Archive for Marcellus Shale News
The Utica Shale play in eastern Ohio is one of the fastest-growing natural gas plays in the nation. Last month, in recognition of this status, the U.S. Energy Information Administration (EIA) added the Utica to its monthly drilling productivity report.
The total production in the Ohio natural gas region, which includes production from the Utica and Point Pleasant formations plus legacy production from conventional reservoirs, has increased from 155 million cubic feet per day (MMcf/d) in January 2012 to an estimated 1.3 billion cubic feet per day (Bcf/d) in September 2014.
The EIA’s drilling productivity report uses recent data on the total number of drilling rigs in operation along with estimates of drilling productivity and estimated changes in production from existing oil and natural gas wells to provide up-to-date oil and natural gas production figures for seven key regions: Bakken (bah′-ken), Eagle Ford, Haynesville, Marcellus, Niobrara, Permian, and Utica. (see table)
These seven regions accounted for 95 percent of domestic oil production growth and all domestic natural gas production growth during 2011-13.
EIA’s approach does not distinguish between oil-directed rigs and gas-directed rigs because once a well is completed it could produce both oil and gas. More than half of the wells in the shale plays produce both.
In 2012, it was the anticipation of drilling oil shale that led Chesapeake Energy, which has the largest number of drilling permits in Ohio, and other E&P companies to pull some rigs from Pennsylvania and Texas and move them to Ohio and other states where shale formations showed promise of producing more oil and natural gas liquids.
In the past two years, Chesapeake has spent $17 million alone to widen, repair and build new roads to transport equipment and workers to and from its well sites in Ohio.
The Utica shale play, now in its third year, is producing an average 37,000 barrels of oil per day. By comparison, the Marcellus shale play, which is in its seventh year and covers a much larger area, with many more active wells (6,391 vs. 553 for the Utica), is producing 50,000 barrels per day.
For new oil production (the first 30 days a well comes online), the Utica surpasses the Marcellus, Haynesville and Permian shale plays.
The Utica is now producing almost as much natural gas as the Bakken Shale. The Utica has an estimated 38 trillion cubic feet of recoverable natural gas, according to the U.S. Geological Survey; however, the Bakken has significantly more estimated recoverable oil (4.3 billion barrels vs. 940 million barrels for the Utica).
The Bakken formation is rock from the late Devonian to Early Mississippian age, which occupies approximately 200,000 square miles under parts of Montana and North Dakota in the U.S., and Saskatchewan and Manitoba in Canada. It’s named after Henry Bakken, a farmer in Tioga, North Dakota, who owned the land where the formation was first discovered while the farm was being drilled for conventional oil.
The Utica formation took its name from the city of Utica, N.Y., where it outcrops at the earth’s surface. The Utica was deposited in a deep ocean basin about 450 million years ago during a period geologists call the Ordovician.
Ohio was one of the first states where the oil and gas industry originated. Standard Oil, the famous oil company of John D. Rockefeller, was established in Ohio in 1870. Over the past few decades, Ohio’s once-active oil production has been steadily declining, but now eastern Ohio, home to Point Pleasant, the liquids-rich “sweet spot” of the Utica shale play, is changing that.
As with the Bakken, it was long known that oil existed in the Utica shale, and hydrofracturing was already pulling up oil from the wet gas in southwestern Pa. and other shale plays, but it wasn’t until oil prices jumped to more than $100 per barrel in early 2012 that oil exploration in the Utica became economically feasible.
Conventional crude oil is relatively cheap to produce and refine, and it produces most of our transportation fuels.
However, drilling the oil shale in Ohio turned out to be more difficult than anticipated. Some the oil located in oil shale region of western Ohio was too shallow to provide enough pressure to come up through hydrofracturing. The deeper oil found in the Utica proved more difficult to permeate the shale rock than natural gas.
“We haven’t really unlocked the code yet as to how to get the oil out of the shale, it’s harder to get oil molecules to move through rock than gas molecules,” said Mike Chadsey, director of public relations for the Ohio Oil and Gas Association (OOGA).
OOGA is a trade association with more than 3,300 members involved in the exploration, production and development of crude oil and natural gas resources in Ohio.
