January « 2010 «

January 30, 2010

Recent Articles from PA

Filed under: news updates — admin @ 6:28 pm

Subject: Natural Gas Articles 1/29/2010

From the 1/29/2010 Wayne Independent.

DEP to add 68 staff to oversee gas drilling

Wayne Independent
Fri Jan 29, 2010, 06:06 PM EST

Harrisburg, Pa. -
In order to protect Pennsylvania’s residents and environment from the impact of increased natural gas exploration across the state, Governor Edward G. Rendell announced today that the commonwealth is strengthening its enforcement capabilities.
At the Governor’s direction, the Department of Environmental Protection will begin hiring 68 new personnel who will make sure that drilling companies obey state laws and act responsibly to protect water supplies. DEP also will strengthen oil and gas regulations to improve well construction standards. These critical upgrades are designed to prevent gas leaks that can pose risks to the public and water quality.
“Interest in Pennsylvania’s Marcellus Shale formation is greater than ever before and as natural gas prices continue to rise, that interest will only increase,” said Governor Rendell. “In fact, the industry has told us that they expect to apply for 5,200 permits to drill in the Marcellus Shale this year — nearly three times the number of permits we issued in all of 2009. Given these conditions, an extraction tax is gaining widespread support across our state and I will again ask the General Assembly to enact such a levy. It is fair and affordable to drillers. They know it, and so do members of the House of Representatives who voted for it last year.
“The actions I am announcing today, however, are about decisive, progressive protections for the people of Pennsylvania. We were able to hire 37 additional inspectors and permitting staff in 2009, but the industry’s projected growth in 2010 means that we need additional inspectors to ensure oil and gas companies follow environmental laws and regulations. As I’ve said all along, we want to encourage the development of this resource because it’s a tremendous economic opportunity for the state, but we will not allow that to happen at the expense of our environment.”
DEP performed 14,544 drilling site inspections in 2009 and took 678 enforcement actions against drillers for violations.
The 68 additional personnel will be funded entirely from money generated by new, higher permitting fees that were instituted in 2009—the first such increase since 1984. The new fees were put in place with bipartisan support from the General Assembly, industry and environmental organizations.
The Governor noted that given the need for these additional health and safety personnel and the dedicated funding source that is independent of the state’s General Fund, these new hires are exemptions to the general hiring freeze he instituted last year.
DEP’s work to amend Pennsylvania’s oil and gas regulations will strengthen well construction standards and define a drilling company’s responsibility for responding to gas migration issues, such as when gas escapes a well or rock formation and seeps into homes or water wells.

Specifically, he said the new regulations will:
• Require the casings of Marcellus Shale and other high-pressure wells to be tested and constructed with specific, oilfield-grade cement;
• Clarify the drilling industry’s responsibility to restore or replace water supplies affected by drilling;
• Establish procedures for operators to identify and correct gas migration problems without waiting for direction from DEP;
• Require drilling operators to notify DEP and local emergency responders immediately of gas migration problems;
• Require well operators to inspect every existing well quarterly to ensure each well is structurally sound, and report the results of those inspections to DEP annually; and
• Require well operators to notify DEP immediately if problems such as over-pressurized wells and defective casings are found during inspections.
“These new draft regulations, which were developed through open meetings with experts in the industry, are designed to give Pennsylvanians peace of mind by bringing our state’s requirements up to par with other major gas producing states or, as in the case of the well casing requirements, to a level that is even more rigorous,” said Governor Rendell.
The new regulations will be offered for public comment on Jan. 29 before going through DEP’s formal rulemaking process.
Interest in Pennsylvania’s Marcellus Shale formation has been increasing. One third of the more than 6,200 oil and natural gas drilling permits DEP issued in 2009 were for drilling in the Marcellus Shale. By comparison, only four of the more than 6,000 permits issued in 2005 were for the Marcellus formation.
For more information, visit www.depweb.state.pa.us.

Related stories

State legislative panel probes water quality issues related to gas drilling
EPA creates tipline for reports of suspicious gas drilling activities
New gas drilling companies targeting Wayne County

HARRISBURG – The Rendell administration is hiring 68 new staffers to oversee natural gas drilling operations in the Marcellus Shale formation, a major exception to state government’s shrinking payroll in tight fiscal times.

These new employees for the Department of Environmental Protection will handle a number of jobs ranging from inspecting and monitoring activities at natural gas well sites to processing thousands of applications for Marcellus Shale drilling permits.

A sizeable but undetermined number of the new hires will be based at DEP’s Northeast Region office in downtown Wilkes-Barre, Acting DEP Secretary John Hanger said in an interview Thursday.

“We realize there is major new expansion there (in the northeast),” added Mr. Hanger. “We want to boost the number of people in the Wilkes-Barre area who will be working on this.”

The regional office is the hub for enforcement of state environmental laws and rules in 11 counties: Carbon, Lackawanna, Lehigh, Luzerne, Monroe, Northampton, Pike, Schuylkill, Susquehanna, Wayne and Wyoming.

The new hires will be placed on the job during the next three to six months.

Even though the taxpayer-supported state General Fund is running in the red, DEP can afford to hire new gas inspectors because their salaries are funded by revenue from increased fees charged to natural gas drillers.

The agency implemented a higher fee scale last year to replace a flat $100 well application fee. The new fee scale is based on the length and type of wells being used. It is designed to reap revenue from the drilling to reach the deep pockets of natural gas in Marcellus Shale formations.

“These positions will all be paid for by drilling fees,” said Mr. Hanger. He anticipates the new fee system will bring in $11 million in revenue this year. DEP received $700,000 annually under the old fee system.

DEP hired 37 natural gas inspectors last year as enhanced revenue from the costlier drilling fees started to flow in. Eleven of these staffers were assigned to DEP’s regional office at Williamsport. DEP also has inspectors in western Pennsylvania where both shallow and deep well drilling activity occurs.

DEP was hit with layoffs after the overdue state budget was enacted in October, but the agency’s oil and gas division is considered exempt from layoffs or hiring freezes, added Mr. Hanger. All told, 193 agency employees work full time on oil and gas regulatory issues.

In a statement, Gov. Ed Rendell said the hiring of new inspectors is justified by expectations that the number of Marcellus Shale drilling permit applications will jump threefold this year to 5,200.

“The industry’s projected growth in 2010 means that we need additional inspectors to ensure oil and gas companies follow environmental laws and regulations,” said Mr. Rendell.

DEP also plans to offer proposed regulations for public comment starting today to strengthen well construction standards and define a drilling firm’s responsibility when natural gas migrates away from a well or rock formation and seeps into homes or water wells.

The proposed rule will require that casings of Marcellus Shale wells be built with a specific grade of cement and require well operators to correct and provide notification when gas migration problems occur.

“These new draft regulations…are designed to give Pennsylvanians peace of mind by bringing our state’s requirements to par with other major gas producing states, or as in the case of the well casing requirements, to a level that is even more rigorous,” said Mr. Rendell.

Contact the writer: rswift@timeshamrock.com

2 posted comments

Waste of money and jobs for cronies. Our state gov’t has already proven they don’t care what these gas companies do. They have already opened up state forest lands to them. Why create jobs that will not ensure responsible drilling.
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jdr, 01/29/10 12:02
what experience is needed to be an inspector or oil wells? are they coming down to TX to hire them. This will be another state job that goes to people that know people. An old neighbor of mine lost his job at the old SSGH. They gave him a job as a building inspector. the guy never even built a dog house. Having moved to TX a year ago, I read stories all the time about the many problems with these oil wells. the long term effects to the enviroment are nasty and they will be inspected by the old manager of the 7/11.
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zeke, 01/29/10 10:49

______________
FYI – Letter to the Editor from the 1/29/2010 Scranton Times-Tribune.
Dave

Tie tax to costs

Editor: Those calling for a state tax on natural gas extraction – including Gov. Ed Rendell and The Times-Tribune – use poor logic to support their positions.

Higher-than-expected lease bids for state lands from drilling companies convinced the governor that natural gas companies can afford an additional tax.

However, drilling companies were able to bid high for land rights precisely because the state does not have a severance tax. Drilling companies already pay the corporate net income tax or personal income tax, capital stock and franchise tax, leasing fees, and 18 percent royalties.

While proponents of the severance tax draw attention to its implementation in other states, they fail to mention that Florida gives tax credits to small oil and gas producers. Texas reduced its tax by 80 percent in areas that – like the Marcellus Shale – are hard to drill; Oklahoma doesn’t impose the tax until investment costs have been recovered; and Louisiana suspended its severance tax to incent new well drilling.

Advocates for the tax should also be aware more than 26,000 jobs in Pennsylvania come from shallow oil and gas producers that are marginally profitable. In fact, the natural gas industry is one of few industries hiring in Pennsylvania.

A natural gas tax should not constitute merely another slush fund to support Mr. Rendell’s spending habits. A severance tax should not be implemented until the companies recoup the capital costs, and revenues should be tied directly to the environmental costs of drilling.

KATRINA ANDERSON

Research Fellow

Commonwealth Foundation

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FYI – From the 1/29/2010 Scranton Times-Tribune.
Dave

Victim of Susquehanna County fatal crash identified

Published: January 29, 2010
BRIDGEWATER TWP. – The victim of a two-vehicle crash on state Route 706 was identified Friday as a 54-year-old South Montrose man, police said.

Mark Decker died Thursday after his minivan and a pickup truck driven by Thomas Carman, 22, of Springfield, Mo., collided around 5 p.m. outside Montrose, state police at Gibson said.

The two vehicles were traveling in opposite directions, police said, but troopers were still investigating what led to the collision.

State police asked anyone with information to call the Gibson barracks at 465-3154.

1 posted comments

Was the out of state driver working in the gas drilling industry? If so, get ready for more and more serious accidents. They don’t know our roads, and drive like “all get out”! Bradford County see almost an accident a day between pickups and larger vehicles with out local drivers.
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Bradford County observer, 01/29/10 2:06

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FYI – From the 1/29/2010 Natural Gas Forum for Landowners.
Dave

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Topic: MARCELLUS LANDOWNER THINK TANK – PA NY WV coalition (Read 8 times)
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rfscala
Premium Member
Too much free time

Posts: 819

MARCELLUS LANDOWNER THINK TANK – PA NY WV coalition
« on: Today at 06:52:30 pm »

Though I am not sure this is the right place to post the thread, it deserves a place to call home.

This thread is based upon the brain child of Ron (Admin) posted in it’s entirety here:

Re: Obama AGAIN ignores Nat Gas
« Reply #3 on: January 28, 2010, 10:14:22 pm »
Quote
One of the benefits of age is that one no longer feels guilty about falling asleep on the couch after dinner. I happened to wake up while my wife was watching Neil Cavuto. The program was discussing how the president and government officials are constantly giving press conferences about how things are going to change… but never seem to…. And how Steve Jobs only gives a press conference about once a year, but when HE does, a major change is already in the works. Ipods, and now some kind of tablet.

I found myself doing a little introspection and when I checked on the forum, here was this thread. I will ask you all the same question that confronted me.

Am I falling into the trap that I have accused so many others of… That being, am I looking to the government for my welfare? In a real sense the answer was yes. I want the DRBC and DEC to get off their duffs and send the religious envionmentalists packing. I want Obama and the government to promote natural gas, because it is clean and I want to get this drilling started so I can benefit from the royalties.

But then, I thought about Steve Jobs. You know, the guy who saw the vision for a computer smaller than a house…. that anyone could use. And built them in his garage for a while.

I keep forgetting, this is America. Steve Jobs isn’t rich and successful because he got Nixon to back his idea. He saw a need for a product that was better than anything else, and the world saw it’s benefit.

Natural gas is a better, cleaner, cheaper resource to power our cars, trucks, busses and homes. Whether it is CNG, LNG or NG, right out of the pipeline it is plentiful and perfectly fits the bill to power our nation. If the people of our country are provided with a better, cheaper energy source, the gevernment will cave in to public demand. It always does, because it is the votes that count…. sadly, not the integrity of the issue. I believe that November will bring that fact to the forefront on both the Democratic AND Republican sides.

But…. Anyway, I started thinking. As a community, we have more power than you might imagine. In a sense, we are a coalition of coalitions primarily across three states. New York, Pennsylvania and West Virginia.

I am just throwing out my rantings, but there are Electric Co-Ops and Food Co-ops. What if a co-op was created to put in natural gas filling stations for cars, trucks and busses. Owned by a co-op of landowners who just happen to have rigs taking gas from their land?

Perhaps, entrepreneurial insight and vision may be more important than the DEC, DRBC, DEP and the President combined. Think about this. We have over 5000 members, of which about 3200 are active (Yup that includes the lurkers). If only half of that kicked in $100. We would have an arsenal of $320.000 to begin to put on a first class information campaign about natural gas and drilling targeted towards voters. Get the voters and the politicians will follow.

We would also be able to encourage the companies who are already working with CNG in vehicles to consider our areas for implementing conversions to CNG. Do you see where I am going?

Ideas? This is America and no matter what the politicians do or don’t do, it is we the people who make it happen.

ron

AND Marian’s comments of the same thread in it’s entirety here:

Re: Obama AGAIN ignores Nat Gas
« Reply #31 on: Today at 04:29:07 pm »
Quote
Go back to the thought that Ron, your administrator threw out there on this string.

Think about the power of solidarity and how it can grow exponentially if we did organize and unite! to quote Ron:

“But…. Anyway, I started thinking. As a community, we have more power than you might imagine. In a sense, we are a coalition of coalitions primarily across three states. New York, Pennsylvania and West Virginia.

This is pure fresh and powerful!

The NWPOA started small, we snowballed in no time. We put the message out there that all communities should get united and educated. The idea caught on and land owner associations large and small were and are springing up every where. It is a good thing and has empowered property owners. Collectively we have changed the way leasing is done!!!!

NWPOA began sponsoring joint negotiations where many landowner groups together met with and negotiated the Companies. The idea was that a super Alliance might collectively be able to achieve what individual groups had not. We hoped to raise the bar in all respects. It was a wonderful excersisie where landowner leadership represented some 390,000 acres of unleased lands in direct negotiation with Industry.

Now the leasing for many groups is done but the work going forward is not. Many groups disband their leadership to return to a more normal life. But we still need structure to carry us all forward. The Alliance NWPOA is planning a future and recognizes that there is power in numbers. Maybe for business ventures later, maybe for lobby work maybe just to keep each other informed and updated…The list goes on.

Some county farm bureaus have opened dialog with one an other recognizing that we need some type of state wide organization as we move into the future. We have not pushed Pennsylvania Farm Bureau on this issue yet but in our mind Farm Bureau mission is to work with and lobby for rual causes or matters that affect forestry and farm owners and the rural communities in which they live. As I see it this gas activity fits the bill. NY State Farm Bureau is involved in Natural Gas information and education. Perhaps PA Farm Bureau could help too. If not we can do it our selves, maybe through PA gas lease or NARO or some other structure.

Give it some thought. Can you see the long term potential benefits to us all?
Keep brain storming. from a think tank like this good things will evolve.
Good luck to us all! Marian

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FYI – From the 1/29/2010 Natural Gas Forum for Landowners.
Dave

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Topic: Big Brother wants your help (aka EPA’s “eyesondrilling.gov” tipline) (Read 385 times)
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mohawk70
Too much free time

Posts: 945

Re: Big Brother wants your help (aka EPA’s “eyesondrilling.gov” tipline)
« Reply #10 on: Today at 07:42:57 am »

Quote from: MrMajik on Today at 06:22:21 am
Having an official federal agency set the citizenry out to “monitor” industrial operations could be a mess. In NY the DEC already stated they will have an agent present on site at all critical junctures in a well’s development. Amateurs snooping around may help keep folks honest but they also could potentially start producing data that would cause unwarranted delays and recriminations.

This may lie somewhere between an informed citizenry and a team of hysterical witchhunters. If you look into the systems in place to “prevent child abuse and neglect” you”ll find a dangerous network of [mostly] women reporting allegations, many of which investigations result in severe damage to families well before a finding of abuse, no less further legal action be taken. It amounts to an army of snitches on the lookout at your local supermarket, school, sports practice, daycare facility, etc.

There’s more to be said about this but I’ll wait to see if it strikes a chord with anyone.

If the bureaucrats only work 9-5 M-F with a long lunch, does that mean that the drillers will also be restricted to those hours?

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mohawk70
Too much free time

Posts: 945

Re: Big Brother wants your help (aka EPA’s “eyesondrilling.gov” tipline)
« Reply #11 on: Today at 07:50:36 am »

By the way, I had one of these guys drive by one of my sites and stopped and gave orders to the construction crew that totally deviated from the drawings and also from the approved plan that the contractor had proposed. It caused the crew to cut up a bunch of steel and they got annoyed because they had gone to a lot of trouble to get the materials to do it as designed. A couple of hours later the same government guy drove by again and demanded they do it the original way. The crew threw down their tools and walked off the job in disgust and anger.

I had to go to the agency head (who I knew) and made a “mock” demand for an immediate payment of several thousand dollars for new materials to replace the stuff his guy had screwed up. Then I backed off and made him agree to keep his guy away from us. [He had no authority there, but just couldn't resist imposing himself.]

Then I had to make nice with the contractor.

So, there are HUGE dangers of someone with lots of “implied authority” but with no knowledge imposing himself or herself on the project and screwing up the whole thing, throwing it off schedule, and causing serious financial reverses.

The government needs to s-t-a-y away. Give the guy a pair of binoculars and let him or her write a letter if there is something he or she doesn’t like. And if the government is wrong, then the government guy or gal has to write a personal check for the delays and damages.

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ghrit
Hero Member

Posts: 472

Re: Big Brother wants your help (aka EPA’s “eyesondrilling.gov” tipline)
« Reply #12 on: Today at 09:45:52 am »

“Citizen, you are being watched.”

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3 unleased acres
There are two kinds of ships. Submarines and targets.
Kilgour Farms
“Driller”
Global Moderator
Resident Advisor

Posts: 2740

Re: Big Brother wants your help (aka EPA’s “eyesondrilling.gov” tipline)
« Reply #13 on: Today at 10:01:42 am »

If I’m not mistaken at least in NYS it is illegal for anyone other then the gas workers and the DEC to be on site without permission from the land owner..

