Natural gas is a preferred energy source with a wide variety of uses. The future looks good for the development of the Marcellus Shale in the northeastern United States.
Peter
Economic Development
The size of the economic impacts from Marcellus
depend critically on whether the businesses exist
within the Pennsylvania communities to support
ancillary economic activity created by natural gas
exploration and development. The more spending
that occurs outside the community, the less economic
benefit will accrue locally since those dollars will
simply leave the community rather than recirculating
among local businesses.
Similarly, to the extent
nonresidents hold new jobs, the lower the benefit to
the community. The twofold economic development
challenge is thus:
1. Finding ways to help local businesses and workers
compete for the new business opportunities
arising from natural gas.
2. Finding ways to encourage businesses, workers,
and royalty owners to spend their new dollars
locally rather than out of town. New business
start-up and technical assistance should target
business opportunities related to natural gas, and
workforce development training should focus on
the new specialized jobs that will be created (such
as land men who service the wells).
General local business and community development
programs focused on helping local businesses
or downtowns be competitive could similarly help
Pennsylvania communities better compete for the
new spending resulting from the natural gas revenues.
Environmental Impacts
The construction, activity, and existence of natural
gas wells in the community and industry may cause
significant environmental changes to the areas.
These issues should be considered when planning
and enforcing local action to accommodate the
developing gas industry. Possible environmental
concerns that could arise from drilling activity
include:
• Aesthetics and recreation—heightened noise and
the effects of drilling may affect the aesthetics and
recreational value of a resource for both nonconsumptive
(e.g., hiking, birding) and consumptive
(e.g., fishing, hunting) recreational use. This may
affect communities that are promoting natural resource-
based tourism.
• Habitat fragmentation—well sites and associated
infrastructure may fragment Pennsylvania forests.
Fragmentation will decrease habitat quality for
many wildlife species that are dependent on
deep forest habitat; it is also associated with an
increased spread of nonnative and invasive plants,
causing further habitat degradation for native
plants and animals.
• Water impacts—water consumption and
wastewater disposal may affect aquatic resources
both locally and within the larger watershed.
• Timber resources—access roads and pipelines
may cause damage to timber stands, resulting
in loss of forestry income, appraisal, and sale of
timber.
• Soil compaction and long-term site fertility—
well sites may compact the soil, affecting the
long-term health and fertility of the area.
Forestry concerns that show effects on forests,
wildlife, ecology, and local natural balance need to
be addressed by DEP, Conservation Districts, and
other associated agencies through regulation and
enforcement.
After drilling has occurred in an area,
proper site restoration is a necessity. The best ways
to restore sites depend on the location and natural
surroundings, making it necessary for officials to
gather information on the pros and cons of different
methods of site restoration. The type and quantity of
vegetation replanted will make a large impact on the
natural ecology and balance.
What Local Officials Can Do
Local government officials concerned about the
impact of Marcellus shale development on their
community need to greatly expand and upgrade their
comprehensive community planning efforts. The fast
pace of gas drilling—and all its related activities—
means that planning must be done on a continuous,
daily basis. Every new well that is drilled causes small
changes in the community. Monthly meetings of the
planning commission are not sufficient to keep up
with these changes.
We also need a new way to think
about how communities plan for gas exploration.
Comprehensive community planning is more
than just the established “comprehensive plan.” A
comprehensive plan, as permitted in the Municipalities
Planning Code, serves as a useful tool for
municipal management by providing a broad, general
framework for common development issues projected
ten to twenty years into the future. This would be
acceptable if things did not change very quickly, but
that is not the case with gas drilling. Few comprehensive
plans were prepared with major natural gas
development in mind, so they are not adequately
prepared to address the potential impacts of the
Marcellus shale formation.
A more comprehensive view must take into
account all the important issues and how they interrelate
to one another. This view involves more
than just land use. Gas drilling brings many new
factors to communities that have not been experienced
previously in many areas of Pennsylvania.
Exploration of the Marcellus shale will generate
large amounts of money from the leasing of land,
construction, trucking, commerce, and housing development.
Some residents will have more money to
spend, but will they spend it in the community and
region? Will they take that capital somewhere else
if there are no places for them to spend their money
locally?
New opportunities for business development
should increase with gas drilling, which will require
infrastructure investments in roads, water, and
sewer facilities. Housing needs for gas and related
workers will increase. Will their needs be met with a
temporary variety of housing or is the plan to build
long-term residential areas that will be attractive to
gas industry workers and their families?
There will also be new service, public safety, and other expenses
imposed on local governments that may not be
consistent with tax revenues derived from natural gas
drilling or leasing activities.
To address these complex issues, the comprehensive
planning undertaken by municipalities and
counties should have four components:
1. Taxation and municipal finance: a component to
examine tax revenues and expenditures related
to gas exploration and project future financial
resources needed for municipal and county operations,
and school districts in the region.
2. Public investment: for examining and developing
a plan on how municipalities, counties, and
school districts can use their assets and facilities
to generate revenues from drilling, transmission,
water, and wastewater activities related to gas
exploration.
3. Comprehensive land use: a plan to incorporate
natural gas development as a new and distinctive
land use and provide for economic development,
new commercial and residential activity, and
improvements to the local transportation system.
4. Municipal management: a component of planning
to provide personnel that will keep track of
mining activities, carry out inspections, anticipate
production changes, and encourage workforce
development to supply skilled workers. Since gas
exploration is regional in scope, the management
process needs to be carried out jointly by affected
municipalities, counties, and school districts, as
well as the private sector.
The vast economic and social impacts related
to exploration of the Marcellus shale deposit call
for new thinking. Sound, innovative, continuous
comprehensive planning is needed for Pennsylvania
municipalities to maximize the long-term benefits
from Marcellus shale development while minimizing
potential negative impacts.
The experience of some local governments
with the gas companies has been very positive, and
many companies have shown a desire to conduct
themselves appropriately within the community.
The companies are investing millions of dollars into
drilling and pipeline construction with plans to remain
in the drilling areas for years. The length of these
relationships demands a certain level of cooperation
between parties, and jeopardizing the ability of the
companies to operate would be detrimental to a
productive and beneficial relationship. It is important
for municipal officials to ensure good communication
and collaboration, with a method for quickly and
easily addressing problems if they occur.
Areas to Consider
Road Bonding
The Commonwealth can prohibit the use of and
impose size or weight restrictions on highways and
bridges under its jurisdiction in accordance with
Department of Transportation regulations. Trucks
considered heavy haulers must pay for the road
damages that they create; thus, bonding is necessary.
No vehicles in excess of the size or weight
limitations specified are allowed on Pennsylvania
highways unless the department or local authority
grants a waiver. Local authorities that post size or
weight restrictions, either in accordance with the
size, weight, and load chapter or that differ from that
chapter, must comply with the department regulations.
Posting and bonding municipal roads is
authorized in the state vehicle code.
The PennDOT
Bureau of Maintenance and Operations is in charge
of municipal road posting and bonding information.
You can also find codes for the authorization to use
bridges posted owing to condition of the bridge and
to use highways posted because of traffic conditions.
Some of the key provisions of road bonding include:
• Posting: a road must be posted with a weight
limit before a bond can be required of a hauler.
The steps taken to establish a weight limit include
(1) completing an engineering and traffic study
that supports the need for a weight restriction;
(2) passing an ordinance identifying the road
segment and setting the weight restriction; (3)
advertising the posting two times in a general
circulation newspaper at least five days prior
to actual posting; (4) contacting known heavy
haulers who are using the road about executing a
maintenance agreement; and (5) erecting standard
signs showing the weight limit.
• Excess maintenance agreement: after posting a
road, the local government enters into an excess
maintenance agreement with each hauler who will
be operating overweight vehicles on that road.
This agreement allows the local government to
shift responsibility for repairing road damages
on a pro rata basis to the haulers who damage the
road. Note that haulers are only responsible for
damage they cause in excess of normal wear and
tear on the road.
• Permits: driving an overweight vehicle on posted
roads generally requires a permit. The type of
permit depends on the number of vehicles, the
number of posted roads used, and the amount of
use. Permits are issued only after an excess maintenance
agreement has been signed.
• Inspections and monitoring: before overweight
hauling begins, the local government inspects the
road to determine its condition. The hauler who
pays for this service has the right to be present.
After hauling begins, the local government is
responsible for monitoring the condition of the
road and notifying the hauler of any necessary
repairs. If the local government is responsible for
making the repairs under the excess maintenance
agreement, the local government bills the hauler
for the costs.
• Security (bonding): haulers generally must provide
security to ensure payment for any road repairs for
which they are responsible under the agreement.
This security is usually a performance bond, a
standby letter of credit, or a certified bank check.
The regulations specify the amount of security that
may be required for unpaved roads ($6,000 per
linear mile) and paved roads ($12,500 per linear
mile) in cases wherein the hauler agrees not to
downgrade the road. When the local government
and the hauler agree that the road type can be
downgraded during hauling and restored after
hauling ceases, the amount of security required is
$50,000 per linear mile. If the hauler uses several
roads for only a short time or makes relatively few
trips, the rates per mile may be replaced with a flat
rate of $10,000. By following these rules, local
officials can assure taxpayers that they will not
have to pay for road repairs caused by overweight
vehicles.