“We have to figure out what kind of technologies we need to put in place — the frack fluid, the pressures, how long to drill the laterals– there’s a lot of things that need to come together in order to extract the oil from the shale,” said Chadsey
“We have a good understanding of the dry gas and the wet gas, we just have to figure out the oily gas, so it’s coming — our companies are working on it, and we’ll eventually get there.”
It’s the oil that’s mixed with the “wet gas” that’s now being extracted in the Utica.
E&P companies have drilled for natural gas in 44 of Ohio’s 88 counties, with 198 wells being drilled in the Utica/Point Pleasant formations. Carroll County has the most active wells in Ohio, with 87 wells drilled.
In Pennsylvania, Bradford County has the most active wells, with 1,142 — more than twice as many as all the gas wells in Ohio. However, as in other shale gas producing counties in the Northern Tier, the Marcellus wells produce only methane, the “dry” component of natural gas, which is less valuable than “wet gas.”
“Our dry gas extends over the Pennsylvania border, and as you move west, you get into the wet gas window and then farther west, you move into the oil shale window, though the oil shale has had limited if any exploration thus far, but that will change in time, particularly as oil prices rise,” said Chadsey. (see map)
The good news for drillers is that nearly all the shale in the Point Pleasant “sweet spot” in the east-central Ohio counties of Belmont, Harrison, Gernsey, Monroe, Jefferson, Carroll and Washington contains “wet gas,” methane mixed with natural gas liquids (NGLs), which adds value to the gas.
The NGLs can be broken down into individual components through processing, and those components such as butane, isobutene, propane, natural gasoline, and ethane have uses in various products and industries. Butane is used in cigarette lighters, propane for heating, and ethane can be “cracked” into ethylene, which is the chief feedstock for the plastics and polymers industries.
According to OOGA, the oil and gas industry has spent nearly $12 billion in Ohio in the last two years, developing processing plants and pipelines to process Utica wet gas and transport it to markets in Canada and the Gulf Coast.
The bad news for the drillers is that due to the low price of methane or “dry gas,” many companies have decided to focus on wet gas in Ohio, southwestern Pa. and elsewhere that the price of NGLs is also dropping.
The Wall Street Journal recently characterized the ethane market as “collapsing,” and said that energy analysts expect NGLs to sell at low prices for years to come.
“The bottom line on the ethane market is that the region that includes the Ohio Valley, eastern Ohio, western Pa. and northern West Virginia needs a cracker facility, which will assist our producers in getting the product to market, and that facility will also attract plastics and polymer manufactures to the region, which means new jobs,” said Chadsey.
“Two companies, Shell and Oderbrecht, have already announced plans to build cracker plants in the Appalachian basin, Shell in Pennsylvania near the Ohio border, and Oderbrecht in northern West Virginia.
“Time will tell if they intend to follow through with their plans, but as the Wall Street Journal pointed out, there should be plenty of wet gas production to justify building a cracker plant or two.”
WELLSBORO, PA – Tioga County and neighboring Bradford and Susquehanna counties have been a large focus for the Marcellus Shale industry for a number of years.
As exploration and drilling increased, the region found itself trying to accommodate the number of visitors to the area, along with the demand for services.
Julie VanNess, Executive Director of the Wellsboro Area Chamber of Commerce, described business growth and expansion as “steady.”
“Some businesses have seen substantial growth, while others are seeing slower increases,” VanNess said. “Businesses directly impacted by the gas industry, such as Tioga Central Railroad and Wellsboro Johnston Airport, have seen and continue to see growth and expansion.”
In addition to an abundance of Shale gas available beneath the ground in the Northern Tier, VanNess said Tioga County offers new business and industry many advantages, including newly constructed interstate highways, a regional airport, an active railroad and most importantly, a viable workforce.
She explained that the
“The Marcellus industry impact on Tioga County varies,” VanNess said. “The industry boom a few years ago had a significant impact on the county but has since slowed down. The local hospital, Soldiers and Sailors Memorial Hospital, added a new emergency room to meet the growing needs of the area.”
The Macellus drilling boom has brought a few new hotels and restaurants to Tioga County in the last few years, bringing additional jobs to the area.
“Many of the existing businesses took advantage of the boom by adjusting to the needs of the industry,” VanNess said. But she added that while some new Marcellus businesses seemed to show up overnight, many also moved with the industry when the price of natural gas bottomed out a few years ago and drilling seemed to wane.
But VanNess said the Northern Tier should not be referenced only as a Marcellus-driven and dependent area.
