PA Marcellus News Digest 7/16/12

PA Marcellus News Digest

July 11 & 12, 2012

Releases

UGI Energy Services announces plans to supply LNG as a fuel for drilling operations in the Marcellus Shale region
Wallaby
BusinessWire
July 11
WYOMISSING, Pa.-UGI Energy Services, Inc. today announced that it will provide liquefied natural gas (LNG) to fuel drilling rigs active in the Marcellus Shale region. The LNG will displace diesel currently used to fuel power generation equipment at the rig site.
Link: http://wallaby.telicon.com/PA/library/2012/2012071298.HTM

MSC Reinforces Local Hiring With Supply Chain Recommended Practice
Wallaby
July 12
Pittsburgh, Pa. – In line with its Guiding Principle “to attract and retain a talented and engaged local workforce,” the Marcellus Shale Coalition (MSC) today released the second in a series of Recommended Practices aimed at bolstering the region’s supply chain. The document -- available online here -- builds upon and formalizes ongoing MSC efforts focused on expanding small- and medium-sized business opportunities related to safe American natural gas development.
Link: http://wallaby.telicon.com/PA/library/2012/2012071273.HTM

Articles

Marcellus Tax Loopholes on WHYY’s Radio Times
State Impact
Susan Phillips
July 11
Link: http://stateimpact.npr.org/pennsylvania/2012/07/11/marcellus-tax-loopholes-on-whyys-radio-times/

Can fracking pollute water? Study tries to answer
Times Online
AP
July 11
We know that the Pirates’ surprising summer success and our recent hotter-than-average temperatures may not be the only reasons leaving you to scratch your head lately.
Link: http://www.timesonline.com/news/business/can-fracking-pollute-water-study-tries-to-answer/article_12bbf19c-9932-58d4-b372-462521580ad3.html

Displaced families at center of fracking protests
Times Online
Tara Zrinski
July 11
JERSEY SHORE, Pa. -- At 7 a.m. June 13, the day after police escorted 35 activists from the Riverdale Mobile Home Village, the demolition company Alan K. Meyers went to work clearing the colorful barricades, abandoned trailers and all traces of a two-week protest that brought national attention to the plight of dozens of families being displaced by an aggressive natural gas industry.
Link: http://www.timesonline.com/news/local_news/displaced-families-at-center-of-fracking-protests/article_6dc8f7da-8121-5873-a73f-3550cc1b4d9e.html

Compressor hearing set for September
Times Leader
Camille Fioti
July 11
WEST WYOMING – A public hearing regarding UGI’s permit application to the state Department of Environmental Protection for a proposed gas compressor station will be held sometime in September, council President Eileen Cipriani said during Monday’s council meeting.
Link: http://www.timesleader.com/stories/Compressor-hearing-set-for-September,174261?category_id=487&town_id=1&sub_type=stories

'Truthland' screening comes to central Pennsylvania
Post-Gazette
Laura Olson
July 11
HARRISBURG -- A new industry-sponsored documentary firing shots at Josh Fox and his controversial film brought its road show to central Pennsylvania on Tuesday, where a dozen residents and experts gathered for an evening screening.
Link: http://shale.sites.post-gazette.com/index.php/news/archives/24682-truthland-screening-comes-to-central-pennsylvania

DOE study in Greene County focuses on rise of fluid through shale layers
Pitt Trib
Timothy Puko
July 12
The U.S. Department of Energy plans to chime in on the question of whether fluids from deep, underground shale formations can rise over time.
Link: http://triblive.com/news/allegheny/2190046-74/marcellus-shale-gas-hammack-wells-drillers-drilling-energy-fluid-natural

Quality as well as quantity: Are water withdrawals damaging?
Post-Gazette
Halle Stockton, Publicsource
July 11
Three million gallons of water a day sounds like an enormous amount to take from the Susquehanna River -- or any natural waterway.
But the Susquehanna withdrawals planned by Aqua America and Penn Virginia Resource Partners are only a fraction of water removed from all Pennsylvania water sources.
Link: http://shale.sites.post-gazette.com/index.php/news/archives/24686-quality-as-well-as-quantity-are-water-withdrawals-damaging

Delaware River Basin Commission approves water uses for natural-gas-pipeline firm
Inquirer
Sandy Bauers
July 12
[...]At its meeting Wednesday, the interstate agency that oversees water issues in the river basin unanimously approved water withdrawals totaling nearly six million gallons for a major interstate pipeline project that would involve tunneling under the Delaware River.
Link: http://articles.philly.com/2012-07-12/news/32649354_1_pipeline-project-water-issues-water-withdrawals