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“Freedom is never more than one generation away from extinction. We didn’t pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same.”

Government cannot give anything to anyone – that they have not first taken away from someone else.

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FYI – From the 1/28/2010 Natural Gas Forum for Landowners.
Dave

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Topic: Range Announces Sale of NY Leaseholds (Read 348 times)
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vlaamseman
Sr. Member

Posts: 328

Range Announces Sale of NY Leaseholds
« on: January 28, 2010, 02:49:30 pm »

From a Range Resources press release of January 28, 2010 available on Range website –

“In 2009, Range sold properties containing 140 Bcfe of proved reserves. The sold properties included the Fuhrman Mascho field in West Texas and essentially all of the Company’s properties in the State of New York. These properties included 2,291 producing and non-producing wells. ”

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virtuallyme
Premium Member
Resident Advisor

Posts: 2077

Re: Range Announces Sale of NY Leaseholds
« Reply #1 on: January 28, 2010, 03:04:56 pm »

way to go NYState

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Tuckabuckaway
Sr. Member

Posts: 259

Re: Range Announces Sale of NY Leaseholds
« Reply #2 on: January 28, 2010, 05:09:32 pm »

FWIW, Range didn’t count their NY holdings as prospective Marcellus acreage. I think their acreage was largely out of the Marcellus fairway. Nonetheless, I’m sure the regulatory climate made the decision to sell much easier. The NY holdings are the latest in the string of asset sales for Range, enabling them to go “all in” on the PA Marcellus.

Here is the transcript from Range’s 3Q 2009 earnings call where they discuss their “NY State of Mind”:

Thomas Gardner – Simmons & Company
Q: Thanks Jeff. Just staying with the northeast portion of the play. How much acreage do you currently have in New York? And can you give us an update on these regulatory initiatives, and the ultimate impact perhaps on drilling in the state?

Jeff L. Ventura (Range President & COO)
Yeah, well, we have roughly 2 million acres in the basin. When we talk about 1.4 million acres for the Marcellus that’s prospective. Let me talk about that that 1.4 million acres basically is almost all in Pennsylvania, a little bit in the West Virginia panhandle, right adjacent to Pennsylvania. We’re not counting any New York acreage at all as being prospective for the Marcellus.

And when we talked about our high-graded acreage, the 900,000 that’s basically again, almost all in Pennsylvania, a little bit in the West Virginia panhandle. And the difference, that other 500,000 acres has potential for the Marcellus, but it’s behind pipe and existing wells that we have. There, we’ll be looking at it as a recompletion potential, or later on, but it’s on HBP oil and HBP acreage.

So, when we originally went back and targeted the Marcellus, when we started the play several years back, we targeted different areas predominantly in southwest Pennsylvania and northeast Pennsylvania, we did not target New York. I’m not saying New York doesn’t have potential, it just wasn’t within our originally targeted areas, and as we’ve continued to refine our model, our model actually has held up very well, and it’s been very robust. And we continue to target basically those same areas.

John H. Pinkerton (Range CEO)
Yeah, Tom, and this is John, I think that’s Jeff’s perspective is more, let’s say, from a geological perspective. The other perspective is kind of the business perspective. And as, and maybe some people don’t, we’ve been operating up in Appalachia for over 25 years now. And we are one of the largest producers in natural gas in the State of New York. That didn’t mean a lot, but we’re still the largest producers in New York.

So, we know firsthand how difficult, on a relative basis, is New York versus PA versus West Virginia versus Ohio versus Virginia, and we take all of that into account when we look at this play. And there is no doubt in our mind that New York, was going to be more challenging from a regulatory perspective. It always has been, and in my view, always will. I don’t want to go into why we believe that, but I think most people can just see that for themselves. I’m not bringing up something that I think is all that earth-shattering here.

So again, I think in all these plays, whether it’s the Barnett, or whether you want to be drilling wells in downtown Fort Worth, or whether it’s the Marcellus or all the other plays. You got to take your technical work, and overlay with what you think the business risks are. And quite frankly, when we did that, New York was not one of the ones that, that popped out, where we ought to be buying acreage. So, that in a nutshell is why we don’t own any material Marcellus potential in New York. Again, just want to reiterate what Jeff said is that, it’s not that we don’t think that it’s bad, we just think Pennsylvania is better.

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LCW
Premium Member
Resident Advisor

Posts: 2618

Re: Range Announces Sale of NY Leaseholds
« Reply #3 on: January 28, 2010, 05:14:57 pm »

V-
We simply need an election to flip this scenario. November can’t get here quick enough.

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tc-ny
Master Maven

Posts: 544

Re: Range Announces Sale of NY Leaseholds
« Reply #4 on: January 28, 2010, 05:43:33 pm »

if there is anyone that rubs shoulders w/ any ny politicians, please share the portion where range describes how difficult it is to do business in ny. let’s send this note in emails to our usual batch as well. lets also note this as a future talking point at next gas rally.

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FYI – From the 1/28/2010 Natural Gas Forum for Landowners.
Dave

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Topic: New Production Info – EQT and CNX Gas (Read 227 times)
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RBC
Full Member

Posts: 107

New Production Info – EQT and CNX Gas
« on: January 28, 2010, 11:03:23 am »

Both EQT and CNX Gas (CXG) released earnings this morning. They both had comments about production. Below are some excepts. See their webites for the full press releases. Things look really good for Greene County, PA.

From EQT:

Highlights for 2009 include:

•Record annual sales of produced natural gas of 100.1 Bcfe, 19.5% higher than in 2008;
•Proved reserves increased by 31% to 4.1 Tcfe;
•Drilled 800th horizontal Huron/Berea well, 33% of fourth quarter sales were produced from horizontal Huron/Berea wells;
•Drilled 46 horizontal Marcellus wells, including what EQT believes to be the most prolific well in the entire play based on a 30-day average production rate of 14 MMcfe per day;
•Unit development costs for EQT’s major plays are projected to be reduced to less than $0.85 per Mcfe in the Marcellus play and less than $0.90 per Mcfe in the Huron/Berea play;
•Unit lease operating expense, excluding production taxes (LOE), decreased 14% in 2009, to $0.30 per Mcfe. Including production taxes, LOE was $0.59 per Mcfe, an industry leading result;
•Record EQT Midstream throughput and operating income; and
•Record Distribution operating income of $78.9 million, 32% higher than 2008.

Marcellus Play

EQT drilled 19 and turned-in-line (TIL) six horizontal Marcellus wells in the fourth quarter of 2009. One well in Greene County, Pennsylvania produced at an average rate of 14 MMcfe per day for the first 30 days of production. Two adjacent wells, shut-in due to temporary takeaway constraints, had similar initial flow test results. Within a 2-mile radius of these wells, EQT has three multi-well pads, totaling 12 wells, which two are currently being drilled. The 9 MMcfe per day 30-day initial production well, announced in the third quarter, is located eight miles away and there are currently seven offsets that are cleared to drill.

EQT has now drilled 53 horizontal wells in the Marcellus play since 2008, of which 17 wells have been on-line for more than 30 days. Total sales of produced natural gas from the Marcellus play at year-end were 37 MMcfe per day. EQT expects this rate to more than double by the end of 2010. Takeaway capacity in the Marcellus is currently 50 MMcfe per day and is anticipated to be 100 MMcfe per day by the end of 2010.

EQT estimates the average EUR across its approximately 445,000 Marcellus acres to be between 3.5 and 4 Bcfe per well, at a cost per well of $3.0 million. Unit development costs for this play are projected to average less than $0.85 per Mcfe. In Greene County, Pennsylvania, the average EUR per well is 4.5 Bcfe. In Doddridge County, West Virginia, the average EUR per well is 3.6 Bcfe.

From CNX Gas:
In the Marcellus Shale, CNX Gas drilled, completed, and brought online one vertical well and two horizontal wells. The first of the two horizontal wells, GH 11C CV, has shown a 30-day daily production rate of 1.6 MMcf. This well has only 1,600 lateral feet, due to acreage constraints. The second horizontal well, GH 11B CV, is currently producing from only the first two frac stages at a 30-day production rate of 0.8 MMcf. This 1,800-ft lateral well is expected to see more normal levels of production when the remaining 3 stages are fraced.

For the entire horizontal Marcellus Shale program to date, 13 horizontal wells have been drilled. The reserves associated with the first 11 wells total 35.6 Bcf, or about 3.3 Bcf per well. The laterals on these wells averaged less than 2,000 feet.

Upcoming drilling in the Marcellus Shale is expected to be predominantly horizontal and on multiple-well pads, with laterals closer to 3,000 feet. For 2010, the company expects to drill approximately two dozen horizontal wells, with a drilling budget of about $110 million.

CNX Gas successfully increased its acreage with Marcellus Shale potential by 20,000 in the quarter, to a year-end total of 250,000. Of this, approximately 170,000 acres is considered to be Tier 1. The company remains committed to expanding its footprint to 400,000 acres.

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ruby_99
Dedicated

Posts: 1196

Re: New Production Info – EQT and CNX Gas
« Reply #1 on: January 28, 2010, 12:10:12 pm »

The 30-day average production rate from EQT is great. I don’t remember what the 30 day rate was for Range’s big well, but I think it was less. Nice EUR for Greene county as well.

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Washington County Landowners Group washcountygrp@gmail.com
RBC
Full Member

Posts: 107

Re: New Production Info – EQT and CNX Gas
« Reply #2 on: January 28, 2010, 12:15:28 pm »

I don’t think Range ever publicaly gave a 30 day rate for their biggest well – just Initial Flow.

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ruby_99
Dedicated

Posts: 1196

Re: New Production Info – EQT and CNX Gas
« Reply #3 on: January 28, 2010, 01:56:32 pm »

From their 1Q20089 earnings conference call:

“Range also holds the record for the highest rate horizontal well in the play too which is 24.5 million cubic feet equivalent per day in the southwest part of the play. The 24.5 million cubic feet equivalent per day well actually cleaned up some after we reported it and its best rate 24 hour rate to sales was 26 million per day.

For the best 30 days to sales this will average 10.8 million per day.”

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Gas drilling to be art exhibit focus

January 29, 2010, 7:26 am

Comments(3)
Gas drilling in the Marcellus Shale is the inspiration for more than 40 artists whose work is exhibited at the “EarthStewards Coalition” show opening First Friday at Binghamton’s City Plaza Gallery. The exhibit opening will run from 6 to 9 p.m

Artists are from New York, Pennsylvania and several other states. The opening reception will include music, poetry, drumming, dance and a performance by Pictures Move by Strings Puppet Theater from Scranton.

The gallery is open to the public Monday through Friday from 9 a.m. to 5 p.m. The show runs through the closing reception on March 5 from 6 to 9 p.m.

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FYI – From the 1/29/2010 Splashdown blog.
Dave

Friday, January 29, 2010
BLATANT VIOLATIONS + THAW = ROAD DAMAGE

Natural gas truck stopped on Bradford County road weighing 41.6 tons over weight limit
By Jason Whong •jwhong@gannett.com
pressconnects.com
January 28, 2010, 10:45 pm

The driver of a natural gas industry service truck that was more than 41.6 tons over the weight limit on a Bradford County road received more than $25,000 in traffic citations Tuesday, according to state police in Towanda.

Police said Kevin Parsons, 44, of New Albany, Pa., was the driver of the truck found parked on Covered Bridge Road in Burlington Township. The road has a posted weight limit of 10 tons.

“We’ve had so many problems lately with blatant (weight limit) violations,” said Cpl. Roger Stipcak.
“We’ve tried … to educate them about this stuff, but now we’re going to start taking them forthwith to the magistrate,” Stipcak said.

Police said the truck is owned by Hodges Trucking Co. of Oklahoma City, Okla., which Chesapeake Energy lists as a subsidiary on its Web site.

“It’s only going to get worse with all these gas companies coming in,” Stipcak said.

Police said they investigated the truck, which they said was parked illegally, at about 12:30 p.m. Tuesday and learned the truck’s oversize load was being transported with an invalid permit.

Police then weighed the truck and saw it exceeded the road’s 10-ton weight restriction by 83,208 pounds, or 41.6 tons, without a permit.

Police said they also learned of “numerous other permit violations” in the investigation. They did not provide a detailed list of the violations or the exact amount of the fines.

Parsons was arraigned before Magisterial District Judge Timothy Clark, who impounded the truck and its load. Parsons pleaded guilty to the violations, police said.

Heavy trucks can damage roads that weren’t built for heavy loads, Stipcak said.

“Take a look at some of the roads that these trucks are running on. They’re clumping and breaking up,” Stipcak said.

“With this last thaw we had, the roads are really starting to fall apart.”
LINK

DEMAND ACCOUNTABILITY!
Posted by SPLASHDOWN at 11:55 AM 0 comments
Labels: BRADFORD COUNTY, ROADS, VIOLATION
UPDATE on the Mysterious Death of 17 Cows in Caddo Parish, LA Last April

Chesapeake, Schlumberger receive penalty notices
By Vickie Welborn • vwelborn@gannett.com
shreveporttimes.com
January 28, 2010
KEITHVILLE — Chesapeake Energy Corp. and contractor Schlumberger Technology Corp. could be penalized in connection with an inquiry into the deaths April 28 of 17 cows that ingested liquid spilled from a natural gas well site in south Caddo.

While the investigation is incomplete, the state Department of Environmental Quality noted three violations, according to Assistant Secretary Peggy Hatch’s letter posted online.
· The companies caused or allowed a regulated solid waste to be deposited without a permit, violating state law. After reviewing and discussing the necropsy report, veterinarians said the cows did not die within the time frame suggested by information from Chesapeake and Schlumberger.
So the spilled material, which includes a proprietary blend of non-hazardous materials used for well fracturing, had been on the ground long enough to constitute solid waste disposal, DEQ alleges.

· The companies failed to promptly notify the state Public Safety Department’s 24-hour hazardous materials hotline of an unauthorized discharge that caused an emergency.
· And the companies failed to submit a written report about the unauthorized discharge to DEQ within seven days as law requires. The report was submitted June 16.
The penalty notices require Chesapeake and Schlumberger to submit annual gross revenue statements and a statement of monetary benefits of noncompliance for each violation. If no monetary benefits were gained, the assertion must be justified, Hatch says in the letter.

DEQ may seek civil penalties and compliance for each violation. “We can’t really determine right now what that would be,” spokesman Tim Beckstron said Wednesday. “It’s decided on a case-by-case basis “» and each scenario is different.”

DEQ issued the notices Jan. 15 and mailed them Jan. 19. Each company has 10 days to request a meeting with DEQ or submit comments prior to enforcement action. The timeline starts once the certified letters are received, Beckstron said. “We’ve not gotten a return receipt yet.”

Chesapeake, which has received the letter, is deferring comment until it can review the notice in detail and meet with DEQ, Kevin McCotter, the company’s senior director of corporate development in Louisiana, says in an e-mail to The Times.

The cows died in a pasture Cecil and Tyler Williams own in Spring Ridge. Schlumberger was performing routine fracturing operations for well owner Chesapeake when some of the fluid leaked from the well pad then into the pasture after a rain.

Elevated chlorides, a salt, as well as oil and grease and some organic compounds were detected in the liquid.

A preliminary necropsy report by the Louisiana Animal Disease Medical Laboratory at LSU in Baton Rouge is among documents in DEQ’s public records database. The report does not determine the cause of death and notes a toxicology report was pending.

The report states the one cow tested suffered from severe pulmonary hemorrhage and edema. Witnesses to the cows’ deaths described them as bellowing and bleeding before falling over dead.

Earlier this month, DEQ spokesman Rodney Mallet said an in-house toxicologist reviewed the necropsy report, and a third veterinarian was to be brought in to verify the results.

A Jan. 12 letter from Christine B. Navarre, an LSU AgCenter veterinarian, informs DEQ environmental scientist Wayne R. Slater that she studied the information included in a report Dec. 2 from Dr. June Sutherlin. “Dr. Sutherlin’s report is very thorough and I concur with her observations,” the letter states.

LINK.

DEMAND ACCOUNTABILITY!

Posted by SPLASHDOWN at 1:14 AM 0 comments
Labels: CHESAPEAKE ENERGY, CONTAMINATION, DEATH, SCHLUMBERGER
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FYI – From the 1/28/2010 Splashdown blog.
Dave

Thursday, January 28, 2010
12:45 p.m. Update:

Chesapeake denies its well exploded
RON HOSIE
the dailyreview.com
Published: January 28, 2010
The incident involving a Chesapeake Energy natural gas well this morning in Tuscarora Township [in Bradford Co., PA] was not an explosion, a company spokesman said early this afternoon.

Brian Grove, Chesapeake’s director of corporate development in Towanda, in a prepared statement, described what happened as “a brief but forceful uplift of tubing.” He specifically denied that the phenomenon was an explosion.

Three employees of a contract company were transported to a hospital, he said, but none had critical injuiries.

“There was no release of any materials that could be harmful to the environment and the situation presents no danger to the public. This is all the information that is available at this time,” Grove said in the statement.

According to transmissions over Wyoming County 911 communications at the time of the incident, an explosion took place at the Mowry well site of Chesapeake Energy on Clapper Hill in Tuscarora Township.

One person was thrown in the air 30 feet, and suffered back pain and injuries to his wrist and another individual sustained back pain, according to preliminary reports.

Emergency crews were called out, according to the scanner transmission, but there was no visible fire. Laceyville Fire Chief Scott Fisher refused to comment at mid-morning, saying he wouild need to finish his report first.

Jim Vajda, Bradford County’s Emergency Management Agency director was reported on the scene and unavailable for immediate comment.
LINK

DEMAND ACCOUNTABILITY!
Posted by SPLASHDOWN at 8:18 PM 0 comments
Labels: CHESAPEAKE ENERGY, EXPLOSIONS
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FYI – From the 1/29/2010 FOX 40 News.
Dave

Gas Drilling Occurrence Not an Explosion

The gas drilling incident in Bradford County yesterday was not an explosion, according to the Chesapeake Energy Corporation.

It occurred at a rig similar to this one.

Officials say there was a sudden uplift of tubing that injured two workers.

New York State has not okay-ed natural gas drilling into the Marcellus Shale yet, but local safety officials are already preparing for possible accidents.