“Tourisms is significant to many of our businesses, most of which are privately owned, who count on the tourist industry,” VanNess said. “The Pennsylvania Grand Canyon and the many events hosted by the Chamber attract thousands of visitors each year.
“Tioga County boasts a variety of attractions and activities, vibrant and well-maintained communities, as well as owner-operated shops, restaurants, and lodging.”
STATE COLLEGE, PA – Once again, The Pennsylvania and Marcellus Business Central is proud to present the fourth annual “Women Making a Difference” publication scheduled to appear in the Sept. 19 edition.
It was announced earlier this week that nominations are now open for the very popular “Women Making a Difference” that showcases some of the most successful women in the region.
This marks the fourth year that the publication has teamed up with St. Francis University to seek nominations for “Women Making a Difference” so that the stories of some of the most successful women in the 22-county coverage area can be told!
Nominations are being sought from readers, community leaders, Chambers of Commerce, local businesses and community organizations to nominate women who make a difference within their own companies and the community.
Once collected, nominations will be presented to a third party independent committee spearheaded by St. Francis University’s school of business. The selection committee chooses the finalists, whose success stories will be published in The Pennsylvania Business Central on Sept. 19.
In the past, readers have presented dozens of candidates who were worthy of recognition.
Nominations can be obtained by visiting the PBC Web site: www.pabusinesscentral.com. Click on the “Women Making a Difference” tab to download the nomination form. Nomination forms can be e-mailed to firstname.lastname@example.org, faxed to (814) 278-1303, or submitted verbally by calling (814) 278-1321 or (814) 278-1323
The deadline for nominations is Sept. 5.
By Julie Benamati, MBC Editor
Municipalities in the Commonwealth are cashing in on about $135 million in Act 13 Impact Fees that were distributed by the state’s Public Utility Commission (PUC) on July 1.
Local governments received on average about an 11.5 percent increase statewide from last year’s figures. To date, the impact fee has generated a total of $630 million in new revenue for the citizens of Pennsylvania since its enactment in February 2012.
The fee provides for the imposition of an unconventional gas well fee (also called an impact fee), and the distribution of those funds to local and state governments. It also contains 14 provisions regarding how the impact fee may be spent at the local level:
- Construction, reconstruction, maintenance and repair of roadways, bridges and public infrastructure
- Water, storm water and sewer systems, including construction, reconstruction and repair
- Emergency preparedness and public safety, including law enforcement and fire services, hazardous material response, 911, equipment acquisition and other services
- Environmental programs, including trails, parks and recreation, open space, flood plain management, conservation districts and agricultural preservation
- Preservation and reclamation of surface and subsurface waters and water supplies
- Tax reductions, including homestead exclusions
- Projects to increase availability of safe and affordable housing to residents
- Delivery of social services
- Judicial services
- Records management, geographic information systems and information technology
- Deposit into the municipality’s capital reserve fund if the funds are not used soley for a purpose set forth in Act 13 of 2012
- Career and technical centers for training workers in the oil and gas industry
- Local or regional planning initiatives known as the state Municipalities Planning Code
Washington County collected the largest amount of impact fees this year – in the amount of $6.11 million. The county’s Union Township will receive the highest allocation at $207,988, followed by Fallowfield Township with $139,363. California Borough will receive $100,615, Donora will get $86,781, Monongahela will receive $71,136 and Charleroi will receive $63,572.
Nearby Westmoreland County is getting $1.7 million, including $348,228 for greenways and parks.
Clearfield County received just short of $1 million, and Chest Township supervisors there have already earmarked their share of impact fees in the amount of $14,492. The board authorized donating $1,800 to each of the three volunteer fire departments that serve the township, with the remaining funds set aside to be used for maintenance and repair of township roads.
State Rep. Fred Keller (R-85) said the $81,000 in impact fees received by Union and Snyder counties would be welcomed.
“This more than $81,000 is a tangible investment in safer roads, cleaner water and better trained emergency responders that will directly benefit the very taxpayers who are directly responsible for the revenue that makes our local, county and state budgets possible,” Keller said in a statement.
The northeast portion of the state received the largest percentage of funds. Susquehanna County, which received $5.4 million, is planning to upgrade heating and cooling and electronics at the county jail, improve the county’s 911 center to meet state requirements and expand the county’s GIS program. According to Commissioner Alan Hall, the county used last year’s fees to cut property taxes by 20 percent.