Local governments considering road bonding or
posting weight limits on bridges should carefully
consider potential impacts on other road users since
they may unintentionally affect others. Bridge weight
limits, for example, could make it difficult for milk
trucks or feed trucks to reach farms, hurting those
businesses.
For more about road bonding, see PennDot
publication 221: Posting and Bonding Procedures for
Municipal Highways, which may be purchased from
the PennDOT store. ftp://ftp.dot.state.pa.us/public/
PubsForms/Publications/PUB%2012.pdf
Zoning and Subdivision and Land Development
Ordinances
At the time of the writing of this publication,
Pennsylvania’s Oil and Gas Act and the Municipalities
Planning Code restrict the ability of local
governments to zone or permit drilling, so zoning
has limited usefulness to influence where and when
drilling occurs. Yet zoning and subdivision and land
development ordinances remain a vitally important
tool for influencing the potential secondary effects
of natural gas activity, such as from possible new
residents, housing, supporting businesses, patterns
of development, and the other spinoff impacts. Much
of the economic opportunity (and challenge) from
Marcellus will be these secondary effects, which can
be influenced and regulated through zoning and other
land-use tools.
Capital Budgeting
Capital budgeting is a powerful but often underutilized
tool of Pennsylvania local governments. By
planning future expenditure needs for infrastructure
and other capital expenses, such as road maintenance
and repair, trucks, and equipment, capital budgets
allow the local government to ensure it has the funds
in hand to pay for upcoming needs. This includes a
schedule of setting funds aside for future needs and
anticipating spending for future needs in current
budget decisions.
Local Natural Gas Task Force
Given the localized nature of many of these impacts,
a local, comprehensive, and proactive approach can
help ensure that a wide range of the community’s
interests are represented—and importantly—
taken into account when decisions are made. One
important way to meet this challenge is to create a
local task force or a similar organized effort to guide
community discussions, information gathering, and
decision making. Members should reflect the broad
community, including businesses, the chamber of
commerce, nonprofits, schools, local government,
and citizens, among others. Such a task force can
ensure that regular communication occurs among
local governments, the business sector, real estate,
workforce development, academics, service
providers, and citizens, and that the community is
able to be proactive about the opportunities.
As of this publication, several counties in Pennsylvania
have already formed local task forces to
address gas exploration and development issues in
their communities. Several counties in Texas helped
pioneer this approach to responding to the natural gas
opportunities and challenges and have found it useful.
For a more in-depth discussion of ways to build a
successful local strategy, see the Penn State publication
“Creating and Fostering a Local Task Force”
available from http://www.naturalgas.psu.edu/.
Leasing Municipal Land
Many Pennsylvania local governments themselves
will have the opportunity to lease their own land, such
as parks, open space, reservoirs, and other municipal
property, and may receive substantial royalty
income in the future. If a local government has this
opportunity, it is vital to take care during the leasing
process.
As with landowners, Penn State Cooperative
Extension’s Marcellus Education Team recommends
talking with several companies and with an attorney
familiar with leasing issues because the typical
contract offered by the companies may not adequately
protect or represent municipal interests and likely
will require some amendments written by an attorney.
Those issues may include the ability to jointly approve
the location of access roads, drilling pad locations, and
how land is cleared (and disposal of the trees).
Site restoration is another postdrilling issue that
local officials should try to address. Restoration is
a requirement for all drilling sites and is regulated
by DEP. However, it is important for local officials
to talk with gas companies about the specifications
of each site’s restoration to ensure that the recreated
habitat is appropriate for the area. Site restoration
should be conducted in accordance to the surrounding
ecology of the well site so that local wildlife is
provided the proper vegetation species and coverage
for their environment.
It is also critical for local officials to carefully
consider how leasing and royalty income will be used.
It may be tempting to use the funds to cover current
operating expenses, reducing taxes in the short run.
But the dollars result from the sale of a capital asset,
so they should be used for capital expenditures that
benefit more than just current residents; the gas being
sold also is owned by future generations of residents,
who also should benefit from the sale. Good fiscal
management suggests viewing these dollars as a
way to invest in the future of the jurisdiction, such as
building infrastructure or purchasing land and other
assets that benefit current and future residents; in
other words, use the windfall gains to improve the
community for the long run, not just for the period
when the gas is flowing.
Looking Ahead
Marcellus shale is providing many Pennsylvania
communities a significant opportunity for strong
economic development and improvements in the
quality of life. Along with these strong opportunities,
major challenges will need to be addressed directly.
The role of local officials should be to help balance
these challenges and benefits to ensure the focus is
not just short-term gain. They must constantly keep
in mind how to use this opportunity to improve
the community for the long run so that when the
Marcellus play is over, the community has improved
and is poised for the future. ■
Friday, April 3, 2009
Marcellus Shale Gas Play: Part 6
Money. Who profits and who suffers? There is no question that this shale gas development with generate revenue for everyone, from individuals to local, state and federal governments. The answer to the question of who benefits and who suffers lies in how that money is managed. Governments are notorious for being wasteful; but that is wholly another issue.
Greater employment owing to natural gas activity
will of course increase local earned income taxes,
but because earned income taxes generally go to the
jurisdiction where taxpayers live rather than where
they work, the specific jurisdictions facing higher
service costs due to the Marcellus may not be those
who receive higher earned income tax revenues. Most
Pennsylvanians do not work in the same municipality
where they live and there is little reason to expect
new natural gas workers to be any different.
Tax collections by the state government will
increase in Pennsylvania through the corporate income
tax and sales tax, but these collections will have little
direct benefit to the local jurisdictions, which will face
higher service costs due to natural gas exploration.
In other words, local jurisdictions with natural gas
wells very likely will face higher demands for services
and thus higher costs, and yet receive little new
revenues to pay for those services. The result could be
higher local taxes (paid for by everyone, not just those
directly benefiting from lease or royalty revenues)
or cuts in other services.
It is important to recognize that school districts
and the county and municipal governments that own
land leased for natural gas extraction may receive
significant revenues from leasing and royalties, so
they will receive some benefits. Yet the amount they
receive will not relate directly to the overall costs they
may experience across their jurisdiction.
Clean and Green Act
Under Pennsylvania law, county governments
administer the Clean and Green program, which
provides preferential tax assessments for eligible
Infrastructure
The potential impact of the increased drilling associated
with the Marcellus shale extends beyond the
wells, pipelines, and other natural-gas-related sites
and equipment. The economic and social changes a
region will experience once the industry has established
itself in the area may lead to stress on local
infrastructure, such as increases in road traffic, school
enrollment, and housing needs.
Obtaining seismic data also generates revenue for landowners.
Compressors
Compressors are used to increase the gas pressure
from the wells before being shipped to market and can
produce significant amounts of unwanted noise. Since
compressors run nonstop, this can create concerns for
local officials who handle noise disturbances. Some
well sites will house the compressors in buildings to
decrease the output of noise, which can improve the
problem but also results in the creation of permanent
structures on site.
Pipelines
Any gas produced from wells is valueless unless it
reaches market. Pipelines are necessary for moving
the gas and are laid to travel from the site out to
Pipelines should be acknowledged as permanent
infrastructure of the gas industry and their
construction should be strategic and efficient.
Local officials need to concern themselves with
influencing pipeline construction in hopes of minimizing
potentially unnecessary lines. Excessive lines
across local landscapes could result from poorly
planned or disjointed networks of pipelines. 
Pipelines are needed to collect the gas and move it to the end-users.
Population Change and Impacts on the
Community
Housing, Schools, Crime
As indicated by the experience in Texas and
Wyoming, it is important for local officials to prepare
for the population changes that may occur due to
the Marcellus. As noted in the studies conducted in
similar circumstances across the country, some of
the major associated changes in the community will
likely be:
• The need for adequate housing stock. If an inadequate
amount of housing is an issue, the influx of
workers will not live in the community, therefore
affecting the large array of possible economic
benefits for local business and government.
• Impacts on schools and service industries will
change the dynamic of the community as well,
seeing student population increases, higher
government infrastructure expenses, etc.
• An increase in crime, particularly nonviolent
crimes such as driving under the influence and
drug violations.
• Social tension or animosity between “newcomers”
and “old timers,” or between residents gaining
personally from natural gas and others in the
community who feel they are not benefitting.
• Local officials should reevaluate their comprehensive
plan, official map, and other planning
tools they use in their communities to cater to or
prepare for these changes. In addition, education
and communication can be important tools to deal
with potential changes in the social fabric of the
community.
Peter
Revenues
Due to Pennsylvania’s local tax structure, the revenue
impacts of Marcellus shale on Pennsylvania local
governments and taxpayers will likely be relatively
small compared to the cost and service impacts.
Natural gas exploration and drilling by itself will
provide relatively little new tax revenues to local
jurisdictions in Pennsylvania since natural gas is not
Due to Pennsylvania’s local tax structure, the revenue
impacts of Marcellus shale on Pennsylvania local
governments and taxpayers will likely be relatively
small compared to the cost and service impacts.
Natural gas exploration and drilling by itself will
provide relatively little new tax revenues to local
jurisdictions in Pennsylvania since natural gas is not
subject to local taxation in the Commonwealth. Neither
lease nor royalty income in Pennsylvania is subject to local
lease nor royalty income in Pennsylvania is subject to local
income taxes, nor do Pennsylvania
local jurisdictions benefit directly from higher local
retail sales since they lack authority to levy a local
sales tax.
local jurisdictions benefit directly from higher local
retail sales since they lack authority to levy a local
sales tax.