Can fracking pollute water? Department of Energy study tries to answer
Patriot-News
AP
July 12
PITTSBURGH — A new study being done by the Department of Energy may provide some of the first solid answers to a controversial question: Can gas drilling fluids migrate and pose a threat to drinking water?
Link: http://www.pennlive.com/midstate/index.ssf/2012/07/can_fracking_pollute_water_dep.html

Preparations Ahead to Develop Utica Shale
State Impact
Susan Phillips
July 11
Link: http://stateimpact.npr.org/pennsylvania/jp/preparations-ahead-to-develop-utica-shale/

Fractured lives along the Susquehanna: Marcellus Shale operations lead to evictions
Post-Gazette
Halle Stockton, Publicsource
July 11
JERSEY SHORE, Pa. -- On hot days, twins Amanda and Chevelle Eck splashed in the Susquehanna River behind their trailer in the Riverdale Mobile Home Park.
Link: http://shale.sites.post-gazette.com/index.php/news/archives/24685-fractured-lives-along-the-susquehanna-marcellus-shale-operations-lead-to-evictions

Campus drilling bill remains live issue
Times-Tribune
Robert Swift
July 12
HARRISBURG - A bill paving the way for natural gas drilling at the 14 state-owned universities and other unexplored state property just missed winning final passage in the marathon legislative session that produced a new state budget earlier this month.
Link: http://thetimes-tribune.com/news/gas-drilling/campus-drilling-bill-remains-live-issue-1.1342236

Make utilities find lost gas
Times-Tribune
Opinion
July 11
Natural gas prices have declined steadily over the last few years because of the discovery of huge new domestic sources, including the Marcellus Shale.
Link: http://thetimes-tribune.com/opinion/make-utilities-find-lost-gas-1.1341686

Washington Township residents: Use drilling revenue to ease impact
Pitt Trib
Jodi Weigand
July 10
Westmoreland County residents want officials to use some of the money the county will receive from Marcellus shale impact fees to prepare for possible environmental damage caused by the drilling practice.
Link: http://triblive.com/news/2185297-74/county-township-impact-washington-westmoreland-drilling-money-residents-wells-drilled

Fracking ban is about our water
Inquirer
Editorial
July 11
The eleventh-hour surprise decision by Pennsylvania lawmakers to ban natural-gas exploration across a swath of suburban Philadelphia is another sign that the region isn't ready for drilling rigs. It's possible that it never will be.
Link: http://articles.philly.com/2012-07-11/news/32633463_1_drilling-ban-gas-drilling-limit-drilling

Warning Lights: Rare synchronous fireflies are discovered in Allegheny National Forest — a hotbed of logging and gas-drilling.
"The Allegheny, they've just written it off as an extractive forest. It's being liquidated."
Pittsburgh City Paper
Bill O'Driscoll
July 11
[...]Cathy Pedler, of the Allegheny Defense Project, learned of the well last November, shortly after the U.S. Forest Service's Allegheny Resource Advisory Committee, on which she sits, approved funding for the firefly study. Concerned about the site and its timing, she says, she confronted PGE general counsel Craig Mayer. Mayer, who's secretary of the Pennsylvania Independent Oil & Gas Association, also sits on the committee.
Link: http://www.pghcitypaper.com/pittsburgh/warning-lights-rare-synchronous-fireflies-are-discovered-in-allegheny-national-forest-a-hotbed-of-logging-and-gas-drilling/Content?oid=1542185

Review of state fracking rules finds lots of gaps
E&E News
Peter Behr
EnergyWire
July 12
(full text below)
As shale gas and oil development has taken off, state officials and some prominent industry representatives have told Washington to keep its hands off an area they want left to state regulation.

A new study of state rules for hydraulic fracturing highlights a dilemma on this front, however. On a number of crucial safety issues, many state rules are applied well by well, hampering comprehensive assessments. In some cases, there is no state regulation at all.

The study, "A Review of Shale Gas Regulations by State," published this week by Resources for the Future, reports a survey of regulations in 31 states with large gas reserves or active gas drilling. State regulations were compared with the American Petroleum Institute's "best practice" guidelines for conducting safe drilling and fracturing operations.

RFF maps displaying fracking regulations include blanks for many states because its researchers could not find the data. "So far, we've limited our effort to look at the rules," said RFF senior fellow Alan Krupnick, director of the foundation's Center for Energy Economics and Policy, whose experts wrote the report.

If an issue is not written down in state regulations, RFF could not assess the state's standards. "It might be covered in the permitting process, or it might be not regulated at all. We just don't know," he said.

