Study suggests businesses benefiting from Marcellus Shale development

http://live.psu.edu/story/53511#nw69
Thursday, May 19, 2011

Marcellus Shale development is likely to affect local businesses across Pennsylvania, according to Timothy Kelsey, professor of agricultural economics.

University Park, Pa. — A survey of businesses in two Pennsylvania counties where natural-gas drilling is occurring suggests that the Marcellus Shale boom is having a positive net effect on business activity.

Summarized in a fact sheet, “Local Business Impacts of Marcellus Shale Development: The Experience in Bradford and Washington Counties, 2010,” the survey was part of a larger economic impact study being done by the Marcellus Shale Education and Training Center, a partnership between Penn State Extension and the Pennsylvania College of Technology in Williamsport.

Partial funding for the study came from the Pennsylvania Department of Community and Economic Development.

“The Marcellus Shale gas boom clearly has the potential to affect local businesses across Pennsylvania,” said Timothy Kelsey, professor of agricultural economics in Penn State’s College of Agricultural Sciences and a lead author of the publication.

“The survey results provide insights into what occurred in two of Pennsylvania’s most active Marcellus Shale counties during 2010 and what other counties could experience as drilling activity increases,” added Kelsey, who also serves as Penn State Extension state program leader for economic and community development.

Researchers surveyed 1,000 randomly selected businesses in each of the counties. Responses were received from 619 businesses — 360 from Bradford County and 259 from Washington County. “The types of businesses responding generally were consistent with the actual business composition of each county’s economy, making the survey fairly representative of actual conditions,” Kelsey said.

Approximately 22 percent of businesses in Bradford County and 9 percent in Washington County reported changes due to Marcellus Shale development.

Nearly a third of Bradford County businesses and 23 percent of Washington County businesses reported increases in sales due to natural-gas drilling. Three percent of Bradford County respondents and 2 percent of Washington County respondents reported a drop in sales.

In regards to employment trends, about 90 percent of survey respondents said that natural-gas drilling has not changed their number of employees. Most of those reporting a change said that they have more employees due to natural-gas development.

A similar percentage reported that their ability to find and hire qualified employees has not changed, although this varied by county. About 13 percent of Bradford County businesses reported trouble attracting workers, compared to only 2 percent in Washington County. About 9 percent of Bradford County businesses reported greater employee turnover due to Marcellus activity.

Kelsey noted that differences in Marcellus-related sales and employment trends in the two counties likely were due mostly to the relative size of their populations and economies. Bradford County is largely rural with a population of about 60,000, while Washington County is much more urbanized and is home to more than 200,000 residents.

“The results suggest that the size of the host county is an important factor affecting the scope and visibility of impacts on businesses due to natural-gas drilling,” he said. “The relative impacts likely will be greater in smaller counties, but this also means greater risk of a ‘bust’ when drilling activity slows.”

The survey also showed that changes in business activity differed across business types. For instance, 80 percent of hotels and campgrounds in Bradford County reported changes due to gas-drilling activity, and 100 percent reported higher sales.

Higher sales also were reported by half of that county’s financial businesses, 44 percent of retailers, 38 percent of eating and drinking establishments, and 33 percent of wholesale trade and business services firms.

Despite concerns about the possible negative effects of Marcellus gas drilling on tourism, tour operators, souvenir stores, tourist attractions and other tourism-related businesses did not appear to be affected. Twenty-nine percent of such businesses reported increased sales due to natural-gas drilling activity, while 71 percent reported no change. None reported difficulties in finding or retaining employees.

“However, the long-term impact on tourism still is unknown, since additional new well pads, pipelines and access roads have the potential to change communities enough to affect tourism,” Kelsey said.

Kelsey cautioned that the survey offers just a snapshot, taken very early in the long-term development of the Marcellus Shale.

“The impacts on businesses may change over time due to the cumulative effects of drilling,” he said. “It’s also important to note that higher local business sales do not directly affect local tax collections by counties or most municipalities and school districts. This study does not change the need for continuous, long-term monitoring of how natural-gas development is affecting businesses, residents, communities and the environment.”