Greater employment owing to natural gas activity
will of course increase local earned income taxes,
but because earned income taxes generally go to the
jurisdiction where taxpayers live rather than where
they work, the specific jurisdictions facing higher
service costs due to the Marcellus may not be those
who receive higher earned income tax revenues. Most
Pennsylvanians do not work in the same municipality
where they live and there is little reason to expect
new natural gas workers to be any different.
Real property tax collections will increase some
due to new building construction associated with the
Marcellus; but, because reassessment is typically
infrequent in Pennsylvania counties, rising real
property values due to Marcellus will not have an
immediate impact on property tax collections. Under
current law natural gas will not significantly increase
the local tax base, and thus will not significantly
increase local tax revenues.
due to new building construction associated with the
Marcellus; but, because reassessment is typically
infrequent in Pennsylvania counties, rising real
property values due to Marcellus will not have an
immediate impact on property tax collections. Under
current law natural gas will not significantly increase
the local tax base, and thus will not significantly
increase local tax revenues.
Tax collections by the state government will
increase in Pennsylvania through the corporate income
tax and sales tax, but these collections will have little
direct benefit to the local jurisdictions, which will face
higher service costs due to natural gas exploration.
In other words, local jurisdictions with natural gas
wells very likely will face higher demands for services
and thus higher costs, and yet receive little new
revenues to pay for those services. The result could be
higher local taxes (paid for by everyone, not just those
directly benefiting from lease or royalty revenues)
or cuts in other services.
Because Pennsylvania law
limits municipalities’ and counties’ abilities to employ
land-use planning tools to influence the location
of natural gas drilling activities, local governments
will have little ability to prevent or affect drilling in
locations, which will significantly affect local service
costs and taxes.
limits municipalities’ and counties’ abilities to employ
land-use planning tools to influence the location
of natural gas drilling activities, local governments
will have little ability to prevent or affect drilling in
locations, which will significantly affect local service
costs and taxes.
It is important to recognize that school districts
and the county and municipal governments that own
land leased for natural gas extraction may receive
significant revenues from leasing and royalties, so
they will receive some benefits. Yet the amount they
receive will not relate directly to the overall costs they
may experience across their jurisdiction.
In addition,
some may be tempted to use these windfalls for
basic operations (keeping taxes low in the years the
monies are received) rather than to use the monies
for capital expenditures and other investments in
their communities’ future. The natural gas money
provides a great opportunity for local jurisdictions to
improve infrastructure, such as by creating parks or
other investments to be enjoyed by current and future
generations.
some may be tempted to use these windfalls for
basic operations (keeping taxes low in the years the
monies are received) rather than to use the monies
for capital expenditures and other investments in
their communities’ future. The natural gas money
provides a great opportunity for local jurisdictions to
improve infrastructure, such as by creating parks or
other investments to be enjoyed by current and future
generations.
Clean and Green Act
Under Pennsylvania law, county governments
administer the Clean and Green program, which
provides preferential tax assessments for eligible
farm- and forestland. County governments have some
discretion in how they interpret the law, which at the
time of this writing is silent about whether leasing
land for natural gas drilling makes the land ineligible
for Clean and Green (and, if so, whether the rollback
is on the entire enrolled parcel or only on the acreage
directly affected by the drilling).
discretion in how they interpret the law, which at the
time of this writing is silent about whether leasing
land for natural gas drilling makes the land ineligible
for Clean and Green (and, if so, whether the rollback
is on the entire enrolled parcel or only on the acreage
directly affected by the drilling).
County commissioners
and assessment offices need to carefully think
about how they will treat such land and the impact of
that decision on landowners, neighbors, taxpayers,
Clean and Green land, and gas leasing activity.
In Harrisburg there currently is policy discussion
about whether to revise the Clean and Green Act to
provide more clarity on issues of interpretation. For
more information, visit the Pennsylvania Department
of Agriculture Web site, http://www.agriculture.state.pa.us/.
and assessment offices need to carefully think
about how they will treat such land and the impact of
that decision on landowners, neighbors, taxpayers,
Clean and Green land, and gas leasing activity.
In Harrisburg there currently is policy discussion
about whether to revise the Clean and Green Act to
provide more clarity on issues of interpretation. For
more information, visit the Pennsylvania Department
of Agriculture Web site, http://www.agriculture.state.pa.us/.
Infrastructure
The potential impact of the increased drilling associated
with the Marcellus shale extends beyond the
wells, pipelines, and other natural-gas-related sites
and equipment. The economic and social changes a
region will experience once the industry has established
itself in the area may lead to stress on local
infrastructure, such as increases in road traffic, school
enrollment, and housing needs.
Obtaining seismic data also generates revenue for landowners.Access Roads
Once a well site is chosen and established, private
access roads will be built to enable the necessary
large equipment and trucks to reach and service that
particular well. In addition to these newly constructed
roadways to the well pad, the initial preparation to
begin drilling and producing gas delivers a considerable
amount of heavy traffic to surrounding local
roads.
Once a well site is chosen and established, private
access roads will be built to enable the necessary
large equipment and trucks to reach and service that
particular well. In addition to these newly constructed
roadways to the well pad, the initial preparation to
begin drilling and producing gas delivers a considerable
amount of heavy traffic to surrounding local
roads.
It is important to remember, however, that
after site construction, the wells will still generate
consistent truck traffic and road use. Holding tanks
on site for water by-products created during drilling
must be emptied at least once, if not several times,
per week and will be hauled to treatment or injection
facilities. Since wells produce year-round, road use
and truck traffic on both access and local roads will
be occurring year-round.
after site construction, the wells will still generate
consistent truck traffic and road use. Holding tanks
on site for water by-products created during drilling
must be emptied at least once, if not several times,
per week and will be hauled to treatment or injection
facilities. Since wells produce year-round, road use
and truck traffic on both access and local roads will
be occurring year-round.
Compressors
Compressors are used to increase the gas pressure
from the wells before being shipped to market and can
produce significant amounts of unwanted noise. Since
compressors run nonstop, this can create concerns for
local officials who handle noise disturbances. Some
well sites will house the compressors in buildings to
decrease the output of noise, which can improve the
problem but also results in the creation of permanent
structures on site.
Pipelines
Any gas produced from wells is valueless unless it
reaches market. Pipelines are necessary for moving
the gas and are laid to travel from the site out to
central gathering points where the lines continue
transporting larger quantities of gas from numerous
wells to market. The pipeline construction affects
environmental and aesthetic aspects of the area and
generates additional construction sites and associated
disturbances.
transporting larger quantities of gas from numerous
wells to market. The pipeline construction affects
environmental and aesthetic aspects of the area and
generates additional construction sites and associated
disturbances.
Pipelines should be acknowledged as permanent
infrastructure of the gas industry and their
construction should be strategic and efficient.
Local officials need to concern themselves with
influencing pipeline construction in hopes of minimizing
potentially unnecessary lines. Excessive lines
across local landscapes could result from poorly
planned or disjointed networks of pipelines.
Pipelines are needed to collect the gas and move it to the end-users.Population Change and Impacts on the
Community
Housing, Schools, Crime
As indicated by the experience in Texas and
Wyoming, it is important for local officials to prepare
for the population changes that may occur due to
the Marcellus. As noted in the studies conducted in
similar circumstances across the country, some of
the major associated changes in the community will
likely be:
• The need for adequate housing stock. If an inadequate
amount of housing is an issue, the influx of
workers will not live in the community, therefore
affecting the large array of possible economic
benefits for local business and government.
• Impacts on schools and service industries will
change the dynamic of the community as well,
seeing student population increases, higher
government infrastructure expenses, etc.
• An increase in crime, particularly nonviolent
crimes such as driving under the influence and
drug violations.
• Social tension or animosity between “newcomers”
and “old timers,” or between residents gaining
personally from natural gas and others in the
community who feel they are not benefitting.
• Local officials should reevaluate their comprehensive
plan, official map, and other planning
tools they use in their communities to cater to or
prepare for these changes. In addition, education
and communication can be important tools to deal
with potential changes in the social fabric of the
community.
Marcellus Shale Gas Play: Part 5
Once again, there are many issues that must be dealt with in this kind of Shale Gas development. The old adage that "there ain't no free lunch" certainly applies. But are giant wind turbines for generating electricity any less disruptive of the environment? Are thousands of acres of solar panels better for the environment? Are they close to being as efficient a source of energy as natural gas?
Can we dam-up some more rivers and create hydro-electricity? Can we build more nuclear power plants? What about cutting trees to burn for heat? How intelligent is it to plow up hundreds of thousands of acres, plant corn, water and fertilize it, harvest it, and then distill it to produce ethanol to burn as a fuel in our vehicles? Honest answers to these questions make drilling for natural gas our best option.
Peter
Local Issues
Roads
The process of drilling, fracing, and maintaining
natural gas wells can create significant heavy truck
traffic on rural roads, many of which were not
designed for carrying vehicles of this size. A recent
well in Lycoming County, for example, reportedly
required 77 tractor trailer loads simply to bring the
drilling equipment to the site.
