New rules for water withdrawals from the SRBC

Beginning on Oct. 15, the Susquehanna River Basin Commission will require that every natural gas operator that seeks to draw water from the basin to develop wells in the Marcellus Shale will need to get prior approval from the commission.

In the past, only operators that consumed an average of 20,000 gallons per day or more during any consecutive 30-day period or withdrew 100,000 gallons per day or more during any consecutive 30-day period, were required to get prior approval.

The rule change marks the first time in the commission's history that such prior approval has been imposed on a class of projects, according to commission executive director Paul Swartz. "After careful consultation with the commissioners and my technical and legal staff, I decided it would be prudent to impose the more stringent provision on the natural gas industry to give us the ability to review and regulate the industry's individual and cumulative impacts on water resources," he said in a news release on Aug. 15.

According to Paula Ballaron, the commission's regulatory program director, gas companies were taking up a lot of the commission's time asking questions about how to "just skim under the radar" of the commission's regulations. "A lot of the effort, at least initially, was being spent on avoiding the whole thing," she said. Now, the commissions' exchanges with gas companies can be directed toward ensuring proper compliance with the regulations that apply to everyone.

Because the additional applications will probably strain the commission and slow down the gas companies, the commission is proposing new rules that would provide a "more streamlined administrative procedure for reviewing consumptive water uses by the natural gas industry." Specifically, the proposed rule change calls for expanding the "approval by rule" procedure, so that it is available regardless of the water source a gas company wants to draw from. Approval by rule currently only allows companies to buy water from public water supplies while waiting for approval to draw surface water from the basin's rivers and streams.

The proposed rules will be released for public comment at the commission's quarterly public meeting on Sept. 11 at Bucknell University.

Potential economic impact study

Penn State Professor Timothy Kelsey has written a paper, 'Potential Economic Impacts of Marcellus Shale in Pennsylvania: Reflections on the Perryman Group Analysis from Texas.'

Kelsey's report refers to a study of the Barnett Shale in Texas by Texas-based economic consultants Perryman Group. The Perryman Group completed its study this year.


In his report, Kelsey writes that many sectors in the state's economy will benefit from natural gas exploration and drilling, with opportunities for a number of industries, including construction, retail and trade.

He says the two-fold economic challenge is:
1- Finding ways to help local businesses and workers compete for the new business opportunities arising from natural gas
2- Finding ways to encourage businesses, workers, and royalty owners to spend locally


Kelsey also states that local jurisdictions will face "higher service costs due to natural gas exploration."

He adds, "In other words, local jurisdictions with natural gas wells very likely will face higher demands for services and thus higher costs, and yet receive little new revenues to pay for those services."

Chief Oil and Gas meeting

Chief Oil and Gas LLC has scheduled a 'community meeting' for Tuesday, Aug. 25, at the Harford Fire Hall. The meeting runs from 5 to 9 p.m. According to a Chief spokeswoman, the company is holding the meeting to inform the public about Chief's operations. She noted the company holds community meetings before they begin drilling wells in an area.

The Harford fire hall is located on Fair Hill Road. Any questions, call, 1-866-770-5827


-- Josh Mrozinski

DEP Says Municipalities Have Some Say Over Gas Development

The state Department of Environmental Protection recently weighed in on the role local municipalities can play in regulating oil and gas development.

The issue is at the heart of a Supreme Court case, scheduled to be argued in September, over oil and gas ordinances adopted in Salem Township in Westmoreland County and Oakmont Borough in Allegheny County. Those ordinances were challenged in court by gas companies or industry groups.

The state law that regulates gas drilling, the 1984 Oil and Gas Act, explicitly precludes municipalities from regulating anything already outlined in the act. How wells will be permitted and plugged, what safety features and environmental controls are necessary, and how well sites must be restored are all outside local control.

But DEP filed friend of the court briefs in the cases stating that "the Department does not support a reading of the (Oil and Gas) Act that eliminates any municipal regulation of oil and gas well activities that bear only a tangential relationship to the features" already regulated by act.

DEP also states that municipalities "retain the authority to make land use determinations" as long as they are not redundant or do not conflict with the act.

In the Oakmont case, DEP held that the Commonwealth Court was wrong to say that the Oil and Gas Act preempts a municipality's right to limit gas drilling to certain zoning districts. A municipality must allow for gas drilling to occur somewhere, but the Municipalities Planning Code-- which regulates how towns and cities make zoning laws-- "does not require that mineral development be allowed in each and every zoning district," the Department argued. In essence, DEP said that municipalities can regulate where wells are drilled, as long as they do not try to regulate any aspect of how wells are drilled.

DEP noted that the court also mistakenly conflated setback limitations in the Oil and Gas Act (which determine how far away from structures and water sources a gas well can be drilled) with an understanding that gas operators have "unconditional permission to locate oil and gas operations 'anywhere' in a municipality" outside those minimum setback distances.

This reading, if adopted by the Supreme Court, could have profound implications for municipalities seeking to limit where gas wells can be drilled, particularly since most wells are planned for agricultural or residential zones where industry is not traditionally prevalent.

The DEP was less definitive in the Salem case, which challenged a more wide-ranging ordinance that regulated everything from the placement of access roads and pipelines, to the installation of tire-cleaning surfaces, to water-quality testing associated with oil and gas development.

The court acted properly in that case, the DEP argued, except that it failed to allow for local control over grading and slope standards for wells-- a fact that had been established by a previous precedent.

