For Pennsylvania’s Doctors, a Gag Order on Fracking Chemicals
www.theatlantic.com/health/archive/2012/03/for-pennsylvanias-doctors-a-gag-order-on-fracking-chemicals/255030/
By Climate Desk
Mar 27 2012
A new provision could forbid the state’s doctors from sharing information with patients exposed to toxic—and proprietary—fracking solutions.
Under a new law, doctors in Pennsylvania can access information about chemicals used in natural gas extraction — but they won’t be able to share it with their patients. A provision buried in a law passed last month is drawing scrutiny from the public health and environmental community, who argue that it will “gag” doctors who want to raise concerns related to oil and gas extraction with the people they treat and the general public.
Pennsylvania is at the forefront in the debate over “fracking,” the process by which a high-pressure mixture of chemicals, sand, and water are blasted into rock to tap into the gas. Recent discoveries of great reserves in the Marcellus Shale region of the state prompted a rush to development, as have advancements in fracking technologies. But with those changes have come a number of concerns from citizens about potential environmental and health impacts from natural gas drilling.
There is good reason to be curious about exactly what’s in those fluids. A 2010 congressional investigation revealed that Halliburton and other fracking companies had used 32 million gallons of diesel products, which include toxic chemicals like benzene, toluene, ethylbenzene, and xylene, in the fluids they inject into the ground. Low levels of exposure to those chemicals can trigger acute effects like headaches, dizziness, and drowsiness, while higher levels of exposure can cause cancer.
Pennsylvania law states that companies must disclose the identity and amount of any chemicals used in fracking fluids to any health professional that requests that information in order to diagnosis or treat a patient that may have been exposed to a hazardous chemical. But the provision in the new bill requires those health professionals to sign a confidentiality agreement stating that they will not disclose that information to anyone else — not even the person they’re trying to treat.
“The whole goal of medical community is to protect public health,” said David Masur, director of PennEnvironment. He worries that the threat of a lawsuit from a big industry player like Halliburton or ExxonMobil for violating a confidentiality agreement could scare doctors away from research on potential impacts in the state. “If anything, we need more concrete information. This just stifles another way the public could have access to information from experts.”
The provision was not in the initial versions of the law debated in the state Senate or House in February; it was added in during conference between the two chambers, said State Senator Daylin Leach (D), which meant that many lawmakers did not even notice that this “broad, very troubling provision” had been added. “The importance of keeping it as a proprietary secret seems minimal when compared to letting the public know what chemicals they and their children are being exposed to,” Leach told Mother Jones.
The limits on what doctors can say about those chemicals makes it impossible to either assuage or affirm the public’s concerns about health impacts. “People are claiming that animals are dying and people are getting sick in clusters around [drilling wells], but we can’t really study it because we can’t see what’s actually in the product,” said Leach.
At the federal level, natural gas developers have long been allowed to keep the mixture of chemicals they use in fracking fluid a secret from the general public, protecting it as “proprietary information.” The industry is exempt from the Environmental Protection Agency’s Toxics Release Inventory — the program that ensures that communities are given information about what companies are releasing. In 2005 the industry successfully lobbied for an exemption from EPA regulation under the Safe Drinking Water Act as well, in what is often referred to as the “Halliburton Loophole.” The Obama EPA has pressed drillers to voluntarily provide more information about fracking fluids, but the industry has largely rebuffed those appeals.
The latest move in Pennsylvania has raised suspicions among the industry’s critics once again. As Walter Tsou, president of the Philadelphia chapter of Physicians for Social Responsibility, put it, “What is the big secret here that they’re unwilling to tell people, unless they know that if people found out what’s really in these chemicals, they would be outraged?”
This story was produced by Kate Sheppard at Mother Jones as part of the Climate Desk collaboration.
DEP asks gas driller to help remedy Franklin Twp. methane spike
citizensvoice.com/news/dep-asks-gas-driller-to-help-remedy-franklin-twp-methane-spike-1.1287800#axzz1pfKvaAid
DEP asks gas driller to help remedy Franklin Twp. methane spike
By Laura Legere (Staff Writer)
Published: March 20, 2012
The Department of Environmental Protection has asked a natural gas drilling company to step in and help three Franklin Twp. families whose well water contains high levels of methane.