Traffic will also include
trucks carrying large amounts of water. A report from
Denton, Texas, suggests that each drilling site could
require 364 such water truck trips, which would be
equivalent to 3,494,400 car trips (Denton County Oil
and Gas Task Force, 2005).
Local governments do have the option of
requiring companies to post a bond, but this requires
careful planning ahead of time in order to achieve
this, and the local government must be diligent about
following procedures to recover costs if the gas
company causes damage.
Water Issues
Water usage has been a concern in other states where
deep well drilling and hydrofracing have generated
both a demand for large quantities of water and
resulting waste fluids that require removal and
treatment. The millions of gallons of water required
for drilling and the associated waste products are also
major concerns here in Pennsylvania. As in other
states, the source of water
used in drilling raises an
issue, as do the waste fluids,
their treatment and disposal,
and natural bodies of water in the
vicinities of drilling activity and the
communities tied to them.
Use
The Susquehanna River Basin
Commission (SRBC) regulates
significant water use
within its jurisdiction
(discussed below)
and recently ruled
that companies can
purchase water from
other permitted users with
excess capacity without prior approval of the SRBC,
provided that the total amounts used do not exceed
the permitted quantity.
As a result, widespread
interest has arisen among natural gas companies
in purchasing water from municipal water systems
and other already permitted users. If approached by
such a company, municipal water systems need to
carefully consider how much surplus capacity they
can sell without jeopardizing other users or other
future water-dependent economic development
opportunities.
Large water withdrawals may come from many
sources other than municipal water companies
(streams, ponds, lakes, etc.) and can have significant
effects if not performed carefully. Water withdrawals
generally exceeding 10,000 gallons per day require
permits or registration with DEP under authority
of the Water Resources Planning Act.
Withdrawals occurring in the Susquehanna or Delaware River
watersheds also require permits from the Susquehanna
River Basin Commission or the Delaware River Basin
Commission (discussed ahead). In addition, the Clean
Streams Law limits the amount of water that can be
withdrawn from streams to maintain sufficient stream
flows to protect aquatic life.
These various regulations have all
caused the shutting down of gas well drilling
operations that failed to acquire the proper permits or
exceeded allowable withdrawals from streams.
Another concern with deep gas well drilling
technologies is the disposal of large volumes of
wastewater resulting from the hydrofracturing
process. The water used in the drilling process is
mixed with sand and other products, and then is
pumped into the shale formation under high pressure
to fracture the shale so the natural gas can be
accessed. The volume of wastewater produced during
gas well drilling and operation can vary considerably
depending on the depth and location of the gas well.
One study in Pennsylvania found that the average
volumes of water produced during shallow gas well
drilling in western Pennsylvania was 25,000 gallons
during drilling, 50,000 gallons during stimulation,
and 150 gallons per day during production.
Drilling companies must identify where they
plan to obtain and store the water used in the drilling
operations and where the wastewater generated as part
of the drilling process (“frac” water) is to be stored,
treated, and disposed.
Erosion and Stormwater
Gas well construction involves extensive earth
disturbance, including roads, drilling pads, and
pipelines that can speed erosion. Drilling pads alone
may be four to six acres in size for deeper gas wells,
which is a larger portion of disturbed earth than used
for shallow well pads.
Various regulations, implemented through DEP
and Pennsylvania Conservation Districts, are in
place to protect surface water and groundwater from
erosion and sedimentation due to these disturbances.
Erosion and sediment control plan requirements
under state law apply to any earth disturbance
activities, including oil and gas drilling (Pa. Code
Chapter 102).
Erosion and sediment plans require gas
companies to use preventative measures such as filter
fence, sediment traps, vegetation, hay bales, culverts
with energy dissipaters, and rocked road entrances
to minimize erosion. These plans also include a
requirement to restore vegetation to the drill site
within nine months of well completion by planting
grass, trees, or crop plots.
For oil and gas activity on less than five acres,
an erosion and sediment control plan must contain
best management practices to minimize point-source
discharges to surface waters, preserve the integrity of
stream channels, and protect the physical, biological,
and chemical qualities of the receiving waterway.
For oil and gas activities that disturb more
than five acres at one time, a notice of intent and
general permit for authorization to control erosion
and sediment must be completed. The erosion and
sediment control plan or the notice of intent must be
submitted to DEP or an authorized county conservation
district for review and approval.
The DEP’s Bureau of Oil and Gas and each
individual county’s Conservation District oversee
the enforcement of erosion and sediment regulations
related to gas well operations.
Groundwater
While many residents throughout Pennsylvania
have voiced concerns about private water well and
spring contamination that can occur from gas well
drilling, the reality of these fears has shown to be
less prominent than assumed.
Data collected thus far from various
regulatory agencies responsible for
enforcement of gas well drilling regulations indicate
that more than 95 percent of complaints received
from homeowners suspecting problems from nearby
gas well drilling are in actuality due to preexisting
problems or other land-use activities such as
agriculture. However, when contamination does
occur as a result of drilling, the impacts can vary
greatly.
While the instances are low, it is important
to be aware of the range of possible complications.
Pennsylvania law requires that before drilling to
deeper zones, gas drillers must install cemented steel
casing through all freshwater aquifers. This casing
protects groundwater by isolating the borehole from
the groundwater system. It also keeps water from
the surface and other geologic strata from mixing
with and contaminating groundwater through the
borehole.
When pollution of private water supplies
from gas well activity occurs, it is often documented
as primarily stemming from absent or corroded well
casings on older or abandoned gas wells. That does
not mean that there are not pollution risks in newer
deep well drilling. Groundwater contamination can
result from flooded or leaking brine pits that contain
bottom-hole stimulation and production fluids from
drilling activities.
In the event of these types of mishaps and
negligence, pollution can still occur despite the
variety of regulations through DEP and the SRBC
and DRBC. When contamination does occur, it
should be noted that gas well brines are highly mineralized
and contain levels of some pollutants that are
far above levels considered safe for drinking water
supplies. As a result, even small amounts of brine
pollution can result in significant impacts to drinking
water supplies.
If problems with drinking water supplies are
encountered, state law requires drilling operators to
replace or restore water supplies affected by drilling.
Landowners should contact the drilling company
if problems with water supply wells develop.
Landowners who are not satisfied with the drilling
company’s response should contact the nearest DEP
regional office. DEP will investigate complaints
within ten days and issue orders as necessary to
replace or restore water supplies.
More information about water contaminates can
be found in related publications available through
the local Penn State Cooperative Extension office or
www.naturalgas.psu.edu.
Can we dam-up some more rivers and create hydro-electricity? Can we build more nuclear power plants? What about cutting trees to burn for heat? How intelligent is it to plow up hundreds of thousands of acres, plant corn, water and fertilize it, harvest it, and then distill it to produce ethanol to burn as a fuel in our vehicles? Honest answers to these questions make drilling for natural gas our best option.
Peter
Local Issues
Roads
The process of drilling, fracing, and maintaining
natural gas wells can create significant heavy truck
traffic on rural roads, many of which were not
designed for carrying vehicles of this size. A recent
well in Lycoming County, for example, reportedly
required 77 tractor trailer loads simply to bring the
drilling equipment to the site.
Traffic will also include
trucks carrying large amounts of water. A report from
Denton, Texas, suggests that each drilling site could
require 364 such water truck trips, which would be
equivalent to 3,494,400 car trips (Denton County Oil
and Gas Task Force, 2005).
Local governments do have the option of
requiring companies to post a bond, but this requires
careful planning ahead of time in order to achieve
this, and the local government must be diligent about
following procedures to recover costs if the gas
company causes damage.
Water Issues
Water usage has been a concern in other states where
deep well drilling and hydrofracing have generated
both a demand for large quantities of water and
resulting waste fluids that require removal and
treatment. The millions of gallons of water required
for drilling and the associated waste products are also
major concerns here in Pennsylvania. As in other
states, the source of water
used in drilling raises an
issue, as do the waste fluids,
their treatment and disposal,
and natural bodies of water in the
vicinities of drilling activity and the
communities tied to them.
Use
The Susquehanna River Basin
Commission (SRBC) regulates
significant water use
within its jurisdiction
(discussed below)
and recently ruled
that companies can
purchase water from
other permitted users with
excess capacity without prior approval of the SRBC,
provided that the total amounts used do not exceed
the permitted quantity.
As a result, widespread
interest has arisen among natural gas companies
in purchasing water from municipal water systems
and other already permitted users. If approached by
such a company, municipal water systems need to
carefully consider how much surplus capacity they
can sell without jeopardizing other users or other
future water-dependent economic development
opportunities.
Large water withdrawals may come from many
sources other than municipal water companies
(streams, ponds, lakes, etc.) and can have significant
effects if not performed carefully. Water withdrawals
generally exceeding 10,000 gallons per day require
permits or registration with DEP under authority
of the Water Resources Planning Act.
Withdrawals occurring in the Susquehanna or Delaware River
watersheds also require permits from the Susquehanna
River Basin Commission or the Delaware River Basin
Commission (discussed ahead). In addition, the Clean
Streams Law limits the amount of water that can be
withdrawn from streams to maintain sufficient stream
flows to protect aquatic life.
These various regulations have all
caused the shutting down of gas well drilling
operations that failed to acquire the proper permits or
exceeded allowable withdrawals from streams.