“If you were to have an explosion or a fire at a gas drilling site, which they’ve actually had some. Those have occurred in New York State in other areas with vertical drilling as recently as the last couple of years.” said Broome Co. Dir. of Emergency Services Brett Chellis.

The Chesapeake Energy Corporation told us they do not know what caused the quote “brief but forceful” uplift of tubing, other than equipment failure.

Chesapeake says one of the workers sent to the hospital was released yesterday.

The other was kept over night for observation.

The company says a third minor injury was not directly related to the incident.

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FYI – From the 1/29/2010 Wall Street Journal.
Dave

JANUARY 29, 2010, 7:02 P.M. ET
Latest Risk to Alaska Gas Pipeline: More Gas

As the Long-Discussed Energy Project Finally Advances, Discoveries of Fields Outside the State Threaten Chances

By BEN CASSELMAN

The discovery of huge new natural-gas fields across the contiguous U.S. is threatening Alaska’s plans for a pipeline to export gas to the lower 48 states.

Two rival consortiums, each backed by major energy companies, are competing to build the pipeline, designed to carry gas from Alaska’s North Slope to continental markets.

But even as the project is poised to get off the ground after decades of discussion, its viability is being called into question as energy companies have found huge new supplies of natural gas locked in dense rocks known as shale in places such as Texas, Louisiana and Pennsylvania.

Those supplies are glutting the market and driving down prices, leading many experts to question whether a pipeline from Alaska is needed or could turn a profit for its backers.

Still, on Friday, one of the two contenders, backed by energy giant Exxon Mobil Corp. and pipeline company TransCanada, formally asked federal regulators for permission to begin accepting bids from gas producers for space on the pipeline, which would carry as much as 4.5 billion cubic feet of gas a day.

“This filing is an important milestone for the project and Alaska,” said Tony Palmer, TransCanada’s vice president in charge of the project. Mr. Palmer said he believed there is “no lack of demand” for the gas in the contiguous U.S.

The rival project, a joint venture of oil and gas producers BP PLC and ConocoPhillips, plans this spring to announce details of its own plans and begin its own bidding process. The project would stretch as much as 2,000 miles from Alaska and would cost an estimated $30 billion.

Mr. Palmer said TransCanada is considering two versions of the project, one of which would pipe gas through Canada and cost up to $41 billion, and another that would pipe the gas a shorter distance to Alaska’s southern coast, where it could be transported by ship. That option would cost up to $26 billion. Either would be complete in 2020.

Supporters argue the pipeline, first proposed in the 1970s, would help stabilize U.S. natural-gas prices, reduce dependence on foreign sources of energy and provide revenue and jobs for Alaska.

Former Gov. Sarah Palin, who in 2008 signed a bill providing state support for the project, touted the pipeline during her vice presidential campaign as a potential solution to the nation’s energy needs.

But that was before the success of shale drilling was widely recognized. The industry and many outside experts now believe the U.S. has a century’s supply of gas.

“I just don’t think that people appreciate even still the magnitude of gas volumes that are possible in the lower 48,” said Porter Bennett, CEO of Bentek Energy, a consulting firm.

The bidding process, in which gas producers can make offers to secure space on the pipeline, could help determine whether there is enough demand for the pipeline to move forward. Backers of both projects are playing down expectations. They say they are worried that producers won’t make the firm offers necessary to secure financing for the project.

“We are concerned that the bids may be heavily conditioned to address risks that are outside of our control,” said David MacDowell, a spokesman for the Conoco-BP project.

The surge in lower-48 production isn’t the only factor calling the project into question. Producers also are concerned about cost overruns, possible increases in Alaska’s energy tax and other variables.

Most of those challenges have been known for years. The impact of shale drilling, however, became clear only recently. It has been so rapid that a planned natural-gas import terminal in British Columbia last year announced plans to export gas to Asia instead.

Not everyone thinks the U.S. gas glut has put the project in jeopardy. Alaska’s vast gas resources are relatively cheap to produce. Ed Kelly, a gas analyst for the energy consulting firm Wood Mackenzie, said the U.S. gas market could shift significantly in the time needed to build the pipeline. “It’s not competing with shale gas now. It’s competing with shale gas 10 to 15 years from now,” he said.

The uncertainty is making many Alaskans nervous. The state depends on revenue from the oil industry to fund nearly 90% of its budget, but oil production has been declining steadily for 20 years as giant fields such as Prudhoe Bay begin to dry up. State officials hope natural gas could help fill that void, but only if a pipeline gives producers a way to get that gas to market.

But Kurt Gibson, deputy director of the Alaska Division of Oil and Gas, said he is still confident the project will happen. “It’s an important component to our state’s economic future.”

Others are less certain. State Rep. Craig Johnson, a Republican who co-chairs the House of Representatives’ Resources Committee, said repeated delays had put the whole project in jeopardy.

“I think we’ve probably cost ourselves a few years, which allowed the shale plays to come in,” Rep. Johnson said. “We should’ve built this pipeline four years ago.”

Write to Ben Casselman at ben.casselman@wsj.com

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FYI – From the 1/29/2010 KDKA
Dave

Jan 29, 2010 6:14 pm US/Eastern
Pa. Police Catch Truck 41 Tons Over Weight Limit
TOWANDA, Pa. (AP) ― Police in northern Pennsylvania say they discovered a natural gas well-drilling service truck that was more than 41 tons over the weight limit for the road it was on.

Cpl. Roger Stipcak said it is the latest of numerous examples of state troopers finding overweight natural gas trucks inflicting damage on area roads.

Drilling crews are flocking to Pennsylvania as they rush to extract natural gas from the potentially lucrative Marcellus Shale formation.

Police say they found the truck Tuesday. It was parked illegally and without a valid permit for its oversize load on a Bradford County road posted with a 10-ton weight limit.

It is owned by a subsidiary of Chesapeake Energy Corp. of Oklahoma City. The driver drew traffic citations worth more than $25,000.

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FYI – From the 1/29/2010 Dallas Morning News blog.
Dave

Lantana: Town hall meeting draws a crowd

4:10 PM Fri, Jan 29, 2010 | Permalink
Wendy Hundley/Reporter Bio | E-mail | News tips
The Denton Record-Chronicle covered last night’s meeting with public officials about gas drilling proposals. Here’s the story:

07:13 AM CST on Friday, January 29, 2010
By Lowell Brown / Staff Writer

LANTANA — More than 200 area residents packed a middle school gymnasium here Thursday night for a wide-ranging meeting on gas drilling operations.

The gathering was called in light of public anger over plans to build natural gas compressors and a commercial disposal well inside a rural neighborhood near Argyle, and neighbors used an hour-long open house to discuss the plans with representatives of the companies behind them.

State regulators and environmental officials used the ensuing town hall meeting as a platform to offer detailed explanations of their rules and permitting processes. They also updated residents on several high-profile issues related to gas drilling, including a state air quality study released Wednesday and an ongoing cancer cluster investigation in Flower Mound.

A panel of a dozen state officials spent two hours presenting slide presentations on various issues, putting off questions from the audience until about a half-hour after the meeting’s scheduled end time. When residents finally got the floor at about 9 p.m., panelists couldn’t answer some questions, including whether asthma rates are worse in counties with high drilling activity and whether cities have the authority to mandate wastewater recycling at drilling sites.

Recycling of oil and gas production waste can greatly reduce the need for disposal wells like the one planned for a 7-acre property near the corner of Frenchtown and Jeter roads southeast of Argyle. Four natural gas compressors — used to maintain pressure in pipelines as the gas is transported to market — are planned for the same property to serve about 20 gas wells in the Argyle area, said Kelly Swan, a spokesman for Tulsa, Okla.-based Williams Production Co., which owns the site and is planning the compressor facility.

Q&A comes late

After residents heard presentations from the Texas Railroad Commission, Texas Commission on Environmental Quality and Texas Department of State Health Services, questions continued until 11:30 p.m.

In the final half hour, some residents asked which state officials had rule-making authority over the proposed wastewater pipelines. Williams has told local public officials that they plan to collect wastewater at centralized facilities and then pump it to the injection site. State officials said no one had rule-making authority over those pipelines.

No one from the railroad commission’s pipeline safety division would inspect the wastewater lines, but the commission’s oil and gas division would come out if the line failed and a clean-up was required. Glen Rose-based Bosque Disposal Systems LLC, an independent operator, is planning the disposal well.

Both projects have attracted heavy opposition from neighbors and some government officials who worry about the potential for truck traffic and pollution of the air and underground water supplies. Denton County Commissioner Andy Eads and state Rep. Tan Parker called the meeting in light of those concerns.

State agencies will have to approve permits for the disposal well and compressor projects before they can move forward, officials said at the meeting.

Flower Mound resident Debi Friedlander said she came to get more information about gas drilling. She left early, but satisfied.

“[Knowing] the protections that the state agencies have in place, I feel much more comfortable,” Friedlander said.

Those who stayed later expressed skepticism about the state’s ability to protect the public.

Flower Mound resident Sue Ann Lorig questioned the state’s ability to inspect gas facilities often enough to spot problems that cause pollution.

“That’s my concern — that we have at least maybe 100 wells just in little Flower Mound,” Lorig said. “And if they’re not even being checked but maybe every three years and … [a problem] is not being found, that I find very, very frightening.”

The state inspects wells on a priority system because it lacks the manpower to inspect each well “as often as we’d like,” said Gil Bujano, an official with the Texas Railroad Commission.

Bujano also declined to offer assurances to an Argyle resident who asked whether earthquakes could create cracks that allow wastewater injected underground to creep into drinking water wells.

“There are faults throughout the state, so there is no surety,” he said.

When companies extract oil and gas from deep in the ground, they also get brine as a natural byproduct. It’s essentially salt water, but it can contain toxic metals and radioactive substances, according to the Environmental Protection Agency.

Oil- and gas-producing states require operators to inject the fluids back underground to minimize the risk to soil, lakes and streams. They can also recycle it, although some industry officials say the technology is still too expensive. Operators also sometimes inject brine into gas wells to re-establish pressure and allow more production.

State regulators and oil and gas industry representatives say the wells are safe and highly regulated. The state requires several layers of casing to lower the risk of leaks, including a concrete-encased steel pipe that extends from the ground to below the deepest level of drinkable groundwater, according to the railroad commission.

Officials with Williams and Bosque have said the public would benefit from centralized locations for gas compression and wastewater disposal, for aesthetic and practical reasons. For example, Bosque plans to send wastewater to the disposal well through underground pipes, limiting the need for gas drillers to haul it by truck on public roads to other disposal sites, the company’s president has said.

On Tuesday, the Argyle Town Council approved a resolution opposing the disposal well, joining a list of opponents that includes neighboring landowners; Dallas-based energy company Gulftex Operating Inc., which is drilling gas wells in the area; and the Argyle and Bartonville water supply corporations, which rely heavily on groundwater supplies to serve their combined 11,000 customers.

The town hall meeting also touched on a Texas Commission on Environmental Quality report released Wednesday that said inspectors found elevated levels of benzene at nearly one-fourth of natural gas facilities they sampled last year, including at Devon and Crosstex compression facilities in the Denton County town of Justin. Earlier independent testing in Dish, another Denton County town with gas compression facilities, found several carcinogens and neurotoxins at levels that exceeded state limits.

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FYI – From the 1/29/2010 UPI.com
Dave

Canada can’t keep up with drilling surge

Published: Jan. 29, 2010 at 4:16 PM
CALGARY, Alberta, Jan. 29 (UPI) — Amid a promising forecast for Canada’s 2010 oil and natural gas drilling activity, the sector is facing an unexpected labor crunch.

“We’re turning jobs down that we have equipment for because we can’t hire qualified people,” Duane Mather, president of Nabors Canada, one of the country’s largest drilling companies, told the Globe and Mail.

Mather said the company has had to refuse six jobs in the last 10 days because it can’t staff its rigs.

In 2009 Canada drilled a total of 8,450 wells. That compares with the 2006 peak of 22,127 wells drilled.

Nabors had to slash its workforce to 1,200 from about 3,500 as a result of the recession.

“We’ve called back everybody that we laid off, and the door is wide open. The advertising is going on in every place we ever hired people during those boom times,” Mather said.

But Nabors cannot promise work beyond the winter drilling season, which continues for only the next six to eight weeks. Typically, the first quarter is the busiest quarter for drilling. Most drillers expect 200 to 250 days of work annually in order to leave jobs they may have found after the oil price crash.

The Petroleum Services Association of Canada, in the first update to its 2010 drilling activity forecast released this week, expects a total of 9,000 new wells will be drilled across Canada this year. That’s an increase of 12 percent — or 1,000 wells — from its original forecast. All of the new wells added to the list are to be drilled in Alberta.

“Hopefully this means we’re coming out of the doldrums we’ve been in for the better part of 18 months,” said PSAC President Roger Soucy, reports Calgary’s CHQR-AM radio.

While Soucy says he’s optimistic about the future, the industry still has a long way to go and “it will be quite some time before we see levels of activity seen between 2005-7, if ever again,” he said.

BMO Capital Markets analyst Michael Mazar is even more optimistic, with his forecast of 10,675 wells for this year. He believes 2010 is the year the industry will start to “turn the corner” on a recovery.

Three years ago, it took an average of 6.5 to seven days to drill a well. Now deeper and more sophisticated wells have raised the average to 11, which means fewer wells are producing more drilling days, and more revenue, for service companies.

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FYI – From the 1/29/2010 Transworld News.
Dave

Newfield Exploration Company to Webcast their Presentations at Several Future Events

Ft Lauderdale, Florida 1/29/2010 09:10 PM GMT (TransWorldNews)

Newfield Exploration Company (NYSE: NFX) will give a presentation at several upcoming events. The company will be webcasting their presentations at the events through its website, www.newfield.com.

The first event that the company is scheduled to present at is the 2010 Energy Summit hosted by Credit Suisse. Newfield has been scheduled to give their presentation at the Energy Summit on February 2nd at 9:25am (MST).

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The latter conference is the Institutional Investors Conference which is being hosted by Raymond James. At this event, which is being held on March 9, 2010, the company is scheduled to present at 7:30am (EST).

Newfield Exploration Company is an independent crude oil and natural gas exploration and production company. The Company relies on a proven growth strategy of growing reserves through an active drilling program and select acquisitions.

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FYI – From the 1/29/2010 Grist
Dave

Shall we Sundance?

The best green films at Sundance 1

29 Jan 2010 1:30 PM
by Donald Carr
The Sundance Film Festival has long been a celebrated venue for environmental documentaries, due in part to Sundance founder Robert Redford‘s green sensibilities. An Inconvenient Truth, The Cove, and Who Killed the Electric Car? all attracted critical buzz at Sundance before they made their way into theaters around the country. The festival’s 2010 lineup continues this trend with a handful of well-crafted, compelling films that address crucial environmental themes not yet in the public consciousness.

Gasland

Avant garde filmmaker Josh Fox grew up in Pennsylvania on a pastoral stretch of the Delaware River, which happens to sit on the natural gas-rich Marcellus shale formation. When he got a $100,000 offer to lease his property for natural-gas exploration, Fox felt compelled to chronicle the impact that the natural gas-extraction process known as hydraulic fracturing has had on the American landscape.

Gasland begins by deftly explaining the complicated practice of hydrofracking, which involves injecting toxic chemicals into the ground—often not far from drinking-water sources—to force natural gas to the surface. This allows the film’s central theme to emerge: that average Americans are under siege from toxic water and air contamination while cavalier energy executives brush aside their concerns.

With his untraditional filmmaking background, Fox elevates the often-dry conventions of environmental documentaries into a persuasive, mood-driven piece. But this is no art film. Fox travels across 25 states, including the drill-punctured lands of Colorado and Texas, to document the debilitating health effects endured by people who have had the misfortune of living near natural-gas wells.

Gasland‘s subjects aren’t crunchy types ensconced in eco-conscious enclaves like Boulder. Most are rural families and ranchers who could easily have cast a McCain vote in the last election. Yet they seethe at an unsympathetic natural-gas industry that clings to the eroding notion that its product is safe and environmentally friendly, and that fights tooth and nail to protect its Bush-era exemption from the Safe Drinking Water Act.

And then there’s the flammable tap water. In one home after another, Fox and his subjects put lighters to faucets to show how sloppy drilling has let gas leak directly into drinking water. The pyrotechnic parlor trick is good cinema; combined with images of endless parades of heavy trucks to and from drill sites, it makes the visually quantifiable point that the natural-gas industry has engaged in a rabid, decade-long expansion without much thought to the consequences.

Fox is hopeful that a distribution deal is imminent for Gasland. Robert Koehler’s swooning review in Variety—which says Gasland is so “potent” that it could be the rare film that forces social change—could help make studio distribution a reality. At Monday night’s screening at Sundance, Fox was greeted by a roaring crowd and choked-up audience members during the Q&A session. If that’s any indication, the future of Gasland is as bright as flaming tap water.

See the flammable tap water:

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Climate Refugees

Director Michael Nash’s alarming documentary, which details the impact that a billion humans displaced by climate change will have on global security, should goose even the most fervent climate deniers into reconsidering their positions. Nash uses lush cinematography and first-person accounts to chronicle hellish experiences of displacement caused by increasingly severe weather-related events like the ones expected to be triggered by global warming.

Climate Refugees begins with the tiny sliver of Polynesian islands that make up the country of Tuvalu. Tuvalu is expected to be the first sovereign nation to become a casualty of rising sea levels. This raises a central question of the film: What happens to the political identity of people when their country no longer exists? In a world of tightly controlled national borders, climate refugees have many more barriers to relocation than political refugees.

And what will happen when larger groups, in the hundreds of thousands or even millions, are displaced and have no country in which to relocate? Will they pour over borders and destabilize already shaky governments in Asia and the South Pacific?

When the film pivots from the recent Bangladesh cyclone to the U.S. disasters of Hurricanes Katrina and Ike, it makes the point that America is also in deep danger from displaced refugees. Crime rates have spiked in towns and cities where Katrina survivors relocated. Viewed in the context of tens of millions of refugees potentially rushing our border from the South, our current immigration problems seem trivial.