DEP relied on the court's description of the Salem ordinance for its opinion and was careful to tailor its agreement with the court's decision to that "limited description."

In its decision, the Westmoreland County Court had thrown out the Salem ordinance wholesale, without addressing the particular aspects of the ordinance piece by piece-- much to the dismay of the township's solicitor who had hoped to press the court for a finding on each specific issue.

Wine country visit yeilds gas

I went to the Finger Lakes region to visit wineries, but saw something that reminded me of Northeastern Pennsylvania:
A four-acre drill pad overlooking Keuka Lake.
In the middle of the gravel was a cement platform with some plumbing on top, waiting for a gathering pipe to carry the precious gas away.
The pad was just down the road from the quaint farmhouse bed and breakfast I stayed at. Turns out, the co-owner Keuka Overlook Bed & Breakfast, Bob Barrett, is also on the Barrington Township Zoning Board.
The Finger Lakes region is full of very practical farmers. While some have complained as the well was being drilled and trucks hauled in gravel, Mr. Barrett said since activity there has quieted so has the grumbling.
“The gas company was very straightforward and direct,” he said. “The roads took a beating, but they said the roads will be restored.”
Mr. Barrett tells me I also passed a portion of the 77-mile natural gas pipeline known as the Empire Connector being interred nearby, but I missed that. He said those crews are restoring the land to its prior condition or better. So far, he said the gas and pipeline companies have been responsible.
“There are lots of things that will be necessary in the future that we ought to accept and sacrifice for now,” he said.
-- David Falchek

Signs

As the Five Man Electrical Band sang, "...sign, sign everywhere a sign, blocking out the scenery breaking my mind...."


Signs of natural gas drilling can be found just about anywhere in Northeastern Pennsylvania, including on the roadways. The other day a truck with a tank that could hold thousands of gallons passed south through Tunkhannock on Route 29. On the truck, were words related to natural gas drilling, including brine.

Brine is water saturated with salt. And brine can be created as a by product of natural gas well development.

Other signs of natural gas drilling are the drilling sites of course. There are other items as well, such as natural gas drilling representatives staying at area hotels or attending municipal/school board meetings. And company offices. Cabot has buildings on Route 29, just north of Tunkhannock.

And then there are municipalities, who are adding language related to natural gas extraction to ordinances, including Eaton and Monroe townships.

The townships' joint planning committee is looking at adding definitions for natural gas and oil wells to zoning, among other items.

So, just look around and you'll see that natural gas well development is already starting to change the area. Post the signs you see.

Shale.TV

I searched the Internet recently and found an article by Ben Casselman of
the Wall Street Journal about a Web site that Chesapeake Energy Corp. expects to launch in the fall.

According to Casselman, the site is devoted to natural gas well development in the Barnett Shale in Texas.

http://online.wsj.com/article/
SB121669178244972553.html?mod=googlenews_wsj


-- Josh Mrozinski

Interscholastic Drilling

"Buy land," Mark Twain is alleged to have said, because “they aren't making anymore of it.” They aren't making any more oil either.
The university system of the State of Texas is lucky to have lots of land and the fossil fuel that goes with it. One hundred years ago, the state of Texas gave 2.1 million acres of land to the nascent state university that today includes Texas A&M and the University of Texas system.
Oil and gas bonuses and royalties from those lands in West Texas have been put into a “the Permanent University Fund,” an endowment created by the state's constitution. Over the years, that endowment has grown to $3.65 billion.
In Pennsylvania, other community groups have the potential to benefit financially from natural gas drilling activity. Tyler Memorial Hospital, school districts, municipalities, the Wyoming County Kiwanis and even the state of Pennsylvania itself have leased, or are considering leasing, mineral rights of their land to natural gas exploration companies.

-- David Falchek

Marcellus, meet Oriskany

Several dozen landowners in Bedford County have found themselves between a geologically formation and a hard place. They will likely be in court and tilting against a massive gas company resisting the sale of underground storage rights.

Here's a short summary of the twisted path that got them there.
They've already tapped their property natural gas once -- from the Oriskany sandstone formation. That,it seemed, could have been the end of it.

Then last year, Spectra Energy and New Jersey Resources unveiled plans for one area underlying about 40 parcels – for natural gas storage in those old Oriskany holes. The joint venture wants to pump natural gas into the ground – 12 billion cubic feet of it. The company got approval from the Federal Energy Regulatory Commission, which regulates interstate pipelines and storage.

The process has just started in federal court in Pittsburgh and a judge and a panel of experts, it is presumed, will make sure landowner are properly compensated for the underground storage rights.

Here's the problem: The landowners want to get to the natural gas in the Marcellus formation, which they also have underfoot. They fear that if the Oriskany layer is filled with natural gas, it would preclude them from teaming up with a natural gas company for getting their Marcellus gas for decades. A Marcellus lease and royalties, they figure, could end up being worth much more than a storage lease. The Oriskany layer, they say, could be productive again with modern fracking and drilling techniques.

-- David Falchek

Natural Gas Websites

Here's a Web site that provides information on natural gas and the natural gas industry. It's pretty informative and has a lot of information. The site is maintained by the Natural Gas Association --- http://www.naturalgas.org/

Also, apparently, YouTube has a number of videos on natural gas drilling and fracing. Search Google with "natural gas drilling" and one of the first entries is a YouTube video


--- Josh Mrozinski