Another concern with deep gas well drilling
technologies is the disposal of large volumes of
wastewater resulting from the hydrofracturing
process. The water used in the drilling process is
mixed with sand and other products, and then is
pumped into the shale formation under high pressure
to fracture the shale so the natural gas can be
accessed. The volume of wastewater produced during
gas well drilling and operation can vary considerably
depending on the depth and location of the gas well.
One study in Pennsylvania found that the average
volumes of water produced during shallow gas well
drilling in western Pennsylvania was 25,000 gallons
during drilling, 50,000 gallons during stimulation,
and 150 gallons per day during production.
Drilling companies must identify where they
plan to obtain and store the water used in the drilling
operations and where the wastewater generated as part
of the drilling process (“frac” water) is to be stored,
treated, and disposed.
Erosion and Stormwater
Gas well construction involves extensive earth
disturbance, including roads, drilling pads, and
pipelines that can speed erosion. Drilling pads alone
may be four to six acres in size for deeper gas wells,
which is a larger portion of disturbed earth than used
for shallow well pads.
Various regulations, implemented through DEP
and Pennsylvania Conservation Districts, are in
place to protect surface water and groundwater from
erosion and sedimentation due to these disturbances.
Erosion and sediment control plan requirements
under state law apply to any earth disturbance
activities, including oil and gas drilling (Pa. Code
Chapter 102).
Erosion and sediment plans require gas
companies to use preventative measures such as filter
fence, sediment traps, vegetation, hay bales, culverts
with energy dissipaters, and rocked road entrances
to minimize erosion. These plans also include a
requirement to restore vegetation to the drill site
within nine months of well completion by planting
grass, trees, or crop plots.
For oil and gas activity on less than five acres,
an erosion and sediment control plan must contain
best management practices to minimize point-source
discharges to surface waters, preserve the integrity of
stream channels, and protect the physical, biological,
and chemical qualities of the receiving waterway.
For oil and gas activities that disturb more
than five acres at one time, a notice of intent and
general permit for authorization to control erosion
and sediment must be completed. The erosion and
sediment control plan or the notice of intent must be
submitted to DEP or an authorized county conservation
district for review and approval.
The DEP’s Bureau of Oil and Gas and each
individual county’s Conservation District oversee
the enforcement of erosion and sediment regulations
related to gas well operations.
Groundwater
While many residents throughout Pennsylvania
have voiced concerns about private water well and
spring contamination that can occur from gas well
drilling, the reality of these fears has shown to be
less prominent than assumed.
Data collected thus far from various
regulatory agencies responsible for
enforcement of gas well drilling regulations indicate
that more than 95 percent of complaints received
from homeowners suspecting problems from nearby
gas well drilling are in actuality due to preexisting
problems or other land-use activities such as
agriculture. However, when contamination does
occur as a result of drilling, the impacts can vary
greatly.
While the instances are low, it is important
to be aware of the range of possible complications.
Pennsylvania law requires that before drilling to
deeper zones, gas drillers must install cemented steel
casing through all freshwater aquifers. This casing
protects groundwater by isolating the borehole from
the groundwater system. It also keeps water from
the surface and other geologic strata from mixing
with and contaminating groundwater through the
borehole.
When pollution of private water supplies
from gas well activity occurs, it is often documented
as primarily stemming from absent or corroded well
casings on older or abandoned gas wells. That does
not mean that there are not pollution risks in newer
deep well drilling. Groundwater contamination can
result from flooded or leaking brine pits that contain
bottom-hole stimulation and production fluids from
drilling activities.
In the event of these types of mishaps and
negligence, pollution can still occur despite the
variety of regulations through DEP and the SRBC
and DRBC. When contamination does occur, it
should be noted that gas well brines are highly mineralized
and contain levels of some pollutants that are
far above levels considered safe for drinking water
supplies. As a result, even small amounts of brine
pollution can result in significant impacts to drinking
water supplies.
If problems with drinking water supplies are
encountered, state law requires drilling operators to
replace or restore water supplies affected by drilling.
Landowners should contact the drilling company
if problems with water supply wells develop.
Landowners who are not satisfied with the drilling
company’s response should contact the nearest DEP
regional office. DEP will investigate complaints
within ten days and issue orders as necessary to
replace or restore water supplies.
More information about water contaminates can
be found in related publications available through
the local Penn State Cooperative Extension office or
www.naturalgas.psu.edu.
Marcellus Shale Gas Play: Part 4
Too often "regulation" means strangulation to resource development. Of course we must do as little harm to our environment as possible. Of course we must improve our civil and social structure. There has to be a balance, but we can do it. It has been done. It is being done. It can be done if government doesn't over-regulate and tax the industry to death.
Role of the Department of Environmental Protection (DEP)
The Pennsylvania Department of Environmental
Protection enforces Pennsylvania’s oil and gas laws
relating to resource management, well construction
activities, and waste management practices. The
DEP’s Bureau of Oil and Gas Management is
responsible for the statewide oil and gas conservation
and environmental programs. The bureau facilitates
the exploration, development, and recovery of Pennsylvania’s
oil and gas reservoirs in a manner that
is intended to protect the Commonwealth’s natural
resources and the environment. It also develops
policy and programs for the regulation of oil and gas
development and production in accordance with the
An operating gas company must secure a bond
before applying for a well permit. It is DEP’s
responsibility to approve bonds and well permits,
inspect wells and environmental controls, and permit
and inspect waste disposal facilities and waste
management activities. Operators must submit reports
on well completion, waste management, annual
production, and well plugging.
Municipalities can be alerted regarding well
permit applications filed with DEP though a no-cost
subscription service called ENotice.
Role of the Department of Conservation and Natural Resources
The Department of Conservation and Natural
Resources has authority under the Conservation
and Natural Resources Act to lease state forestland
for natural gas exploration. The act also gives the
department the ability to lease state forestlands for
underground storage of natural gas—a practice
currently less common in Pennsylvania than in other
areas of the country. The Oil and Gas Lease Fund
stipulates that all rents and royalties from these leases
are to be placed in a fund used exclusively for conservation,
recreation, dams, or flood control or used to
match any federal grants for those purposes.
Thumbs up for creating jobs.
Role of the Susquehanna River Basin
Commission (SRBC) and Delaware River Basic
Commission (DRBC)
The DRBC and SRBC hold more influence than
the DEP in regulating water usage and other waterrelated
aspects of gas well drilling that fall under
their jurisdiction. SRBC’s regulations are intended to
protect the environment and existing water users from
unapproved water use and water-use conflicts. The
agency regulates issues such as water withdrawals,
deep well injection of fracing waste fluids, and
disposal of fracing fluids from constructed lagoons.
In cooperation with the DEP the DRBC will also
investigate and manage situations in which drilling
damages neighboring wells. Companies operating
without prior water-use approval for drilling and
other water-related activities will be considered in
willful noncompliance if they continue to operate
after receiving the distributed notice sent out in early
June 2008.
This consumptive water use is regulated in several
different ways. Consumptive use in gas drilling is
considered any water that is used in a way that results
in it not being returned to the basin. An example
is the injection of waste fluids into a subsurface
formation where it would not be reasonably available
for future use or any diversions of water out of the
Susquehanna watershed. These consumptive uses are
defined in regulations through volume over a certain
period of days.
SRBC also has the authority to make an across the-
board determination that well development
activities in the Marcellus shale formations may
require approval regardless of the amount of water
used. The SRBC can exercise this broad authority if
it determines that the water-use activities may affect
interstate water quality, have a significant effect on
SRBC’s Comprehensive Plan, or have an adverse,
cumulative, or interstate effect on the basin’s water
resources.
Land situated outside the basin commissions’
boundaries, such as in southwest Pennsylvania, are
solely under the regulatory authority of DEP and are
not monitored or regulated by a basin commission.
A pipeline through the forest. Some disruption is inevitable.
Role of the Pennsylvania Emergency
Management Agency (PEMA)
The Pennsylvania Emergency Management Agency
coordinates state agency response to emergencies
or disasters. The agency supports county and local
governments in the areas of civil defense, disaster
mitigation and preparedness, planning, and response
to and recovery from human-made or natural
disasters. PEMA is an important resource for local
governments adapting to the changing emergency
management needs arising from increased natural gas
exploration and drilling, and can provide training,
information, and resources to local emergency
responders.
If emergencies occur, the local municipality
should engage the local Emergency Management
Team prior to and during the response. The municipality
should have the site(s) listed in its Municipal
Emergency Operations Plan, including emergency
The type of roadways or access ways to a site may
make it difficult for standard firefighting, rescue, and
emergency medical services vehicles to access. These
vehicles may not have sufficient ground clearance
to traverse the roadways. Fire and rescue services
should be aware of the areas and test-drive the access
roads to ensure that the vehicles can gain access to
sites.
Additionally, sites may be in rural or extremely
rural areas and could be thousands of feet from any
inhabited structures. Despite remote locations, the
emergency plans and site plans should still include
the identification of the nearest inhabited structures
and list the distance and direction. Other structures,
facilities, and chemical or hazardous material sites
should also be listed.
Even though large quantities of chemicals are
not found on the well sites, the municipality and
the county Local Emergency Planning Committee
(LEPC) should be informed of the number, names,
and quantities of chemicals stored or used at the
site(s). The county LEPC and the Pennsylvania
Department of Labor and Industry PENNSAFE
Program are able to provide assistance and guidance.
