Oil and Gas Leases Don't Last Forever

On Wednesday, October 3, 2012 0 comments

There is a misconconception that if you signed an oil and gas lease years or even decades ago you are still bound to that lease. Truth is, leases for gas drillers don't last forever.

Gas Leases are set up for specific terms. According to a  recent article published by Post-Gazette, "Most leases signed in 2007 and 2008 were for five-year terms, meaning many that never saw drilling are coming close to expiration now".

If you signed an oil and gas lease years or even decades ago, your lease may not be "active". A licensed attorney can help landowners to read through their oil and gas lease language to help dermine whether or not the lease is is active and in what capacity.

When it comes to gas leases -- drillers would prefer the language in the lease in regards to expiration be as broad as possible, while landowners should demand the language be as specific as possible.

The language that explains the terms of the lease, specifically the language surrounding the expiration of the lease can mean a difference of thousands to hundreds of thousands of dollars for landowners.

It is recommended that all landowners contact a licensed attorney to receive their unique situation, lease and needs if considering entering into or soliciting an oil and gas lease.

If you are looking for a quick answer, the general rule of thumb is... do you have a well on your property that is producing gas? If you answered yes, you are most likely in an "active" lease - even if that lease is not providing you with the income you desire.

On the other hand, if there is NOT a producing well on your land - it may be a good idea to go back and revisit your lease to see how an "active" lease is defined in your lease language.

Need help? Contact Safe Shale Lease, LLC or a licensed lawyer in your area for a free personalized consultation. 

38 Million Acre Oil and Gas Lease Sale

On Monday, September 24, 2012 2 comments

WASHINGTON--(ENEWSPF)--. As part of President Obama’s all-of-the-above energy strategy to expand safe and responsible domestic energy production, Secretary of the Interior Ken Salazar and Bureau of Ocean Energy Management (BOEM) Director Tommy P. Beaudreau today announced that BOEM will offer 38 million acres in the Central Gulf of Mexico for oil and gas exploration and development. This sale will build on two major Gulf of Mexico lease sales in the last year – a 21 million acre sale held last December and a 39 million acre sale held in June – and supports the Administration’s goal of continuing to increase domestic oil and gas production which has grown each year the President has been in office, with domestic oil production in 2011 higher than any time in eight years.

Proposed Lease Sale 227, scheduled to take place in New Orleans on March 20, 2013, will offer all unleased areas in the Central Gulf of Mexico Planning Area, offshore Louisiana, Mississippi, and Alabama and could lead to the production of up to nearly a billion barrels of oil and nearly 4 trillion cubic feet of natural gas. This will be the second sale under the Administration’s new Outer Continental Shelf Oil and Gas Leasing Program for 2012-2017 and the first of five annual Central Gulf lease sales. Announced in June, the Five Year Program makes offshore areas with more than 75% of the technically recoverable oil and gas resources available for exploration and development, consistent with President Obama’s commitment to continue to expand domestic energy production and reduce America’s dependence on foreign oil.

“The Obama Administration is fully committed to developing our domestic energy resources to create jobs, foster economic opportunities, and reduce America’s dependence on foreign oil,” Secretary Salazar said. “We are moving full speed ahead on the President’s all-of-the-above energy strategy because the exploration and development of the Gulf of Mexico’s vital energy resources will continue to help power our nation and drive our economy.”
Since President Obama took office, domestic oil and gas production has increased each year, with domestic oil production at an eight-year high, natural gas production at an all-time high, and foreign oil imports now accounting for less than 50 percent of the oil consumed in America – the lowest level since 1995.

Lease Sale 227 encompasses about 7,250 unleased blocks covering approximately 38 million acres. The blocks are located from three to about 230 miles offshore, in water depths ranging from nine to more than 11,115 feet (three to 3,400 meters). BOEM estimates the proposed lease sale could result in the production of 0.46 billion to 0.89 billion barrels of oil and 1.9 trillion cubic feet to 3.9 trillion cubic feet of natural gas.

“This proposed sale is another important step to promote responsible domestic energy production through the safe, environmentally sound exploration and development of the Nation’s offshore energy resources,” said BOEM Director Tommy P. Beaudreau.

This sale will build on successful lease sales that BOEM has held within the past year. Western Gulf Lease Sale 218, held in December 2011, made 21 million acres available, and received high bids on tracts covering about one million acres, netting nearly $325 million. Central Gulf Lease Sale 216/222, held in June 2012, covered nearly 39 million acres, and attracted more than $1.7 billion in high bids for more than 2.4 million acres. The next sale, Western Gulf of Mexico Lease Sale 229, announced earlier this year, will take place in New Orleans on Nov. 28, 2012.

BOEM conducted an extensive environmental review and published a Final Environmental Impact Statement with analysis to support decision-making for proposed Lease Sale 227 and other Western and Central Gulf of Mexico lease sales scheduled under the new Five Year Program. The terms of this sale include conditions to ensure both orderly resource development and protection of the human, marine and coastal environments. These include stipulations to protect biologically sensitive resources, mitigate potential adverse effects on protected species, and avoid potential conflicts associated with oil and gas development in the region.

The proposed terms also continue to include a range of incentives to encourage diligent development and ensure a fair return to taxpayers. In addition, BOEM has implemented a new, streamlined format for sale notices, beginning with this sale, making the document more user-friendly and accessible to the public.