“Local Business Impacts of Marcellus Shale Development: The Experience in Bradford and Washington Counties, 2010” can be found at http://pubs.cas.psu.edu/freepubs/pdfs/ee0005.pdf online. Alternatively, one free copy of this publication can be obtained by Pennsylvania residents from the Penn State College of Agricultural Sciences Publication Distribution Center, The Pennsylvania State University, 112 Agricultural Administration Building, University Park, PA 16802-2602; telephone: 814-865-6713; fax: 814-863-5560; or email, at AgPubsDist@psu.edu.

For out-of-state or bulk orders, contact the Publication Distribution Center.

Susquehanna River Basin Commission faces difficult balancing act

http://www.pennlive.com/editorials/index.ssf/2011/05/susquehanna_river_basin_commis.html
Published: Sunday, May 22, 2011, 4:00 AM
By Patriot-News Op-Ed

While news that a modern-day gold rush is in full bloom this spring in the natural gas-rich Marcellus Shale region would surprise only a hermit, the question remains: Is hydraulic fracturing — a method of extracting natural gas from the shale — turning into yet another rape of the landscape?

Are Pennsylvania’s environmental guardians up to the task or, as some critics claim, are they just a hapless 21st-century band of Keystone Kops?

I believe the Susquehanna River Basin Commission is tackling the issue head-on. Its executive director through nearly half the agency’s 40-year history, Paul O. Swartz, and regulators are protecting our water resources, striking a reasonable balance between environmental needs and the state’s booming natural gas industry.

Just last week the SRBC came out strongly against some findings in a report by American Rivers, a national environmental group. The commission disagrees, for many reasons, with American Rivers’ call for the commission to impose a moratorium on water withdrawals and use approvals for gas drilling. SRBC believes the state’s regulatory improvements, including well casing, impoundments and other safety standards, will adequately protect water quality and their use and enjoyment by the 4 million-plus residents of the river basin.

“Accidents can still happen,” Swartz allows, “but the improvements are intended to make the industry abide by a higher standard.”
Read more

Many worry about water

http://citizensvoice.com/news/many-worry-about-water-1.1150470#axzz1MzQ9BcoU

By Laura Legere (staff writer)
Published: May 22, 2011

An agreement between the Department of Environmental Protection and Chesapeake Energy to address methane seeping into water wells in Bradford County has left some affected residents wondering how and if the deal will help fix their tainted water.

The consent order issued May 16 accompanied a $700,000 fine and $200,000 voluntary payment by Chesapeake for allowing methane trapped in shallow rock formations to leak into drinking water aquifers as it drilled at least six sets of wells into the Marcellus Shale last year.

Sixteen families were identified in the order as having water wells directly impacted by the disturbed methane. Although the order outlines steps the driller must take to monitor and address the contamination, the residents said they have not been told what to expect.

“We don’t know if it is fixable,” said Michael Phillips, one of a cluster of affected residents on Paradise Road in Terry Township. Chesapeake tried unsuccessfully to drill the family a new well and then installed a temporary water-treatment system in a shed in the backyard. Private water tests showed contaminants remained despite the system, he said, so the family is relying on a large plastic water tank, or buffalo, for drinking and cooking.
Read more

Chemical industry looking to expand in Pennsylvania because of Marcellus Shale

http://www.pennlive.com/midstate/index.ssf/2011/05/chemical_industry_looking_to_e.html
Published: Friday, May 20, 2011, 1:55 PM     Updated: Friday, May 20, 2011, 6:00 PM
By DONALD GILLILAND, The Patriot-News

The chemical industry — newly optimistic because of natural gas development in the Marcellus Shale — is looking at Pennsylvania as a venue for expansion.

Secretary of Community and Economic Development Alan Walker said Friday morning that “Three very large international chemical companies came to us and expressed interest in billion-dollar-plus investments in Pennsylvania.”

“We really have to focus on how we attract them,” he said.

Walker made the comments during the meeting of the Marcellus Shale Advisory Commission.

Walker also said there is “a need for an ammonium nitrate plant in Pennsylvania” because the two main ingredients are natural gas and water, both of which Pennsylvania has in great supply. Ammonium nitrate is an ingredient in agricultural fertilizer, which is used in huge quantities in the state.