Role of Pennsylvania Oil and Gas Act
The ability of municipalities to regulate natural gas
exploration is limited by the Oil and Gas Act, which
states that “no ordinances or enactments, adopted
pursuant to the aforementioned acts shall contain
provisions which impose conditions, requirements or
limitations on the same features of oil and gas well
operations regulated by this act.” Essentially, this
statutory provision means that the Oil and Gas Act
preempts a municipality or county from regulating
a matter that has been addressed in the act. As of
August 2008, the precise extent of the Oil and Gas
Act’s preemption of local regulation is not clear, as
there are two cases on this issue pending before the
Pennsylvania Supreme Court. Each of these cases
was appealed to the Supreme Court following a
Commonwealth Court decision ruling that the Oil and
Gas Act had preempted the municipal ordinance in
question.1
In light of pending Supreme Court cases, a municipality
should determine the current state of the law
before enacting an ordinance that will be regulating
natural gas drilling operations. A municipality also
should consult the Oil and Gas Act to determine the
specific issues that are the subject of state regulation.
The Oil and Gas Act addresses topics including
well permitting, well registration and identification,
well location, well site restoration, protection of
water supplies, bonding, reporting requirements, gas
storage, inspection of facilities and records, public
nuisances, enforcement orders, and civil penalties.
1 Great Lakes Energy Partners v. Salem Township, 931 A.2d
101 (Pennsylvania Commonwealth Court 2007); and Huntley &
Huntley, Inc. v. Borough of Oakmont, 929 A.2d 1252 (Pennsylvania
Commonwealth Court 2007).
How much regulation is too much? Read the following article to get an idea of how complex this regulation gets and how easy it is to kill development rather than encourage it.
Look to Texas, visit Ft. Worth, look at the Barnett Shale example. Ask people in Louisiana if they like the Haynesville Shale Gas Play. Look at the Bakken Play in the Williston Basin of eastern Montana and western North Dakota. Let's keep our energy dollars in America.
Peter
Regulating Natural Gas Exploration
Regulating the expanding gas industry is a central
concern for government agencies. It is important to
remember that in addition to the social and economic
changes that may accompany drilling there is the
possibility of significant impacts on the environment
and natural resources.
Regulating the expanding gas industry is a central
concern for government agencies. It is important to
remember that in addition to the social and economic
changes that may accompany drilling there is the
possibility of significant impacts on the environment
and natural resources.
Several principal state and
federal groups are involved in regulating natural
federal groups are involved in regulating natural
gas exploration in Pennsylvania, including two state
agencies and two commissions created by federal
regulations: the Department of Environmental
Protection (DEP), the Department of Conservation
and Natural Resources (DCNR), the Susquehanna
River Basin Commission (SRBC), and the Delaware
River Basin Commission (DRBC). Each of these
groups derives its regulatory authority from various
sources, including state statutes and federal regulations.
In addition, several other state agencies affect
natural gas activity.
agencies and two commissions created by federal
regulations: the Department of Environmental
Protection (DEP), the Department of Conservation
and Natural Resources (DCNR), the Susquehanna
River Basin Commission (SRBC), and the Delaware
River Basin Commission (DRBC). Each of these
groups derives its regulatory authority from various
sources, including state statutes and federal regulations.
In addition, several other state agencies affect
natural gas activity.
Role of the Department of Environmental Protection (DEP)
The Pennsylvania Department of Environmental
Protection enforces Pennsylvania’s oil and gas laws
relating to resource management, well construction
activities, and waste management practices. The
DEP’s Bureau of Oil and Gas Management is
responsible for the statewide oil and gas conservation
and environmental programs. The bureau facilitates
the exploration, development, and recovery of Pennsylvania’s
oil and gas reservoirs in a manner that
is intended to protect the Commonwealth’s natural
resources and the environment. It also develops
policy and programs for the regulation of oil and gas
development and production in accordance with the
Oil and Gas Act, the Coal and Gas Resource Coordination
Act, and the Oil and Gas Conservation Law;
it oversees the oil and gas permitting and inspection
programs, develops statewide regulation and
standards, conducts training programs for industry,
and works with the Interstate Oil and Gas Compact
Commission and the Technical Advisory Board.
Act, and the Oil and Gas Conservation Law;
it oversees the oil and gas permitting and inspection
programs, develops statewide regulation and
standards, conducts training programs for industry,
and works with the Interstate Oil and Gas Compact
Commission and the Technical Advisory Board.
An operating gas company must secure a bond
before applying for a well permit. It is DEP’s
responsibility to approve bonds and well permits,
inspect wells and environmental controls, and permit
and inspect waste disposal facilities and waste
management activities. Operators must submit reports
on well completion, waste management, annual
production, and well plugging.
Well operators are
required to report production annually, and state
agencies must keep this information confidential
for five years, except for enforcement proceedings,
as provided in the Oil and Gas Act. DEP has the
authority to take action to enforce compliance
with applicable laws and to seek civil penalties for
violations of these laws. Depending on the project’s
acreage, the local county conservation district may
also play an important role in regulating construction
activities relative to erosion and sedimentation control.
required to report production annually, and state
agencies must keep this information confidential
for five years, except for enforcement proceedings,
as provided in the Oil and Gas Act. DEP has the
authority to take action to enforce compliance
with applicable laws and to seek civil penalties for
violations of these laws. Depending on the project’s
acreage, the local county conservation district may
also play an important role in regulating construction
activities relative to erosion and sedimentation control.
Municipalities can be alerted regarding well
permit applications filed with DEP though a no-cost
subscription service called ENotice.
ENotice notifies
municipalities with an e-mail when a well permit
application is received. This system enables municipalities
to receive notice of a permit application at
the same time that DEP receives the application. This
will allow the municipality to obtain information
about potential drilling activity much earlier in the
process so bond requirements can be considered
in advance of operations. ENotice can be accessed
through DEP’s Web site: http://www.depweb.state.pa.us/.
municipalities with an e-mail when a well permit
application is received. This system enables municipalities
to receive notice of a permit application at
the same time that DEP receives the application. This
will allow the municipality to obtain information
about potential drilling activity much earlier in the
process so bond requirements can be considered
in advance of operations. ENotice can be accessed
through DEP’s Web site: http://www.depweb.state.pa.us/.
Role of the Department of Conservation and Natural Resources
The Department of Conservation and Natural
Resources has authority under the Conservation
and Natural Resources Act to lease state forestland
for natural gas exploration. The act also gives the
department the ability to lease state forestlands for
underground storage of natural gas—a practice
currently less common in Pennsylvania than in other
areas of the country. The Oil and Gas Lease Fund
stipulates that all rents and royalties from these leases
are to be placed in a fund used exclusively for conservation,
recreation, dams, or flood control or used to
match any federal grants for those purposes.
Thumbs up for creating jobs.Role of the Susquehanna River Basin
Commission (SRBC) and Delaware River Basic
Commission (DRBC)
The DRBC and SRBC hold more influence than
the DEP in regulating water usage and other waterrelated
aspects of gas well drilling that fall under
their jurisdiction. SRBC’s regulations are intended to
protect the environment and existing water users from
unapproved water use and water-use conflicts. The
agency regulates issues such as water withdrawals,
deep well injection of fracing waste fluids, and
disposal of fracing fluids from constructed lagoons.
In cooperation with the DEP the DRBC will also
investigate and manage situations in which drilling
damages neighboring wells. Companies operating
without prior water-use approval for drilling and
other water-related activities will be considered in
willful noncompliance if they continue to operate
after receiving the distributed notice sent out in early
June 2008.
This consumptive water use is regulated in several
different ways. Consumptive use in gas drilling is
considered any water that is used in a way that results
in it not being returned to the basin. An example
is the injection of waste fluids into a subsurface
formation where it would not be reasonably available
for future use or any diversions of water out of the
Susquehanna watershed. These consumptive uses are
defined in regulations through volume over a certain
period of days.
SRBC also has the authority to make an across the-
board determination that well development
activities in the Marcellus shale formations may
require approval regardless of the amount of water
used. The SRBC can exercise this broad authority if
it determines that the water-use activities may affect
interstate water quality, have a significant effect on
SRBC’s Comprehensive Plan, or have an adverse,
cumulative, or interstate effect on the basin’s water
resources.
Land situated outside the basin commissions’
boundaries, such as in southwest Pennsylvania, are
solely under the regulatory authority of DEP and are
not monitored or regulated by a basin commission.
A pipeline through the forest. Some disruption is inevitable.Role of the Fish and Boat Commission
The Fish and Boat Commission’s responsibility is to
preserve and protect the Commonwealth’s aquatic
resources while providing fishing and boating opportunities.
Their water quality officers work closely
with DEP field personnel to monitor the impacts of
drilling and other activities on stream quality and
aquatic life, and offer input to DEP on regulatory
decisions.
The Fish and Boat Commission’s responsibility is to
preserve and protect the Commonwealth’s aquatic
resources while providing fishing and boating opportunities.
Their water quality officers work closely
with DEP field personnel to monitor the impacts of
drilling and other activities on stream quality and
aquatic life, and offer input to DEP on regulatory
decisions.