Proposed terms and conditions for the sale are available at: http://www.boem.gov/sale-227. The Notice of Availability of the Proposed Notice of Sale can be viewed today in the Federal Register at: https://www.federalregister.gov/public-inspection. Copies can also be requested from the Gulf of Mexico Region’s Public Information Office at 1201 Elmwood Park Boulevard, New Orleans, LA 70123, or at 800-200-GULF (4853). All terms and conditions for Lease Sale 227 will be finalized when the Final Notice of Sale is published at least 30 days prior to the Sale.

Source: doi.gov
Source: http://www.enewspf.com/latest-news/science-a-environmental/36833-obama-administration-announces-38-million-acre-oil-and-gas-lease-sale-in-the-central-gulf-of-mexico.html

5 Facts: Well Drilling

On Sunday, September 16, 2012 1 comments

There are countless article surrounding royalties, riches, water contamination and leases... but what are the "facts" surrounding drilling a well. Here are 5 facts regarding well drilling.

1. Dilling is a 24/7 operation.
2. The drilling phase itself is a temporary operation, typically lasting 3-4 weeks per well bore.
3. Multiple wells may be drilled, one after another.
4. After the well pad is constructed a drilling rig is moved on site. A single drilling rig can take 50-65 tractor trailers to move and will stand well over 100 feet tall.
5. Most Marcellus shale wells are drilled down vertically 5,000-8,000 feet and then horizontally 3,000-5,000 feet on average. To drill vertically and then horizontally, a special drilling bit is used.

PA Drilling Impact Fee Surpasses Estimates

On Monday, September 10, 2012 0 comments

In February, the State of Pennsylvania signed into law an "impact fee" on energy companies exploring Marcellus Shale.  Drillers were required to pay 50k for each horizontally drilled well and 10k for each vertically drilled well. It was estimated that the "Impact fee' could generate $100 million dollars for the State of Pennsylvania, benefiting not only the state but local municipalities.
The Public Utility Commission announced that the "impact fee" has generated approximately $206 million dollars from more than 4400 wells. The State of Pennsylvania will retain 25 million dollars o the revenue, while the remaining revenue will be split amongst 1,500 municipalities who host gas wells. The funds will be used to fix roads, repair bridges and improve other infrastructure. In addition, funds are earmarked to assist with providing affordable housing, preserving open space and buying equipment for first responders as well as assisting state agencies with drilling impacts.
Pennsylvania's new fee on gas drillers has raised more than $200 million, most of which will be distributed to counties and towns to fix roads, restore water supplies and pay other expenses borne by local governments in the Marcellus Shale region.
According to 13 News "Bradford County, the most heavily drilled county in Pennsylvania, expects to receive $6 million to $9 million".  They also shared the breakdown of revenue by energy company -
"Oklahoma City-based Chesapeake Energy Corp. was tops with $30.8 million paid on 624 wells. Two others paid more than $20 million: Calgary, Canada-based Talisman Energy Inc., $26.4 million on 540 wells; and Fort Worth, Texas-based Range Resources Corp., $23.7 million on 475 wells".
The "impact fee" will be collected once a year for 15 years and vary based upon the price of natural gas.

Oil & Gas Lease Impact on Refinancing

On Monday, September 3, 2012 0 comments

One Pennsylvania homeowner was looking to refinance his home, located just 30 miles north of Pittsburgh, PA but he met a roadblock. It wasn't his credit score, it wasn't his job, it wasn't the appraisal value of the home... they were good. So, what was it, you ask? 

It was the oil and gas lease he signed allowing a company to drill for gas beneath his property that was raising a red flag to the bank. You see, each bank has different guidelines regarding financing properties with active oil and gas leases.  Oil and gas leases represent an "interest" in the property and depending how the lease is written, financial instituations may request that they be re-written to protect the "banks interests" first.

The Pennsylvania homeowner was lucky enough to be able to go back to the oil and gas company, who agreed to put the bank's interests first... but this it not always the case.  Some banks are not willing to refinance ANY homes with oil and gas leases on the property while others have strict guidelines that must be met to qualify for financing.

Banks are taking a new look at both the positive and negative impacts of oil and gas leases and drilling. Experts say, banks are just not sure how to assess the impacts of the Marcellus Boom relative to lending.

In the past -- lending institutions never even asked about oil and gas leases, but that has since changed. More than 350,000 oil and gas wells have been drilled since 1859.

Let's TALK Natural Gas History

On Monday, August 27, 2012 0 comments

We know where we are today -- in a drilling boom, but how did we get here? Let's explore a brief history of natural gas.

Did you know, the Chinese used gas from shallow wells to burn it under large pans and evaporate seawater for salt?  In fact, ancient cultures (pre-1800's) discovered natural gas and were mystified by it's presence.

(Fun Fact: Raw natural gas is odorless, colorless and tasteless so it wasn't until modern time that natural gas companies addded a chemical to natural gas to give it the smell of "rotten eggs" so it could be detected).

Fastforward to 1821...

Fredonia, NY - The first successful natural gas well was dug.

Fastforward to 1958 - same town... Fredonia Gas Light Company began America's first natural gas company.

Hard to believe that in 2012... Natural gas accounts for 24% of the energy we use in the United States. Coal accounts for 23%.