Bradford County commissioners hadn’t yet decided how they will spend their $7 million, Commissioner Daryl Miller said. Municipalities in Bradford County cumulatively will receive almost $5 million more than the county government.
Lycoming County also receives a large chunk of the pie at a whopping $5.1 million.
Lycoming County Government has established a Mini-Grant Program to fund a limited number of community park projects – up to $20,000 each – using a share of the county’s Marcellus
Shale Legacy Funds. These natural gas impact Legacy Funds were provided to the county for this purpose by the PUC.
The county has recently notified municipal officials and is now inviting members of organizations that are responsible for community parks to nominate projects.
A candidate park may be owned by a municipality or a community organization, and must be open to and benefit the entire community.
The nomination deadline is Aug. 15. Award notifications will be sent the second week of September. Every project nominated will be retained by the county for future consideration of other funding sources.
The Associated Press contributed to this story.
By Beth Powell
TYRONE, PA — There have been numerous studies regarding hydraulic fracturing and groundwater contamination. Surface spills, however, are one area where industry, regulators and environmentalists tend to agree on the risk. Sources of oil, fuel, fracturing fluid and flowback spills at the well site include the drilling rig, mud tanks, diesel tanks, frac tanks, pumps, sand kings, generator sets, light stands, contractor vehicles, and blowouts at the well head.
The risk of surface spills can be mitigated by secondary containment, which is a safeguarding method in addition to the primary containment system (storage tanks, pipes, drums, blowout preventer). Depending on the liquid, secondary containment may be required by federal and state regulations. New Pig’s focus is 100 percent on safely, effectively and efficiently containing these chemicals to prevent to contamination of the ground and surrounding water.
New Pig Energy (NPE), founded in 2013, manufactures secondary containment liners for the shale gas industry to protect the environment while keeping workers safe on the job. The company’s products provide an engineering control for operators, service companies and regulators to prevent spills and reduce slips and falls. New Pig, the parent company, is the world leader in liquid control and containment—and has been for nearly 30 years. By leveraging that experience and applying it to the shale industry, the team of leak and spill experts deliver the best secondary containment solutions on the market.
From tank farms to well pads, NPE has designed containment systems and furnished onsite support for some of the world’s largest and most respected companies in the United States and abroad. Along with design and manufacturing, we provide training and keep current on the latest regulations and certifications to help our customers stay in compliance. From the stone used on the pad to the equipment that removes the liner, we are actively involved and always improving.
Award-winning PIG Well Pad Liners
Named as Environmental Protection’s New Product of the Year for the past three years, the patents-pending PIG Well Pad Liner is engineered and proven to perform under real-world conditions. he unique layered composite handles long-term, multiphase deployments under the harshest conditions— offering up to four times the tear resistance and seven times the puncture resistance of standard HDPE liners. Secondary containment is the safeguard if anything happens to the original containers, which means the secondary containment must be watertight even under heavy traffic. NPE pioneered the composite structure and its lifespan from air rig to fluid rig to completions to production.
Each layer in the composite is formulated—with all materials made in the USA–and constructed for specific properties, such as toughness, long-term chemical compatibility and cold-crack resistance. Beyond the physical properties, how a material interacts with the workers is critical. Unlike plastic, our composite liner is designed to be thermally stable to maintain a flat work surface–it will not grow and shrink causing tripping hazards as the temperature changes. In fact, safety was why we got involved in well site containment in the first place. Plastic can effectively stop a spill but it quickly becomes an ice-skating rink in the winter leading to near misses and lost-time accidents. The top layer is 20-year old New Pig product proven to reduce slips in falls in manufacturing environments. The PIG Well Pad Liner is only liner certified by the National Flooring and Safety Institute (NFSI) as a high-traction work surface to help prevent slip and fall accidents.
Beyond the liner manufacture, NPE engineers and modifies tools and equipment for installation and removal. We designed cleaning, cutting and winding equipment to efficiently remove the liner. Instead of requiring up to ten dumpsters, we can fit a typical site into two containers with one going for recycle.
New Pig Energy’s Legendary Service Advantage
• PIG Well Pad Liners are always in stock and available for warehouse pickup or hotshot 24/7.
• NPE is headquartered in the heart of the Marcellus Shale play to provide personal service, hands-on training and support.