Role of the Pennsylvania Emergency
Management Agency (PEMA)
The Pennsylvania Emergency Management Agency
coordinates state agency response to emergencies
or disasters. The agency supports county and local
governments in the areas of civil defense, disaster
mitigation and preparedness, planning, and response
to and recovery from human-made or natural
disasters. PEMA is an important resource for local
governments adapting to the changing emergency
management needs arising from increased natural gas
exploration and drilling, and can provide training,
information, and resources to local emergency
responders.
If emergencies occur, the local municipality
should engage the local Emergency Management
Team prior to and during the response. The municipality
should have the site(s) listed in its Municipal
Emergency Operations Plan, including emergency
contact information. It is important that the municipality
has accurate information regarding the precise
location of the site in terms of GPS coordinates and
can identify the closest access road(s). The municipality
should also encourage the posting of signs
that list the name of the site operator, the address of
the actual site, the emergency contact number of the
company, and any additional information.
has accurate information regarding the precise
location of the site in terms of GPS coordinates and
can identify the closest access road(s). The municipality
should also encourage the posting of signs
that list the name of the site operator, the address of
the actual site, the emergency contact number of the
company, and any additional information.
The type of roadways or access ways to a site may
make it difficult for standard firefighting, rescue, and
emergency medical services vehicles to access. These
vehicles may not have sufficient ground clearance
to traverse the roadways. Fire and rescue services
should be aware of the areas and test-drive the access
roads to ensure that the vehicles can gain access to
sites.
Additionally, sites may be in rural or extremely
rural areas and could be thousands of feet from any
inhabited structures. Despite remote locations, the
emergency plans and site plans should still include
the identification of the nearest inhabited structures
and list the distance and direction. Other structures,
facilities, and chemical or hazardous material sites
should also be listed.
Even though large quantities of chemicals are
not found on the well sites, the municipality and
the county Local Emergency Planning Committee
(LEPC) should be informed of the number, names,
and quantities of chemicals stored or used at the
site(s). The county LEPC and the Pennsylvania
Department of Labor and Industry PENNSAFE
Program are able to provide assistance and guidance.
Role of Pennsylvania Oil and Gas Act
The ability of municipalities to regulate natural gas
exploration is limited by the Oil and Gas Act, which
states that “no ordinances or enactments, adopted
pursuant to the aforementioned acts shall contain
provisions which impose conditions, requirements or
limitations on the same features of oil and gas well
operations regulated by this act.” Essentially, this
statutory provision means that the Oil and Gas Act
preempts a municipality or county from regulating
a matter that has been addressed in the act. As of
August 2008, the precise extent of the Oil and Gas
Act’s preemption of local regulation is not clear, as
there are two cases on this issue pending before the
Pennsylvania Supreme Court. Each of these cases
was appealed to the Supreme Court following a
Commonwealth Court decision ruling that the Oil and
Gas Act had preempted the municipal ordinance in
question.1
In light of pending Supreme Court cases, a municipality
should determine the current state of the law
before enacting an ordinance that will be regulating
natural gas drilling operations. A municipality also
should consult the Oil and Gas Act to determine the
specific issues that are the subject of state regulation.
The Oil and Gas Act addresses topics including
well permitting, well registration and identification,
well location, well site restoration, protection of
water supplies, bonding, reporting requirements, gas
storage, inspection of facilities and records, public
nuisances, enforcement orders, and civil penalties.
1 Great Lakes Energy Partners v. Salem Township, 931 A.2d
101 (Pennsylvania Commonwealth Court 2007); and Huntley &
Huntley, Inc. v. Borough of Oakmont, 929 A.2d 1252 (Pennsylvania
Commonwealth Court 2007).
Marcellus Shale Gas Play: Part 3
The potential economic impact of the Marcellus Shale gas play is very significant, all the more so because of the current local, national, and global economic "recession". There is much talk, and activity concerning energy supplies, energy independence, carbon dioxide emissions as a cause of global warming and climate change, the environment, jobs, and taxes and of the economy. This makes the following discussion about the Marcellus Shale Gas Play all that much more important.
If our governmental leaders truly want to restore the American economy to health and vigor, they should do everything possible to encourage the development of the Marcellus Shale Gas Play.
Peter
Experience in Other States
Several other states have significant experience
with deep natural gas drilling, including Texas
and Wyoming. The experience in those states and
the more comprehensive time frame of activity
is a helpful indicator of the potential impact in
Pennsylvania and suggests the types of issues local
officials should be considering.
Experience in North Texas
The Barnett shale play in northern Texas, around the
Dallas/Fort Worth area, is very similar in geology
to the Marcellus, making it a good indication of
technological and industry needs. Since the development
of the Barnett shale started in earnest in 2001,
employment and income impacts have been documented.
In 2008, the Perryman Group, a Texas-based
economic consulting group, conducted an economic
impact study of activity in the Barnett shale on Fort
Worth and the surrounding area. At the time of the
Perryman analysis, there were a total of 7,170 gas
wells across the Barnett shale region, 541 of them
within the Fort Worth city limits. Their findings should
help illustrate potential impacts in Pennsylvania.
The analysis includes an industry-by-industry
estimate for impacts on the gross product, permanent
income, and permanent jobs. The Perryman analysis is
specific to the local economy surrounding Fort Worth,
so the properties and numbers cannot be applied
directly to Pennsylvania. Extrapolating to Pennsylvania
is also particularly difficult because the oil
and natural gas sector and supporting infrastructure are
not as fully developed in some of the rural areas with
the Marcellus shale, therefore much of the economic
activity, at least initially, will have to be conducted
by firms and employees located outside the region,
which will lessen the local economic impact. Yet the
Perryman analysis does provide useful indications of
the general impacts that could be expected and which
Pennsylvania policy makers should consider.
Gas well frac job, showing some of the massive equipment used.
Overall Economic Impact
Overall, the Perryman Group report estimates that
Barnett shale accounts for $8.2 billion in annual
output (8.1 percent of total output in the regional
economy) and 83,823 jobs (8.9 percent of total jobs).
This is a significant number, particularly because the
Barnett shale region is predominantly an urban area
that already boasts a large and extensive economy.
In addition, experts suggest that the stability of the
natural gas economy has essentially shielded the
region from economic downturns. Potential impacts
in areas of Pennsylvania could be much higher on a
percentage basis considering that the local economy
is relatively smaller.
Where the Jobs and Income Are
As with most economic activity, the impacts of
natural gas affect more than just the specific firms
directly involved in the industry. There are also
important employment and income effects on local
businesses that supply the industry (such as oil field
service companies, local contractors, area surveyors,
attorneys, and local fuel and stone suppliers) and
effects that result from employees spending their
wages locally (local retailers and restaurants).
Leasing and royalty income, which is currently
of much interest in Pennsylvania, actually accounts
for a very small share of the economic impact. The
Perryman report identifies three separate types of
economic activities related to natural gas and outlines
their share of economic activity, including:
1. Exploration, drilling, and operations (67 percent
gross product, 62 percent personal income)
2. Leasing and royalties that go to landowners
(11 percent gross product, 12 percent personal
income)
3. Pipeline infrastructure (22 percent gross product,
27 percent personal income)
The employment impacts related to natural gas in
the Perryman report show similar trends:
1. Exploration, drilling, and operations (58 percent
of new permanent jobs)
2. Royalty and lease payments (14 percent)
3. Pipeline infrastructure (28 percent)
As the industry expands within Pennsylvania
more of these jobs and revenues should be reaching
local residents, either as new hires or as the industry
employees relocate to the region. Communities can
increase the possible economic benefits of a growing
natural gas industry by planning ahead to respond to
the growing population within their areas.
Which Industries Benefit
As expected, the industrial sector with the largest
gain from the Barnett shale is the crude petroleum
and natural gas industry, accounting for about one fifth
(21 percent) of increases in personal income
and 7 percent of new jobs. Retail trade accounts for
about 16 percent of increased personal income and
27 percent of the new jobs, while new construction
accounts for 10 percent of increased personal income
and 9 percent of new jobs. Eating and drinking
establishments similarly benefit, accounting for 5
percent of personal income and 15 percent of new
employment.
For any individual industry the difference between
their impact on gross product and on employment
partially reflects wages and salaries within that
industry. Retail trade and dining establishments,
for example, together account for 21 percent of
new personal income but 42 percent of total new
employment, reflecting that many such jobs are relatively
low paying.
Experience in Sublette County, Wyoming
Sublette County is the largest gas-producing county
in Wyoming, accounting for 44 percent of the state’s
gas production in 2006. Unlike the North Texas play,
Sublette County is a very rural area with a population
of only 5,920 in 2000. The small population size
means that the impacts of natural gas development are
much more apparent than those of the Barnett shale.
Studies in the county have demonstrated that
gas exploration and drilling has had a direct and
significant influence on the county’s population,
affecting almost all sectors of the community,
including housing construction, the demand for
public services, and culture.
They found that much of
the oil and gas employment was transient (not local
citizens). For example, during development of the gas
fields, a little over half (53 percent) of the workers
were living in camps or motels. Housing needs have
proved to be a constraint on local hiring because
the high cost of living and saturated housing market
inhibits new employees from finding places to live.
Reports found that the availability of housing unmistakably
affects nonresident workers’ desire to move
into the county.