Walker said his assistant Ashe Khare is on “a national search” to find a manufacturer to set up shop in the commonwealth.

Walker wasn’t the only state official at the meeting to drop tantalizing bits of news.

Secretary of Conservation and Natural Resources Richard Allan announced that his department was preparing a plan to replace its aging fleet of trucks with a fleet powered by natural gas.

Republican legislators have introduced a series of bills aimed at promoting the conversion of large parts of the transportation sector to natural gas.

Lt. Gov. Jim Cawley said, “We need to look beyond drilling. We must not only extract the gas in Pennsylvania, we must use the gas in Pennsylvania.”

The idea has the backing of environmental groups like PennFuture because heavy diesel truck traffic is one of the biggest contributors to air pollution in the midstate. Natural gas emits far fewer pollutants than diesel and gasoline.

Kathryn Klaber, president of the Marcellus Shale Coalition, an industry group representing the top 20 drilling companies in the state, said the benefits of converting transportation to natural gas “accrues most to our cities” where vehicular air pollution is worst. In that way, she said, places like Philadelphia — outside the Marcellus region — stand to benefit from its development.

Klaber also addressed the issue of gas migration into private water wells, calling it a serious and perplexing issue.

No other topic has so seriously damaged the industry’s reputation, as evidenced by the movie “Gasland,” which uses gas migration as the starting point for a host of other — largely unfounded — claims of pollution.

State regulators have fined drilling companies for causing gas to migrate into private wells, the most recent and serious fine — more than $1 million — being just last week.

Yet, in the northern tier where most of the gas migration has occurred, there is naturally occurring methane in the water supply. Companies have argued with regulators — at varying degrees of acrimony — over the extent to which their operations have caused or exacerbated the problem.

Klaber said her member companies have begun testing private water wells in the area before drilling, to establish a baseline. The problem is when they discover polluted wells — before any drilling begins — it’s the industry that has to go knock on the door and inform the citizens.

Klaber noted that Pennsylvania does not regulate or set standards for drilling private water wells, many of which are polluted well before the gas industry arrives.

Nicholas DeBenedictis, former Environmental Resources Secretary under Gov. Dick Thornburgh and current CEO of the water supply company Aqua America Inc., said his company and others have done comprehensive testing and found no contamination from drilling.

Dr. Terry Engelder, PennState geologist credited with advancing the exploration of the Marcellus, said the recent study from Duke University lends additional support to the water companies’ results: It found zero evidence that fracking fluids had contaminated the water supply.

Engelder said the reason is very simple: The fracking occurs about a mile below the aquifer and “Water does not flow uphill.”

Fifteen persons appointed to Schuylkill Marcellus Shale Task Force

http://www.tnonline.com/node/197264
Reported on Friday, May 20, 2011
By AL DIETZ tneditor@tnonline.com
A resolution to establish a Marcellus Shale Task Force was approved by the Schuylkill County Commissioners at their work session held Wednesday at the courthouse in Pottsville.

Fifteen professionals were named to serve on the task force. They include: attorney James J. Amato, Shenandoah Heights, a construction defect, product liability and general liability litigant; Bob Carl, Orwigsburg, executive director of the Schuylkill County Chamber of Commerce and former county commissioner; Patrick M. Caulfield, Ashland, executive director of the Schuylkill County Municipal Authority; Lindsey C. Cortese, Pottsville, photographer; Brett Fulk, New Ringgold, director of commercial services with Susquehanna Bank; Robert Gadinski, Ashland, head of Gadinski Environmental Services; Arthur Kaplan, Frackville, emergency response/training consultant; Wayne G. Lehman, Pottsville, Schuylkill Conservation District natural resource specialist; Craig Morgan, Pine Grove, retired conservation district manager; Ryan P. Munley, Pottsville, field director for bridge and highway construction inspection; Peter J. Oswald, Girardville, retired senior evaluation and assignment manager for Natural Resources and Environmental Team; Gary L. Slutter, Friedensburg, waterways conservation officer; Ed Wytovich, Butler Township, founder of 10 watersheds and science teacher; Thomas V. Yashinsky, Orwigsburg, AARO engineering and environmental consultant; and Frank Zukas, Ashland, president of SEDCO (Schuylkill Economic Development Corporation).

