Marcellus Shale on Capital Hill Agenda

On Tuesday, September 27, 2011 0 comments

According to an article published by Patriot News - "Many think it is likely that after three years of trying the state will finally set policy on how to tax and regulate the burgeoning shale gas industry.
Corbett is days away from announcing his own proposal for an impact fee that would closely tie any revenue raised to impacts from the drilling, be it mitigating damage to state roads or forests or improving municipalities’ ability to keep their public water supplies safe.

There are some shared goals: Democrats and many Republicans believe the time is ripe for the industry to give back.

But there are still big divides over exactly how much money to extract — bills range from Senate President Pro Tempore Joe Scarnati’s impact fee, which would generate $172 million annually by year six, to a House Democratic tax plan generating $483 million in its second year — and what to use it for.

Even some Republican House members, for example, have ambitious plans to use shale tax money for broad purposes, including the return of block grants to local school districts and dedicated funding streams for programs such as drug and alcohol treatment or emergency mortgage assistance.
Corbett is likely to be much more targeted in his approach, working hard to tie the money derived from per-wellhead impact fees to costs created by the industry.

At the end of the day, observers think chances are good a package can be hammered out, in part because there is some support in all four caucuses, and polls show that even in a strident no-new-tax climate, Pennsylvanians don’t mind taxing energy companies.
What needs to happen: Corbett and Republican allies must offer enough in terms of revenue and environmental protection to win over Democrats whose votes will be needed since some Republicans in the GOP-controlled Legislature remain steadfastly against any new taxes.

House Minority Leader Frank Dermody, D-Allegheny County, said his members are ready to negotiate. But he added this caution: “There’s only going to be one chance to do this, so I also think we have to make sure that we do it right so this industry develops in the most environmentally sound way possible.”

Fall prognosis: Call it likely. "

Read the entire article, here.

Is Marcellus Shale a Mineral?

On Friday, September 23, 2011 0 comments

A pending case in Pennsylvania considers whether Marcellus shale is a mineral.

The answer could determine whether contracts transferring mineral rights to Marcellus shale also transfer rights to Marcellus natural gas, the Pittsburgh Tribune-Review reports. "For anyone who's played the game 'Animal, Vegetable, Mineral,' it might seem obvious that the Marcellus shale isn't alive and doesn't grow—it's a rock layer in the ground, so it's a mineral," the story says. "In the Pennsylvania courts, the answer is not so clear."

Under the state’s so-called “Dunham rule,” Pennsylvania courts have held that a grant of mineral rights in a deed generally does not mean that the parties intended to grant or reserve oil or gas rights, according to a summary by the law firm K&L Gates.

In a ruling earlier this month, a Pennsylvania superior court asked a Susquehanna County court to decide whether the shale is a mineral and, if so, whether anyone who owns the shale also owns the shale gas, according to a summary by McGuireWoods.

The superior court ruled in an action to quiet title filed by John and Mary Josephine Butler. Their deed gives them the rights to half the minerals on their 244 acres of property, the Tribune-Review says. The case is now pending in Susquehanna County. “If the Marcellus shale is not a mineral,” the newspaper says, “it could change everything drillers have assumed about the state's oil and gas laws.”

Hat tip to Pat’s Papers and ABA Journal.

WV Proposal Means Natural Gas Operators Would Pay to Drill

On Thursday, September 15, 2011 0 comments

CHARLESTON, W.Va. (AP) — Natural gas operators would pay $10,000 to drill a well in West Virginia's share of the Marcellus shale field, and $5,000 for each additional well at the initial site, under a proposal adopted Wednesday by a special legislative committee.

The House-Senate panel also approved provisions increasing bonds posted for well projects, enhancing public notice of drilling and compensating the owners of surface land where operators drill their wells. With the committee resuming its work next month, Wednesday's changes move lawmakers closer to a regulatory bill that they hope to propose during a special session before year's end.

But the permit fee amendment has been considered a crucial hurdle in the process. Operators now pay just a few hundred dollars for a permit. The resulting revenues have helped to leave the Department of Environmental Protection's Oil and Gas office with a $1 million shortfall in its budget.

Tapping the rich Marcellus reserve can involve a horizontal drilling method that differs from the practices followed for vertical wells. Marcellus drillers also employ hydraulic fracturing, or fracking, and pump a high-volume, high-pressure mix of water, chemicals and sand into wells to release the shale's gas.
The mile-deep rock formation, stretching beneath several states in the region, is considered one of the world's largest natural gas fields. The resulting push to drill into the shale has spurred concerns about the large amounts of water needed, the potential effects of drilling and fracking on nearby drinking supplies, and what happens to the tainted frackwater afterward.

