-to-death Democrats in Pennsylvania are like big spending Democrats everywhere: They lie about who new taxes will affect, and their appetite to get their hands on YOUR money is insatiable. Case in point from the Pittsburgh Tribune-Review:

    HARRISBURG — Natural gas from the vast Marcellus Shale reserve will be taxed under the ground and when it is extracted, if Democratic lawmakers and the governor have their way.

    Fifty-four of 67 counties would be able to levy real estate taxes on the underground value of natural gas and oil under a bill proposed Monday by House Majority Whip Bill DeWeese, D-Greene County.

    Of course, taxing natural gas deposits in the ground is not enough (never mind how you can even come close to calculating the size of a deposit before you pump it out), let’s tax it when it comes out too:

    Gov. Ed Rendell last month proposed a state severance tax on extracted natural gas. Rep. Bud George, D-Clearfield County, is expected to propose the severance tax in legislation.

    Here comes lie Number One: “It’s for the children.”

    Forty-five of the poorest school districts would benefit from levying a real estate tax on natural gas, said Timothy Allwein, an official with the Pennsylvania School Boards Association, one of several groups that joined DeWeese at a news conference.

    And lie Number Two: “It won’t affect the landowner.”

    DeWeese said the real estate tax on natural gas would hit developers and drillers, not landowners and farmers.

    And lie Number Three: “It’ll keep your taxes low.”

    David Coder, chairman of the County Commissioners Association of Pennsylvania, said the revenue would be used to lower property taxes or prevent the rise of property taxes.

    Really? You think energy companies will not adjust their lease terms and royalties to account for this rape of their profits? Do you really think any single locality in PA will either hold the line, or reduce your property taxes, if this legislation is passed? Come on. Don’t fall for the same, tired old lies trotted out by the Democrats!

    Here’s what will happen: If the Democrats in PA pass this legislation, energy companies will stop expanding and drilling in PA and instead go to New York, Ohio, West Virginia and other Marcellus locations. If you’re a landowner living in PA, make some noise with your state representatives about this issue before it’s too late.

    Read the full article: Bill revives tax on gas, oil underground (Pittsburgh Times-Review)

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    Cabot Oil & Gas Served with “Notice of Violation” in Dimock, PA

    The latest development in the unfolding story of several local water wells contaminated by very deep Devonian natural gas in Dimock, PA, is that the local drilling company, Cabot Oil & Gas, has been served by the PA Department of Environmental Protection with a “Notice of Violation.” What does that mean? According to an article in the Binghamton Press & Sun-Bulletin:

    While tapping gas from the Marcellus Shale formation, the company has violated the state’s Oil and Gas Act and Clean Stream Laws, the notice states. Both of those regulations protect drinking water supplies from natural gas hazards.

    Gas from Cabot drilling operations has migrated into an aquifer providing water for local residents, the DEP has determined. More than a dozen wells proving water to homes along and near Carter Road have been affected. Four have been taken offline and others have been vented.

    Not only that, but the Notice also says Cabot has not provided “timely” records of drilling to the DEP. It seems the paper-pushers are in a snit at the DEP. This is not to make light of the serious issue that a dozen homes have been affected, with four of them requiring water to be trucked in. The truth is, neither the DEP nor Cabot still understands how this has happened. Yes, you drill down into the earth for natural gas and it’s no surprise you find it, especially in the Marcellus! However, the kind of natural gas that is “contaminating” the water aquifer in Dimock is from the very very deep Devonian layer, far below where Cabot is drilling. Makes sense that Cabot somehow caused this, but let’s figure how and why, shall we? Before the finger pointing starts in earnest?

    As Cabot points out, the DEP’s assessment that Cabot is 100% to blame is premature at this stage. Cabot has been completely above board and transparent throughout the process.

    Read the full article: Pa. finds gas-drilling firm in violation (Binghamton Press & Sun-Bulletin)


    Download the Notice of Violation (112 KB)

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    Range Resources Hands Out $1.2M in Royalty Checks in PA

    Breaking news, this just in from the Wilkes Barre Times-Leader:

    A leading company drilling on the Marcellus Shale natural gas formation in Pennsylvania says it handed out nearly $1.2 million in royalty checks last week.

    Range Resources Corp. spokesman Matt Pitzarella said Monday the distribution is the first significant royalty the company has paid from its 120-plus Marcellus shale wells.

    People in the exploration industry say they haven’t yet heard of such a large distribution of royalties from Marcellus shale gas wells in Pennsylvania.

    The money went to 31 landowners who have wells on or near their land and live near Range’s gas-processing plant about 20 miles south of Pittsburgh.

    Read the article: Marcellus shale wells royalty checks go out (Wilkes Barre Times-Leader)

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    Cabot Oil’s Actions Help Lower Gas Levels in PA Water Wells

    Several local water wells near the drilling operations of Cabot Oil in Dimock, Pennsylvania have been contaminated with natural gas. According to the Binghamton Press & Sun-Bulletin, somehow (no one yet knows exactly how), Cabot penetrated the very deep Devonian geological formation that released the gas into an aquifer that feeds local drinking wells in a small area near one of Cabot’s drilling sites. Four area homes have been affected to the point they need fresh water trucked in.

    Cabot has been completely transparent through the entire process and is paying for the water needed by the four homes. Cabot has worked closely with the Pennsylvania Department of Environmental Protection to investigate and remediate the problem.

    The P&SB article dutifully reports “both sides” of the drilling issue, with an obvious slant against drilling by throwing in a few fear-factor paragraphs. Kudos to Cabot for taking responsibility and for working hard to understand why this happened in the first place, with an eye toward preventing it from happening again.