Susan Smith, director of the Schuylkill County Planning Commission, will serve as task force facilitator.

The task force was established for the purpose of advising the board of commissioners and assisting in the preparation of Marcellus Shale-related activities which may occur in Schuylkill County. The task force duties will include identifying key issues, research fact and information, generate public awareness regarding Marcellus Shale activities and review and recommend public policy regarding current and future issues and opportunities related to Marcellus Shale activity in the county.

Commissioner Chairwoman Mantura Gallagher announced the individuals who are appointed to the task force shall commence their respective membership immediately.

The task force will now schedule a meeting to select a chairman and vice chairman and shall meet at least four times per year. They are directed by the commissioners to provide a final report to them no later than 12 months from the initial meeting. They all are serving on a voluntary basis.

Marcellus panel turning focus to local impacts

http://citizensvoice.com/news/drilling/marcellus-panel-turning-focus-to-local-impacts-1.1149959#axzz1MzQ9BcoU

By Robert Swift (Harrisburg Bureau Chief)
Published: May 21, 2011

HARRISBURG – At the halfway point of its work, a state commission looking at development of the Marcellus Shale gas reserves will shift more of its focus to the impact of drilling operations on local communities, Lt. Gov. Jim Cawley said Friday.

Cawley, the chairman of the Marcellus Shale Advisory Commission, said the members will hear presentations from local government officials at its next meeting on June 17.

The introduction of a local impact fee bill this week by Senate Republican leader Joseph Scarnati, R-Jefferson County, is focusing attention on where that issue stands on the commission’s agenda.

Gov. Tom Corbett has said he wants to hear what the commission has to say about impact fees before taking a position. Cawley said the commission intends to stick to its six-month timetable of making comprehensive recommendations concerning Marcellus issues to Corbett by July 22.

“We are looking at impact fees as a possible recommendation to the governor,” Cawley said. “If this commission determines there are unmet impacts that need resources, we will recommend that.”

Cawley reiterated that the commission won’t be recommending a state severance tax on natural gas production since Corbett strongly opposes one. Scarnati’s impact fee bill would levy a base $10 fee annually on each Marcellus well. The base fee would be adjusted for increases in the volume of natural gas produced and price of gas on the market.

Under Scarnati’s bill, up to 60 percent of the fee revenue would go to municipalities and counties with producing wells. The remaining 40 percent would go to environmental and infrastructure projects overseen by the Commonwealth Financing Authority and to county conservation districts.

rswift@timesshamrock.com

Gas Drilling Turning Quiet Tourist Destination into Industrial Town

http://www.reuters.com/article/2011/05/19/idUS338229803420110519
By Elizabeth McGowan at SolveClimate
Thu May 19, 2011 9:00am EDT

‘While we’re drilling wells there are going to be a whole lot of trucks going past your house. And you’re not going to like that,’ says an industry insider

Editor’s Note: SolveClimate News reporter Elizabeth McGowan traveled to Northeastern Pennsylvania in late March to find out how the gas drilling boom is affecting the landscape and the people who call it home. This is the sixth in a multi-part series.

MONTROSE, Pa.—Lynn Senick’s cozy clapboard house is just steps away from state Highway 29, which basically serves as Montrose’s Main Street.

Founded as a center for abolitionists in 1824 — its lore claims it harbored escaping slaves on the Underground Railroad — the county seat has a New England-quaint feel with a prominent town green bookended by a handsome county courthouse and a welcoming library.

Even though Montrose is nowhere near the beaten track, diligent and dedicated organizers put the town on the local map by drawing flocks of visitors to popular annual events such as the Fourth of July parade and festivals celebrating the apple and blueberry harvests, as well as the production of wine and chocolate.

Senick, who educates the public about hydraulic fracturing via an online forum she launched three years ago, is also affiliated with a local group called the Montrose Restoration Committee.

Committee volunteers have played off the success of Montrose’s signature happenings by focusing on attracting and retaining an organic restaurant, book shop, health food store and farmers market. Several years prior, members of the organization had noticed their county’s natural resources, hard by the New York State border, were attracting a different type of resident.