For example, RFF surveyed state requirements for pre-drilling testing of well water at drilling sites, which is needed to establish a baseline for water quality prior to development. Regulations in 22 states do not mention pre-drilling testing, including major producers such as Texas, Arkansas, Michigan and Pennsylvania, four of the five largest U.S. shale gas producers in 2009. API says best practice is to test water samples from any water sources near a well before drilling or fracturing.

Perhaps the most dramatic demonstration of state-by-state differences in the RFF report concerned the number of inspectors each state deploys to inspect drilling and fracturing operations. The report compares the number of wells by state in 2010. The data on inspectors are more recent, RFF said.

Ohio and Indiana, for example, reported having one inspector for 30 to 140 producing wells. Pennsylvania and Arkansas had one inspector for 141 to 360 producing wells. Inspectors in Colorado, Kansas and Wyoming were responsible for 501 to 1,630 wells, RFF said. Texas and Oklahoma were among states that did not publish data on inspectors or did not respond to RFF's requests for information before the study was published, RFF said. States that are struggling to balance budgets will be pressed to hire enough qualified inspectors to keep up with the growth in shale gas production.

Krupnick said the RFF report provides valuable comparisons of state practices but is not a scorecard of best and worst public safety regulation. "I would say that is definitely not an inference you want to make," he said.

Matt Watson, senior energy policy adviser for the Environmental Defense Fund, called the RFF report "a very exciting tool that can help state regulators quickly get a sense of what their peers are doing as they try to evolve their regulatory structures. It can be handy for citizens, advocacy groups and industry for the same purpose.

"What jumped out to me were the differences among the states," he said. That's not surprising, he added, but highlights the importance of efforts under way to develop best practice models.

Krupnick said, "A best practice, to me, is where the companies have an incentive to balance the benefits and costs of a particular course of action [to] maximize the benefit to society. You don't want to overcontrol something that isn't that great a risk, and you want to take into account the variability of geology" and other circumstances, such as whether drilling is occurring in isolated areas or near population.

"Flexibility is actually a good thing if the enforcing agency has the staff and expertise to evaluate how flexible they should be," Krupnick said. "You have to balance the appropriate flexibility with regulatory expertise and independence."

"The operators like flexibility," said Briana Mordick, oil and gas science fellow at the Natural Resources Defense Council. "But it makes accountability difficult. We're for having performance-based requirements, but we think those should be written into law and regulation, and not just left up to the discretion of people writing or approving the permits."

It's the water

One area of considerable permitting discretion concerns the several million gallons of water that are pumped down each well to carry out the fracturing of shale formations.

According to RFF, no state currently sets statewide restrictions for water withdrawal. While 28 states require general permits, or registration for surface or groundwater withdrawal, nearly half of these don't specify a threshold amount. Among the latter are Texas, Arkansas, Oklahoma, Colorado and Pennsylvania. Louisiana and Kentucky exempt the oil and gas industry from water withdrawal requirements.

API guidelines specify the type of cement that should be pumped into the space between the well hole and the drilling pipe, a critical barrier to prevent gas or wastewater leaks from contaminating water aquifers. While 10 states -- including Texas, Michigan, Pennsylvania and West Virginia -- specify a cement type, the rest do not, or they cover the issue when individual wells are granted permits, RFF said.

API recommends that the cement casing extend 100 feet below the low point of an underground drinking water source. Thirteen states prescribe that depth, varying from 30 feet in West Virginia to 120 feet in Wyoming. Ten states set depths for individual wells, with a general performance standard requiring drillers to protect freshwater aquifers, RFF said.

Fewer than half the states have regulations requiring disclosure of hydraulic fracturing fluids, which include toxic and nontoxic chemicals added to enhance gas production. Leading shale gas producers, including Texas, Arkansas, Oklahoma, Montana, North Dakota, Colorado, Pennsylvania and Ohio, require disclosure in different forms but allow drillers to claim trade secret protection for chemicals they consider proprietary.

"One of the biggest challenges in developing model standards for states is being able to do it in a way that accounts for variable conditions," Watson said. "That is a challenge, but it isn't insurmountable. There are aspects to regulating shale gas production that lend themselves more to uniformity than others."

In one shale area, a 100-foot barrier below an aquifer might be sufficient. It could be 150 feet in another area, he said. On other issues, differences aren't significant. "The methods for controlling methane emissions in Colorado aren't likely to be that different from the methods in Pennsylvania," he said.

"We would all default to wanting there to be clear, immutable rules," Watson said. "But the fact is, you need to build in an opportunity for professional judgment to come into play. To me, that demonstrates first and foremost the importance of having transparency not only in industry operations, but also in regulatory practices."