Lawmakers estimate the amended permit fees would provide DEP with $2.5 million annually, enough to cure that shortfall and allow the office to add as many as 15 additional staffers. The office would hire two field inspectors for every office worker it adds, DEP lawyer Kristen Boggs told the committee Wednesday.

"I think that this is a very good compromise," said Delegate Tim Manchin, D-Marion and the committee's House co-chair. "This is a very good step forward in terms of trying to meet the needs of the folks in the impact zone and get more feet on the ground and to restore some confidence in the people that the that the state is watching out for them."

Senate Co-Chair Doug Facemire said natural gas operators support the amendment.
"The industry made it clear to us that they wanted to try to protect the environment and the citizens," the Braxton County Democrat said, adding that "The industry did not try to fight or obstruct this. That's an important thing, also, to bring up."

The Legislature proved unable to pass a Marcellus measure during this year's regular session. Acting Gov. Earl Ray Tomblin has since ordered DEP to issue emergency regulations. Approved last month, these temporary provisions requires drillers to explain how they'll protect area land, manage the large volumes of water involved and respond to accidents, among other topics.
But environmental groups and the West Virginia Surface Owners Rights Organization argue that the emergency rule as falling short in such areas as air pollution and surface owner protections. The special committee expects to consider some of those subjects during October's interim study meetings.

Critics of the state's handling of this issue include West Virginia for a Moratorium on Marcellus. They plan to picket Thursday outside a well site at Morgantown Industrial Park. This Marcellus project spurred a Morgantown ordinance banning horizontal drilling-hydraulic fracturing operations within or near city limits.
A circuit judge has since blocked that ordinance.

Read the original article here.

Pittsburgh Residents Suing to Hault Anti-Drilling Referendum

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An affluent Pittsburgh suburb is suing to stop an anti-drilling referendum that a citizens group has gotten on the Nov. 8 ballot.

The Peters Township Marcellus Shale Awareness group collected 2,500 signatures to get the question on the ballot that would amend the township's home rule charter to ban gas drilling and hydraulic fracturing.
The township has already passed an ordinance that limits drilling to 40-acre parcels and requires soil and water testing, but the citizens group doesn't believe those measures are strong enough.

Township solicitor William Johnson believes the referendum is illegal under a state act that regulates drilling and could expose the township to litigation from drillers or those who want to lease their land for that purpose.

A Washington County judge has set a Sept. 28 hearing on the issue.

Read original article here

Marcellus Shale Could Mean Fifty-Thousand Jobs to New York

On Monday, September 12, 2011 0 comments

In announcing the study, DEC Commissioner Joe Martens said the agency will propose regulations for high-volume hydraulic fracturing, or "fracking," of gas wells in early October. Environmental advocates have urged the agency to enact regulations rather than mere permitting guidelines to give the rules the force of law.
The study proposes guidelines to protect the environment, human health and communities from potential harm related to gas production using fracking, which injects wells with millions of gallons of chemically-treated water and sand a mile underground to release trapped gas.

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Flooding in NY and PA Raising New Fracking Concerns

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The floods in upstate New York are raising new concern about plans for natural gas drilling in New York.
The areas most affected by the disaster happen to sit on the Marcellus Shale, the rich natural gas field that the natural gas industry hopes to open for future drilling using horizontal hydraulic fracturing, the controversial extraction method that is currently under public review in New York.

The New York State Department of Environmental Conservation has set a timeline that calls for a public comment period on its environmental impact document and proposed regulations by Dec. 12, with final regulations and new drilling permits envisioned for some time next year.

But environmental groups and some elected officials are now calling for more time, saying floodplains maps should first be updated to take into account the recent extreme weather events and point out that such flooding makes hydrofracking an even bigger environmental risk.

“The floodplain is a different place than it was,” said New York State Assemblyman Kevin A. Cahill, a Democrat, who chairs the energy committee.

He said places that used to flood sporadically or not at all now experience three or four floods a year. “We need to remap,” he said.

In Pennsylvania, where drilling in the Marcellus is already taking place, environmental groups are asking that state’s environmental officials to disclose whether drilling pits have overflowed and spilled their toxic contents into flooded creeks, streams and rivers.

In New York, state environmental officials say that their draft requirements for hydrofracking already ban the placement of well pads and storage for drilling chemicals and waste water in flood plains.
But their own environmental impact document acknowledges that mapping of some of the areas affected by recent flooding won’t be ready until 2012.

“Broome County is one of the hotspots that gas companies are trying to target for drilling and much of the county is now underwater,” said Katherine Nadeau, of Environmental Advocates of New York. “That’s scary to think about.”