    Read the full P&SB article: Cabot says gas levels in water drop

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    PA Gov. Ed Rendell Justifies New Tax on Marcellus Shale Drilling

    In a Times-Tribune editorial about Pennsylvania’s impending budget deficit, which is now projected to be $2.3 billion, Gov. Ed Rendell is quoted saying a proposed tax on drilling in the Marcellus Shale won’t be more “severe” than in other states:

    The governor is ready to propose a first-time severance tax on natural gas produced at the wells being sunk across the Marcellus Shale formation.

    “The industry is used to paying severance taxes,” he said. “Our tax will not be more severe than other places.”

    Scranton Times-Tribune: Feds could ease pain for states

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    PA DEP Advises Venting Water Wells in Dimock Twp, But Source of Gas Still Unknown

    Four water wells in Dimock Township, PA have been found to have high levels of natural gas, and the Pennsylvania Department of Environmental Protection is advising area home owners to vent their water wells.

    Following an explosion Jan. 1 that shattered an 8-foot cement well cover, four wells with unacceptable levels of natural gas have been taken off-line in the township.

    In the past few days, letters and fact sheets were sent to about 20 homeowners south of Montrose, Pa., alerting them to the dangers of gas trapped in wells and encouraging them to vent them, said Pennsylvania Department of Environmental Protection spokesman Mark Carmon.

    Meanwhile, DEP officials are analyzing tests from about 20 homes in the area to determine whether the gas found in the wells is from natural ground conditions or a byproduct of drilling operations by Cabot Oil & Gas. The Houston-based energy company is drilling dozens of wells more than a mile deep to tap the gas-rich Marcellus Shale formation.

    The question is not so much as whether or not there are high levels of natural gas seeping into some area wells so much as why, and from what source is it coming? Terry Engelder, a Penn State University geoscientist says this:

    “The rock formations in and around the area carry a lot of fractures with them,” he said. “There is a slim possibility that if a company like Cabot came along, man-made fractures in the Marcellus could connect up with other fractures in more shallow units.”

    A more likely scenario, he said, is gas from natural sources has been moving through shallow soils for some time, and residents are now just beginning to notice.

    Press & Sun-Bulletin: Natural gas in water wells has N.Y. officials on alert – Pennsylvania homeowners notified of dangers

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    Former PA Rep Dan Surra Appointed to “Protect Interests” of Non-Landowners in Marcellus Shale Drilling

    Pennsylvania Gov. Ed Rendell has violated his own hiring freeze and appointed an ally, former Democrat State Representative Dan Surra, as senior adviser on the Pennsylvania Wilds to DCNR (Department of Conservation and Natural Resources) Secretary Michael DiBerardinis. The position pays $95,000 per year and includes “protecting interests” with regard to Marcellus Shale drilling.

    In his new position, one of Surra’s responsibilities will be to focus on protecting the interests of recreationists and sportsmen as Marcellus Shale drilling expands.

    “The Marcellus Shale gas deposits represent an enormous economic opportunity for the state if done correctly,” [State Rep. Camille “Bud”] George [D-Houtzdale] said. “I think Dan Surra will do a bang-up job in the position. His work with me on the House Environmental Resources and Energy Committee dovetails perfectly for this position. He’s a sportsman who is also well versed on mineral extraction.”

    And this comment from State Sen. Mary Jo White, R-Oil City:

    “I don’t know enough about the PA Wilds to know if this particular job is needed. My understanding from the governor is that Mr. Surra will be doing work regarding the Marcellus Shale natural gas development,” White said. “This is an important economic opportunity for Pennsylvania, so to that end I am hopeful that he is successful in working with all affected parties.”

    Courier-Express/Tri-County: Lawmakers react to ex-Rep. Surra’s $95,000/year new job

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    Chesapeake Files Application to Drill in Oregon Twp, PA

    Wayne County, PA may see the first Chesapeake-drilled well as soon as late March:

    Chesapeake Appalachia, a West Virginia subsidiary of the natural gas development giant Chesapeake Energy, filed a permit application last week for permission to drill a natural gas well on a Oregon Township property located near Fox Hill Road, according to state and county records obtained by the Wayne Independent.

    As for the timing:

    DEP spokesperson Mark Carmon said the agency has recently expedited the permit review process, creating a 45-day timetable to approve or deny.

    Also from the article, StatoilHydro, a Norweigen-based energy company, has taken over some 590 leases from Chesapeake in Wayne County as part of a larger deal:

    StatoilHydro, which is the second largest natural gas supplier to Europe, entered a joint venture with Chesapeake Energy in November. As part of the deal announced then, Chesapeake would relinquish 32 percent of its leases – 600,000 acres – in the Marcellus Shale area to StatoilHydro for $3.3 billion.

    Wayne Independent: Oregon Twp may see natural gas drilled

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    PA Gov. Ed Rendell Proposes Tax on Marcellus Shale Gas Production

    Pennsylvania Gov. Ed Rendell, in commenting on a serious budget shortfall in Pennsylvania, is proposing a new tax on gas production coming from wells tapping the Marcellus Shale formation.

    The governor also said he will seek a “severance” tax, or extraction tax, on gas produced in the vast Marcellus Shale formation. Pennsylvania is the only gas-producing state without such a tax. The governor’s plan to establish one, at the level set by other states, would help to increase state revenue without adversely affecting gas exploration and extraction.

    Scranton Times-Tribune: Grim, realistic across board.