The film alternates between heart-wrenching accounts of survivors of climate disasters all over the globe and interviews with leading environmental experts such as Lester Brown. Political leaders like Sen. John Kerry and former House Speaker Newt Gingrich also provide insight and commentary, with Gingrich saying he became concerned about climate change in part because the U.S. military has warned that the phenomenon threatens to become a serious destabilizing force around the world.

Climate Refugees doesn’t address the causes of climate change, opting not to get bogged down in that distracting debate. But Nash makes a frightening point near the end of the film. If climate change is human-made, we have a chance to head off the global threat of climate refugees. If it’s naturally occurring, we’re screwed.

Watch the trailer:

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Born Sweet

Oscar winner Cynthia Wade’s short film Born Sweet follows Vinh Voeurn, a 15-year-old Cambodian boy suffering from arsenic poisoning. Arsenic occurs naturally in Cambodia’s volcanic soil and has been poisoning Vinh’s village water supply for years, recently causing the death of a young neighbor girl. The arsenic is permanently in Vinh’s system, leaving him anemic and with ugly dark spots on his body. Yet in this moving but hopeful short, Vinh comes to terms with his illness and potential mortality, all while nursing the normal teenage hope of meeting a girl.

In Vinh’s village, the main source of entertainment is singing along with Cambodian karaoke music videos, and Vinh dreams of escaping his desperate future with a career as a karaoke performer. When aid workers connect Vinh with karaoke video producers in order to make an arsenic PSA, his life changes in a way he and his family could never have imagined.

Watch the trailer.

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And two more worth a mention: Mark Lewis introduced a 3-D update of his 1988 comedy/documentary about the misguided introduction of amphibians into Australia, called Cane Toads: The Conquest. And Wasteland, a film by Lucy Walker, shows how Brazilian artists use found objects, in this case from vast garbage landfills, to make inspired creations.

Comments
Donald Carr is a press secretary for the Washington, D.C.-based Environmental Working Group. He also writes about music and film for the Washington City Paper and is the author of Psaurian: A Novel of Semi-Intelligent Design.

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FYI – From the 1/29/2010 WJAC TV
Dave

More Inspectors, Safer Gas Well Rules In Pa. Plans

Posted: 2:55 pm EST January 29, 2010

HARRISBURG, Pa. — Gov. Ed Rendell said his administration is taking new steps to ensure public safety is being protected amid a rush to drill for natural gas beneath Pennsylvania.
Rendell said Thursday his administration is hiring more inspectors to monitor a growing number of well sites and writing tougher rules to prevent gas from leaking into nearby homes and water wells.
In the last three years, dozens of gas companies have flocked to Pennsylvania in hopes of tapping into the huge Marcellus Shale gas formation.
An industry group, the Marcellus Shale Coalition, said it supports the state’s moves.
The 68 new inspectors would be paid for by fees for drilling permits. The proposed new rules would require companies to inspect wells more often and restore water supplies polluted by drilling.
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FYI – From the 1/29/2010 Las Cruces Sun-News (NM)
Dave

Bob Gallagher out as shakeup hits NM oil and gas industry (12:50 p.m.)

By Susan Montoya Bryan / The Associated Press
Posted: 01/29/2010 12:45:42 PM MST

ALBUQUERQUE – The New Mexico Oil and Gas Association is parting ways with its longtime president, Bob Gallagher.
Gallagher says the board informed him it wanted to move in a different direction, and that means he will be relieved of his duties.

Gallagher says his attorney and the board are working on the terms of his departure from the industry trade group where has worked for more than a decade.

The chairman of the association’s board, Leland Gould, declined to comment on Gallagher’s situation, saying it was a personnel matter.

Gallagher has been a vocal supporter of the oil and natural gas industry in New Mexico. That has often pitted him against the Richardson administration and its policies for tightening oversight of oil and gas development.

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FYI – From the 1/29/2010 Oil & Gas Journal.
Dave

US land drilling continues to make gains

Jan 29, 2010
By OGJ editors
HOUSTON, Jan. 29 — US drilling activity climbed for the fifth consecutive week, up by 35 rotary rigs to 1,317 working, compared with 1,472 working rigs in the same period last year, Baker Hughes Inc. reported.

The entire week’s increase was in land operations, which were up 35 units with 1,261 rigs drilling. Inland waters was unchanged at 14 rigs. US offshore also remained unchanged at 41 units in the Gulf of Mexico and a total 42 rigs in US waters.

Of the US rigs working, 861 were drilling for natural gas, an increase of 28 from last week. The number of rigs drilling for oil rose by 7 units to 444. There were 12 rotary rigs unclassified. Horizontal drilling increased by 20 units to 647. Directional drilling gained 8 to 226.

Texas had the largest increase among major producing states, up 10 rigs to 538 working. Oklahoma increased 7 rigs to 112. Pennsylvania jumped by 6 units to 70. North Dakota was up 3 to 75. Alaska and Louisiana were both up 2 units to 9 and 197, respectively. Up 1 unit each were Arkansas, Colorado, and New Mexico with counts of 40, 47, and 53, respectively. California, with 24, and Wyoming, with 37, were both unchanged from last week. West Virginia lost 1 unit to 25.

Canada’s rotary rig count increased by 36 to 531 units working this week, up from 432 a year ago.

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FYI – From the 1/29/2010 Reuters UK.
Dave

U.S. natural gas rig count hits 10-1/2 mth high

Fri Jan 29, 2010 6:26pm GMT
NEW YORK, Jan 29 (Reuters) – The number of rigs drilling for natural gas in the United States jumped 28 this week to a 10-1/2 month high of 861, according to a report on Friday by oil services firm Baker Hughes in Houston.

The latest gas rig count is the highest since March 13, 2009, when there were 884 gas rigs operating.

The U.S. natural gas drilling rig count has rebounded nearly 30 percent after bottoming at 665 on July 17, its lowest level since May 3, 2002, when there were 640 active gas rigs.

But the rig count is still well off its recent peak above 1,600 in September 2008, and still stands at 289 rigs, or 25 percent, below the same week last year.

Many gas producers had scaled back drilling operations earlier this year with credit tight and natural gas cash prices sinking this summer to about $2 per million British thermal units (mmBtu), a 7-1/2 year low and down some 85 percent from July 2008 highs above $13.

But cash gas prices have more than doubled since hitting their late summer lows, hovering in the $5.25 area this week, a level high enough to encourage more onshore drilling, particularly in some of the prolific shale basins.

While drilling is still down over the past year or so, traders noted production has not slowed that much, with recent government data estimating that January marketed gas output will be about 2.3 percent lower than in January 2009.

Some traders said rig cuts eventually may be necessary to balance the market unless demand, particularly from the industrial sector, starts to recover with the economy, but few expected to see any steady rig declines with cash prices at current levels. (Reporting by Joe Silha; Editing by Lisa Shumaker)

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FYI – From the 1/29/2010 UPI.com
Dave

Shale gas could redefine energy, BP says

Published: Jan. 29, 2010 at 1:09 PM
DAVOS, Switzerland, Jan. 29 (UPI) — Extracting natural gas from shale rocks could redefine the energy sector in the United States during the next century, oil executives said in Switzerland.

U.S. companies have pioneered a method known as hydraulic fracturing to extract natural gas from shale rocks and coal seams. The technology uses water, sand and chemicals to break up rock formations to gain access to natural gas.

Environmental activists complain the amount of water needed for the extraction and subsequent drilling pollutes the ground water.

But energy executives and analysts said the unconventional extraction method could redefine the dynamics of the global energy sector, London’s Guardian newspaper reports.

Andrew Neff, an analyst at HIS Global Insight, said shale gas could undermine the global significance of major energy giants like Russian gas monopoly Gazprom.

British supermajor BP, meanwhile, moved into the U.S. shale market when it took control of Amoco in 1989, expanding its portfolio with a $1.75 billion stake in U.S. gas company Chesapeake Energy in 2008.

Tony Hayward, the chief executive at BP, said shale gas could bring about a sea change in the U.S. energy sector that could potentially percolate across the world.

“It probably transforms the U.S. energy outlook for the next 100 years,” he said at the World Economic Forum. “It’s yet to be seen if it can be applied globally.”

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FYI – From the 1/29/2010 News 10 Now.
Dave

01/29/2010 12:34 PM
Pennsylvania to hire more drilling inspectors
By: Web Staff
PENNSYLVANIA — As interest grows in natural gas drilling in Pennsylvania’s Marcellus shale Governor Edward Rendell is working to make sure it doesn’t have a negative impact on people living in the area or the environment.
Governor Rendell says the gas industry plans to apply for about 5,200 drilling permits for the Marcellus shale this year, nearly three times the amount of permits issued last year.

So the governor has directed the state Department of Environmental Protection to hire 68 more people to help monitor drilling activity. Money for the new employees will come from permit fees.

The DEP will also strengthen gas and oil regulations in efforts to prevent leaks that could affect the public or water quality.
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FYI – From the 1/29/2010 Reuters UK.
Dave

Nov natgas output climbs in lower 48 U.S. states

Fri Jan 29, 2010 5:42pm GMT
NEW YORK, Jan 29 (Reuters) – Gross natural gas production in November in the lower 48 U.S. states rose 0.2 percent from October, according to data released Friday by the U.S. Energy Information Administration.

In its monthly Natural Gas Gross Production Report, EIA said lower 48 “wet” gas output climbed to 63.13 billion cubic feet per day in November, up 0.14 bcf per day from upwardly revised October output of 62.99 bcf daily.

Despite steep declines in drilling activity earlier this year, gas production has been holding at fairly high levels.

Louisiana production was up 5.1 percent for the month, its 11th straight gain due to strong Haynesville shale output.

EIA also cited strong gains from Fayetteville shale production in Arkansas, which falls in the “other states” category in EIA’s table.

Wyoming gas output saw a second straight increase, rising 3.5 percent for the month, partly due to higher gas prices.

Production in the Gulf of Mexico fell 5 percent as Tropical Storm Ida and some maintenance and repair work slowed output.

Lower 48 gross production was up 0.68 bcf per day, or 1 percent, from November 2008, when output was still slowed by the impact from two hurricanes.

For the United States including Alaska, gross gas production in November rose 1 percent to 72.70 bcf per day versus upwardly revised production of 71.97 bcf daily in October.

Gross withdrawals are converted to marketed natural gas production by subtracting gas used for repressuring, quantities vented and flared, and nonhydrocarbon gases removed in treating or processing operations. (Reporting by Joe Silha; Editing by Lisa Shumaker)

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FYI – Editorial from the 1/29/2010 iStock Analyst.
Dave

EDITORIAL: Drilling down
Friday, January 29, 2010 11:53 AM
(Source: Akron Beacon Journal (Akron, Ohio))By The Akron Beacon Journal, Ohio
Jan. 29–An industry-friendly Senate bill revamping regulations on oil and gas well drilling is getting close scrutiny from the Ohio House Agriculture and Natural Resources Committee. Thankfully, the panel, chaired by John Domenick, is willing to listen to the concerns of suburban residents from Northeast Ohio who argue the rules don’t go far enough to protect their safety and property values. Domenick, a Smithfield Democrat, too, feels the Senate approach leaves much to be desired.

Things got out of whack in 2004, when the state Department of Natural Resources gained sole regulatory authority over oil and gas wells, obliterating local control. That left suburban residents like Dan and Denise Tonelli of Stow fuming when faced with the prospect of a well within 130 feet of their house. While the Senate bill would increase fee, insurance and oversight requirements, it would expand setback requirements from 100 feet to just 150 feet. Domenick is rightly considering an expansion to 300 feet.

Mandatory pooling, the practice of forcing property owners like the Tonellis into a group large enough to form an area sufficient for drilling, is also on the House agenda. Practically speaking, the Senate bill would not curtail mandatory pooling, allowing drillers much flexibility in forming pools.

An alternative Senate bill, offered by Sen. Tim Grendell, a Chesterland Republican, presents a better approach, balancing the interests of the oil and gas industry against those of residential property owners. Grendell would bring drillers under local zoning, increase setbacks to 1,000 feet and end mandatory pooling, among other necessary corrections.

Drilling what’s left of Ohio’s oil and gas reserves would have a marginal effect at best on the energy market. The Senate bill should be extensively reworked, along the lines suggested by Grendell. Far more care must be taken when placing a sometimes dangerous, potentially polluting industrial process in the middle of residential neighborhoods.

—–

To see more of the Akron Beacon Journal, or to subscribe to the newspaper, go to http://www.ohio.com.

Distributed by McClatchy-Tribune Information Services.

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FYI – From the 1/29/2010 Science Daily.
Dave

Natural Gas Supplies Could Be Augmented With Methane Hydrate

ScienceDaily (Jan. 29, 2010) — Naturally occurring methane hydrate may represent an enormous source of methane, the main component of natural gas, and could ultimately augment conventional natural gas supplies, says a new congressionally mandated report from the National Research Council. Although a number of challenges require attention before commercial production can be realized, no technical challenges have been identified as insurmountable.

Moreover, the U.S. Department of Energy’s Methane Hydrate Research and Development Program has made considerable progress in the past five years toward understanding and developing methane hydrate as a possible energy resource.

“DOE’s program and programs in the national and international research community provide increasing confidence from a technical standpoint that some commercial production of methane from methane hydrate could be achieved in the United States before 2025,” said Charles Paull, chair of the committee that wrote the report, and senior scientist, Monterey Bay Aquarium Research Institute in California. “With global energy demand projected to increase, unconventional resources such as methane hydrate become important to consider as part of the future U.S. energy portfolio and could help provide more energy security for the United States.”

Methane hydrate, a solid composed of methane and water, occurs in abundance on the world’s continental margins and in permafrost regions, such as in the Gulf of Mexico and Alaska’s North Slope. Although the total global volume of methane in methane hydrate is still debated, estimates yield s that are significant compared with the global supplies of conventional natural gas. The existence of such a large and untapped energy resource has provided a strong global incentive to determine how methane might be produced from methane hydrate safely, economically, and in an environmentally sensible way.

Some of the remaining challenges to production identified by the committee include developing the technology necessary to produce methane from methane hydrate and understanding methane hydrate’s potential to behave as a geohazard. For example, industry practice is to avoid methane-hydrate bearing areas during drilling for conventional oil and gas resources for safety reasons. However, avoidance will not be possible if methane hydrate is the production target. In addition, the committee recommended research and development areas for DOE’s program, such as designing production tests, appraising and mitigating environmental issues related to production, and determining with greater accuracy the methane hydrate resources on the Alaska North Slope and in marine reservoirs.

Report: Realizing the Energy Potential of Methane Hydrate for the United States

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FYI – From the 1/29/2010 New Mexico Business Weekly.
Dave

Friday, January 29, 2010
Oil output sweetens, natural gas stinks

New Mexico Business Weekly – by Kevin Robinson-Avila NMBW Staff

View Larger
New Mexico’s oil and gas industry is facing a very lopsided recovery.

A significant rebound in oil prices is generating a new boom in drilling and related activities in the Permian Basin in southeastern New Mexico. But natural gas prices remain too low and unstable to drive any short-term recovery in the San Juan Basin in the Northwest, said Bob Gallagher, president of the New Mexico Oil and Gas Association.

“Going forward, things are looking better for oil producers, but the situation is still pretty glum for natural gas production,” Gallagher said. “We’ve had about six months with oil prices consistently between the $70 and $85 mark, which is driving a lot more activity. But for the last 12 months, natural gas has been uncharacteristically low, and it remains stubborn to rebound.”

The industry slipped into crisis mode after oil and gas prices plummeted in 2008. Crude fell from a high of $147 per barrel to below $35 by early 2009. Natural gas prices fell from more than $6 per 1,000 cubic feet to below $3 per MCF.

The price declines led to a sharp drop in drilling activity across the state, Gallagher said.

“Producers drilled about 600 [fewer] wells last year compared to the year before prices fell,” Gallagher said. “We estimate that about $1.1 million of economic activity is generated by each new well drilled. That means more than $600 million in new economic activity was lost.”

The San Juan Basin was hit particularly hard. According to the San Juan Economic Development Service, the area’s 17 largest oil and gas companies laid off nearly 1,500 between fiscal year 2008 and 2009, representing a 30 percent drop in employment. San Juan County’s 8.9 percent unemployment rate is now the highest in the state.

This winter, gas prices climbed back to about $5.50 per MCF, but Gallagher said the price needs to reach $6.50 to $7 per MCF and remain there to spur recovery.

“There is no magic number, but we need consistent, higher natural gas prices for rigs to go back to work,” Gallagher said.

That’s unlikely in the short term, because new technologies to profitably extract natural gas from shale has generated a huge boom in gas production at major shale deposits in Texas, Louisiana and the Northeast. That, in turn, had caused a glut on the market, keeping prices depressed.

Jason Sandel, an executive vice president with Aztec Well Servicing in Farmington, said he doesn’t expect any significant rebound until late 2010 or early 2011, when the national economy recovers enough to generate more commercial and industrial demand for natural gas. Aztec’s work force dropped from more than 700 employees in 2008 to about 350 now.

“We’re operating at about 25 percent of capacity in our drilling services, and about 30 percent in our well-servicing activities,” Sandel said. “We’re a bit of a bellwether for the industry, because as drilling goes, so goes the remainder of activities in the field.”

Tom Mullins, co-owner of Synergy Operating LLC in Farmington and a past president of the Independent Petroleum Association of New Mexico, said his company is not currently drilling wells and, as yet, it has no plans to re-start.

“We’re waiting for prices to improve and the economy to rebound,” Mullins said.

In contrast, oil production in the Permian Basin is rapidly coming back.

“The rig count tripled in southeastern New Mexico in the past six months, thanks to the rise in oil prices,” Gallagher said. “I’m optimistic that prices will remain consistent and oil activity will continue to climb.”

State Oil Conservation Division Director Mark Fesmire said the state’s rig count reached 52 in late January, up from between 30 and 35 last year.

“We’re seeing a steady climb in the rig count as drilling comes back up in the Southeast,” Fesmire said.

Raye Miller of Artesia-based Marbob Energy Corp., said his company has gone from two rigs in mid-2008 to four now, and it will add another one in February.

“We’re very busy developing new wells,” Miller said. “We expect to have all our rigs contracted throughout the year.”