State environmental regulators have not determined the source of the gas and are not saying WPX Energy is responsible for the methane, DEP spokeswoman Colleen Connolly said. But in a letter to the driller Friday, regulators asked that WPX help address the problem.
“They can offer to put in (methane) mitigation systems. They can offer to buy bottled water. We did ask them to vent at least one well,” Ms. Connolly said.
“We’re looking at a situation where some temporary fixes need to be put in, and we’re putting the ball in WPX’s court.”
The department began investigating elevated methane in the water wells in December when residents along Route 29 in the hamlet of Franklin Forks noticed discolored water and intermittent eruptions of gas and water from their well.
WPX has been cited by the DEP for flaws in the steel and cement barriers in two of its Marcellus Shale wells closest to Franklin Forks, but the company has said those well casings were properly installed and cemented.
WPX spokeswoman Susan Oliver said that the company received the message from DEP late Friday and reached out to the department Monday to set up a meeting this week.
“WPX Energy has been a good neighbor to the Endless Mountain area,” she said, adding that the company has spent more than $2 million on road repair, charitable giving and flood relief in the last year.
Methane, the primary component of natural gas, has seeped into water supplies through faults or weaknesses in Marcellus Shale wells in other areas of Susquehanna County and the region.
The department also is investigating a natural methane seep in nearby Salt Springs State Park as a possible cause of the well contamination.
Ms. Connolly said she did not have a copy of the letter to WPX to release on Monday.
Tammy Manning, whose family of seven lives in one of the affected homes, said the amount of methane dissolved in her well water rose from 38.9 milligrams per liter during a DEP test in December to 58.4 milligrams per liter during a test this month.
A flammable gas, methane can pose a fire or explosion risk when it escapes from water and becomes trapped in enclosed spaces.
The atmosphere in the open gap in Mrs. Manning’s water well was 82 percent methane during a recent DEP test, she said – too rich to pose an explosion risk, she was told.
Methane is generally explosive at a concentration of between 5 and 15 percent in air.
As of Monday afternoon, her well was still not vented.
Contact the writer: llegere@timesshamrock.com
First 11 Dimock homes sampled by EPA show no health concerns
citizensvoice.com/news/first-11-dimock-homes-sampled-by-epa-show-no-health-concerns-1.1286406#axzz1pCMrG0Lu
By Laura Legere (Staff Writer)
Published: March 16, 2012
The first 11 Dimock Township water supplies tested by the U.S. Environmental Protection Agency did not reveal levels of contamination that could present a health concern, but the samples indicated the presence of arsenic and other compounds that will require further tests at some homes, the agency said Thursday.
Agency officials hand delivered test results to residents whose wells were sampled during the week of Jan. 23 and will meet again with the families individually to review the results and answer questions.
The first test results reported Thursday represent about a sixth of the data collected by the EPA over weeks of sampling in a nine-square-mile area of Dimock where the agency is investigating the potential impact of nearby natural gas drilling on water supplies.
In a statement Thursday, the EPA said samples from six of the 11 homes showed concentrations of sodium, methane, chromium or bacteria, but all were within the safe range for drinking water. The sampling results also identified arsenic in two homes’ water supplies, both of which are being sampled again by the agency.
“Although the (arsenic) levels meet drinking water standards, we will resample to better characterize the water quality of these wells,” EPA spokesman Roy Seneca said in the statement.
Three of the 11 homes tested during the first week of sampling are receiving replacement water deliveries from the EPA. Those deliveries will continue “while we perform additional sampling to ensure that the drinking water quality at these homes remains consistent and acceptable for use over time,” Seneca said.
The agency began testing about 60 water wells in January after the EPA’s review of past tests by the state and other groups raised concerns about contamination from Marcellus Shale drilling.
Seneca said that the agency will share more test results with Dimock homeowners “as further quality assured data becomes available for the remaining homes.”
The statement released by the EPA did not include a complete list of the compounds detected in the first 11 water supplies.
In the test results given to the families, the EPA highlighted compounds found at concentrations that exceeded what the agency described as “trigger levels” based on risk-based screening levels or the standards for public drinking water supplies.