Mr. Cahill said he was also asking the environmental conservation department for an extension of the public comment period by an additional three months. He said communities affected by the floods need to recover to be able to participate in the public review of the proposed hydrofracking rules.

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More Hydraulic Fracturing Wastewater is being Recycled

On Wednesday, September 7, 2011 0 comments

In early 2010, the West Virginia Department of Environmental Protection took two steps to get a better idea of water sourcing, volumes and disposal for hydraulic fracturing of Marcellus shale gas wells.

A year and a half later, results are beginning to accumulate.

Several million gallons of water are injected into a Marcellus shale well to release the gas within.

As this hydraulic fracturing, or fracking, began ramping up several years ago, public concern grew over where the water was coming from and how the flowback that returns to the surface was treated and disposed of.

In response, the WVDEP Office of Oil and Gas issued a permit addendum in January 2010 requiring operators planning to use more than about 200,000 gallons of water to detail in advance their expected volumes, sources and disposal methods.

The OOG’s primary interest, according to office Chief James Martin, was to find out how much water operators are withdrawing from where.

A global position system website that will use that information in real time is still in development, Martin said.
However, he was able to share some aggregate information on anticipated volumes and sources.

From April 2010 through August 2011 — about 17 months — gas well operators reported expecting to use about 2.1 billion gallons of surface water, 230 million gallons of purchased water and 26 million gallons of groundwater, according to the OOG database.

The report did not detail how many wells these permits represented.

Operators also reported expecting to re-use about 87 million gallons — less than 4 percent for the 17 months, a number Martin said is, in reality, far higher.

“There’s been more move toward trying to re-use and recycle as much as possible,” he said. “We weren’t expecting that in the beginning. It’s been more than I would have thought two years ago.”

Conclusions to be drawn from the numbers are limited because they are pre-use — plans could change during drilling — and also because operators are allowed two years after receiving a permit to drill or may never drill at all.

More interesting, though also incomplete, is post-use reporting that the WVDEP Division of Water and Waste Management, or DWWM, began requiring in March 2010.
“Keep in mind, once they do the fracking and they get the return water back, then at that point they have a year to report,” said DWWM Director Scott Mandirola.

“Up until the last three months or so, we didn’t have very much data at all and all of a sudden we’re starting to get reporting coming in,” Mandirola said.

So far for 2010, operators have reported withdrawing 344 million gallons in surface, purchased and groundwater to fracture wells at 38 sites, according to the DWWM database.

The number of wells at the 38 sites is not specified.

Of that water, 323 million gallons was reported injected into wells as hydraulic fracturing fluid. Chesapeake Appalachia has so far reported injecting the most in 2010, with 196 million gallons at 16 well sites. Second is Antero Resources, with 41 million gallons at five well sites.

About 31 million gallons of the injected fluid returned to the surface as flowback, or 9.5 percent of fluid injected, with companies reporting flowback rates ranging from 4.8 percent for EQT to more than 43 percent for Waco Oil and Gas Co.

In aggregate, for all wells reporting so far in 2010 and the few that are in for 2011, about three-quarters of flowback was destined for re-use — far more than gas operators anticipated in their pre-use permit addenda, as Martin suspected.

Nearly all the rest was disposed of by underground injection, with a few hundred thousand gallons going to publicly owned treatment works in Pennsylvania.

Water use will be reported more formally through new water management plans required by the emergency rule that WVDEP issued in August for Marcellus operations, Mandirola said.

And he added to Martin’s mention of a real-time GPS tracker for water withdrawals.

Operators will contact WVDEP 24 to 48 hours before beginning to withdraw, he said, and the agency will plot their withdrawal points and estimated volumes online. Operators will then notify the agency when they’re done.
“That way we will have a dynamic map of sites coming online and going offline so at any time we know how many folks are out there drawing water,” he said.

Read the original article here.

Post-Gazette Seeks Settlement Details

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The Pittsburgh Post-Gazette has asked a Washington County Common Pleas judge to unseal a recent legal settlement between a Mount Pleasant Township family and various corporations involved in Marcellus Shale gas drilling operations near its home.

Judge Paul Pozonsky scheduled arguments for 11 a.m. Oct. 4 on whether the settlement he sealed Aug. 23 should be open to public review.

In settling the case, plaintiffs Stephanie and Chris Hallowich and defendants -- including Range Resources, the Mark West Energy Partners and Williams Gas/Laurel Mountain Midstream Partners -- agreed to not disclose settlement details.

But Post-Gazette attorney Frederick N. Frank said Post-Gazette reporters had been present for the settlement hearing, so compelling reasons should have been stated to justify sealing the results from public view.