Still, even with higher prices, industry leaders say adverse environmental regulations could impede recovery in the Permian Basin and elsewhere. Businesses are particularly concerned about the cost of complying with new rules on oil-and-gas pits that the state imposed in 2008. And, government efforts to set state-level restrictions on greenhouse gas emissions could raise costs a whole lot more, said Ray Payne, Devon Energy Corp.’s vice president for drilling operations in the Western Region.

Payne said Devon could invest up to $200 million in Southeast New Mexico this year, but that depends on the regulatory environment (see related story).

“With the increase in oil prices, activity is starting to pick back up, but the regulatory environment remains a critical factor,” Payne said. “Our investment plans are tentative, pending an improvement in the cost structure related to state regulations.”

krobinson-avila@bizjournals.com | 505.348.8302

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FYI – From the 1/29/2010 New Mexico Business Weekly.
Dave

Friday, January 29, 2010
Industry: Blame state’s budget woes on regs

New Mexico Business Weekly – by Dennis Domrzalski NMBW Staff

Media

As state legislators in Santa Fe try to close a $500 million budget deficit, the state’s oil and gas industry has a message for them: Stop trying to kill the industry that has kept the state’s budget afloat.

Industry officials and some lawmakers are angry about regulations they say have made it more expensive to drill for oil and natural gas in New Mexico and that are driving the industry from the state.

That could have dire consequences for the state’s budget, which has relied heavily on oil and gas revenue, they say. In the past five years, for instance, the industry has poured $5 billion directly into the state’s general fund through severance taxes and royalties.

For the current fiscal year, oil and gas revenue accounts for nearly 15 percent of the general fund budget. That’s expected to rise to slightly more than 15 percent in FY11, according to the Legislative Finance Committee. In FY2008, oil and gas money made up more than 20 percent of the budget.

But the days of heavy reliance on the oil and gas industry could be changing because of those regulations – particularly a 2008 rule on oil and gas pits, and new efforts by the state to regulate greenhouse gas emissions. Although oil drilling activity is on the rise in southeastern New Mexico, San Juan County in the northwest is hurting.

“A year ago in Farmington, there were 21 rigs, now there are eight,” said Karin Foster, executive director of the Independent Petroleum Association of New Mexico. “Operators are making financial decisions not to operate in New Mexico.”

“The oil and gas industry is being run out of town in this state because of the regulatory environment,” said state Sen. Sue Wilson Beffort, R-Sandia Park. “We are in a dire financial situation and we are reaping what we have sown.”

Nevertheless, Oil Conservation Division Director Mark Fesmire said the plunge in fuel prices that occurred in late 2008 is responsible for depressed oil and gas production, not the state’s pit regulations.

According to drilling rig data compiled by Baker Hughes Inc. – a Houston-based petroleum industry service company that closely tracks rig activity in Western states – the rig count in New Mexico continued to grow after the new pit rules took effect in June 2008 (see media at right).

The number of active drilling rigs rose from 79 in mid-June to a peak of 97 by early September. The count remained above 90 for two more months, until early November 2009, and then began to decline as the bottom fell out of the oil and gas market, Fesmire said.

“Even with the pit rules, the industry continued to push the rig count up,” Fesmire said. “The drop in activity was the result of prices, not state regulations.”

Wilson, lawmakers and industry experts say that when taxes from businesses that support the oil and gas industry are calculated, the sector is directly and indirectly responsible for 40 percent or more of the general fund budget.

“Thirty percent of the general fund comes from oil and gas. That includes severance taxes, corporate income taxes and five other taxes we have to pay,” Foster said.

“Every time there’s a 10-cent increase in the price of natural gas, the state gets $13 million, and it gets $3 million for every $1 increase in the price of a barrel of oil.

“The feds pull down a billion dollars from royalties off federal land, and half of that comes back to the state and rolls into the general fund.”

State Sen. Bill Sharer, R-Farmington, said the oil and gas industry and the businesses that serve it account for more than 40 percent of the general fund’s revenues.

“We can tell you how much oil and gas produces in taxes, but when you add in the trucking companies, the rig companies, the compressor makers and the retail that serves all of them, you’re talking about 40 percent of the budget,” Sharer said.

“We’ve cut nearly $1 billion from the state budget in the past year and we’ll probably have to cut another $1 billion. That’s because there are fewer producers, and there are fewer producers because of insane regulations that have absolutely no scientific backing. Some of these rules were designed as punishment, and now schools in Farmington, Las Cruces and Albuquerque will suffer, and so will Medicaid recipients, and all because we have had regulators go nuts and try to kill the industry that has been paying our bills.”

Although there has been an increase in drilling in southeastern New Mexico, oil and gas revenues are down. The New Mexico State Land Office said it collected $186.3 million in oil and gas revenues in the first half of FY10. That’s half of last year’s mid-point earnings, the Land Office said.

Land Office revenues, 95 percent of which come from oil and gas drilling, support New Mexico’s public schools, seven universities and several other beneficiaries.

The good news is that bonuses collected by the Land Office, which are the amount that drillers pay above the minimum bid to drill on state land, are up and could reach the $60 million range this fiscal year. That would be a near record for bonuses, said Land Office spokeswoman Kristin Haase.

Sharer says the solution to the state’s budget deficit is to get regulators out of the way of the oil and gas industry.

“Two thousand people have lost their jobs or moved out of state because of the pit rules,” Sharer said. “We need some regulatory sanity. State regulators should not have the authority to bankrupt the state.”

dfdomrzalski@bizjournals.com | 505.348.8306

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FYI – Editorial from the 1/29/2010 Pottsville Republican & Herald.
Dave

Pottsville Republican & Herald: Even with tax, industry won’t run out of gas:
Pennsylvania’s burgeoning natural gas industry found enough sympathetic lawmakers in Harrisburg last year to ward off establishment of a “severance” tax on the extraction of gas.
Results of a recent auction for those leases invalidate the arguments against a severance tax.
According to the industry and lawmakers who opposed the tax, such a levy would inhibit growth of the nascent gas industry.
But the state now has nearly 1,000 working wells drawing gas from the Marcellus Shale formation. And the auction produced $128.5 million for the state, about twice the amount that had been projected by legislators.
Clearly, the gas rush is on. The quite reasonable tax proposed by Rendell last year, as a means to help cover a massive deficit, would not inhibit that rush.
State revenue results and projections indicate that another revenue shortfall looms. Over the last year the industry has answered any lingering questions about the viability of the gas fields. It’s time to use the fair tax to share the wealth from the commonwealth’s natural resource.
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FYI – From the 1/29/2010 News OK.
Dave

Oklahoma’s natural gas producers try to woo New York
Worries about water supply have slowed acceptance of industry

BY JAY F. MARKS Comments 0
Published: January 29, 2010
A lot of people are spending a lot of time and money touting natural gas as the solution to America’s energy problems, but the folks in New York state apparently haven’t gotten the message.

Tom Price Senior vice president for corporate development and government relations at Chesapeake Energy Corp.

Multimedia

Photoview all photos

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01/29/2010 Hydraulic fracturing is a well-established technique used in the oil field for more than 60 years, industry officials said. Devon Energy Corp. does not have…
Natural gas producers like Oklahoma City’s Chesapeake Energy Corp. have faced opposition from those who believe the industry’s exploration methods will endanger the state’s water supply.

“We have seen a lot of concern among environmental groups in New York and in particular the New York City area about the potential impact of hydraulic fracturing drilling on the watershed, which supplies water to New York City,” said Tom Price, Chesapeake’s senior vice president for corporate development and government relations.

New York state has enacted a moratorium on horizontal drilling, a key part of natural gas exploration, until regulators complete new standards expected to be among the strictest in the country.

Chesapeake has voluntarily halted plans to develop a 5,000 acre leasehold in the New York City area because of concerns about hydraulic fracturing, a process used to harvest oil and natural gas from shale formations. New York is part of the Marcellus shale play, one of the four largest such formations in the United States.

“Chesapeake and many others have been doing this kind of drilling safely, responsibly and in environmentally sensitive areas for decades,” Price said. “These folks are unfamiliar with the process and thus really afraid of the unknown.

“Rather than ask questions and seek solutions, they have made accusations and sought to scare people.”

Price said Chesapeake and other gas producers are working to allay those fears.

“Where we have engaged in discussion, demonstrated our technology and showed facts rooted in the science of drilling, we have been able to address people’s concerns,” he said. “The majority of people in New York have been open to drilling and really want it to occur, sooner rather than later, in the Marcellus shale.”

Chesapeake’s experience in other parts of the country is one of the selling points that company representatives are using in New York.

“We are working very hard to educate and inform New Yorkers about an industry that people in Oklahoma, Texas, Louisiana, Arkansas and elsewhere already know is a safe, responsible, job-creating economic development dynamo,” Price said.

“We operate with the highest standard of operational safety and care for the environment everywhere we operate, and developing the Marcellus shale in New York would be no different.”

Price said Chesapeake’s decision not to develop the New York watershed was only partly due to the controversy over hydraulic fracturing.

Chesapeake officials also believe the area does not have as much potential as other parts of the play.

“This was a business decision, not an environmental decision,” Price said.

Chesapeake holds leases on more than 1.5 million acres in the Marcellus, but the company isn’t sure what it has in New York.

“We have shown that we can safely drill anywhere, but until we can drill deep shale Marcellus wells the natural gas producing potential of the state cannot be known,” he said.

Read more: http://www.newsok.com/natural-gas-producers-try-to-woo-new-york/article/3435535?custom_click=lead_story_title#ixzz0e3N88JUX
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FYI – From the 1/29/2010 Local News 8.com (WY).
Dave

Enviro study on Shoshone Forest gas well delayed
Associated Press – January 29, 2010 7:45 AM ET

POWELL, Wyo. (AP) – An environmental assessment of drilling natural gas wells on the Shoshone National Forest in northern Wyoming has been pushed back.

Shoshone spokeswoman Susie Douglas says the assessment that was originally slated to be done last spring is not expected to be finished until this September.

Since the summer of 2008, U.S. Forest Service staff have been evaluating a proposal from Windsor Energy Group to drill a well just inside the Shoshone’s boundary, about seven miles northeast of Clark.

Windsor initially indicated it was hoping to begin drilling in summer 2009. But the completion of the environmental study was pushed back to fall 2009, then to this winter, and now to this fall.

Information from: Powell Tribune – Powell, http://www.powelltribune.com

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FYI – Letter to the Editor from the 1/29/2010 Daily Item.
Dave

Devastating drilling
January 29, 2010 06:20 am

— I am writing to point out some additional ideas that you failed to cover in your recent editorial on the drilling of natural gas in the Marcellus Shale formation of our state. You failed to mention the extent of leasing that has occurred on state forest lands. While the most recent leases were for around 33,000 acres, the state now has leased nearly one-third of the state forests for gas drilling. One is forced to ask when will enough be enough? This leasing has moved forward at such a rapid rate that no one has taken the time to ask what will be the consequences of all this on the health of the forest. How will all of this affect all of the forest users such as hunters, fishermen, backpackers, photographers, day hikers, bird watchers, leaf peepers, bikers and snowmobilers? Will the owners of the forest, the people of Pennsylvania, be able to enjoy their forest? Will all of the users of the forest be able to speak up loudly enough to be heard over the millions of dollars the industry is using to lobby the Legislature? The Republican Senate failed to pass a severance tax on the industry this past summer.
They said they were concerned about hurting the industry as it gets started in the state. This is hogwash. The prices paid for the recent leases puts to lie this argument.
These are big corporations worth hundreds of millions of dollars moving into our state.
They certainly can afford to pay the same tax they pay in every other gas producing state. The state must have this money to undo some of the negative effects of the drilling activity.
In your editorial you pointed out the number of jobs expected to be created in the state. Did you consider that most of the jobs on the drilling rigs, the most work intensive part of the process, are taken by men from places like Oklahoma and Texas? Do you have any idea how all this drilling activity will affect the recreation industry? Will it result in a loss of jobs here? Have you considered the price for the environmental damage that will be caused. Have you considered that most of the money from the state’s natural gas will leave the state? You pointed out that we must protect our environment and particularly our water from the drilling activity. We must also recognize that the cutting of our state forests for thousands of drilling pads, pipe lines, and other related activities can’t have anything but devastating effect on our forests.
We can’t allow the state Legislature to continue to cover their fiscal incompetence by the devastation of our forests.
Jack D. Miller,
Middleburg

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FYI – From the 1/29/2010 Financial Times.
Dave

Energy industry isn’t giving up on fossil fuels

January 29, 2010 11:01am
by Sheila McNulty
In further evidence that the energy industry is not about to let oil production peak, GE Energy Services is moving toward boosting oil and natural gas production from reservoirs unreachable with current technology, which begins to break down at the higher temperatures at greater depths. In 2008, GE Energy asked the US Department of Energy to support its program to develop high temperature electronics required for oilfield and geothermal drilling.

The DOE agreed to fund the program to enable deep well drilling applications for discovering hard-to-reach oil and gas reserves and toward the development of geothermal energy. That funding began in October 2008, with $1.8m from the DOE and, with progress being made, continued into 2009, with $11m in funding. GE has contributed some of its own money, as well. Brian Palmer, a GE Energy vice president, explains the goal:

Effectively, as you go deeper, on land or subsea, the temperature increases. The electronics and power of the equipment starts to reach a breaking point at 150-175 degrees Celsius. Those on the market that can go higher will have an edge. We’re starting real development with DOE to get to 300 degrees Celsius.

GE is concentrating efforts on technology that will aid navigation, formation evaluation, and evaluation and logging of reservoir conditions. That the company is trying so hard is just another example of why it is foolish to conclude oil production has peaked. Whether the world chooses to move away from using it is another matter.

The oil industry is betting that will not happen. Take Royal Dutch Shell. It is researching using surfectants, similar to household soaps, which, when combined with water, can literally wash the oil out of reservoirs. This water-based enhanced oil recovery is a technique that can be used on its own, but also could be combined with the horizontal drilling and facturing that has enabled the US onshore natural gas business to boom.

For the past four years, the industry has been using horizontal drilling and hydraulic fracturing of rocks to extract natural gas from rock – mostly shale – boosting estimates of US natural gas from 30 years of supply, with today’s technology, to 100 years’ supply. The process involves drilling a vertical well, up to 20,000 feet, followed by drilling horizontally under the ground, up to 4,500 feet across. Producers then force highly pressurized water into the hole to fracture the rock in multiple places, releasing natural gas.

Raoul LeBlanc, senior director of PFC Energy, a consultancy, says if the industry could do on the oil side even a fraction of what they did on the gas side, that could be quite important. Indeed, the independents (producers without refining operations) that drill most wells in the US are increasingly applying these techniques to oil fields, with good results.

Mr LeBlanc said more than 80 per cent of the wells drilled in the US last year targeted natural gas. If the hundreds of independents applied this technique to oil trapped in rock with the same zeal, the results could be meaningful. Jeff Fisher, senior vice president of production at Chesapeake Energy, says the process certainly offers a lot of potential, and everybody is looking at it.

At a time when the US government is having difficulties committing to carbon legislation, and the contributions by wind and other renewables to the electricity supply remains miniscule, it does make sense for the oil and gas industry to keep searching for more ways to get fossil fuels out of the ground. Environmentalists are just going to have to hope the oil industry is one day forced to clean up the fuel once they find it. Because it is looking increasingly likely the world is going to be powered on oil and gas for many years to come.

January 29, 2010 11:01am in Corporate news, Oil | Comment

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FYI – From the 1/29/2010 Delaware County Daily Times.
Dave

The Delaware County Daily Times (delcotimes.com), Serving Delaware County, PA

News
Rep. Vitali introduces new bill

Friday, January 29, 2010

By ALEX ROSE
arose@delcotimes.com

State Rep. Greg Vitali, D-166, of Haverford, announced the introduction of a bill Thursday that would place a five-year moratorium on leasing any more state forest land for natural gas drilling in the Marcellus Shale region.

“Our state forests can’t be viewed as a cash cow,” said Vitali in a release. “We shouldn’t lease another square inch until we fully evaluate the impact of drilling.”

Vitali said his legislation, House Bill 2235, has 30 co-sponsors.

URL: http://www.delcotimes.com/articles/2010/01/29/news/doc4b62697b86a47317145281.prt

Comments

The following are comments from the readers. In no way do they represent the view of delcotimes.com.

ud mike wrote on Jan 29, 2010 7:47 AM:

” I agree. The state has plenty of revenue coming into it’s coffers. The job market couldn’t be better and now is the time to legislate more laws preventing the economy from overheating. Now is not the time to kick our dependence on foreign energy.

Three cheers for the putz from Haverford. ”

Report Abuse
Tom_Martin wrote on Jan 29, 2010 8:42 AM:

” Way to go, Greg! We certainly don’t need any more oil. Not with all those Arabs willing to sell it to us, using their profits to buy weapons to kill our soldiers. You must be so proud. ”

Report Abuse
daltontrumbo wrote on Jan 29, 2010 2:51 PM:

” Evidently these two gentlemen don’t understand the “green” logic. I might imagine that they’ve been out of school for many years to harbor such an “old School mentality”. I suggest a summer reading program for these people. Start with Rachel Carson’s “Silent Spring”, a good beginners book in ecology. ”

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FYI – From the 1/29/2010 Towanda Daily Review.
Dave

Northern Tier Solid Waste Authority seeks permit

BY ERIC HRIN (STAFF WRITER)
Published: January 29, 2010

Review Photo/ERIC HRIN The Northern Tier Solid Waste Authority in West Burlington Township is building a new garage for truck maintenance, shown here.

WEST BURLINGTON TWP. – The Northern Tier Solid Waste Authority is seeking a permit from the state Department of Environmental Protection (DEP) to accept increased tonnage brought to its West Burlington Township landfill as a result of the natural gas drilling industry.

According to David Terrill, authority executive director, there has been an increase in tonnage brought to the authority.

He said it’s drilling residual material left over from the gas drilling process.

Terrill said the authority wants to increase the maximum tonnage accepted per day from 750 tons to 1,500 tons; however, he said this amount wouldn’t be accepted every day. It would just be to cover the days when peak flows are coming into the site.