Although all of the results were reviewed by a toxicologist before they were presented to residents, compounds above a trigger level were reviewed sooner by toxicologists and processed quicker by the agency “should we need to take an immediate action to provide water,” Seneca said.
“EPA conducted those reviews and found no health concerns,” he said.
Dimock resident Scott Ely said his test results showed five compounds above their trigger levels, including arsenic, chromium, lithium, sodium and fluoride. The arsenic level in his well water, 7.6 micrograms per liter, was below the federal drinking water standard of 10 micrograms per liter but above the 3 micrograms per liter chronic drinking water screening level for children established by the Agency for Toxic Substances and Disease Registry.
Ely, who has three small children in his home, said the results reveal “nothing surprising: my water is contaminated.”
The number of compounds in his water well that triggered an expedited toxicological review “just confirms that we have issues,” he said.
The natural gas industry said that the results confirm that their operations have not affected drinking water.
George Stark, a spokesman for Cabot Oil and Gas Corp., the firm drilling extensively in the township, said the company is “pleased that data released by EPA today on sampling of water in Dimock confirmed earlier findings that Dimock drinking water meets all regulatory standards.”
He said that the company will continue to work with the EPA as well as state and local regulators to address concerns in Dimock, but he chided federal regulators for intervening in the case.
“We hope that lessons learned from EPA’s experience in Dimock will result in the agency improving cooperation with all stakeholders and to establish a firmer basis for agency decision making in the future,” he said.
llegere@timesshamrock.com
Webinars on March 15 and 22 to examine Pa.’s new gas-well impact fee
live.psu.edu/story/58352#nw69
The webinars are aimed at two different audiences. The March 15 session is a broad overview for the public; the March 22 session is intended for local municipal officials.
UNIVERSITY PARK, Pa. — Two Web-based, evening seminars presented by Penn State Extension, on March 15 and 22, will provide a detailed examination of the shale-gas impact fee legislation recently passed by the General Assembly and signed into law by the governor.
The free webinars, both beginning at 7 p.m. and running 90 minutes, are aimed at two different audiences. The March 15 session, “What the Public Needs to Know about the New Shale Gas Impact Fee: Act 13,” will offer a broad overview, while the March 22 session targets local municipal officials in areas where Marcellus gas-well drilling is prevalent. The March 22 webinar will focus on the local control and planning aspects of the act.
Presenting in the March 15 webinar will be Timothy Kelsey, professor of agricultural economics in the College of Agricultural Sciences, and Stanford Lembeck, professor emeritus of agricultural economics and rural sociology and director of the Pennsylvania Municipal Planning Education Institute. They will briefly discuss background about “The Unconventional Gas Well Impact Fee Act,” including the scale of gas development so far in Pennsylvania, and the impacts on local governments and communities.
“We also will cover how Pennsylvania’s primary local taxes — the real property tax and the earned income tax — miss much of the economic growth occurring from Marcellus,” Kelsey said.
“We then will talk about the impact fee components of the act, including the fee schedule, the decision facing counties — and municipalities, if the counties don’t act — how the dollars will be allocated, and how local governments can use them.”
Kelsey noted that an introduction to the environmental setbacks and local-control components of the act will be provided in the March 15 webinar, including how the act relates to the Municipalities Planning Code.
“We will address what this means for local decision-making and influence about where Marcellus-related activity occurs within a jurisdiction,” Kelsey said. “We also will talk about the Public Utility Commission’s new roles under the act.”
In the March 22 webinar, “What Local Officials Need to Know about the New Shale Gas Impact Fee: Act 13,” presenters will be Ross Pifer, clinical professor and director of the Agricultural Law Resource and Reference Center in Penn State’s Dickinson Law School, and Jerry Walls, AICP, professional planner and retired executive director of the Lycoming County Planning Commission. They will discuss possible impacts of Act 13 on municipalities and suggest aspects of the new law to consider.
They will evaluate the local control components of the act, digging deeper into the specific details about local ordinances and what is allowed and not allowed. Their presentation will be more technical in nature, breaking down the act for planning commission members, elected officials and others who create, update and implement ordinances.
“I will offer perspectives on how to frame policy questions and draft ordinance wording for Public Utility Commission review,” Walls said. “Also, I will explain how the Natural Resource provisions of the Pennsylvania Municipalities Planning Code and the Comprehensive Plan are important as the policy framework within which to write ordinance provisions.”