Vibrant young people intent on making their living off the land had started to migrate to this area with the nickname “Endless Mountains” that reflects its continuous up and down geography.

North-South Interstate 81, which roughly bisects the county, is the sole major highway, and the recent arrivals recognized their land and freshwater needs could be easily met in a county with a mere 43,000 people rattling around in 800 square miles. The largest population centers are Wilkes-Barre and Scranton, to the south, and Binghamton, N.Y., to the north.

Recognizing this influx, Susan Griffis McNamara started stocking organic seeds and other affiliated paraphernalia for these small-scale growers at the hardware store side of her business that has been in the family for four generations. Other merchants followed suit.

Now, however, Senick, McNamara and other committee members fear narrow rural roadways clogged with the never-ending grind of drilling-related trucks, and landscapes marred with gas wells, will be a turnoff to tourists and artisan farmers.

“I don’t think this is going to be the quiet little tourist destination we thought it could be,” says Senick, who works at the local food bank. “This is going to become an industrial town.”

While she knows that some property owners will no doubt make money from their oil leases, she wonders how the have-nots she encounters daily will hang on as landlords realize they can raise their rent prices and offer accommodations to well-paid, out-of-town specialists employed by the gas exploration and drilling companies.

“Not everybody always got along here, but this was a stable community,” Senick says. “But this has fractured our community. It has really tossed everybody’s future into the air.”

“They are going to drill to kingdom come and this is breaking my heart. I didn’t move here to be embroiled in this. And now, not a day goes by that I don’t want to get in my car and get out of here.”

Drill, Baby, Drill at What Cost?

With the Marcellus Shale well count growing to at least 2,500 statewide during the last six years — and thousands more on the way — it’s little wonder that those leery of drilling feel they have been booted from their traditional Pennsylvania and plopped down in unfamiliar territory more akin to a mouthful such as PennTexLouisAhoma.

Knowing that natural gas now satisfies about one-fourth of the country’s energy needs and that the powers that be are clamoring for more in the interest of national security has drilling opponents on edge.

Natural gas is touted as a “clean” fossil fuel because burning it releases about half the greenhouse gas emissions of coal. Hydraulic fracturing critics such as Cornell University scientist Robert Howarth have tried to poke holes in that widely accepted estimate with a study claiming that natural gas is filthier than coal because gas wells are leaking gigantic amounts of methane.

The gas industry and other researches have pretty much pooh-poohed Howarth’s results and methodologies, and environmental organizations have raised their own sets of queries.

However, other environmental concerns with hydraulic fracturing have green groups focused on Pennsylvania speaking in unison.

They are worried that rules are too lax at the state level and that regulatory offices can’t keep up with inspections because they are understaffed during these times of severe budget austerity. And it makes them nervous that gas companies are exempt from vital pieces of the Safe Water Drinking Act, the Clean Air Act, the Clean Water Act and other authoritative federal laws.

Endless Questions

Their litany of questions sounds something like this: Are enormous water withdrawals threatening rivers, streams and other waterways? How is it that hydraulic fracturing can proceed when the Environmental Protection Agency has barely begun its study about the impact on groundwater? Why  have companies been so slow to reveal the chemicals they use as lubricants to draw the gas to the surface? Can treatment plants be upgraded to handle radioactive and other dangerous waste liquids?

And the list doesn’t end there.

They want to know how companies can guarantee that drilling casings are failsafe enough that migrating gas doesn’t contaminate drinking water. Are drilling companies thinking about how roads fragment forests and contribute to noise and traffic problems? What impacts are wells, pipelines and the accompanying compressors having on air quality? Why hasn’t the Pennsylvania Legislature required gas companies to pay a severance tax that could cover environmental and social impacts of drilling?

Recent studies such as the one by four Duke University scientists linking shale drilling and hydraulic fracturing to well water contamination with methane offer temporary solace. But conservationists wonder what difference it will make to their long-term plight.

“We all need to keep pressure on regulators and legislators need to give resources to regulators so they can issue permits and develop and enforce those rules,” says Mark Brownstein, the deputy director of the Environmental Defense Fund’s energy program. “Government can’t be everywhere at once.”