• NPE works with our customers every step of the way, from assessing needs and explaining regulations to installation support and post-install maintenance
• NPE doesn’t believe in the “lay and walk away” approach to containment.The oil and gas industry runs 24/7, so NPE provide sonsite service and support 24/7— even after installation.
• The PIG Well Pad Liner is 100 percent American made—zero imports, zero offshore!
• NPE has warehouse locations in Pennsylvania, Ohio and Wyoming to support the Marcellus, Utica and Niobrara Shale plays.
Beth Powell was appointed vice president and general manager of New Pig Energy in January 2013 to focus on the specific needs of Shale drilling. She is a graduate of The Pennsylvania State University with a BS degree in chemical engineering and an MBA.
The American Society of Civil Engineers (ASCE) held its inaugural shale-related conference, titled Shale Energy Engineering Conference: Technical Challenges, Environmental issues and Public Policy, in Pittsburgh on July 21-23. More than 300 people attended from the engineering community, the shale gas industry, environmental organizations, and local, state and federal governments.
ASCE stated in its program that it decided to hold its first national conference on shale gas in Pennsylvania because “it’s one of the most active regions of shale works in the U.S., where the effects and impacts of operations and production have become part of our daily lives, whether it is the sudden fortune of landowners, creation of new jobs in the region, controversial debates over drilling in public parks, the environmental effects of occasional substandard practices, and many other stories and activities.”
The ASCE conference focused on the challenges that lie ahead: developing the means and technology to carefully monitor all aspects of shale plays; encouraging and promoting the development of technologies that would allow for cost effective shale exploration while minimizing the impact on water resources, surface and groundwater aquifers, geological stability of impacted areas, and air quality; and discussing infrastructure assets such as roads, pipelines, water, and wastewater networks.
The conference opened with a speech by Governor Tom Corbett.
“Engineers have figured out how to drill for gas and do it safely,” said Corbett.
“Marcellus shale has had an impact, and the young engineers will someday look back and see what they did. This is important not just for us, but for [future] generations.
“You can change the geopolitics of the world. Ten years ago, we were getting natural gas from abroad. The United States was an importer and Pennsylvania was an importer. Pennsylvania is now an exporter.”
Corbett ended his speech by thanking the engineering community.
“You’re really on the cutting edge,” said Corbett. “All engineers are, but especially here because of natural gas. We look to you to do this. We thank you for the work you do and have done.”
Kemal Niksic, P.E., a native of Bosnia and a principal engineer with Hatch Mott MacDonald of Pittsburgh, was the conference chair. He is also the president of ASCE’s Pittsburgh region.
“I wanted the governor at the conference because he’s very supportive of the industry, and everyone thought he gave a very uplifting speech,” said Niksic.
“We had a lot of environmental groups attend, so it was assuring to them to hear the governor say that engineering related to shale development will be done using best practices to protect the environment.
“It was also important to us, because as civil engineers, we have as our core mission the protection of the public good and the sustainable development of our resources.”
Conference panelists and keynote speakers discussed water resources, geotechnical issues, environmental and public policy regulation, and different kinds of infrastructure, from site development to transportation.
“The idea was that these topics would be of interest to our members, but also to a wider public and industry audience, with the goal of trying to identify the challenges in these areas,” said Niksic.
“Judging from the comments we received from the conference attendees and what I personally drew from what was going on, our inaugural conference was very successful.”
ASCE’s conference had more than 40 presentations and panels with experts from various disciplines, from civil engineering to geotechnology, from key industry players including oil & gas drillers to government officials, including USGS, the Pennsylvania Department of Transportation and Ohio Department of Transportation.
On Sunday, before the conference began, a group of attendees toured two of Range Resources’ seven pads in Cross Creek Park. The tour started at a drilling rig and ended at a producing well pad. The purpose was to learn how Range has successfully overcome traffic, zoning and geological issues unique to the area.
Organizing the conference began earlier this year with a call for papers. ASCE received over 70 peer-reviewed papers.
“When we started looking at the abstracts for the papers, it was clear there was a high interest on the topics of transportation and infrastructure, by that I mean roads, bridges, and pipelines,” said Niksic. “I found that fascinating since I didn’t realize how extensive these issues were.”
Niksic decided to break off the topic of infrastructure into a fourth tract at the conference with its own set of panelists and speakers, adding to the other three tracts – technical challenges, environmental issues and public policy.