Questions will be taken and answered as time allows after both webinars. The URL to take part in the webinar is https://meeting.psu.edu/naturalgaswebinars/. For more information, contact Carol Loveland at 570-433-3040 or by email at cal24@psu.edu.
EPA’s Dimock tests divisive
www.timesleader.com/news/EPA_rsquo_s_Dimock_tests_divisive_03-06-2012.html
Mar 6, 2012
Cabot Oil & Gas Corp. and its supporters are at odds with the federal agency.
DIMOCK — The U.S. Environmental Protection Agency’s testing of scores of water wells will give residents of this small Suquehanna County village a snapshot of the aquifer they rely on for drinking, cooking and bathing.
The first EPA test results, expected this week, are certain to provide fodder for both sides of a raging 3-year-old debate over unconventional natural gas drilling and its impacts on Dimock, a rural crossroads that starred in the Emmy Award-winning documentary “Gasland.”
A handful of residents are suing Cabot Oil & Gas Corp., saying the Houston-based driller contaminated their wells with potentially explosive methane gas and with drilling chemicals. Many other residents of Dimock assert the water is clean, and that the plaintiffs are exaggerating problems with their wells to help their lawsuit.
In a letter to EPA Administrator Lisa Jackson, a pro-drilling group called Enough is Enough contends the agency’s “rogue” Philadelphia field office has allowed itself to be a pawn of trial lawyers seeking a big payout from Cabot. More than 300 people signed it. “Dimock Proud” signs dot lawns throughout the village in Susquehanna County, one of the most intensively drilled regions of the Marcellus Shale gas field.
The same group recently launched a website aimed at dispelling what it contends is the myth that Dimock’s aquifer is contaminated.
Residents who have been clamoring for federal intervention say the attacks on the EPA — which have come not only from their neighbors but from Cabot and Pennsylvania’s environmental chief — are groundless.
“Since the EPA’s investigation began, Cabot and (state regulators) have undertaken a shameless public campaign against the EPA’s attempt to rescue the victims who are now without potable water and prevent their exposure to hazardous constituents now present in the aquifer,” one of their lawyers, Tate Kunkle, wrote recently.
Cabot spokesman George Stark said the company opposed the EPA testing because it creates a false impression about Dimock.
“It’s the notion that there must be something wrong there in order for the EPA to either do testing or to deliver water. I think it causes more concern, more mistrust, more misinformation about the industry overall,” he said.
In addition to testing scores of water wells, the EPA is paying to deliver fresh water to four homes where the agency cited worrisome levels of manganese, sodium and cancer-causing arsenic.
Brian Oram, an independent geologist and water consultant from Northeastern Pennsylvania, said he is puzzled by the agency’s rationale for being in Dimock, since the substances that EPA said it’s most concerned about are naturally occurring and commonly found in the regional groundwater.
Nevertheless, Oram supports the EPA testing because it will provide water quality data the parties can trust, and against which future drilling can be measured.
Cabot asserts the high methane levels that its own testing has consistently found in the Dimock water wells are naturally occurring and easily remediated.
But state regulators have cited “overwhelming evidence,” including chemical fingerprinting, that linked the methane in Dimock’s water supply to improperly cemented gas wells drilled by Cabot.
Webinar examines Marcellus gas development and local water decisions
live.psu.edu/story/58188#nw69
The uses and values of water in Pennsylvania are changing because of Marcellus Shale gas development.
UNIVERSITY PARK, Pa. — A Web-based seminar sponsored by Penn State Extension will examine municipalities’ roles related to water use and protection in the face of burgeoning Marcellus Shale gas development in Pennsylvania.
The 75-minute webinar will begin at 1 p.m. on March 15. Presenters are Charles Abdalla, professor of agricultural and environmental economics in Penn State’s College of Agricultural Sciences, and Peter Wulfhorst, extension educator based in Pike County, who specializes in economic and community development.
The uses and values of water are changing in Pennsylvania as a result of the rapid development of the Marcellus Shale gas industry, according to Abdalla. These changes are affecting municipal governments’ roles and activities and local outcomes and impacts.