How does Natural Gas Form? Scientists believe that natural gas was formed from the remains of tiny sea animals and plants that died nearly 400 million years old... this is why natural gas is generally considered a non-renewable resource.  The sea animals and plants would sink to the bottom of the oceans and buried under layers of sediment, that eventually turned into rock. Over millions of years, scientists believe that the rock which was thousands of layers thick subjected the remains to enormous pressure. It is predicted that the pressure and heat combined changed the remains into pertroleum and natural gas.

All Signs Point to Marcellus Boom Still Going Strong

On Friday, August 24, 2012 0 comments

 Natural gas production Pennsylvania has doubled in the past year despite facing low market prices and a new tax on the industry.

The Department of Environmental Protection released figured that were quite impressive and surprising to some. Drillers operating in PA, extracted 895 billion cubic feet of gas during the first half of 2012.

According to watchdog.com "More than 2,700 actively producing Marcellus shale gas wells exist in Pennsylvania, with the highest concentration in Washington and Greene counties in the state’s southwest corner and Tioga, Susquehanna and Bradford counties along the northern tier, according to DEP.

At the midpoint of 2011, about 1,600 wells were producing gas in the commonwealth, a figure that climbed to more than 2,200 by the end of last year.

Mark Szybist, a staff attorney for PennFuture, an environmental organization here, said celebrating increased production should include a thorough review of the environmental impact of the industry.
“It would be nice if DEP tracked environmental consequences as much as they do the production itself,” Szybuist said. “It seems premature to assess what this production means without looking at those costs.”

Sunday said the department commissioned a yearlong study of emissions from natural gas compressor stations in Washington County, which began at the end of July.

The department also required all drillers in the state to submit emissions data for 2011. Sunday said that data would be available before the end of the year.

Read the entire article published by Watchdog.com.

Minimum Wage to 100k Year...Marcellus Shale Jobs

On Thursday, June 21, 2012 1 comments

The average income for a worker handling pipelines, maintaining a rig could be $100,000 a year. What are the qualifications?  None, they will teach you.  This is welcome news to many Pennsylvanians who have been out of work or unable to provide for their families as they are making just minimum wage.

One Dow Jones Newswire Report out of Pittsburgh reports on this subject --

"PITTSBURGH (Dow Jones)--Professor Byron Kohut helps hundreds of low-income adults land coveted jobs in the booming shale-gas industry in Pennsylvania. But only the tough need apply, he said".

"If they are not physically capable of working outside, in bad weather, dangerous conditions, I scare them out of drilling," said Kohut, who coordinates a natural-gas job-training course at Westmoreland County Community College, about 40 miles southwest of Pittsburgh. "It's not easy work," Kohut said, adding that people with backgrounds in agriculture, construction and mechanics have a better shot at getting in.

"The community college's course, part of a workforce-development program funded by a $4.6 million federal grant, prepares residents in Pennsylvania and neighboring states to compete for the torrent of jobs being generated by natural-gas companies tapping the prolific Marcellus Shale. The multi-state program, called ShaleNET, is trying to fix a mismatch between the rising number of jobs emerging with the shale-gas business in Pennsylvania, Ohio, West Virginia and New York, and the many unemployed, or low-paid, workers who can't be hired by the shale industry due to their lack of basic skills".

Deep within the layers of Marcellus Shale are large amounts of natural gas, it is an industry continuing to grow and demanding labor to help meet the demand. How many people does it require to drill a single well?  The answer is about 400, and half DO NOT require a four-year degree. These jobs include general labor, heavy-equipment operators, and truck drivers.

"In about four weeks of training, the ShareNET program turns young farmers, construction workers, veterans and carpenters, among others, into certified gas-field workers who know the basics about drilling and controlling a well".

Don't get too excited, yet. The program's standards are high, so student's can compete with experienced works coming from states that have a long standing relationship and success within the energy industry.

According to the Dow Report, "the shale-gas industry has already helped the Pittsburgh region's March unemployment rate of 7.1% to best the nationwide rate of 8.4%, many of the higher-paid occupations--such as tool pushers or pump operators--were going to the newcomers from out of state, Fisher said. Many companies preferred the out-of-state workers because they already knew the basics about safety and were accustomed to working the 12-hour-per-day shifts that are common in the drilling industry, Fisher said".

Labor demand in the Marcellus Shale area is expected to continue to surge in coming years.

For instance, jobs for drill operators are expected to grow 84.9% to 2,674 this year from 1,446 in 2010. This compares to 2.6% estimated growth for all type of jobs state-wide in the same period.

New Study Frowns on Fracking

On Thursday, May 3, 2012 0 comments

A new study released in May 2012 is raising new concerns regarding fracking and the long term effects of the process which injects chemicals into the ground. 

Scientists now predict that "fracking chemicals" could migrate toward drinking water supplies quicker than originially predicted.  Last year, more than 5,000 wells were drilled and operators injected up to 4 million gallons of fluid, under more than 10,000 pounds of pressure to drill and frack each well.

It is more important then ever to contact a licensed attorney regarding an oil and gas lease to ensure your land, water supply and your family are protected.