At the same time, he adds, drilling companies need to fully grasp their obligations to the public. Worker training and environmental management systems are not negotiable.

“For the most part,” he notes, “the gas industry is slow to pick up on the fact that they have an important role to play and that people expect them to play it. They’ve allowed these issues to become very polarized.”

However, advocates from the Environmental Defense Fund and the Sierra Club think environmental issues can be addressed if drilling companies adopt best practices, invest in technology and embrace rigorous oversight.

They say Pennsylvania doesn’t have to continue to be the media poster child for what states shouldn’t do on the hydraulic fracturing front.

“I think Pennsylvania really has the opportunity to get it right and to effectively regulate, to effectively monitor,” says Deborah Nardone, a Keystone State-based senior campaign representative with the Sierra Club. “If the industry really wants to prove that is it has the ability to do it right, then let’s let them do it right. But they need to show us that they can do it right.”

Frack This and Frack That

Industry officials might constantly emphasize their companies’ commitments to safety but they also tend to discount challenges from drilling opponents.

“To them, hydraulic fracturing always becomes fracking,” says Chris Tucker, a spokesman for the gas industry advocacy organization Energy In Depth. Fracking is vilified as the source of all ills and they spew the word with such disdain, he adds, “that it sounds like a dirty word.”

Tucker becomes a bit defensive and falls back on a line Susquehanna County residents have heard repeatedly when they ask pointed questions about drilling. It’s the one about Pennsylvania already being dotted with tens of thousands — the number hovers around 55,000 — of vertically drilled shallow natural gas wells.

When gas companies made their pitch to landowners around Montrose, they soft-pedaled the same argument Tucker deploys now: that hydraulic fracturing is a mature technology that’s really just more of the same because, after all, the industry has done horizontal drilling in Pennsylvania since the 1980s and has been fracturing since the late 1940s.

Only when pressed does he definitely state that the combination of these two practices in Pennsylvania’s portion of the Marcellus Shale that has occurred for the last six years is indeed new and different.

“We’re not saying there’s never been an accident at an oil and gas site,” he continues. “Yes, there have been incidents but they have all been addressed very quickly. At the same time though, when U.S. Steel has an accident, we don’t say we should stop making steel in this country. The key is managing risks.”

A Rare Blunt Insight

Such extreme uneasiness with risk that has unfolded in places such as Montrose is a familiar tune to Terry Bossert, the vice president of government affairs for Chief Oil and Gas. His Dallas-based company has several offices in Pennsylvania.

Unlike most industry insiders, he blames both gas companies and anti-drilling advocates for what he classifies as a lack of candor and balance in their respective arguments. When asked to comment further on his hypothesis at an April seminar on hydraulic fracturing at the Environmental Law Institute, he offers up a refreshingly blunt assessment.

“The industry makes [people] believe we’ll show up some day,” he tells attendees at the Washington gathering. “By using ‘the force’ we’ll get the gas out of the ground. You’ll never know we’re here. Everyone will have jobs and everything will be hunky-dory.”

“Well, no, actually what we’re going to do is we’re going to move in with mobile industrial plants,” he continues. “And we’re going to move them around all throughout your neighborhood. And if you lived on a road that the only truck that ever went by was the guy delivering fuel oil to your neighbor, well, that ain’t going to be the way it is anymore. For a while, while we’re drilling wells there are going to be a whole lot of trucks going past your house. And you’re not going to like that.”

He proceeds to tell a personal story about how annoyed he was years ago when his family lost the peacefulness of cul de sac living after the farmer who owned a chunk of adjacent land sold the property to a housing developer.

Bossert says he is always sympathetic to homeowners affected by hydraulic fracturing who tell him: “I live in a rural area. I like a rural area. And now, you’ve shown up and you’ve put up a 150-foot drill rig and there’s lights on it all night. And there’s trucks driving up and down the road, And you’re a pain in the neck.”

Though he can’t argue with those common complaints, he says they always take him back to the one essential question: Is harvesting the gas from the Marcellus Shale economically and environmentally sensible?