“For example, there has been a significant increase in the demand for water needed in the hydraulic fracturing of shale gas wells,” he said. “Public water suppliers, including municipally owned systems, are meeting this demand and at the same time generating sizable revenues through water sales.
“Also, some municipalities have generated new revenues by leasing their mineral rights to watershed lands that supply water to their reservoirs and customers.”
Abdalla noted that the webinar will address three topics: water sales, leasing of municipally owned watershed lands and municipalities’ potential role in regulating land use to protect water.
“My webinar presentation will provide an overview of what we know — and don’t know — about these municipal activities, and existing and potential future issues.”
Wulfhorst will discuss the environmental safeguards that may be available under Pennsylvania law to help municipalities protect water.
“Specifically, I will cover the notification changes for both host municipality and adjacent municipality and landowners, and the requirement of a water-management plan not to adversely affect the quantity and quality of water resources,” he said.
“Also, I will review the increase in well-location restrictions for existing buildings, water wells, wetlands, public water supplies and streams, and I will discuss rules under which gas operators will be presumed to be responsible for water-supply pollution.”
The webinar is part of a monthly series of online workshops that provide education about the opportunities and challenges related to the state’s Marcellus Shale gas boom. Information about how to register for the session is available on the webinar page of Penn State Extension’s natural-gas website at http://extension.psu.edu/naturalgas/webinars.
Previous webinars, publications and information also are available on the Penn State Extension natural-gas website (http://extension.psu.edu/naturalgas), covering topics such as Marcellus gas development’s impact on transportation systems; seismic testing; air pollution from gas development; the gas boom’s effect on landfills; Marcellus gas water use and quality; zoning; gas-leasing considerations for landowners; implications for local communities; gas pipelines and right-of-way issues; legal issues surrounding gas development; and the impact of Marcellus gas development on forestland.
For more information, contact John Turack, extension educator based in Westmoreland County, at (724) 837-1402 or by email at jdt15@psu.edu.
First sampling completed in national fracking study
citizensvoice.com/news/first-sampling-completed-in-national-fracking-study-1.1278041#axzz1nnFPjLzE
By Laura Legere (Staff Writer)
Published: February 28, 2012
The first round of sampling at five case study sites has been completed in a landmark federal study of the potential impacts of oil and gas extraction on water supplies, the Environmental Protection Agency’s study coordinator said Monday.
Results from those tests, which include drinking water and streams sampled between July and November 2011 in Susquehanna and Bradford counties, will be reported in a draft of the study expected to be released in December.
The multiyear, congressionally mandated study is investigating a possible link between water contamination and hydraulic fracturing, or fracking, the process of injecting a mixture of water, sand and chemicals into underground rock formations to crack the rock and release the oil or gas trapped there.
The EPA is reviewing the full life cycle of the process, from the moment water for fracking is withdrawn from waterways through the mixing of chemicals and the fracturing of wells to the disposal of the wastewater that returns to the surface.
During an update on the study’s progress on Monday, study coordinator Jeanne Briskin said test results from the five case study sites – including Washington County, Pa., and drilling-heavy areas of Colorado, Texas and North Dakota, as well as Bradford and Susquehanna counties – are being audited for accuracy now and another round of sampling is planned between March and July.
“We don’t assume from the beginning that there is any impact of hydraulic fracturing on drinking water resources,” Briskin said. “We are trying to investigate, where there has been something going on with somebody’s drinking water, what is the cause?”
EPA researchers also have received information from nine randomly selected oil and gas companies about well construction techniques and integrity testing, the chemicals used in fracking their wells and other data.
The agency is reviewing the treatment and disposal of the salt- and metals-laden waste fluid that returns from wells after fracking, including modeling the effects on rivers and downstream drinking water intakes if the wastewater is run through treatment plants that discharge to waterways.
In one subset of the study, the agency is looking at how different forms of wastewater treatment remove, concentrate or leave untouched the chemicals in the gas waste.