To organize the infrastructure tract, he chose Cesar Quiroga, Ph.D., P.E., who is the senior research engineer manager at the Texas A&M’s Transportation Institute in San Antonio, Texas.
“What you saw in the infrastructure tract at the conference was partly a reflection of my professional interest in transportation, but it also reflected the larger interest of the civil engineering community in terms of what issues they thought were most urgent,” said Quiroga.
“If we hold this conference again, we will try to broaden the scope to include urban planning, transportation planning, emergency responders, hospitals, and even workforce development.”
Quiroga organized the infrastructure tract along several themes – technologies and examples of documentation of the transportation network before drilling and after development; roadway repair and reconstruction technologies; and pipelines, both surface impacts and below ground impacts.
Panelists presented papers on pipeline detection monitoring, and also on site development.
“The latter is perhaps what the organizers of the conference had in mind, to optimize the safe and responsible construction of structures at the well site itself,” said Quiroga.
The papers were followed by three sessions dealing with infrastructure coordination. The biggest disagreement about infrastructure among the attendees wasn’t over technical challenges, environmental issues or public policy, but about who should pay for the maintenance, repair and reconstruction of roads and bridges.
“This is where we hit a wall, at least at first,” said Quiroga.
“Depending on which group you talked to, you’d get different answers.
“For example, if you talked to local government officials, very frequently, they would point the finger at the industry, and tell the gas companies, ‘You ruined the roads, now you have to fix them.’
“But when you talked to the industry players, they didn’t understand the process the government uses to plan, design and operate road systems, and most gas operators don’t own the trucks that bring in water, sand and chemicals. They could easily say, those are our suppliers using the roads, not us.
“When you talk to the suppliers, they would tell you, we use the roads just like other companies that supply the automotive industry or the plastics industry or the food industry. They are on the roads every day just like we are. So yes, we carry heavy loads, but so do they, so we’ll kick in to help maintain the roads as long as everybody else who uses the roads does, too.”
Some argued that the landowners who are getting rich from the shale production should pay for the infrastructure. Others said that everybody in states with shale plays benefit directly or indirectly from having a gas boom in their state, so the residents of the state should pay for the infrastructure maintenance.
“At the end of the day, what you had is a big conversation with all the major stakeholders, and each one eventually agreeing that they should pay a portion of the cost to maintain, repair and reconstruct the roads and bridges since they all benefit from well-maintained infrastructure.
“At the transportation center where I work, we’re beginning a new program called the Sustainable Transportation and Energy Systems Initiative, and one of the goals is to provide forums for the various stakeholders to sit at the table together and try to come with up solutions which recognize that everybody benefits from shale gas, and therefore everybody should pay for the infrastructure that makes the shale plays possible.”
PITTSBURGH, PA – The Marcellus Shale Coalition (MSC) recently released the results of its annual workforce survey. The findings – based on 2013 data – were provided by a large majority of MSC member companies, representing nearly 95 percent of Pennsylvania’s shale production.
Key survey highlights include:
- 26.5 percent of new hires work in engineering and construction, 23 percent of new hires work in equipment operations; 15.2 percent in operations and maintenance, 8 percent in administration, 7 percent in land and 5 percent in environmental, health & safety;
- 83 percent of new hires came from Marcellus Shale states: Pennsylvania, Ohio, West Virginia, New York and Maryland
- Positions most difficult to fill
- Workforce diversity; and
- Recruitment methods and challenges, including educational and professional training needs.
According to the survey data, MSC member companies expect to hire more than 2,000 new employees in 2014. The survey also indicates that the majority of new hires are in three sub-sectors and are weighted more so in southwestern Pennsylvania: engineering and construction; midstream and pipeline; and operations and maintenance.
“Attracting and retaining a high-quality, local workforce is a key tenet of our Guiding Principles. By nearly all metrics – and with Pennsylvania’s unemployment at its lowest level since September 2008 and well below the national average – we continue to make positive progress on this important commitment, helping to create opportunities for those seeking work in our growing industry. And while some challenges still exist, this survey helps identify gaps to refine and better direct our collective efforts aimed at boosting local job growth for years to come.”
HARRISBURG, PA (AP) — A Pennsylvania court has further limited the reach of a major 2012 law that modernized drilling regulations, ruling Thursday that state public utility regulators cannot review how local zoning restrictions affect the natural gas industry.