Two new publications address Marcellus Shale-related water issues

http://live.psu.edu/story/53394#nw69

University Park, Pa. — Two new publications from Penn State Extension will help Pennsylvania citizens to become familiar with Marcellus Shale-related water issues, with an eye toward participating in public policy decisions.

“Marcellus Shale Gas Well Drilling: Regulations to Protect Water Supplies in Pennsylvania” introduces the various water-related policies affecting Marcellus Shale natural-gas drilling.

“Marcellus Shale Wastewater Issues in Pennsylvania — Current and Emerging Treatment and Disposal Technologies” discusses the state of the art in treatment and disposal of wastewater from Marcellus Shale natural gas drilling.

“Individuals, businesses and communities may be affected by the operations of this rapidly growing industry in the commonwealth,” said the publications’ lead author, Charles Abdalla, professor of agricultural and environmental economics. “Public policies for environmental protection will be improved if the affected parties — which include almost everyone — are well-informed about likely impacts and take advantage of opportunities to participate in decisions.”

Policy makers at the federal, multistate, state and local levels have made regulatory decisions affecting shale gas exploration, with implications for water resources. In most cases, these regulations originated with legislation, such as Pennsylvania’s Oil and Gas Act. However, government agency rule-making and court decisions also influence how gas drilling affects water resources and the environment.

“Marcellus Shale Gas Well Drilling: Regulations to Protect Water Supplies in Pennsylvania,” discusses the roles of the various levels of government, relevant sections of the Pennsylvania Oil and Gas Act, permit requirements, protection of drinking water quality and groundwater, methods for disposing of drilling fluids, and the role of river basin commissions, among other issues.

The limited options available for treatment and disposal of wastewater from this burgeoning industry have slowed the industry’s expansion. But in the past year or so, important state regulatory changes have been finalized, clearing the way for innovation to meet the challenges of treating Marcellus wastewater, which is very high in total dissolved solids.

“Marcellus Shale Wastewater Issues in Pennsylvania — Current and Emerging Treatment and Disposal Technologies” covers the volume of wastewater generated by the industry in Pennsylvania, the types and chemistries of Marcellus wastewater, additives used in hydrofracturing, the state’s new total dissolved solids standards, and the various options for wastewater treatment and disposal.

Abdalla said the publications are aimed at engaging residents, landowners, environmental organizations, economic development groups and others.

“Now is the time for people to learn about and help shape public policies that will guide development of the Marcellus Shale,” Abdalla said. “These policies will play a large part in determining the economic well-being and quality of life for residents of the commonwealth for a long time — perhaps generations — to come.”

The publications are based upon work supported by the Pennsylvania Water Resources Research Center. Any opinions, findings, conclusions or recommendations expressed in the publications are those of the authors and do not necessarily reflect the view of the center.

These and other publications on water-related aspects of Marcellus Shale gas exploration are available at http://extension.psu.edu/water/marcellus-shale online.

Pa. DEP issues $1M in fines to major gas driller

http://www.businessweek.com/ap/financialnews/D9N9D7T01.htm
By MARC LEVY
HARRISBURG, Pa.

One of the most active companies in Pennsylvania’s natural gas drilling boom was fined more than $1 million on Tuesday, including a penalty that state officials called the single largest fine for an oil or gas operator in the state.

The state Department of Environmental Protection said the action stems from Chesapeake Energy Corp.’s contamination of private water supplies with methane in northern Pennsylvania’s Bradford County and a February tank fire at a drilling site in southwestern Pennsylvania’s Washington County.

“It is important to me and to this administration that natural gas drillers are stewards of the environment, take very seriously their responsibilities to comply with our regulations, and that their actions do not risk public health and safety or the environment,” DEP Secretary Michael Krancer said in a statement.

Oklahoma City-based Chesapeake said it had voluntarily entered into two separate agreements with the DEP and improved its well construction practices, although it did not assume blame for methane gas migrating into wells.

“Even though the results of our joint review remain inconclusive at this time, we believe proceeding with an agreement and taking prompt steps to enhance our casing and cementing practices and procedures was the right thing to do,” Chesapeake official Brian Grove said in a statement.