The study is expected to be completed in two phases, with the first published draft results released in December of this year and the second at the end of 2014.
llegere@timesshamrock.com
New Pennsylvania Oil and Gas Law
www.jdsupra.com/post/documentViewer.aspx?fid=c23f94ce-c909-4882-86e5-4b10959b1a6f
By: K&L Gates LLP on 2/13/2012
New Pennsylvania Oil and Gas Law Targets Unconventional Gas Operations for Heightened Regulatory Oversight
Introduction
On February 8, 2012, the Pennsylvania General Assembly passed a sweeping reform of the key environmental protection regime that governs natural gas operations. House Bill 1950 (“HB 1950” or “the bill”), awaiting the Governor’s signature, provides a wide-ranging update to and recodification of the Commonwealth’s Oil and Gas Act (the “Act”). In addition to extensive revisions to the Act’s environmental regulatory provisions, HB 1950 also addresses drilling fees and local regulation of the industry, each discussed in companion alerts.
The prior Oil and Gas Act (58 P.S. §§601.101-601.605) is recodified as a new Chapter 32 in title 58 of Pennsylvania Consolidated Statutes (Pa.C.S.). While the new law still applies to all oil and gas operations in the state, much of the new language in Chapter 32 targets unconventional (i.e., shale) natural gas drilling operations that utilize hydraulic fracturing. The industry should quickly become familiar with the updates to discern their effect on existing operations and enable meaningful participation in forthcoming regulatory revisions. Some of the most important amendments, detailed more fully below, include:
• Increased setbacks and well siting restrictions
• New chemical disclosure and reporting obligations
• Additional well permitting procedures, plans, and approvals
• New water supply protections
• Increased bonding requirements
• Stricter enforcement mechanisms
The Oil and Gas Act
First enacted in 1984, the Oil and Gas Act has long provided many of the key environmental safeguards that shape the operations of natural gas drillers in the Commonwealth. To implement the Act, the Environmental Quality Board (“EQB”) has adopted oil and gas well regulations at 25 Pa. Code Chapter 78, and those rules govern administration of the regulatory program by the Pennsylvania Department of Environmental Protection (“DEP”). The Chapter 78 regulations, which were overhauled in February 2011, fill-out the Act’s currently effective requirements. Thus, changes to the Act will necessarily mean changes to the regulations, at least where the regulations are inconsistent with the Act’s new features…
Please see full alert below for more information.
New Pennsylvania Oil and Gas Law
Gas drop slowing drilling
www.timesleader.com/news/Gas_drop_slowing_drilling_02-13-2012.html
Posted:Feb. 13, 2012
Several companies have announced plans to cut gas production around the nation.
As natural gas prices continue to drop, the recent nationwide boom in drilling is slowing. Drillers don’t make money if prices go too low — and drilling wells isn’t cheap.
“It is safe to say that there will be fewer natural gas wells drilled in 2012,” said Kathryn Klaber, president of the Marcellus Shale Coalition, an industry group based in Pennsylvania.
In recent weeks, several companies have announced plans to cut gas production around the nation, but experts say the low prices are also opening up new markets.
When the shale drilling boom was starting in 2008 the average price for a unit of gas was about $8. Two years ago it was down to $5.50, and now it’s dropped to about $2.50. Part of the reason is that the shale gas formations became productive more rapidly than expected, as thousands of new wells have been drilled nationwide.
Industry reports note that the national count of active new gas drilling rigs fell to 775 in early February, down from about 1,500 in 2008.
Yet Klaber said that the low prices create opportunities for more people and industries to use the product. For example, some drilling companies are focusing more on the so-called “wet gas” that sells for a higher price because it can be transformed by refineries into consumer products such as plastics and fertilizer.
Last month, Chesapeake Energy of Oklahoma City said it is reducing the number of new dry gas drilling rigs from 47 to 24 this year. In addition, it immediately cut existing production by about 500 million cubic feet per day, adding that if low prices persist, it may double the cut, to 1 billion cubic feet per day.
The company said that about 85 percent of its nationwide drilling expenditures this year will be toward the more profitable wet gas.
A spokesman for Chesapeake didn’t respond to a request for comment.
Experts say the companies have ways to cushion the low prices. It’s called hedging, and business people have used such tools for hundreds if not thousands of years, said Sara Moeller, a professor of business at the University of Pittsburgh.
“When you put a hedge on, you’re locking in one of your prices, because you’re happy with that price,” said Moeller, who has also worked as a commodities trader.