The material brought to the authority that is clean can be used as clean fill anywhere at the landfill, Terrill said.

The dirty material is deposited with the garbage into the landfill. Dirty material can have oils or other substances in it. He added that all the materials have been tested and approved by the state to come into the landfill.

In addition, the authority will begin work this summer on the construction of another disposal field, to be named Field No. 8.

It will be built on the southwest end of the landfill in West Burlington Township, and is needed because the landfill is running out of room, Terrill said.

He estimates that the landfill in West Burlington Township has 6.5 years left.

Also, the authority is building a new garage for truck maintenance. It will measure 60 feet by 80 feet, and will be a four-bay, drive-through building, Terrill said.

It’s being constructed beside the authority’s Northern Tier Greens greenhouse.

What is unique about the building is the planned heating system. It will be heated with waste heat from the authority’s electric generating engine.

According to Terrill, hot water will be pushed through piping in the floor to heat the building.

Buildings Inc. of Covington is the contractor.

Eric Hrin can be reached at (570) 297-5251; e-mail: reviewtroy@thedailyreview.com.

1 posted comments

Why build a new garage when its going to close in 6.5 years or sooner ???? Wasted money ! I know …Just charge me more to take my garbage their !
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Razor, 01/29/10 10:42

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FYI – From the 1/29/2010 Towanda Daily Review.
Dave

Questions remain in gas well accident

Published: January 29, 2010

Review Photo/C.J. Marshall Three workers were sent to the hospital Thursday after an accident at the Mowry natural gas well on Clapper Hill Road in Tuscarora Township. Chesapeake Energy Inc., which owns and operates the well, reported that the accident occurred because of a “forceful uplift in tubing.” The cause of the accident is still under investigation.

By C.J. Marshall

TUSCARORA TWP. – An accident Thursday at the Mowry natural gas well on Clapper Hill Road sent three people to the hospital and sparked an investigation into how the incident occurred.

Although scanner reports from Wyoming County Communications termed the accident an “explosion,” Brian Grove, a representative from Chesapeake Energy Corp., which owns and operates the well site, insisted that no explosion occurred during the situation. Instead, Grove explained, what occurred was a “forceful uplift in tubing,” which launched sections of tubing from the well bore into the derrick.

Two employees of a contract company at the scene were transported to a local hospital for evaluation and treatment of non-critical injuries, according to the press release. They were later released after treatment. A third contractor, who also suffered non-critical injuries, was later taken the hospital for treatment as well, and remains hospitalized as of 6 p.m. Thursday.

In a press release issued by Chesapeake Energy, the accident occurred at approximately 4:30 a.m., and was caused by equipment failure that occurred during completion work on the well.

According to information provided by Grove: “Tubing is in the completion and production phases, not drilling. During completion, tubing (which is a small diameter steel pipe) is used to lower and raise equipment in and out of the well to clean it out before bringing the well into production. In the production process, tubing is used to transport gas from the bottom of the well to the surface. This incident occurred during the clean up phase of completion.”

In an interview, Grove explained that the cause of the mechanical equipment failure is unknown at this time, and is currently being investigated. He said Chesapeake will provide information on what caused the equipment failure when the investigation is concluded. However, Grove was unable to say precisely when that will occur.

Grove reported it was pressure from within the well – which occurs because of the natural gas – that caused sections of the tubing to uplift from the well bore when the equipment failed. He said that the tubing released were contained within the derrick.

Grove said that no explosion occurred during the accident, no fire broke out at the site, no chemicals were released, and the surrounding community was in no danger during the incident.

Bradford County Emergency Management Director Jim Vajda, who was at the scene following the accident, concurred with Grove’s contention that no explosion occurred at the site during the accident. Vajda described the incident as a “blow back because of gas pressure” due to equipment malfunction. Vajda said that the two workers initially sent to the hospital were working on a service rig, and jumped down when the accident occurred. The third worker, Vajda explained, was running to turn a value during the incident, and slipped on the ice and wrenched his knee.

“I have no idea what caused it,” Vajda said about the accident. “It’s one of the hazards of the trade.”

Asked if there was an explosion, Vajda said: “Definitely not. There was no release of any chemical of any kind. There was no fire.”

In addition, Vajda was also asked if there was a risk to the community from the incident, to which he replied: “None whatsoever.”

Vajda also said he contacted the Pennsylvania Department of Environmental Protection, although nothing occurred during the accident to require it, and also contacted the state fire inspector, although no fire broke out.

The initial emergency responder at the scene was the Laceyville Fire Department, with Laceyville Fire Chief Scott Fisher conducting an investigation. Fisher informed The Daily Review on Thursday that he cannot provide information about the accident until the investigation is complete. The Review left a message at Fisher’s residence but he had not returned the call as of 9 p.m. Thursday.

C.J. Marshall can be reached at (570) 265-1630; e-mail: cjmarshall@thedailyreview.com.

11 posted comments

Need info, Haven’t you heard? Our first responders aren’t sure if they would want to help anyways, due to all of the legalities. It seems to me that this is just one more thing for us to be concerned about. Do the land owners have to worry about lawsuits when this kind of stuff happens? I was just curious.
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W, 01/29/10 2:44
Loaded, obviously you’re benefitting from the land but the majority of this area is also concerned with peoples safety. If the gas companies aren’t going to double check all of their so-called faulty equipment then I sure as hell don’t want them on my land!
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BRC, 01/29/10 2:32
So what if it was you don’t see any one having this kind of fit when P&G has a fire or some kind of emergency even though it could take out half of mehoopany or what about all the other plants that have been around it all because it new. all the big company’s have there down falls so why not just let them do there job.
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a.w, 01/29/10 12:48
i think people are just mad because they have no land and thus no gas money… boo hoo!
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loaded from my land, 01/29/10 10:00
Explosion – A violent bursting as a result of internal pressure.
Call it what you will Mr. Grove but it was by definition an EXPLOSION.

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Bill Wheeler, 01/29/10 9:53
Typical of this newspaper. Report it first as an explosion, then when that is proven wrong lead with a headline like “questions remain” when really there are none.
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Signor, 01/29/10 9:46
“Forcful uplift of tubing”. That describes the event but not the cause. For anything to “forcefully uplifted” there needs to be a sudden exertation of pressure in a given direction. This exertation of pressure was caused, I would speculate, by a failure of equipment to control natural gas that is under pressure. This can cause severe damage and injury depending on the amount pressure released.
It would seem that Chesapeake’s spokesman, as with any corporate spokesman, is seeking to minimize the impact of the event to his company. Not especially reassuring. Hopefully the appropriate investigative agencies will look into it and we will have something other than the warm, fuzzy corporate PR statement. People were hurt.

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GeologyStudent, 01/29/10 9:38
SO WHAT. This is on the level of the National Enquirer!
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Glenn, 01/29/10 9:21
If there was an explosion it definately would of been heard and felt for miles. Sounds like an exaggeration to me.
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BS, 01/29/10 8:23
No explosion. Temporary reverse gravity phenomenon.
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Isaac Newton, 01/29/10 8:05
okay, so it’s not an “explosion” – THIS TIME. but it IS “one of the hazards of the trade” and there will be more – and there WILL be an explosion eventually. Please let us know what the emergency management plans are to deal with that eventuality. We have volunteer responders, with limited experience. I’m thinking a drill explosion will be beyond their experience and the dangers should certainly NOT be borne by volunteers. Do the gas companies have their OWN fire response teams, or is that one of the additional costs our communities will be bearing?
Report
need info please, 01/29/10 7:59

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FYI – From the 1/29/2010 Philadelphia Inquirer.
Dave

Posted on Fri, Jan. 29, 2010

Pa. to hire more oil and gas drilling inspectors

By Andrew Maykuth

Inquirer Staff Writer

Gov. Rendell announced yesterday that Pennsylvania will hire 68 more oil and gas inspectors this year to respond to the Marcellus Shale boom, a 54 percent increase in staff.
The new hires will allow the Department of Environmental Protection to manage an expected threefold increase in applications to drill natural gas wells in the Marcellus, which lies under much of the state. The DEP expects gas operators to apply for 5,200 permits this year.

“The governor is committed to giving Pennsylvania a world-class regulatory program to oversee this world-class resource,” DEP Secretary John Hanger said.

The state also announced plans to tighten construction standards for high-pressure gas wells to reduce the chance that natural gas might seep into groundwater or homes. Last year, migrating gas caused a water well to explode at a house in Susquehanna County.

Besides adding 37 inspectors last year, the DEP’s Bureau of Oil and Gas Management has more than doubled its staff since the gas boom began in 2008. With the new hires, the DEP will have 193 people dedicated to oil and gas.

Rendell said the bureau was exempt from the state’s hiring freeze because it is funded entirely with gas-drilling fees, expected to generate $11 million this year.

The state received $700,000 from those fees last year before the $100 permit cost was increased. A typical Marcellus permit now costs about $3,000.

Jan Jarrett, president of Citizens for Pennsylvania’s Future (PennFuture), praised the new hiring. “The governor’s announcements . . . put us on the right road to grow the economy and protect the environment,” she said.

The DEP has come under fire for failing to keep up with the industry’s growth. Until it opened an office in Williamsport, it administered well-drilling north of Scranton from its office in Meadville, near the Ohio border.

Last year, the department performed 14,544 drilling-site inspections and took 678 enforcement actions for violations, Rendell said.

Hanger said the DEP was strengthening regulations to cope with the horizontal Marcellus wells, which require millions of gallons of water to break up shale and stimulate production.

The department is devising new standards for dealing with the wastewater and announced yesterday that it also was launching a process to write new standards for well casing and concrete, which seal off the wells from groundwater.

Yesterday, State Rep. Greg Vitali (D., Delaware) introduced a bill that would halt leasing additional state forest land for natural gas drilling for five years, until the drilling can be evaluated. About 690,000 acres are now under lease.

Contact staff writer Andrew Maykuth at 215-854-2947 or amaykuth@phillynews.com.
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FYI – From the 1/29/2010 Summit Daily News.
Dave

Writers on the Range: A cheer for Interior Secretary Salazar’s new approach

By Thomas Power
Writers on the Range,
As an economist, it startles me when representatives of the business community ignore basic economic relationships such as supply and demand. Yet oil and gas interests have been doing exactly that recently.

It is hard to believe that there is anyone in the country who does not know that we are in a deep recession. It has dramatically cut the demand for and, therefore, the price of most basic raw materials, especially energy. But the oil and gas industry keeps pretending that this has not happened and instead has been blaming Interior Secretary Ken Salazar for the decline in the leasing of and drilling on federally owned lands and the resulting job losses.

Oil and gas firms know better. Randy Teeuwen, spokesman for EnCana, North America’s largest oil and gas producer, characterized the current slowdown in drilling more accurately this past spring. He told the Pinedale Roundup in Wyoming that “We’re like most industries right now — banking, finance, auto industry, real estate. All the economic sectors are experiencing some downturn, and are sort of at the mercy of the national economy and the local economy.”

In June, EnCana announced that it would shut down large numbers of its producing natural gas wells in Canada and the United States until natural gas prices rose again. Other natural gas companies have done the same, as have most coal companies.

So it makes no sense to blame Secretary Salazar for the decline in interest in new federal oil and gas leasing. Blame the recession for causing the prices of oil, natural gas, and coal to tumble dramatically, by 40 to 70 percent between the summer of 2008 and the summer and fall of 2009. That is why there has been less enthusiasm among companies for leasing more federal lands for oil and gas development.

It is also why only 3,267 wells were drilled last year, even though the Obama administration’s BLM issued 4,487 drilling permits. Access to leases is simply not an issue these days for the oil and gas industry. Nationwide, over 65 percent of the on-shore oil and gas leases that industry held in 2008 were not being developed. These undeveloped leases cover a huge amount of land that’s mostly in the West — over 32.5 million acres.

On Jan. 6, Interior Secretary Ken Salazar introduced a new set of onshore oil and gas lease reforms, arguing that they will provide more economic certainty for the industry and increased savings for the taxpayer. Going slower, according to Salazar, will reduce the likelihood of legal battles. Only 1 percent of oil and gas leases were protested in 1998, he said, as opposed to 40 percent in 2008. Fewer protests mean fewer costs for the American taxpayer, because less money ends up going to help resolve protests and lawsuits. Reform will also provide more certainty for the industry, as companies will not end up bidding on leases that then turn out to be inaccessible due to unresolved protests.

Yet for some reason, we continue to hear industry arguing that reform of leasing policy will curb development of domestic resources.

Secretary Salazar has an enormous responsibility over the management of our public lands and our need for energy development. The current slowdown in oil and gas drilling is an opportune time to find the right balance between our need for fossil fuels, our continued development of renewable energy sources like wind and solar, and the long-term health and safety of our air, water and wildlife.

As Salazar recently put it, “Trade groups for the oil and gas industry need to understand they don’t own the public lands. Taxpayers do.”

He is right, and he needs to work to strike the right balance. After eight years of an energy policy highlighted by a tilt toward industry and an historic lack of oversight, it is perhaps understandable that oil and gas companies now resist a more balanced approach. Our nation is better served by a measured approach that reduces the boom-and-bust extremes the West has suffered through in the past. That’s especially true for those communities where resource extraction is occurring.

Thomas Power is a contributor to Writers on the Range, a service of High Country News (hcn.org). He has been an economics professor at the University of Montana for 40 years and is the author of six books on natural resource economics.

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Counties take steps to build a new energy economy

By Peter Runyon and Jim Starr/Writers on the Range

The November elections came and went without the hoopla of a year ago, but voters in western Colorado quietly approved measures that could set the stage for a clean energy revolution.

Rural mountain communities in Gunnison, Eagle and Pitkin counties voted to support clean, homegrown energy and energy efficiency. These clean energy investments are a triple win: They will increase energy security, save money on utility bills and create good local jobs.

Everyone agrees that upgrades such as home weatherization and energy saving appliances help us do more with less energy. Solar rooftops powering homes and small wind turbines powering farms and ranches have helped a number of new businesses get going. And by installing locally produced clean energy, people can do their part to cut pollution and decrease the need for costly energy transmission lines.

So what’s the catch? Money. The biggest obstacle is how homeowners and small businesses find the cash. Local investments make financial sense in the medium–to long term, yet even utility rebates that lower costs are often not enough for many homeowners and businesses.

Enter the program that western Colorado voters approved this fall. PACE stands for “Property Assessed Clean Energy. Its approach is simple: Local governments create programs so that homeowners and businesses can apply for long-term, affordable loans that pay the upfront costs of renewable energy and efficiency improvement projects. The loans are paid back through a special assessment on the property tax of property owners who choose to participate in the program. The loans are tied to the property, and they transfer to the new property owner(s) upon sale. The terms of these types of loans mean that monthly energy savings may be enough to cover the cost of the loan payment.

Once again, Colorado is ahead of the curve. Over a year and a half ago –– well before Vice President Joe Biden announced a plan to make PACE available nationally –– Colorado Gov. Bill Ritter signed a bill that gives cities and counties the means to create similar financing programs. The Governor’s Energy Office also jumped out in front and worked with local jurisdictions to help make these programs a reality. Another creative leader is Boulder County, which got approval in 2008 from voters for a $40 million program called “Climate Smart.” It is giving a shot in the arm to the local economy without costing taxpayers a dime.

Boulder County has issued over $6 million in clean energy improvement loans during the program’s first phase. This summer alone, local contractors and solar installers got close to 400 energy projects off the ground. Small businesses such as EcoHandyman, which added 20 new jobs through Climate Smart financing worth nearly $100,000, received an economic boost at a critical time.

After we saw this success on Colorado’s Front Range, we, as county commissioners, decided to “pick up the PACE” and ask our constituents this November if they wanted similar clean energy financing options. Local business interests including the Aspen Ski Company, Eagle Valley Homebuilders Association and the Crested Butte-Mt. Crested Butte Chamber of Commerce helped lead the charge, advocating for this approach. Voters in all three counties collectively authorized $20 million for clean energy projects loans.

Holy Cross Electric Association and Gunnison County Electric Association, both rural electric co-ops, actively supported the measures. They recognize that opening the door to broader participation in creating clean energy will not only be a boon to local economies, but also create more customers who can choose to “go solar” or make their homes more energy efficient. This will help drive down utility bills and complement utility efforts to reach clean energy and efficiency goals.

Colorado’s Western Slope has taken a big step towards boosting a green economic recovery. Now, our counties are awaiting a $5 million block grant from the Governor’s Energy Office, made possible by federal economic stimulus dollars, which would help jump start the PACE program and start clean energy education programs.

We’re glad to be part of these necessary changes, not just because it’s the right thing to do, but also because it strengthens our communities and the people who make a living here. It’s a bottom-up transformation, and that’s always a good thing.

The writers are contributors to Writers on the Range, a service of High Country News (hcn.org). Peter Runyon is a commissioner for Eagle County and Jim Starr is a commissioner for Gunnison County, both in western Colorado.

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http://www.summitdaily.com/apps/pbcs.dll/article?AID=/20100129/COLUMNS/100129784/1078&ParentProfile=1055&template=printart

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FYI – From the 1/29/2010 Forbes blog.
Dave

Gas Boom Boosts Halliburton
January 29, 2010 – 1:52 am

Christopher HelmanBio | Email
Christopher Helman is the Southwest Bureau Chief of Forbes, based in Houston
When Halliburton announced its fourth-quarter results this week, the headline news was that earnings had plunged nearly 50% over the previous year. But investors are looking beyond that. Shares of Halliburton are up 35% over the past six months, versus a gain of 18% for arch-rival Schlumberger and a loss of 11% for number-three oil services player Weatherford International.

What gives? The U.S. shale gas boom. Halliburton is the biggest player in North America, especially in providing drilling and well completion services in the booming shale gas plays in basins like the Haynesville and Marcellus.

For the quarter, Halliburton’s international results suffered in part from a downturn in drilling in Mexico, but its North American profits were “more than double what we had modeled,” notes Deutsche Bank analyst Michael Urban.

“Halliburton is the one you want to own,” says Paul Coppola, portfolio manager with Arrowhawk Capital Partners in Houston. “There’s a well-completion cycle coming, and that’s right in Halliburton’s wheelhouse.”