Chesapeake will pay $900,000 in the gas migration case and $188,000 for the tank fire.

The fines come as the U.S. Environmental Protection Agency is looking closely at how Pennsylvania is regulating the rush to explore the lucrative Marcellus Shale formation, considered the nation’s largest  natural gas reservoir, and putting pressure on state regulators to toughen enforcement. For instance, the EPA has asked for a full accounting of operations at the site of a Chesapeake well blowout in April.

Any potential violations from that well blowout, also in Bradford County, are not included in the fines announced Tuesday. The accident spilled thousands of gallons of chemical-laced water and prompted officials to ask seven families to temporarily evacuate.

The Chesapeake action might be the largest fine, but it is not the biggest Marcellus Shale-related payout: In December, the agency announced a settlement with Houston-based Cabot Oil & Gas Corp. to pay $4.1 million to residents in the northern Pennsylvania town of Dimock where private water wells were also contaminated with methane gas. Cabot agreed to pay the state $500,000 in the case.

The Marcellus Shale formation lies primarily beneath Pennsylvania, New York, West Virginia and Ohio. Pennsylvania, however, is the center of activity, with more than 3,000 wells drilled in the past three years and many thousands more planned in the coming years as thick shale emerges as an affordable, plentiful and profitable source of natural gas.

Drillers’ use of chemicals and high-volume hydraulic fracturing, which produces millions of barrels of often-toxic briny wastewater annually, has raised fears of river and groundwater pollution.

Chesapeake is perhaps the most active company in the Marcellus Shale, with more than 360 wells drilled. It has received more than 1,200 well-drilling permits — the most of any operator — or about one in six issued on the Marcellus Shale in the last three years, according to state records. In 2010, it was also one of Pennsylvania’s most-penalized Marcellus Shale drillers, with 134 violations and 25 enforcements, state records say.

In the Bradford County problems that contributed to the million-dollar fines, the department said that improper well casing and cementing allowed natural gas to seep into groundwater and contaminate 16 families’ drinking water wells. The department began investigating the complaints last year. In November, it won approval of stronger well-casing and cementing rules that a top DEP official has said would have prevented the gas migration.

The agreement requires Chesapeake to create a corrective action plan for the contaminated wells and clean up the contaminated water supplies.

In Avella in southwestern Pennsylvania, three condensate separator tanks caught fire on Feb. 23, injuring three subcontractors working at the site, the DEP said. The agency blamed improper handling  and management of condensate, a wet gas, and is requiring Chesapeake to submit condensate-management plans.

Chesapeake also is facing lawsuits over the tank fire and gas migration.

Peter Cambs, a lawyer who represents several plaintiffs in Bradford County who have sued Chesapeake over methane contamination, said the fine is the latest indication that gas drilling can be hazardous.

“I think it clearly shows there are problems and I don’t think the DEP would just willy-nilly assess a fine of that magnitude based on a whim or speculation,” Cambs said. “They wouldn’t have done so without careful investigation or analysis. I think you’re going to see more and more of these findings.”

Natural gas drilling moving closer to Delaware River basin

http://www.philly.com/philly/news/pennsylvania/121972574.html?viewAll=y
Posted on Tue, May. 17, 2011
By Sandy Bauers
Inquirer Staff Writer

Although the Delaware River has a moratorium on natural gas drilling until rules are in place, companies are already lining up.

The commission overseeing the river has granted one request for withdrawal of water for natural gas activities, and two more are being evaluated. Yet a fourth was up for a vote last week before it was tabled because of the large flurry of public comments.

Even though the approvals aren’t sufficient to allow companies to start drilling now, critics say that any consideration by the Delaware River Basin Commission is premature.

The commissioners say that they anticipate so much work, they simply need to start.

Either way, it signals that natural gas exploration – a common sight in central and Western Pennsylvania – is moving ever closer to the Delaware basin and its river, which provides drinking water for 15 million people, including Philadelphia and many of its suburbs.

“It looks more and more inevitable that there is going to be drilling in the basin,” said John Quigley, former secretary of Pennsylvania’s Department of Conservation and Natural Resources, now an environmental consultant. “The question is under what rules?”
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