Here's the breakdown of what the recent study revealed:
  • Computer modeling, an advanced technology that show's the earth's underground geology shows that  natural faulst and fractures in the Marcellus could allow chemicals to reach the earth's surface in as little as "just a few years".
  • Fluids could move from most any injection process, as the rock layers are not impermeable.
  • The primary risk of contamination has moved from underground water to ground water. Why the shift ? Software and Computer Modeling used to predict the movement of the fluids led scientists to move "ground water" to the top of the list...
  • Software and Computer Modeling also predicts the movement of fluids to be the cause of natural fractures and faults in underground rock formations.
To sum it up... the models predict that fracking will dramatically speed up the movement of chemicals injected into the ground, some say ten times as fast.

PA "Poster-Child" for Ensuring Clean Water After Drilling

On Monday, April 16, 2012 0 comments

According to an article released by the Associated Press...

A former top environmental official says Pennsylvania's successful efforts to keep Marcellus Shale wastewater away from drinking water supplies should be extended to all other oil and gas drillers.
"It's the same industry. It is the same contaminants. And the goal should be the same," said George Jugovic Jr., who was formerly the Department of Environmental Protection's southwest regional director. He's now president of PennFuture, an environmental group.

An AP analysis of state data found that in the second half of 2011 about 1.86 million barrels -- or about 78 million gallons -- of drilling wastewater from conventional oil and gas wells were still being sent to treatment plants that discharge into rivers.

The core issue is whether a problem in waterways has been solved, or if more needs to be done.
In 2010 health experts raised alarms when they found soaring levels of ultra-salty bromides in rivers and streams that are major sources of drinking water. The general view was that wastewater from Marcellus Shale gas drilling -- polluted with heavy bromides from deep underground -- was contributing to the problem.

High levels of bromides can contaminate drinking water with levels that exceed national safety standards and are potentially harmful. Though not considered a pollutant by themselves, the bromides combine with the chlorine used in water treatment to produce trihalomethanes, which may cause cancer if ingested over a long period of time.

Bromide levels were so high in rivers during 2010 that they caused corrosion at some plants that were using the water.

But since the spring of 2011 most Marcellus drillers have been recycling the fluids, or sending then to deep underground wells mostly in Ohio.

The gas-rich Marcellus, which lies thousands of feet underground, has attracted a gold rush of drillers who have drilled almost 5,000 new wells in the last five years. But the state also has about 70,000 older oil and gas wells, according to DEP statistics, that target different, shallower reserves.
Researchers say the bromide levels did drop last summer, but they had also expected even more of a decline after virtually all of the Marcellus Shale drillers stopped disposing wastewater into plants that discharge into rivers.

But conventional oil and gas wells weren't included in last year's recycling push -- a loophole that state environmental officials downplayed at the time.

Jugovic said DEP secretary Mike Krancer should now take "the next step" and get voluntary compliance from the rest of the gas industry.

"It's hard scientifically to justify a distinction between treating conventional wastewater differently. The wastewater is being disposed in plants that are not capable of treating those contaminants," he said.

Dave Mashek, a spokesman for the Pa. Independent Oil & Gas Association, declined to comment.
Kevin Sunday, a DEP spokesman, claimed that the volume of conventional oil and gas waste is "substantially smaller" than the Marcellus amounts.

But the AP found that 78 million gallons of oil and gas wastewater were still being taken to treatment plants in the last half of 2011 -- about 33 percent less than the Marcellus quantity that was raising concerns in 2010, but still a substantial amount. If that rate continues, the conventional wells will send about 150 million gallons of the wastewater to treatment plants that discharge into rivers this year.

Sunday said the agency encourages wastewater recycling, "regardless of the industry involved," and added that the conventional oil and gas drillers don't produce as much wastewater as the Marcellus drillers.

Sunday also said that the agency has created a new, revised permit to encourage recycling of waste. Ten facilities have applied for the new permit, and if all are approved, that would double the number of such facilities in the state.

David Sternberg, a spokesman for the U.S. Environmental Protection Agency, didn't directly answer a question about whether there was any scientific justification for treating the non-Marcellus waste differently. Sternberg said EPA, which urged Pennsylvania regulators last year to halt the dumping, is working closely with state regulators "to ensure that, where wastewater treatment facilities are accepting oil and gas wastewaters, discharges from these treatment facilities are in compliance with the Clean Water Act."

Jugovic said that some previous assumptions about the non-Marcellus waste turned out to be false. For example, there were suggestions that it generally contained much lower levels of bromides and other contaminants.

He said some of the shallow wells had very high levels of total dissolved solids and other contaminants that can be a problem for drinking water supplies.

Jugovic also said that the fact that 97 percent of Marcellus drillers appear to be complying with the wastewater restrictions raises a fairness issue. Why, he asked, should the conventional oil and gas drillers and the remaining 3 percent of drillers get a pass?

Now, researchers are waiting for expected lower river levels in the summer, to see if the bromide problem has really gone away. The higher flows in early spring dilute any contaminants and make it harder to draw conclusions about the bromides.

PA Judge Presses Pause On Portion of New Shale Law

On Wednesday, April 11, 2012 0 comments

According to reports by The Pittsburgh Tribune Review, Commonwealth Court Senior Judge Keith Quigley issued the 120-day injunction after hearing arguments in Harrisburg. The eight-week-old law's local zoning provisions were scheduled to take effect on Saturday.

A group that includes South Fayette in Allegheny County and Peters, Cecil, Mt. Pleasant and Robinson in Washington County sought the injunction to give the municipalities time to argue their claims that the law, known as Act 13, unconstitutionally takes away local powers and should be overturned.