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Township Officials Denounce Drilling Tax

On Thursday, September 1, 2011 0 comments

In a meeting with several state legislators Wednesday morning, a group of township supervisors from Westmoreland County voiced their objections to a Marcellus shale drilling tax that would benefit counties statewide, regardless of whether they play host to drilling companies.
The state legislators met with the supervisors yesterday at the Unity Township municipal building for an open forum, but much of the discussion was geared toward fair compensation for municipalities that allow companies to drill for the natural gas.

State Sen. Kim Ward, (R-Hempfield), Rep. Joseph Petrarca, (D-Washington Township) and Rep. Mike Reese, (R-Mt. Pleasant Township), among others, fielded questions from the group about severance tax and impact fees, both of which are being considered by the state.

An impact fee is a funding mechanism that would help municipalities pay for the wear and tear on their roads and any other repairs needed because of the impact from drilling activity.

A severance tax, the legislators explained, is a tax levied on the gas taken out of the ground and paid out statewide.

Both the supervisors and legislators voiced their opinions against the latter.

"This is all about a wealth transfer from the western part of the state where the drilling takes place to the southeastern part of the state," said Rep. Tim Krieger, (R-Delmont).

"We should get more money where roads are being affected and water is being threatened," Petrarca added.

Ward advised supervisors to voice their opinions for the impact fee as opposed to the severance tax before it's too late.

"Twenty-six senators don't have any Marcellus shale drilling," Ward said. "That means they could pass (a severance tax) today. If it gets to Harrisburg, things get taken. If it's anywhere where a legislator can get a hold of it, it's gone."

Unity Township Supervisor Mike O'Barto said he isn't concerned with getting extra money from the taxes, just enough to offset the damage done to roads and other public infrastructure.
"We're not looking for any sort of handout, we're just looking to get what we deserve," O'Barto said.
O'Barto also led a lengthy discussion about some municipalities being forced to do work on state roads that should be taken care of by PennDOT.

"Here we are taking care of signage on state roads, traffic lights, cutting grass, all of which we aren't getting paid for. I think we're all frustrated," O'Barto said.

Read more: Township officials denounce drilling tax - Pittsburgh Tribune-Review

Residents Condemn Effects of Drilling

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More than 100 residents turned out Wednesday night to express their concerns about Marcellus Shale drilling in Southwestern Pennsylvania and to urge community leaders to continue the fight in Harrisburg.

Their voices were heard by members of the Citizens Marcellus Shale Commission, a blue-ribbon panel gauging the opinions of residents in preparation of a report to be submitted next month to legislators.

Commission co-chairman Dan Surra, a former Democratic representative from Elk County, said the group -- including numerous environmental and homeowner representatives -- was assembled in response to the governor's Marcellus Shale Advisory Commission, which was "loaded with industry representatives."

"This commission will give citizens an opportunity to add their voice and bring some necessary balance to this critical debate," he said.

The meeting at the South Fayette Middle School auditorium was the first of five scheduled across the state. It opened with presentations from experts on water and air pollution, followed by remarks from more than two dozen residents from Allegheny, Washington, Westmoreland, Beaver and Greene counties.

If there was anyone in the audience who supported gas drilling, he or she didn't speak up.
Pam Judy of Carmichaels told the commissioners how members of her family have been affected by a drilling operation on property adjacent to their home.

"They sound as if it's a jet engine. It rattles the windows in our house," she said. "We've experienced sore throats, headaches, runny noses, muscle aches and fatigue. Our children have experienced nosebleeds. I've had dizziness, vomiting and vertigo."

"It's shocking. It's a failure of the agencies responsible for protecting public health," said Ned Mulchay, executive director of Three Rivers Waterkeeper. "It's not radiation, it's not nuclear waste, we're not going to end up with three heads, but it's something that the state has the power to regulate, and they're simply not doing it."

Mike Atherton of Greensburg decried the decreased value of homes and property near drilling sites.
"Risk alone lowers property values. An accident destroys what is left," he said. "Who would buy a home with unreliable water? Most homeowners get no profit from shale gas, yet we all bear the risks."
Deron Gabriel, a South Fayette commissioner, told how officials learned of drilling companies leasing property near the school and, after researching the matter and conducting public hearings, enacted a zoning ordinance banning drilling in residential areas or conservation districts.

Two weeks ago, they learned that the restrictions are the subject of a lawsuit filed by Range Resources, a Texas-based drilling company.

"We're in a position, as a township, of defending our ordinance," Mr. Gabriel said. "Our residents made it very clear to us. We're hoping for some help from the state because we believe local people should be able to decide."

The other four commission meetings this month will be held in Philadelphia; Williamsport, Lycoming County; Wysox, Bradford County; and Harrisburg.

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