For example, Houston-based Cabot Oil & Gas Corp. said last month that it received $5.17 per thousand cubic feet of natural gas on some hedged deliveries in the final quarter of 2011. Yet the market price at the time was $3.18 per thousand cubic feet.
Moeller said such deals are possible because large consumers of commodities also want to reduce price swings, such as utility companies. Locking in prices limits their exposure to sudden jumps.
It’s done by a simple, registered trade on stock exchanges. People essentially buy and sell the hedges, setting varying prices for different points in the future.
NEPA counties to raise millions or nothing under gas impact fee
citizensvoice.com/news/nepa-counties-to-raise-millions-or-nothing-under-gas-impact-fee-1.1270948#axzz1mH3yTlIS
By Laura Legere (Staff Writer)
Published: February 13, 2012
Northeastern Pennsylvania’s Marcellus Shale boom counties stand to raise millions of dollars this year through an impact fee on the deep gas wells.
Other regional counties with a handful of wells may get little or nothing.
Once Gov. Tom Corbett signs natural gas legislation that passed the House and Senate last week, counties will have 60 days to adopt an ordinance to levy the optional fee.
Counties with active drilling that pass the ordinance will share with the state and their municipalities an estimated $180.5 million this year on the 3,850 vertical and horizontal shale wells that were drilled through 2011, according to state estimates. But only horizontal or producing vertical gas wells can be levied the fee.
Vertical exploratory wells that have never been hydraulically fractured and do not produce gas, like the two drilled in Lackawanna County and the eight drilled in Wayne County, will not be eligible for the fee.
“Our concern was that truly exploratory wells do not pay the impact fee,” said Drew Crompton, chief of staff for Senate President Pro Tempore Joseph Scarnati, R-Jefferson County. He added that the local impact of such wells is relatively minor and “quite frankly, we don’t want to discourage exploratory wells.”
On the other hand, the bill presumes that horizontal wells are not exploratory so even those not producing gas are eligible for the fee, he said.
That means Luzerne County’s two test wells, both of which are horizontal, will be subject to the $50,000 per well fee if the county adopts it, despite the fact that both were plugged after they showed little prospect of producing economic amounts of gas.
The bill allows fees to be collected for three years on horizontal wells with no production. After that, the fee is suspended for any well producing less than 90,000 cubic feet per day.
Crompton said the state recommends that counties with any shale gas wells pass the fee ordinance.
State lawmakers crafting the legislation broadened the fee eligibility from only counties with wells producing gas in an earlier draft of the bill to all those with unconventional gas wells that have been “spud” – the industry term for the start of drilling.
It is not entirely clear whether counties with “spud” wells that cannot be levied a fee, like Lackawanna and Wayne, will be allowed to share the money collected from the impact fee statewide.
Counties’ eligibility for the fee will be subject to a final determination by state environmental regulators, the governor’s office or the Public Utility Commission, Crompton said.
“Whether it covers everyone or not, we’ll have to see,” he said. “I think it will be interpreted that they should go ahead and vote on the resolution and hopefully make themselves eligible to receive, not a big part of the impact fee, but maybe some of it.”
Luzerne County will consider adopting the fee ordinance even if it stands to raise little from it, interim County Manager Tom Pribula said.
“All counties are basically revenue starved,” he said, “so if we have the ability to generate additional revenues it would be wise to do something.”
The county and its municipalities will share less about $51,000 of the $100,000 raised from the two wells – after the state’s share and distributions to other programs, like the Department of Environmental Protection, natural gas vehicle incentives and low-income housing support, are taken out.
In Wyoming County, where gas drilling has increased rapidly in the last year, commissioners are just beginning to review the impact fee bill, chief clerk William Gaylord said.
“There are a lot of questions to be answered,” he said. He did not indicate if the commissioners are inclined to adopt the fee ordinance.
“This has been talked about for years,” he said, “and they have never come out for or against it.”
If Wyoming County adopts the fee, its wells could raise $4.5 million this year. The county and its municipalities would share about $2.3 million of it, according to calculations based on state spud data.
Local and county governments in Susquehanna County, which ranks among the top gas producers in the state, are eligible for about $11 million of the $20.3 million its wells will raise this year if the county passes the ordinance.
Efforts to reach the Susquehanna County commissioners on Friday were unsuccessful.
llegere@timesshamrock.com