"Municipalities must have an adequate opportunity to pass zoning laws that comply with Act 13 without the fear or risk that development of oil and gas operations under Act 13 will be inconsistent with later validly passed local zoning ordinances," Quigley wrote.

His order halts only any part of the law that might "pre-empt pre-existing local ordinances" but denies the rest of the municipalities' injunction request to stop the entire law from going into effect.
"What we were seeking was 100 percent what the court granted," said John Smith, the solicitor for Robinson and Cecil.

The Marcellus Shale Coalition issued a statement saying the natural gas industry group is "confident that the legal merits of this law -- aimed at ensuring the safe and responsible development of clean-burning American natural gas in the commonwealth -- will be recognized and upheld accordingly."
To issue an injunction, a judge must find that the request meets six standards, including that "there is likely success on the merits." Quigley wrote in a footnote to the order that he "is not convinced that petitioners' likelihood of success on the merits is high," but he ordered the injunction because five other factors were compelling.

Read more: Judge halts law on shale oversight - Pittsburgh Tribune-Review http://www.pittsburghlive.com/x/pittsburghtrib/news/regional/s_790908.html#ixzz1rpEwqiOd

Drill Baby Drill... or See You Court?

On Monday, April 2, 2012 0 comments

According to a recent article published by the Philidelphia's Inquirer... Seven municipalities in Pennsylvania have banded together in recent weeks to oppose Pennsylvania's Marcellus Shale gas-drilling law. All seven municipalities filed suit Thursday, challenging whether the state is authorized to supersede local regulation of drilling.

The municipalities are Yardley and Nockamixon in Bucks County and five southwestern Pennsylvania towns. They were joined in the suit by a Monroeville doctor, environmental activists from the Delaware Riverkeeper Network, and a handful of municipal officials contesting the law in their personal capacities.

The 117-page suit, filed in Commonwealth Court in Harrisburg, names as defendants Environmental Protection Secretary Michael Krancer, Attorney General Linda Kelly, and Robert Powelson, who chairs the Public Utility Commission.

Read the entire article here...

The Benefits of Developing Natural Gas from Marcellus Shale...

On Saturday, March 24, 2012 0 comments

Thousands of PA homeowners have been affected by the "Marcellus Shale Boom" some are out there hoping to get rich from leasing their land to the oil and gas companies, others are terrified that they will lose what is most important to them... but either way, one fact remains true... Drilling for Marcellus Shale has affected 11 counties in the State of Pennsylvania significantly and is not going away anytime soon. 

First and foremost - if you are contemplating selling your land, interested in approaching the oil and gas company or have been approached by a landman -  you should contact a licensed Pennsylvania lawyer, such as Safe Shale Lease to make sure your interests are being protected and that you are getting the best deal... when you come to the table to negotiate, make sure you have the trump card (a licensed PA lawyer)...

So this week, the "Marcellus Shale" news feed has been overcome by articles touting the benefits of drilling... we have heard many of the downfalls but now the benefits seem to be adding up, so we dediced to break them down for you...

  • Marcellus Shale is making a positive economic impact at BOTH the state and federal level: Less than 5 years ago most economic experts warned of an ominous shortage of natural gas and the catastrophic effect this shortfall would have in the United States. Now,  TIME Magazine's Editor-at-Large, Farred Zakaria says it best with the title of a recent op-ed peice...  "Natural Gas, Fueling an Economic Revolution".
  • Pittsburgh Post-Gazette has written hundreds of articles on Marcellus Shale and the natural gas boom and often references how this movement has put the State of Pennsylvania on the map internationally. All eyes on Pennsylvania...
  • According to polls conducted independently by Harris and Rasmussen in March 2012: The majority of Americans suppport hydraulic fracturing despite public controvery surrounding the process and challenges by the Obama administration.
  • You go girl! The Marcellus Shale Boom isn't just for men.. in fact, more than 7500 women work in the marcellus shale oil and gas industry in the State of Pennsylvania.

Looking for more benefits of Marcellus Shale, check out a recent article from NorthCentralPA.com.

Shell Picks Pennsylvania for Petrochemical Plant

On Monday, March 19, 2012 0 comments

Initial reports indicate that Shell Oil has tentatively chosen to put a new multibillion-dollar petrochemical plant in Pennsylvania to take advantage of an abundance of natural gas from the Marcellus shale. The company said it signed an option on land in Beaver County, which is just northwest of Pittsburgh.

Shell chose the site, as it offers good access to transportation by water, rail and road as well as access to natural gas and gas liquids that the petrochemical complex would use both as a power source and feedstock.

The plant would be one of the first located because of the boom in shale gas production, which has taken place in the past two to three years. Pennsylvania beat out Ohio and West Virginia despite their attempts to charm the company into starting the plant in their states.

Shell said that if the project goes forward, up to 10,000 people would be working on it during construction. Once the plant is operating, it would employ several hundred full-time employees. Although Shell would not say how much it expects to spend building the plant, it said such plants typically cost “several” billion dollars.

For more information check out Washington Post...

Drilling DOES Mean Jobs for Pennsylvania

On Tuesday, March 13, 2012 0 comments

The impact Marcellus Shale natural gas drilling has had on Pennsylvania's economy has been a controversial topic - in fact it has even been the heart of political debates. One report, released on Monday by Wells Fargo economists says the drilling DID have a measurable effect on Pennsylvania's economy in fact, so much so that it could generate more than 200,000 additional jobs by 2020.