The Commonwealth Court decision threw out the Public Utility Commission’s newly authorized power to withhold drilling fee revenue from municipalities whose zoning it deems to illegally restrict drilling activity.
The decision is another blow to an effort by Gov. Tom Corbett and the Republican-controlled Legislature to respond to the drilling industry’s complaints about municipal zoning. It follows a state Supreme Court ruling in December that said the law could not strip local zoning authority over drilling activity, such as the placement of rigs, pipelines, waste pits and compressor stations.
John M. Smith, a Pittsburgh-area lawyer who helped represent the seven municipalities that sued, said they were pleased that the court “once again protected the rights of local governments and Pennsylvania citizens.”
The Commonwealth Court ruling rejected three other challenges in the lawsuit to elements of the sprawling law.
Those three victories led Corbett’s office to say the opinion “speaks volumes to the constitutionality of state regulation of oil and gas activities.” A spokesman would only say that the office is evaluating the impact of the ruling on the intended role of the utility commission.
The court left intact limits on what doctors may reveal about the proprietary contents of hydraulic fracturing solutions.
Still, Smith said that while the court did not find the “medical gag rule” to be unconstitutional, the court interpreted the law to allow certain disclosures that alleviated much of the plaintiffs’ concerns over the secrecy. Those disclosures include to patients who suffer chemical exposures from drilling operations, to other treating physicians and in medical records, Smith said.
The court also refused to require the state to notify people who rely on private water sources of the potential for drilling contamination and it rejected the argument that the law authorized illegal private eminent domain for natural gas pipelines and storage.
In addition to the seven municipalities — four in Washington County, two in Bucks County and one in Allegheny County — the plaintiffs include environmental advocacy group Delaware Riverkeeper and Dr. Mehernosh Khan, a former Pittsburgh-area physician who is now practicing in Massachusetts.
The 2012 law grew out of a desire to modernize Pennsylvania’s 20-year-old drilling laws to account for a Marcellus Shale drilling boom made possible by innovations in technology, most notably horizontal drilling and hydraulic fracturing.
The law did not include a severance tax on the industry, but it did allow counties to impose an impact fee. Most of the revenue goes to local governments that host the gas wells, while state agencies and grant programs get the rest.
After the industry descended on Pennsylvania in 2008 to tap into the Marcellus Shale, companies began complaining that some municipalities were exploiting a legal gray area and using zoning rules to illegally limit drilling.
Corbett, a Republican, backed the industry, arguing that a 1984 state law had intended to outlaw municipal regulation of oil and gas operations anyway.
The law’s provisions effectively told municipalities where they must allow various types of drilling activity, but they were put on hold by a lower court and were never enforced before the Supreme Court ruled 4-2 in December that the state had overstepped its bounds.
BY JULIE BENAMATIMarcellus Business Central Editor
SHAWVILLE, PA – NRG Energy Inc., based in Houston, Texas and Princeton, NJ, recently announced plans to convert the currently coal-fired Shawville Power Plant to a natural gas operation.
According to David Gaier, spokesman for NRG, the plant will shutter its doors as planned in April 2015 – but will re-open one year later after the facility undergoes a conversion to natural gas.
It was announced in 2012 that the Shawville Power Plant, formerly owned by GenOn Energy, that the plant would be deactivated and about 80 employees would lose their jobs. It was one of eight plants, including four others in Pennsylvania, that were slated for shutdown.
NRG Energy completed the merger with GenOn Energy in December 2012, creating the largest competitive power generator in the nation. The Shawville plant alone has been providing about 600 megawatts of power annually to the Pennsylvania-New Jersey-Maryland grid for more than 55 years.
Gaier said company officials considered economic and environmental factors before making the decision in mid-May to convert the Shawville plant to natural gas.
“We found the coal units could be converted to operate on natural gas,” Gaier said. “This will improve the plant’s emissions profile and comply with environmental regulations.”
All four coal units will be converted to natural gas and a gas pipeline will be drilled to transport the gas to the plant.
When the plant closes, about 80 employees will be jobless. However, Gaier said he anticipates about 40 employees being needed when the plant reopens in April 2016. He did not say if the furloughed employees will be given first opportunity to return to the plant.