Shales are tough to drill, necessitating wells with lots of horizontal laterals snaking their way into thin pay zones. Plus, the rock is tight, meaning gas doesn’t flow readily unless it is cracked open; that process, called fracture stimulation (or “fracking”), is done by injecting millions of gallons of water down a well at intense pressures to break fissures into the rock.

Halliburton leads the industry in all these services, and has more exposure to North America than its large-cap peers, the premium-priced Schlumberger and the international-focused, but riskier Weatherford. Halliburton spun off its much-maligned government contracting division KBR two years ago, and redomiciled its headquarters in Dubai. Though it counts nine national oil companies among its top 10 customers, Halliburton still gets most of its business in North America. Coppola expects the company to take market share from Baker Hughes, which is busy restructuring around recently acquired BJ Services.

The shale boom should be sustainable too; in time federal carbon legislation will likely enshrine clean-burning natural gas as the bridge between fossil fuels and a wonderland of windmills and solar panels.

Tags: fracking, Halliburton, natural gas, Schlumberger, shale, Weatherford
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FYI – From the 1/29/2010 Star Local News.
Dave

Flower Mound Leader > News
TCEQ releases Barnett Shale study

By Chris Roark, roarkc@acnpapers.com
Published: Thursday, January 28, 2010 11:58 PM CST
A study by the Texas Commission on Environmental Quality (TCEQ) indicates that the majority of the 94 oil and gas monitoring sites it tested revealed chemicals were either not detected or were detected below levels of health concern, according to the report.

However, the report also noted two sites that had relatively high levels of benzene, a product that has been linked to various types of cancer. Plus, 19 sites registered benzene concentrations higher than the TCEQ would like to see, the report stated.

The study took place in three phases with tests being conducted Aug 24-28, Oct. 9-16 and Nov. 16-20 at various drilling sites throughout the Barnett Shale. While some tests were performed in Denton County, as well as five neighboring counties, none of the tests were conducted in Flower Mound.

However, TCEQ conducted an air quality study in Flower Mound on Jan. 13 in which the results indicated there were no detections of volatile organic compounds (VOCs).

Matt Woods, director of environmental services for the town, said TCEQ is in the process of analyzing information from a second test in Flower Mound on Jan. 21, and he hopes the results are returned in a couple of weeks.

�We�d like to see what they say about the study they performed on Jan. 21,� Woods said. �We�ll study the results of this (Barnett Shale) test and apply it to operations that might be here. But I�d like to see the results from the Flower Mound test.�

The Barnett Shale study analyzed VOCs but mainly focused on benzene.

One of the sites that detected high levels of benzene was the Targa North Texas LP Bryan Compressor Station, located in eastern Wise County. There, the report stated, instantaneous benzene samples were collected at levels up to 1,100 parts per billion (ppb) approximately 200 yards from two residences. The report went on to say that though these levels are lower than the lowest levels shown to cause adverse health effects in short-term human and animal studies, the levels are concerning because of their contribution to long-term cumulative exposure levels.

The report stated that TCEQ reported the findings to Targa, and the company said repairs have been made.

Tony Walker of the TCEQ said the effects screening levels (ESL) short-term level is 18.0 ppb, and the long-term level is 1.4 ppb. But he added the ESL is not a health level but a screening level, which is set much lower than the level that would require a health concern.

At a Devon Energy natural gas well, also located in eastern Wise County, a sample was collected with a benzene concentration of 15,000 ppb. The report noted that the sample was collected at a well head not close to the general public. Again, the report was given to Devon, which said the repairs have been made.

Thoughts on the study differed among town officials.

�In over 20 percent of the monitored sites, benzene was measured at levels that could cause long-term exposure concern,� said council member Al Filidoro, who added he plans to request a reconsideration of the town council’s decision to not have a moratorium on gas drilling. �All of these sites were within .5 miles of residences.� This isn�t reassuring to our citizens.� When it comes to exposure to a known carcinogen, we need to set expectations of nothing short of 100 percent quality performance from this industry.� These results tell me we have a long way to go.��

Mayor Jody Smith said, “I’m happy and encouraged by the results. We’re committed to continuing the surveys and requesting personal air quality studies in Flower Mound. This study affirms how strong our gas drilling ordinance is in that equipment has to meet air quality standards. We have restrictions that other cities don’t have.”

The study also found elevated levels of other VOCs, such as carbon disulfide and ethane, but none at the levels that would cause adverse health effects.

Following the study, TCEQ has announced it will take new steps to address such issues. It will install two new long-term auto GC monitors to perform continuous near-real-time VOC monitoring in the town of Dish, as well as the Eagle Mountain Lake areas.

TCEQ will investigate sources for proper permit authorizations and require testing of sites with continued excessive emissions.

Other steps include continuing its complaint and investigation guidelines, as well as starting a review process for permitting rules that apply to oil and gas operations.

TCEQ has also said it will conduct another round of testing in the Barnett Shale in the spring.
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FYI – From the 1/29/2010 Wilkes Barre Times Leader.
Dave

Posted: January 29
Updated: Today at 10:29 AM
Law on gas drilling still in flux, public told
A panel offers an update on legislation, which turns out to center on money.

By Rory Sweeney rsweeney@timesleader.com
Staff Writer

BENTON – With interest increasing in drilling for natural gas in the Marcellus Shale, there’s a whole swirl of legislation related to it being considered in Harrisburg, but much of it comes down to money.

Read more Natural Gas Leases – Marcellus Shale articles
Related Documents

Resolution 609
“A lot of what goes on in Harrisburg is who’s gonna pay to make the pie and who’s going to get a piece,” said state Rep. Garth Everett, R-Lycoming. “The fight is how we’re going to divide up the pie. … We want to see the Commonwealth get its fair share, but we also don’t want to … go New York on them and drive them away.”

Everett was among two other representatives – Karen Boback, R-Harveys Lake, and David Millard, R-Columbia – who spoke on Thursday evening at a meeting of the Columbia County Landowners Coalition.

A state Department of Environmental Protection official and a Penn State University educator were also on the panel.

Everett described the intention and status of nearly 20 bills throughout the legislature, noting that they fit into four categories: taxation and where the money goes, water protection, access to information and surface-owner rights.

While some likely won’t ever see a vote, Everett said a few will probably pass this session, including a bill that would require companies to release well production information within six months instead of the current five years.

He said a tax on the gas extraction also seems likely “at some point.”

For the most part, the industry received a pass at the meeting, with most comments favorable. One woman suggested companies might underreport the amount of gas they take out and questioned what’s being done to help landowners keep them honest.

Dave Messersmith of Penn State suggested that an addendum to each lease should be the opportunity for an annual audit of the company’s logs.

Robert Yowell, the director of the DEP’s north-central regional office, said the rush to drill in the shale happened so quickly that DEP is still trying to catch up with regulations. Likewise, he said, companies are still becoming acquainted with differences here from where they’re used to drilling.

“When they first came to town, I don’t think they realized how widely our streams fluctuated,” he said.

He added some public perceptions need to be changed – such as the belief that people aren’t naturally exposed to radiation all the time – and that he felt confident that “this can be done safely.”

In response to contamination issues in Dimock Township in Susquehanna County, DEP is upgrading and standardizing its requirements for well casings, Everett said. He added that it’s being suggested the contamination in might have been caused by “odd geology.”

“Every time humans do anything, there’s an impact on the land,” he said. “We just need to balance this right so that we end up with something we’re happy with when we’re done.”

Rory Sweeney, a Times Leader staff writer, may be reached at 970-7418.

7 Reader Comments

TheProspector said…

The article described the public perception is that there is “the belief that people are naturally exposed to radiation all the time”. Is that correct or is it backwards? I don’t believe that that the public believes this.

January 29, 2010 at 9:32 AM

The Duke said…

Yes Rep.Everett, we wouldn’t want to go New York on them and build a scientific commission to study all aspects of the process and use scientific evidence to make a rational decision regarding the effects of this process on the public’s health? Why would we do that. Let’s go PA style and just let them do anything they want under the guise of some shoddy regulations. Unbelievable.

January 29, 2010 at 9:36 AM

Blondie said…

Most comments favorable… Why didn’t the article include one of the comments that wasn’t?

January 29, 2010 at 11:29 AM

Bob W said…

This meeting was very informative! The state Reps, DEP and the gentlemen from Penn State all had a very good knowledge of the drilling both pros & cons on the subject. I applaud Columbia County Landowners Coalition leaders for butting this meeting & panel together. Thank you.

January 29, 2010 at 11:46 AM

Richard said…

Why a severance tax? That will be deducted from the landowners royalties as well on a pro-rated basis. Taxing landowners for something they are selling and then making them pay state income tax on it as well is not right! The oil/gas companies will do more to increase employment in PA more than our state bureaucrats ever did. That alone will give our state economy a big boost. They don’t need to pay a severance tax on top of all of that. Political Greed, Greed, Greed.

January 29, 2010 at 1:29 PM

Iris said…

The radium 226 which comes up from Marcellus Shale drilling is at extremely high levels, over 2,000 to 16,000 picocuries per liter, many thousands of times the safe level (5 picocuries/liter) for drinking water and 267 times the safe level for release to the environment. The extremely low-level exposure from bricks, granite, soil, etc. is totally different from the dangerously high radium 226 coming up in Marcellus Shale flowback wastewater. Radium causes bone cancer, liver cancer, and breast cancer. New York State cares about people’s health. Let’s see some dedication to protecting public health in Pennsylvania now! We need a moratorium immediately since the waste is currently untreated: only heavy metals are taken out, then it’s dumped in our rivers and streams with all the carcinogens, neurotoxins, endocrine disrupters, pesticides and other hazardous materials still in the water. If shale drilling becomes safe for public health we can do it later. Right now it’s not safe.

January 29, 2010 at 3:23 PM

Railroad Street said…

Companies won’t help our areas out anymore than they’ve helped similar places they’v moved to. Its just a ploy to win you over and give their texan workforce a place to stay. Face it, PA has no spine because we’re poor. WE’ll do things richer states like NY wouldn’t think of doing. Nobody cares about the future.

January 29, 2010 at 3:34 PM

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FYI – From the 1/29/2010 ic CheshireOnline.
Dave

Councillor warns against energy companies drilling for gas across Cheshire
17:44, Jan 28 2010

by Ben Coulbeck, Chester Chronicle

A GREEN-THINKING councillor is warning against allowing energy companies drill for gas across the Cheshire countryside.

Hugo Deynem, Gowy ward member and climate change champion of Cheshire West and Chester Council, said that mining fossil fuels was not the answer to the country’s energy problem.

The recommendation comes after The Chronicle exclusively revealed that Scottish firm Composite Energy has already been drilling for coal containing natural gas, or methane, at Caldecott, near Farndon.

They have also applied to CWaC for planning permission to drill further boreholes at Hargrave, Upton and Shocklach.

Cllr Deynem said: “The application itself is not overly contentious but may well be an indication of what lies ahead. Particularly when, according to industry estimates, we have 3 trillion cubic feet of coal bed methane beneath us in the Cheshire Basin.

“This is a very new type of gas extraction still in it’s infancy though I believe the USA are 5 or 6 years ahead of us in terms of development of this form of extraction.

“I very strongly believe we should be exploring all types of renewable energy sources rather than developing other ways of extracting and consuming fossil fuels.”

So far few objections have been raised by officials or local residents to any of the proposed schemes.

If planning permission is granted by CWaC then drilling rigs will be located across Cheshire working on a 24-hour basis for a 60-day period.

Coal located at the various sites will be analysed to se if it contains methane gas which can be used by the national grid.

For further information about coal bed methane call 0333 800 2000 or visit www.composite-energy.co.uk

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FYI – From the 1/29/2010 Blast.
Dave

- Blast: Boston’s Online Magazine – http://blastmagazine.com -

Sundance 2010: Blast interviews documentarian Josh Fox

Posted By Ned Prickett On January 29, 2010 @ 12:46 am In Sundance Festival 2010 | 4 Comments

PARK CITY, Utah — Josh Fox was a filmmaker living in Pennsylvania when he was offered $100,000 to let a company mine for natural gas on his land. Suspicious of the whole process, Fox investigated natural gas drilling and learned that hydraulic fracturing, the process through which the gas is collected, is terribly damaging to the environment. Fox’s film “Gasland,” is about his investigation into the effects of hydraulic fracturing and the people who live with the consequences. Blast got a chance to sit down with Josh Fox at Sundance and talk to him about the dangerous consequences of natural gas drilling, why most people don’t know about it and what drove him to make the film.

Blast: What is Hydraulic Fracturing?

Josh Fox: It’s a technique pioneered by Halliburton and two other companies which causes mini earthquakes under the ground by blasting a mix of water and toxic chemicals at very, very high pressures, and that extracts the natural gas.

Blast: How did you find out about natural gas drilling?

JF: They wanted to drill in my area of Pennsylvania. I was asked to lease my land, which is like 19 acres, which my family got back in the 70’s. We built our own house by hand. I got this lease in the mail, which said I could lease my land for gas drilling and I would make $100,000 right then and potentially a lot more. I was very suspicious of it, but as it turned out most of my whole county was doing this and getting these letters in the mail. My area is a watershed area. It’s part of the whole system that provides 15 million people with water from New York down to Philadelphia and southern New Jersey. So I just started looking into it and found all these potential problems. Basically Dick Cheney and the Republican controlled Congress of 2005 exempted the natural gas industry and specifically the hydraulic fracturing drilling technique from the Safe Drinking Water Act. That was in addition to exemptions they already had from the Clean Water Act and the Clean Air Act.

So I said, wait a minute: these drilling companies can come in and do pretty much whatever they want? Then I went about 50 miles away to a town called Dimock, Pa. where there was drilling occurring. It was one of the only places in Pennsylvania near me where drilling was going on, and the place was a disaster area.

Blast: What did you find?

JF: Animals were dying, people were getting sick, and water was contaminated with Natural Gas. There were reports that people could light their water on fire. My mind was blown to pieces. Then I found out that we are actually in the midst of the largest natural gas drilling campaign in history in the United States. They are drilling in 34 states. There are these shale plates all over the country and reports were coming back and I was reading a little bit here and a little bit there on the Internet but I couldn’t get a lot of information. What I heard was that other places were having the same problems I saw in Dimock. People could light their water on fire, volatile organic compounds such as benzine toluene and zylene, which were being vented off of the sites and getting into water and people were having real health problems. I found massive industrialization of areas both rural or urban. Dallas-Fort Worth has 10,000 gas wells.

It’s unbelievable the transformation that has happened in Fort Worth over night. I felt like I was standing on the precipice of a cliff where my whole area, upstate New York, The Catskills and Poconos would be upended and also that very few people knew about this because people out west were screaming about it but no one was really listening. And then I basically took my cameras and myself as many places I could. I went to hundreds of drilling sites. I did hundreds of interviews with people in the affected areas from Dallas-Fort Worth to rural Wyoming and found the same story over and over again. Contamination, pollution, health problems — and nobody was listening.

Blast: How was the experience of talking to all these people who have been affected?

JF: The film is my road trip. It’s a road movie. It’s actually kind of fun. I play the banjo so I took the banjo on the road with me and the people who I met were unbelievably inspiring. When you can light your water on fire right out of the sink — the first thing you have to do is laugh. It’s totally absurd. It’s like the world turns upside down for a moment. And then the shock hits you.

Blast: That you were supposed to drink that.

JF: Bathe in it. Drink it. There was an instance where someones lawn was on fire but they couldn’t put it out with their garden hose. So to be here at Sundance is hopefully an opportunity to get this issue much more into the public eye. I think we have created a movie that’s really fascinating,and they’ve taken it here, which means it’s ok.

Blast: I read about the FRAC Act. Will that help?

JF: The FRAC Act is one page long and all it does is take out the exemption for hydraulic fracturing in the safe Drinking water Act. That exemption was $100 million worth of lobbying by the industry, it was aggressively pursued by Dick Cheney and the energy task force and what it effectively did was take the EPA completely off the job. When I talked to someone who worked at the EPA, he said that basically we are asleep at the wheel. No one is looking into this. And you know under the ground is a very complex, beautifully designed system that keeps things separated. It keeps bacteria out of water. It keeps heavy metals out of things we need to eat. It’s this amazing system. When you go ahead and start pulverizing it over and over again you intermingle those layers. You are going to get toxins in all the things that allow us to be alive. In addition to the fact that when they do the fracking, they use something called fracking fluid. There are 596 different chemicals that go into that mixture.

Blast: I saw that Radon was in there?

JF: Well, you know, there are 596 different chemicals and 900 different products. Half of those are proprietary, meaning they are like the special sauce for MacDonald’s Big Mac or whatever — you can’t know what’s in them. They can use toxic chemicals and not tell you what they are and then basically inject them into the ground. But the ones we do know are pretty bad. In the Pennsylvania’s DEP website it says 300,000 gallons of gluteraldahide are used per frack. Gluterahdahide is a dental disinfectant. It’s like the stuff that kills everything. You don’t want to drink it. It’s like drinking Drano. You are injecting that into the ground, into or adjacent to underground drinking water supplies. That creates a myriad of problems. And that is what I discover in the film. It’s like a detective mission. No one is talking about it.

Blast: What other harmful effects does the drilling have besides the affects it has on our water supply?

JF: When you create this level of drilling, you are creating a level of industrial air pollution that I cant imagine it won’t affect Massachusetts. It’s not far from the Berkshires. It’s not far from that area in upstate New York. In Dallas Fort-Worth where I mentioned, there are 10,000 gas wells drilling alone. The drilling process alone burns a lot of diesel; a lot of gas is released which creates more greenhouse gas emissions than all the cars and trucks in the Dallas Fort-Worth metroplex, and that is the fourth largest city in America. So it’s like building another Dallas Fort-Worth 50 miles away. That air pollution is going to migrate.

Blast: In these situations, you often hear companies like Halliburton using the argument that “there is no definitive proof we are harming the environment.” What else could be causing it?