Pennsylvania has added 130,000 jobs since employment bottomed out in February 2010, one-third of them in education and health care, said the report by Wells Fargo Securities' economics group. The state's economy is growing faster than it did at any point during the past decade, it said.

Although the natural resources and mining sector employs fewer than 1 percent of the state's workforce, it accounted for 8 percent of recent job growth, the study said.

Employment in the 14 counties where drilling is most prevalent is already above its pre-recession peak, a result the study ties to the economic impact of natural gas drilling. For every percentage point of employment growth in shale counties, employment in Pennsylvania's other counties rises by 0.27 percent, the study found.

The result was surprising at first, said Wells Fargo economist and study co-author Jay Bryson, but the model fits the data and there is considerable anecdotal evidence corroborating the conclusions.

The study calculated optimistic, pessimistic and midpoint scenarios for Pennsylvania employment through 2020. The midpoint scenario predicts employment growth of 570,000 jobs, of which 200,000 can be attributed to the shale industry and its spillover effects.

Click here to read the article at Central Penn Business.

Some Say Drilling Impact Fee Falls Short

On Sunday, March 4, 2012 0 comments

According to an article in The Standard Speaker, "a new state law that allocates $1 million annually to the Pennsylvania Fish and Boat Commission from the Marcellus Shale natural gas drilling impact fee doesn't go far enough, according to a local state legislator".
"State Rep. Gerald Mullery, D-119, Newport Township, hosted a public meeting about boating and fishing issues Thursday at Crestwood High School.Some residents who attended expressed concerns about the gas drilling and the damage it could cause to lakes, rivers and other water resources.
Mullery said he also is concerned and that's why he supported the law, but feels the $1 million per year for permit reviews falls short".

"The impact fee is too low and in my opinion the environmental protection is nonexistent," Mullery said.

The state representative hopes legislators will use the issue as part of their platform in the next primary, with the environment being the winner.

Read more: http://standardspeaker.com/news/lawmaker-drilling-fee-doesn-t-aid-environment-1.1280844#ixzz1oA4yrePW

Chevron Oil Spill at Marcellus Shale Larger than Anticipated

On Wednesday, February 29, 2012 0 comments

According to reports from the Dow Jones newswire, Chevron Corporation (CVX) has reported to state regulator that a small oil condensate spill occoured late last year at the company's Marcellus Shale well site was greater than anticipated.
The initial report to regulators on December 20th 2011, stated that it (Chevron) has discovered a leak from a pipe joint weld buried four feel under the well pad located in Robison, Washington County. Chevron Corporation estimated 2 barrels of oil condensate had spilled at that time.

According to a spokesman for the DEP, "there is no indication that the spill has spread past Chevron's properties".

New reports place that number at more than 80 barrels, a significate jump from the "minor" spill of 2 barrels indicated in the inital report.

Drillers Recyclinbg More Chemical-Laden Wastewater Every Day

On Thursday, February 23, 2012 1 comments

PITTSBURGH — Pennsylvania's Marcellus Shale gas drilling companies are recycling more and more of their briny, chemical-laden wastewater, in most cases complying with a request from state officials to keep the pollutants from being discharged into rivers that supply drinking water.

But experts are wondering if a loophole in disposal regulations is still allowing significant quantities of one of the worrisome compounds— salty bromides— into rivers and streams, or if shale gas drillers were only part of the problem.

The new mystery is this: why hasn't the dramatic progress on the wastewater recycling led to equally clear declines in river bromide levels?

An analysis by The Associated Press of 2011 state data released Friday found that of the 10.1 million barrels of shale wastewater generated in the last half of 2011, about 97 percent was either recycled, sent to deep-injection wells, or sent to a treatment plant that doesn't discharge into waterways.
Some of the new disposal trends are also raising other questions. The amount of Marcellus drilling waste injected deep underground nearly tripled in the last six months of 2011, with much of that going to Ohio. Officials there are examining whether the high-pressure injections contributed to a series of small earthquakes near one waste site.

In the same period of 2010, shale drillers sent about 2.8 million barrels of waste —or 118 million gallons— to numerous treatment plants that discharge into rivers and streams.

Those discharges raised alarms when the plants reported soaring levels of bromides in rivers that year. Though not considered a pollutant by themselves, the bromides combine with the chlorine used in water treatment to produce trihalomethanes, which can cause cancer if ingested over a long period of time.

Part of the answer to the mystery may be that the highly publicized plan for voluntary compliance by Marcellus drillers had a little-noticed loophole: it didn't apply to thousands of other oil and gas wells in the state.

An AP analysis of the new state data found that about 1.86 million barrels — or about 78 million gallons — of drilling wastewater from non-Marcellus wells were still being sent to treatment plants that discharge into rivers in the second half of 2011.

"They ought to get all of that out of the water. It's obviously hazardous, it presents a public health hazard. What's good for the Marcellus wells should be applied to the other wells, too," said Jan Jarrett, president of the environmental group PennFuture.