But in good news, Gaier said about 100 to 150 jobs will be created to perform the conversion, which is expected last about one year before the plan reopens.
“I can’t predict where the workers will come from in any particular project, but it’s been our experience that many jobs often come from the local and regional areas,” Gaier said. “The main driver of the jobs is the availability of skilled labor in the trades that are needed. There will be about 100-150 jobs during the approximate one-year construction period.”
BY JULIE BENAMATIMarcellus Business Central Editor
PITTSBURGH, PA – It appears that the summer months are becoming more attractive for hosting gas & oil conferences.
More than 3,200 attendees and 321 exhibitors participated in the recent DUG East conference and exhibition in early June at the David L. Lawrence Convention Center.
In response to requests both exhibitors and attendees, DUG East was staged earlier than in the past, changing to a June date instead of the usual November dates. Warmer weather facilitated more interaction among sponsors, exhibitors and conference delegates.
The change was a success, and has already prompted expo coordinators to begin planning for next year’s event, which is scheduled June 23-25, 2015 in the David L. Lawrence Convention Center.
The most recent conference offered in-depth presentations from executives who lead many of the top operators in the Marcellus and Utica shale plays.
Oil and gas experts are typically booked in advance as speakers on various topics in an effort to draw crowds. At the most recent DUG East conference, top management from CONSOL Energy, Magnum Resources, Stone Energy, Anadarko and Talisman Energy USA addressed the conference. Rice Energy CEO Daniel J. Rice IV was the closing keynote speaker.
As an added attraction, former CIA Director Leon Panetta was shared firsthand accounts of his White House experiences as the conference’s keynote luncheon speaker on June 4.
“Hart Energy events provide a platform for information exchange,” Barry Haest, Hart Energy vice president of events, said in a statement. “This conference, like all of our DUG series forums, focuses on the business side of the oil and gas industry – economics, activity levels and investment plans. It also affords great networking opportunities for operators and service companies who work in this region.”
Two week after DUG East, Mansfield University in Tioga County was the site of the fifth annual Northern Tier Marcellus Shale Business Expo held on Wednesday, June 18. This was the first time the event was held at the university. Prior expos were held in nearby Troy, Bradford County.
The event hosted a barbecue the night prior to the expo after exhibitors set up.
“Overall, MU was very happy with the Expo and the turnout, especially because we sold out vendor space this year,” said Lindsey Sikorski, director of the Marcellus Institute at Mansfield University. “Holding an expo on a college campus brings unique challenges that convention centers and fairgrounds do not have, but we felt we did our best to turn the facilities into a suitable exhibit space.”
She said inviting people to visit the campus as either a vendor or an attendee is also a huge benefit for MU.
“When I spoke with vendors, they indicated that they made some really good contacts from the event and established some worthwhile new business leads,” Sikorski said. “MU is extremely pleased to have helped facilitate these new relationships. “
Original plans for a golf outing the day before the expo fell through due to scheduling conflicts at Corey Creek Golf Course, but the expo did host a networking BBQ on campus the evening of June 17.
In a few more weeks, Pennsylvania Independent Oil & Gas Association (PIOGA) is hosting a PIOGA Pig Roast, Equipment Show and Conference on July 22-23 at Seven Springs Mountain Resort in Seven Springs, Somerset County.
The event will not only be educational, but entertaining.
Golf, sporting clays, Texas Hold ‘Em, food and fireworks are on tap for Tuesday, July 22, and the conference is scheduled on Wednesday, July 23 from 9 a.m. to 3:30 p.m., featuring PA conventional formations with horizontal drilling potential, horizontal drilling with air/foam, water disposal options for state producers, hydraulic fracturing of horizontally drilled conventional formations, LNG for high horsepower applications and alternative fuel vehicles.
And mark calendars for Williams third annual Barbecue Cook-Off to benefit four United Way agencies in Susquehanna County, Wyoming County, Wyoming Valley, and Broome County, NY on Friday, Sept. 12 at the Nicholson Carnival Grounds, Wyoming County.
Teams from the area will compete for best pork rib, pulled pork or beef brisket barbecue. Bragging rights include plaques and trophies – and all proceeds are matched dollar for dollar by Williams, according to Mike Atchie, public outreach representative at Williams,.
While the event is not exactly an expo, many Marcellus-related companies attend as cookers and/or judges, and often bring corporate displays to the event.