JF: It’s a chicken or the egg situation. You need expertise to determine that. Expertise only the EPA is qualified to give. You need really qualified hydro-geologists; you need surveys done; you need to find where things are migrating. If gas is migrating into the water supply, where is it coming from? It is a very hard thing to track. So when you take the EPA off the watch, then you have very few inspectors…most of the states’ Departments of Environmental Protection cant handle this. It is too big a job when you are talking about drilling campaigns of this size. You basically can’t have proof because you have no science. There is nothing happening. All the data stopped once that 2005 exemption went through. We ceased to know what was going on underground. So to say there has been no proof is because there has been no investigation.

Blast: Where is the proof coming from?

JF: We have the first level of proof, and that’s what people are saying on the ground. Thousands and thousands of people in these areas cant be wrong if they are in different, disparate areas not communicating with each other, and the only thing that they have in common is that companies are doing hydraulic fracturing. That’s one level of proof to me. That’s the human element. That’s number one. Number two is that we have their water tests. The burden of proof in 2005 shifted to the citizens. We need to look at their individually done water tests. We have all these independent studies. Someone has to look into that. Journalists have to look into that. I’ve looked into it; that’s what is in the film. We also have a few select cases where the EPA has started to get involved. There is only one place that I know of. In Pavilion Wyoming. During the Obama administration these guys out in Pavilion kicked and screamed and got (the EPA) to come out there. The EPA tested 44 water wells in one area and 13 came up with contamination of either fracking chemicals or methane. So there are the beginnings of what everyone expected to be true.
Of course when you are dealing with massive corporations with hundreds and hundreds of lawyers…even if you have the most concrete proof, they are going to contest it. In that case it’s one person or a class action suit of 20 to 50 people versus a mega corporation.

But if one guy can go out there with a camera in a couple of months of filming and uncover this many stories that are in the movie, what is the whole range of what is happening out there? You can’t administer a drilling campaign that drills 400,000 wells in America and 200,000 more projected in just the east coast alone without significant environmental damage being done. It’s a no-brainer.

Blast: It is so widespread and it is kind of baffling because until I heard about your film I had never even heard of natural gas drilling.

JF: Amazing. I don’t know why either.

Blast: The companies must be very good at keeping the whole thing quiet.

JF: They are. If you go on CNN or MSNBC, or you pick up a magazine, you see Natural Gas as a clean-burning solution to our fuel problem. They have done an amazing job of positioning themselves as a green fuel. But it’s a fossil fuel. It involves an incredibly polluting extracting process. It’s carbon emissions. It is all the same stuff that we are trying to get away from for all these different reasons. What you have here is a nightmare of total deregulation, air pollution, water pollution, health problems and the upending of our legal system in order to do all this stuff that contributes to climate change.

It makes no sense and for me personally and a lot of people involved in the film, it’s our homes on the line. If this goes through, I will not be able to live in the place that my family built because the risk of exposing myself to those things in the air and the water, I know what they are. I am one of the people that does know. I have talked to the people who have lived in the toxic clouds. The people who have the brain lesions and the sever neuropathies. Our land would be worthless. Nobody would buy it. It’s basically a nightmare.

Blast: The fact that you are not just talking about the drilling itself, but the fact that you are also talking about having to transport these dangerous chemicals to the sites and then dispose of them somewhere is just as scary.

JF: This is the other thing. The drilling process itself uses 1 to 7 million gallons of water per well dug or per well fracked. And you can frack each one of these wells 18 times and because it is this unconventional drilling, you have to frack it a lot. You have to bust it apart a lot to get the gas out. That water is all going to be toxic waste. If you do the math, with 450,000 wells, which exist now, you do 18 fracks a well, you have something like 40 trillion gallons of toxic waste. Where is it all going? There are very few water treatment facilities that can actually deal with that much waste. In the film we show them spraying it on roads. Dumping it illegally in certain places and injecting it back underneath the ground via injection wells. I have seen it in big open pits. I have seen it sprayed up into the air via evaporation sprayers which causes it to evaporate quickly in sunlight and that just rains back down onto the ground. These are the techniques being used to dispose of this fracking waste. Isn’t that great? Lets just take all these toxins and put them as many places as we can all over America. It’s mindboggling.

Blast: How can these companies do that kind of stuff? It’s so shortsighted and mercenary to say, “Well we’re making money now, who cares about 20 or 50 years from now.” Did you talk to anyone who could talk about the mindset of these companies?

JF: I can’t conjecture as to what they are thinking, but I do know that this is short-term profit in expense of our long-term health and cleanliness of the whole country. I am astounded, and yet we have failed at coming up with sustainable models for anything. It just really calls all that stuff into question. The whole idea of energy independence is here. They are saying this is our domestic source of energy. Well I’ll tell you the only energy independence is renewable energy. That is the only way to go. And we have the technology right now. Instead of transitioning to natural gas we could transition to wind, we could transition to solar, we could transition to a whole portfolio of things that do not pollute the ground in the way that the drilling does. I don’t know what they are thinking in terms of long-term contamination. If history proves any example here, and you look at Louisiana where you have oil refineries and gas refineries for 60 years. All of that drilling and refining waste has been dumped into the Gulf of Mexico for decades. You have mercury ratings off the charts in the fish in the Gulf. When Katrina and Rita came through it dumped all that stuff right back onto land. The storm surge was full of all these chemicals, the waste of 60 years. Typically the companies get their resource and leave the site however they feel like it. It’s for the next generation to clean up. Their costs are externalized onto the landscape.

Blast: How has the whole issue over the environment become a partisan one?

JF: It’s not partisan. It shouldn’t be. This is a basic human issue.

Blast: Is it the best thing for the companies to make it a partisan issue because it gives them more cover?

JF: I don’t even think the Democrats are aware about what a major issue this is. You have a lot of Democrats talking about how great natural gas is. It has got the feeling of partisanship even though the proponents of natural gas are bipartisan. So at this moment of real economic hardship taking the easy money for states and people is one way out of the total chaos of this moment, economically speaking. But you are digging your own grave I think. You are making things way worse.

Blast: You have states taking money for the use of state land and it’s got to be tough for them to turn those opportunities down.

JF: We have got to do better. This is the same old refrain from guys saying it is a new technique that is not that invasive. It was the same refrain with mountain top removal and for the classic fossil fuels. The main thing here is that the drilling technique is claimed to be safe and it’s not. The chemicals are claimed to be safe and they are not. It’s like driving a car without seatbelts, without a windshield, without crash test ratings without a roll bar. You would never do this. If the airline industry reported as many problems as the gas industry no one would ever go near an airplane.

Blast: In his opening press conference Robert Redford talked about documentaries and how they are becoming more important because there is all this media out there now and kids aren’t reading as much so maybe they will respond to a movie. How important do you think documentaries?

JF: When you are making a movie, you are able to do things that are fun. You are able to present information in a way that is thrilling or humorous. Documentaries are the backbone of our journalism right now I think. I am not a documentarian. This is the only documentary I’ve made. It may be the only one I ever make. I am a narrative filmmaker. I felt that this project was forced upon me in a lot of ways because this is the way the world works now. This is the way you can get information out. You have to hear from these people. This is the way for me to tell their stories. The cowboys in Wyoming or the people living in suburbia in Colorado. It is amazingly compelling stuff. For them to be able to speak directly to an audience, I think, that is part of it.

Article printed from Blast: Boston’s Online Magazine: http://blastmagazine.com

URL to article: http://blastmagazine.com/the-magazine/entertainment/movies/sundance-2010/2010/01/sundance-2010-blast-interviews-documentarian-josh-fox/

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FYI – From the 1/29/2010 Danvolle Daily Item.
Dave

Rendell’s move to tighten drilling rules praised
By Diane Petryk
The Daily Item

January 29, 2010 05:47 am

— LEWISBURG — Gov. Edward G. Rendell’s announcement Thursday that natural gas exploration rules will be tightened and 68 Department of Environmental Protection workers hired to enforce them was applauded by local residents, but they say it doesn’t go far enough.
“Thank heaven!” said Judith Marvin, of Lewisburg. “That’s really good news. I’m so glad he is doing something.”
“But,” she added, “we certainly have to slow this down.”
New permit applications for drilling in the Marcellus Shale are expected to triple to 5,200 this year. So, while the governor has directed the state Department of Environmental Protection to add staff, the pace of new drilling permit requests may leave DEP staff spread as thin as before.
At the same time, they will be enforcing rules expected to make wells safer and less likely to pollute ground water.
Rendell said the industry has informed the state it expects to apply for 5,200 permits to drill in the Marcellus Shale this year. That’s three times the number of applications made in 2009. Thirty-seven new inspectors were hired last year, but DEP also has endured a spate of layoffs.
“Interest in Pennsylvania’s Marcellus Shale formation is greater than ever before, and as natural gas prices continue to rise, that interest will only increase,“ Rendell said.
“They want to get in here before we get our act together,” Marvin said, echoing words spoken by U.S. Rep. Chris Carney, D-10 of Dimock, during an hour-long phone conference Wednesday with seven members of Williamsport’s Safe Drilling Alliance, according to member Barb Jarmoska.
Carney, Jarmoska said, indicated the gas drilling industry got started while the rule book was being written.
“They like it the way it is,” she said. “Carney said their lobbyists are in his office every single day arguing against new laws. They are badgering him to vote against the frack act.”
The “frack act” is the Fracturing Responsibility and Awareness of Chemicals Act, or FRAC Act, introduced by Rep. Diana DeGette, a Democrat from Colorado, and Sen. Robert Casey, a Democrat from Pennsylvania, to require drilling operations to come under the Safe Drinking Water Act. They were specifically exempted during the Bush administration.
While Jarmoska, too, applauded Rendell’s move, she said it’s reactive. “It’s ‘how can we catch them and punish them after the harm is done,’ ” she said. “We need laws to prevent the harm.”
“New York has asked for a ban. I’d like to see a moratorium here,” she said. “We need to pull in the reins and take a look at this, ask how we can do this responsibly. That’s not happening.”
Sierra Club member Jack Miller, of Middleburg, said adding inspectors is good, but DEP also had a 27 percent budget cut last year.
“I can’t say whether what they will have will be adequate,” he said. “But it’s about a lot more than the number of inspectors. It’s the laws they have to work with.”
Rendell’s announcement said DEP performed 14,544 drilling site inspections in 2009 and took 678 enforcement actions against drillers for violations.
He also announced that he will ask for an extraction tax. Pennsylvania is the only state with active natural gas drilling that does not have such a tax on the books.
“An extraction tax is gaining widespread support across our state,” Rendell said, “and I will again ask the General Assembly to enact such a levy. It is fair and affordable to drillers. They know it, and so do members of the House of Representatives who voted for it last year.”
Specifically, he said the new regulations will require the casings of Marcellus Shale and other high-pressure wells to be tested and constructed with specific, oilfield-grade cement; clarify the drilling industry’s responsibility to restore or replace water supplies affected by drilling; establish procedures for operators to identify and correct gas migration problems without waiting for direction from DEP; require drilling operators to notify DEP and local emergency responders immediately of gas migration problems; require well operators to inspect every existing well quarterly to ensure each well is structurally sound, and report the results of those inspections to DEP annually; and require well operators to notify DEP immediately if problems such as over-pressurized wells and defective casings are found during inspections.
“These regulations were developed through open meetings with experts in the industry,” Rendell said.
“They are designed to give Pennsylvanians peace of mind by bringing our state’s requirements up to par with other major gas producing states or, as in the case of the well casing requirements, to a level that is even more rigorous,” the governor said.
The new regulations will be offered for public comment today before going through DEP’s formal rule-making process.
“As I’ve said all along, we want to encourage the development of this resource because it’s a tremendous economic opportunity for the state, but we will not allow that to happen at the expense of our environment,” Rendell said.

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FYI – From the 1/29/2010 Pocono Record.
Dave

Resistance continues against natural gas drilling that has begun in Wayne County

Photo 1 of 3 | Zoom Photo +

An aerial photo of the drilling site near Beach Lake.CONTRIBUTED PHOTO
By JESSICA COHEN
Community News Writer
January 29, 2010
Regional environmental groups sharpening their arguments for a showdown in Matamoras have had their Feb. 11 session postponed from Feb. 11 to an undetermined date later in the month when The Delaware River Basin Commission will hold a hearing on granting gas drilling permits in the region. Many are eager for the rescheduled meeting.

“We’ve been waiting for this for a couple of years,” said Pat Carullo, co-founder of Damascus Citizens for a Sustainable Society. “Our lawyers and experts will be present.”

The Damascus Citizens Web site describes their opponents, whom they hope to prevent from drilling in the Delaware Gap watershed, in battleground terms: “Haliburton and Exxon-Mobil, Hess, Cabot, Chesapeake, and their foreign partners have begun ‘deployment’ in the watershed region.”

Meanwhile, Damascus Citizens members have been “deploying” small planes for aerial photography of the lone eastern Pennsylvania site where drilling has occurred — in Oregon Township, Wayne County. Their photos show dying leaves on trees along a route of potential runoff from the Chesapeake drilling site.

More than two months after Carullo reported symptoms of a problem, the Pennsylvania Department of Environmental Protection, its staff smitten by 40 percent budget cuts, sent a “Notice of Violation,” dated Nov. 9, to Chesapeake: “The investigation revealed that pollutional substances generated from activities associated with drilling were not contained in a pit or tank,” stipulating.$50,000 per day in civil and criminal penalties if it persists. The DEP requested a response within 10 days “as to the causes of this incident, when the above listed violations were or will be corrected and what steps are being taken to prevent their recurrence.”

In a response to the DEP on November 18, Rachelle King, Chesapeake Appalachia representative, wrote. “Chesapeake continues to investigate the nature and extent of elevated barium, chloride, and the presence of diesel range organics in soil extending from the northernmost corner of the Chesapeake Robson #1 well pad. “» Surface water nearby also contained elevated barium, calcium, sodium, and chloride.”

“So Chesapeake is doing their own investigation. How ridiculous is that?” asked Carullo.

Carullo noted the radioactive toxicity of the barium.

As for the trees, according to Chesapeake’s report, the investigators noted “leaf loss “» along a fluvial pathway,” but they were “unable to determine whether leaf loss was due to stress or seasonal changes.”

Damascus Citizens and other environmental groups see this denial of drilling pollutants’ effect on the trees as part of an incriminating pattern. In the summer of 2009, near Shreveport, La., 16 cows grazing 50 yards from a drilling site suddenly died, bellowing with their tongues bleeding.

Later, several news reports cited witness reports of a white fluid that rain had washed from the drilling site into the cow pasture, where cows had walked through it. While local authorities deduced the drilling runoff killed the cows, Chesapeake bought the dead cows and issued a statement that “veterinarians and third party toxicology experts were unable to identify a definitive cause of death.”

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FYI – From the 1/29/2010 Pittsburgh Tribune Review.
Dave

DEP plans to hire 68 inspectors
By Rick Stouffer
PITTSBURGH TRIBUNE-REVIEW
Friday, January 29, 2010

The state Department of Environmental Protection said Thursday it will hire 68 inspectors to make sure drilling companies obey state laws and protect water supplies.

DEP officials announced amendments to state oil and natural gas drilling regulations to strengthen well construction standards.

Increased drilling activity in the state’s Marcellus Shale natural gas formation will allow the state to hire the additional staff to review permit applications and monitor drilling activity. The new hires will be paid by money generated by higher well permit fees that were instituted last year.

The amended oil and natural gas drilling regulations were developed in association with the drilling industry and address drillers’ responsibilities for dealing with natural gas issues, such as wastewater treatment and disposal or when natural gas seeps into a water supply or a home.

“The regulations proposed reflect conversations with those in the drilling community, but in the end, the state must set the rules,” said DEP Secretary John Hanger said in an interview. “We have been pleased with the cooperation we’ve received from the industry companies.”

Hanger said it has yet to be worked out where the 68 new employees will be placed, but given that Western Pennsylvania remains a Marcellus Shale permitting hotbed, “a good chunk” will be based in the region. The hope is to have the new personnel on the job by June.

The Marcellus is a layer typically a mile underground, running through much of Pennsylvania and into surrounding states. Some estimates say it contains enough natural gas to supply all U.S. needs for two decades.

Last year, drilling of oil and natural gas wells and permits issued tumbled across Pennsylvania as prices for both fuels plummeted, except for a surge in drilling for gas in the Marcellus formation, state figures show. Total wells drilled last year numbered 2,524, down from 4,192 in 2008. But natural gas wells drilled in the Marcellus formation rose to 763 from 196.

Steve Rhoads, spokesman for East Resources Inc., of Marshall, and former president of the Pennsylvania Oil and Gas Association, said the industry was involved heavily in developing these new regulations “because we understand the need to update the rules.”

The Marcellus Shale Coalition, a trade group representing a majority of companies drilling statewide, said it supports the regulations and hiring of DEP personnel.

“Members of the coalition are committed to applying the industry’s best-management practices to all aspects of their operations to protect the environment and manage the state’s water resources wisely,” said Kathryn Klaber, newly named president of the group.

Hanger said he will try to move the formal rulemaking process as quickly as possible and hopes to have the amended regulations in place within 12 months.

The new personnel will be in addition to 37 hires the department made in 2009 because of Marcellus Shale activity.

“There will be more emphasis in having people in the field from this new group as compared to the group hired last year,” Hanger said. “We want to be more proactive, while also responding to public complaints.”

The coalition said the state made 14,000 field inspections in 2009, with enforcement action from Marcellus drilling accounting for 1.1 percent of state actions.

“We’re glad that the governor recognizes that Marcellus gas drilling represents a new scale of environmental challenges to the Commonwealth’s natural resources, especially water,” Jan Jarrett, CEO of the environmental watchdog group Citizens for Pennsylvania’s Future, said in a statement.

Rick Stouffer can be reached at rstouffer@tribweb.com or 412-320-7853.

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FYI – From the 1/29/2010 Elmira Star-Gazette.
Dave

January 28, 2010

Natural gas truck stopped on Bradford County road weighing 41.6 tons over weight limit

By Jason Whong
jwhong@gannett.com

Police said Kevin Parsons, 44, of New Albany, Pa., was the driver of the truck found parked on Covered Bridge Road in Burlington Township. The road has a posted weight limit of 10 tons.

“We’ve had so many problems lately with blatant (weight limit) violations,” said Cpl. Roger Stipcak.

“We’ve tried … to educate them about this stuff, but now we’re going to start taking them forthwith to the magistrate,” Stipcak said.