Michael Krancer, head of the Pennsylvania DEP, declined requests for an interview. Agency spokesman Kevin Sunday said in a statement that "other industrial wastewater also has the potential for high concentrations of total dissolved solids," but that existing state standards protect waterways.
After being promoted by the U.S. Environmental Protection Agency's concerns, Pennsylvania sought a voluntary moratorium last May, asking Marcellus Shale drillers to cease bringing the drilling waste to plants that discharge into rivers.
The Marcellus Shale is a gas-rich rock formation thousands of feet underground in large parts of Pennsylvania, New York, Ohio, and West Virginia. Over the last five years, advances in drilling technology made the shale accessible, leading to a boom in production, jobs, and profits — and a drop in natural gas prices for consumers.

Last summer, Advanced Waste Services, a wastewater treatment firm with a plant in New Castle, Pa., noted that a senior DEP official confirmed that the moratorium "does not extend to wastewater from shallow well (aka non Marcellus wells) drilling and fracturing nor does it extend to spent drilling mud and other sludge disposal."

Stanley States, director of water quality at the Pittsburgh Water and Sewer Authority, said he believes that municipal sewage treatment plants have stopped taking the brine water, but that other plants continue to do so.

"I think it's still going on," States said of the dumping of fracking wastewater into rivers. "Self-regulation does not work."

Kathryn Klaber, president of the Marcellus Shale Coalition, an industry group, said it was never accurate to blame the shale gas drillers for the whole bromide problem.
"We know there are quite a few other sources going into Pennsylvania waterways," Klaber said. "You have to start looking at other places."

Water quality experts say coal-fired power plants and other industries also produce bromides.
Additional water testing over the last year also appears to have put to rest concerns that radioactivity from the drilling waste could contaminate drinking water.

States said his agency "looked real hard" at the radioactivity issue, but didn't find a problem in western Pennsylvania rivers.

Sunday, the DEP spokesman, said the state's water quality monitoring network shows normal, background levels of radioactivity. "Monitoring at public water supply intakes across the state showed non-detectable levels of radiation; in the two cases that detected any level, the levels were at background," he added.

Pennsylvania also reported recent Marcellus Shale gas production data on Friday. Drillers produced about 607 billion cubic feet of gas from July to December. That's up from about 435 billion cubic feet in the previous six months.
Associated Press reporter David B. Caruso contributed reporting from New York
—Copyright 2012 Associated Press

Increased Water Regulation to Reduce Contamination a Real Possibility

On Monday, February 20, 2012 0 comments

According to a recent article published by Erie Times News... "A boom in natural gas drilling could prompt state legislators to regulate construction of private water wells.

Drilling in the Marcellus Shale and other subterranean shale layers across Pennsylvania is raising concerns about possible contamination of nearby water wells.

Legislation introduced by York County Republican Ron Miller in December would authorize the state to regulate water well construction to reduce the chances that well water and groundwater will be contaminated.

Pennsylvania and Alaska are the only states that do not already regulate private water well construction.

Local drillers oppose Miller's bill, saying that, while its intent is noble, strict regulations could price them out of business and make wells that rural property owners rely on for water cost prohibitive".

Read the entire article here...

Standalone Marcellus Shale Bill Will Pass

On Tuesday, January 17, 2012 0 comments

HARRISBURG - Marcellus Shale well operators would be required to provide sophisticated siting information and develop an emergency response plan under legislation moving close to final passage this week.

The well site safety bill sponsored by Sen. Lisa Baker, R-20, Lehman Twp., is one of a few bills addressing Marcellus drilling that's moving separately from comprehensive impact fee legislation that includes stronger regulation of drilling activities.

The measure requires operators to post signs at the well site bearing their GPS coordinates, give the coordinates to local, county and state emergency officials and develop response plans. The bill specifies this information is to be posted on reflective signs at both the access road entrance and well pad.

Read more: http://thetimes-tribune.com/news/a-standalone-marcellus-bill-moving-to-passage-1.1258565#ixzz1jiXto3nx

Shale Drilling: Answer to Abandoned Wells?

On Monday, January 16, 2012 0 comments

The lastest gas-drillking rush focusing on Marcellus Shale could play a key part in plugging old abandoned gas wells, but also brings the risk that old wells could contaminate the soil and water with the migration of gas and chemicals from the old wells.  

"The whole area up here is like Swiss cheese," said Weltner, 80, secretary-treasurer of Belmar Association Inc., which operates the treatment system. "It just has holes through all the different strata in the ground, so there's an awful lot of opportunities for contamination of the groundwater. And I think a lot of people are concerned about it, and a lot more communities are getting a public system" to replace water wells.

Most of the state's abandoned wells are in Western Pennsylvania. They arc though McKean, Venango and Butler counties and, in smaller clusters, around the Pittsburgh area.

Unplugged wells pose risks of illegal dumping, water pollution, cave-ins, gas seepage and even explosions, but the state can afford to plug only about 130 a year. At that rate, it could take the state more than 61 years to plug the 8,262 remaining wells that officials know about, and more than 1,350 years to plug the rest -- if crews could find them.

In the past, drillers abandoned wells because there was no rule that said they couldn't. Companies that no longer exist cannot be held liable.

The rejuvenation of the fuel-drilling industry in Pennsylvania could provide a chance to deal with abandoned wells, officials say. With the backing of Gov. Tom Corbett, the Senate and House in November passed preliminary bills that would establish "impact fees" on the industry, and some of that money would be put toward plugging old wells.

Abandoned wells can appear -- or hide -- in a number of forms. Some are holes that are several feet wide and more than 100 feet deep. Others are a few inches of pipe at the wellhead poking up from the ground. Some are camouflaged by cave-ins and overgrowth, appearing as small dips in the landscape.

