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

DCNR Opens Bidding for Natural Gas Leases on State Forest Lands

The state Department of Conservation and Natural Resources today announced the tracts that will make up the 74,000 acres of state forest that will be available for new, deep- and medium-well natural gas exploration.

Bidding begins now and is open until Sept. 3 on the 18 parcels, which are in Lycoming and Tioga counties. The individual tracts range in size from 1,800 acres to 8,800 acres. Under DCNR well-spacing regulations, 289 possible well pad sites can be developed on the 74,000 acres, but in its environmental assessment, DCNR notes that it expects 35-50 well sites to be developed on the leased land.

Here is the Oil and Gas Lease Offering page that outlines the deal, including maps of the lease sale tracts, bid information, and a copy of the lease.

Here is the full release:

HARRISBURG (July 14, 2008) — Department of Conservation and Natural Resources Secretary Michael DiBerardinis today announced that the department will hold a lease sale for subsurface oil and gas rights on 18 tracts totaling 74,023 acres in the Loyalsock, Tiadaghton and Tioga state forests in Tioga and Lycoming counties.

“This lease sale is part of the policy announced earlier this year to focus on medium and deep gas drilling to limit the impact on the surface and on other uses of the forest,” DiBerardinis said. “We chose the tracts of land after extensive environmental reviews to protect the health of the forest now and in the future.

“Given the enormity of the nation’s energy demand, making less than an additional 4 percent of our state forest available for drilling is a reasonable decision that protects our forest ecosystem and helps meet energy demands,” DiBerardinis said.

DCNR will receive sealed bids for leases on each of the 18 tracts from pre-qualified bidders until 2 p.m. on Sept. 3. A list of bidders and the award decisions will be posted on DCNR’s Web site within 24 hours.

A lease is awarded to the highest bidder based on the amount of the first year’s land rental. A lease covers annual land rental amounts and possible royalties to be paid based on the volume of gas extracted.

“Only a small portion of the total acreage will be used for well site location,” DiBerardinis said. “For each tract, we have identified the number of well pads that are allowed, and we encourage the use of existing roads. There are portions of the tracts that cannot be developed on the surface to protect wild or natural areas, ecosystems, water bodies, recreational opportunities, or visual impacts from vistas and trails.

A comprehensive environmental review is conducted by DCNR as part of the lease sale planning process. Additional environmental reviews are done at the time of well permitting.

Lease sales are developed by first receiving nominations for the acreage from gas companies. Gas companies are required to submit competitive bids for the offered state forest acreage. Highest responsible bidders may then be issued contracts. DCNR retains ownership and complete control of the land.

The primary term of the lease is a 10-year period, which may be extended by production from the lease. A gas well may produce for several decades or more. The lease document, environmental review and maps are available at www.dcnr.state.pa.us (choose Forestry, then Oil and Gas on State Forest Lands).

Revenues generated from a lease sale go to the Oil and Gas Lease Fund, which by law must be used for conservation and recreation programs. The fund has been used to obtain the mineral rights to parts of the state forest where DCNR did not own them, to purchase the acreage for eight state parks and to expand 31 other state parks.

This lease sale responds to increased interest in the Marcellus Shale formation; a deep resource thought to contain large quantities of natural gas stretching from New York through Pennsylvania and into West Virginia. In Pennsylvania, the formation reaches the northern tier as far east as Wayne County and as far south and west as Greene County and the Pittsburgh area. New technology and increased gas prices have made it possible to recover the hard-to-reach fuel.

Since 1947, the department has held 72 lease sales, the last of which was in 2002. Currently, about 207,000 acres of the 2.1-million-acre state forest are under lease for gas production, with about 650 wells in production.

There's a New Alliance in Town

The Rail-Trail Council of Northeastern PA; the Wayne County Oil and Gas Group; the Elk Gas Group; and the Thompson Area Oil and Gas Group announced on June 29 that they are forming a coalition to negotiate gas leases. This new alliance is called Susquehanna Wayne Oil and Gas Group, otherwise known at SWOGG.

SWOGG joins the Northern Wayne Property Owners Alliance and the Lower Wayne Property Owners’ Association, which are looking to negotiate leases that protect the land.

Here the link to SWOGG’s press release:

http://www.swogg.org/files/SWOGG_press_release_Final3.pdf

And here’s the address for the SWOGG Web site:

http://www.swogg.org/