The Department of Environmental Protection ordered an emergency plug of a well in Moon in 2010 when residents near J.A. Allard Elementary School reported smelling gas from an abandoned well. A house in McKean County exploded last February, leading the DEP to order the owner of three abandoned wells there to pay to have them plugged.

Drillers pay a surcharge when they obtain permits, which amounts to about $1.5 million annually that the state uses to plug wells, according to DEP figures. The cost of plugging can vary. DEP contracts since 2009 have ranged from as little as $3,027 per well to as much as $194,082, an agency spokesman said.

The Senate's bill, which proposes higher well fees than the House measure, would generate an additional $25 million annually for statewide environmental projects that would include well plugging, mine drainage cleanup, parks and water quality monitoring.

"We're trying to tie in ancient environmental problems with new development, which is fantastic," said David Strong, a Jefferson County environmental scientist who sits on several of DEP's citizen advisory boards. "We can find new money to fight these old problems."

It's in the industry's interest to help solve those problems, said Strong and several others, including industry officials. One of the biggest problems is finding most of the abandoned wells. If a company unwittingly drills a well near an abandoned well, it can create a path for gas to flow uncontrolled to the surface or into groundwater, costing profits and causing a safety hazard.

The old holes usually range from 1,500 to 3,500 feet deep, said Cleason Smith, who owns Hydrosystems Management Inc. in Washington County. Smith's family photos of Washington, taken in the 1800s, show about a dozen drilling derricks next to buildings in the foreground -- and another dozen in the background, to the fading horizon. The state never had records of where those wells and others like them are located, according to its website.

Even if an old and new well don't cross, gas migrating from deep wells can reach abandoned ones and cause contamination through natural fissures, or if man-made seals don't hold, Smith said.

"Drilling through the rocks that have previously sealed in the formation ... a lot depends on the efficiency of those borehole seals in preventing any leakage," Smith said. "If there's any leakage from a Marcellus well, there's potential for it to make contact with an old, abandoned oil and gas well."

Shale Drilling Rally Set For Tuesday

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Advocates for tighter regulations and appropriate taxation of drilling operations within the State of Pennsylvania's Marcellus Shale region have announced plans to rally at the State Capitol Rotunda in Harrisburg next Tuesday, January 17th.

The goal of the rally is to urge legislators, who will be returning to work after a winter break, to reject House Bill 1950 and Senate Bill 1100.

Both bills have been sharply criticized by environmental and conservation groups for failing to set adequate regulations on drilling operations, failing to adequately tax energy companies and for removing from local governments the power to regulate drilling operations.

Read more from Hatch Magazine

WSJ: PA Data Missing Nearly 500 Gas Wells

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PITTSBURGH — Pennsylvania's Department of Environmental Protection undercounted the number of wells producing gas from the Marcellus Shale, frustrating industry, environmental groups, and elected officials, according to a newspaper report.

The Pittsburgh Post-Gazette reported that an analysis of DEP data found 495 more wells producing gas, or ready to produce gas, than the DEP has recorded as ever being drilled, and that 182 of those wells don't even show up on the state's Marcellus Shale permit list.

The discrepancies with DEP's Marcellus Shale data have caused headaches for Senate and House staff members who have been trying to make accurate projections about how much revenue an impact fee on wells might generate for local governments, the newspaper reported Sunday.

"There has been a frustration over the last six or seven months that DEP does not have information that is always beyond reproach," said Drew Crompton, chief of staff to Senate President Pro Tem Joe Scarnati, R-Jefferson.

Crompton, who has tried to make sense of DEP's data as the Senate began crafting an impact fee bill last year, said the information problems are so befuddling that it helped delay approval of the bill. Legislators simply haven't been able to get accurate projections on the financial impact.

"Every time I think I've got something locked down, it changes," said Crompton, who discovered the same data issues that the Post-Gazette did.

The paper reported that the data problems span both the Ed Rendell and Tom Corbett administrations.
Data collection and reporting errors were "something identified through the transition period in the first few months" of Corbett's term as governor in early 2011, said DEP spokesman Kevin Sunday. "And it's one we hope to clear up and get more consistent at."

"We acknowledge that there are issues in both how the data is presented and how it's coming in," Sunday told the paper.

Vast stores of natural gas in the Marcellus Shale formation under Ohio, Pennsylvania, New York and West Virginia have set off a rush to grab leases and secure permits to drill using the extraction technique called hydraulic fracturing, or fracking.

Fracking involves the high-pressure injection of millions of gallons of water, along with sand and chemical additives, to liberate gas from the earth. Environmental advocates have complained about fracking's effects on drinking water, while the industry insists the practice is safe.

The DEP says that since 2007 there have been about 4,200 wells drilled in Pennsylvania, so the 495 missing wells is about a 12 percent error rate on data that are widely quoted by politicians, environmentalists and the industry.

"That's a significant error rate," said Bruce Stauffer, vice president of geographIT, a Lancaster-based company that provides geographic information services to industry and governments.
His company also ran into the same problem with the DEP's data when last year it began putting together Marcellus monitor, the company's interactive mapping tool that it sells to companies and governments.

"It's obvious DEP's data isn't clear and accurate," Stauffer said. "Why? I don't know. And I don't think they have the answers."

Read article from Wall Street Journal

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