A wage and salary study in the county also found
that the highest paying jobs are gas field jobs, which
generate significant opportunities for employees. This
also creates challenges for existing businesses, which
must pay higher wages to keep their existing workers.
The gas field jobs offer nearly unlimited opportunity
for overtime along with substantial opportunities
for wage advancement. Seasonal fluctuations in
employment and unemployment have effectively
stopped due to the continuous nature of the gas
industry.
Natural gas drilling has had significant effects on
the local governments and school districts as well.
Due to the population increase, including a dramatic
increase in the number of school students, the county
government and schools have acquired major infrastructure
expenses. In addition to increased costs of
municipal infrastructure, the nonviolent crime rate
has increased in Sublette County, particularly for
driving under the influence, drug possession, and
larceny.
If our governmental leaders truly want to restore the American economy to health and vigor, they should do everything possible to encourage the development of the Marcellus Shale Gas Play.
Peter
Experience in Other States
Several other states have significant experience
with deep natural gas drilling, including Texas
and Wyoming. The experience in those states and
the more comprehensive time frame of activity
is a helpful indicator of the potential impact in
Pennsylvania and suggests the types of issues local
officials should be considering.
Experience in North Texas
The Barnett shale play in northern Texas, around the
Dallas/Fort Worth area, is very similar in geology
to the Marcellus, making it a good indication of
technological and industry needs. Since the development
of the Barnett shale started in earnest in 2001,
employment and income impacts have been documented.
In 2008, the Perryman Group, a Texas-based
economic consulting group, conducted an economic
impact study of activity in the Barnett shale on Fort
Worth and the surrounding area. At the time of the
Perryman analysis, there were a total of 7,170 gas
wells across the Barnett shale region, 541 of them
within the Fort Worth city limits. Their findings should
help illustrate potential impacts in Pennsylvania.
The analysis includes an industry-by-industry
estimate for impacts on the gross product, permanent
income, and permanent jobs. The Perryman analysis is
specific to the local economy surrounding Fort Worth,
so the properties and numbers cannot be applied
directly to Pennsylvania. Extrapolating to Pennsylvania
is also particularly difficult because the oil
and natural gas sector and supporting infrastructure are
not as fully developed in some of the rural areas with
the Marcellus shale, therefore much of the economic
activity, at least initially, will have to be conducted
by firms and employees located outside the region,
which will lessen the local economic impact. Yet the
Perryman analysis does provide useful indications of
the general impacts that could be expected and which
Pennsylvania policy makers should consider.
Gas well frac job, showing some of the massive equipment used.Overall Economic Impact
Overall, the Perryman Group report estimates that
Barnett shale accounts for $8.2 billion in annual
output (8.1 percent of total output in the regional
economy) and 83,823 jobs (8.9 percent of total jobs).
This is a significant number, particularly because the
Barnett shale region is predominantly an urban area
that already boasts a large and extensive economy.
In addition, experts suggest that the stability of the
natural gas economy has essentially shielded the
region from economic downturns. Potential impacts
in areas of Pennsylvania could be much higher on a
percentage basis considering that the local economy
is relatively smaller.
Where the Jobs and Income Are
As with most economic activity, the impacts of
natural gas affect more than just the specific firms
directly involved in the industry. There are also
important employment and income effects on local
businesses that supply the industry (such as oil field
service companies, local contractors, area surveyors,
attorneys, and local fuel and stone suppliers) and
effects that result from employees spending their
wages locally (local retailers and restaurants).
Leasing and royalty income, which is currently
of much interest in Pennsylvania, actually accounts
for a very small share of the economic impact. The
Perryman report identifies three separate types of
economic activities related to natural gas and outlines
their share of economic activity, including:
1. Exploration, drilling, and operations (67 percent
gross product, 62 percent personal income)
2. Leasing and royalties that go to landowners
(11 percent gross product, 12 percent personal
income)
3. Pipeline infrastructure (22 percent gross product,
27 percent personal income)
The employment impacts related to natural gas in
the Perryman report show similar trends:
1. Exploration, drilling, and operations (58 percent
of new permanent jobs)
2. Royalty and lease payments (14 percent)
3. Pipeline infrastructure (28 percent)
As the industry expands within Pennsylvania
more of these jobs and revenues should be reaching
local residents, either as new hires or as the industry
employees relocate to the region. Communities can
increase the possible economic benefits of a growing
natural gas industry by planning ahead to respond to
the growing population within their areas.
Which Industries Benefit
As expected, the industrial sector with the largest
gain from the Barnett shale is the crude petroleum
and natural gas industry, accounting for about one fifth
(21 percent) of increases in personal income
and 7 percent of new jobs. Retail trade accounts for
about 16 percent of increased personal income and
27 percent of the new jobs, while new construction
accounts for 10 percent of increased personal income
and 9 percent of new jobs. Eating and drinking
establishments similarly benefit, accounting for 5
percent of personal income and 15 percent of new
employment.
For any individual industry the difference between
their impact on gross product and on employment
partially reflects wages and salaries within that
industry. Retail trade and dining establishments,
for example, together account for 21 percent of
new personal income but 42 percent of total new
employment, reflecting that many such jobs are relatively
low paying.
Experience in Sublette County, Wyoming
Sublette County is the largest gas-producing county
in Wyoming, accounting for 44 percent of the state’s
gas production in 2006. Unlike the North Texas play,
Sublette County is a very rural area with a population
of only 5,920 in 2000. The small population size
means that the impacts of natural gas development are
much more apparent than those of the Barnett shale.
Studies in the county have demonstrated that
gas exploration and drilling has had a direct and
significant influence on the county’s population,
affecting almost all sectors of the community,
including housing construction, the demand for
public services, and culture.
They found that much of
the oil and gas employment was transient (not local
citizens). For example, during development of the gas
fields, a little over half (53 percent) of the workers
were living in camps or motels. Housing needs have
proved to be a constraint on local hiring because
the high cost of living and saturated housing market
inhibits new employees from finding places to live.
Reports found that the availability of housing unmistakably
affects nonresident workers’ desire to move
into the county.
A wage and salary study in the county also found
that the highest paying jobs are gas field jobs, which
generate significant opportunities for employees. This
also creates challenges for existing businesses, which
must pay higher wages to keep their existing workers.
The gas field jobs offer nearly unlimited opportunity
for overtime along with substantial opportunities
for wage advancement. Seasonal fluctuations in
employment and unemployment have effectively
stopped due to the continuous nature of the gas
industry.
Natural gas drilling has had significant effects on
the local governments and school districts as well.
Due to the population increase, including a dramatic
increase in the number of school students, the county
government and schools have acquired major infrastructure
expenses. In addition to increased costs of
municipal infrastructure, the nonviolent crime rate
has increased in Sublette County, particularly for
driving under the influence, drug possession, and
larceny.
The Marcellus Shale Gas Play: Part 2
The following is continued from the article prepared by Penn State University and explains the Marcellus Shale Gas Play.
The Marcellus Shale
The Marcellus shale is a deep layer of rock that
lies 5,000 to 9,000 feet underground and runs from
the southern tier of New York through the western
portion of Pennsylvania, into the eastern half of
Ohio, and through West Virginia. In Pennsylvania,
the formation extends from the Appalachian plateau
into the western valley and ridge. While this area has
produced natural gas for years, many gas production
companies are now interested in the Marcellus shale
because of higher energy prices and new drilling
technologies that could recover an estimated 50
trillion cubic feet of natural gas. Conservative
estimates state that the Marcellus shale contains 168
trillion cubic feet of natural gas; in reality, it could
Where and How Does Drilling
Take Place?
Natural fractures in the Marcellus
shale are important to recovering large
amounts of gas. As heavily organic
sediments were deposited 380 million
years ago, the black shale that makes
up the Marcellus was formed. As the
organic material decayed, methane
and other components of natural gas
formed and are now trapped tightly
in the dense shale.
Gas wells are drilled in locations where a gas
company has obtained the right to explore for and
develop natural gas. Wells are spaced according
to mineral laws and regulations, with the goal of
extracting gas efficiently using as few wells as
possible.
Natural Gas Well Development
Development of an individual natural gas well site
typically follows this basic timeline, though it may
vary somewhat at any one site. The stages include:
1. Leasing activity, during which land is put under
contract and secured for natural gas exploration
and development. This stage normally lasts four
to six months.
2. Exploration and seismic testing, which is done to
find the areas that will offer the highest potential
natural gas yields. Exploration and seismic testing
typically last about four months.
3. Site preparation and drilling stage, including earth
moving, road grading, and well pad construction
as well as drilling and fracing. This stage lasts
from four to eight weeks. Pipeline is laid to
connect the well to feeder pipelines, allowing the
gas to reach market.
4. Site reclamation activities, during which stage
the active well site is stabilized and vegetation
is established. Site reclamation lasts about two
weeks.
5. Extraction and transport of natural gas from the
well, which can potentially last from five to thirty
years (depending on the productivity of that individual
well). Wells receive active maintenance
throughout their lifespan, which means ongoing
access is required. In addition, it is possible
that the well may be refraced at some later date,
temporarily bringing back much of the equipment.
6. Closure plan, a procedure that is influenced by
the landowner’s leasing terms, during which the
inactive well is closed and the site restored.
When their role on an individual site is completed,
the different crews typically move to a new well site
nearby to do site prep and drilling. Thus, within any
one community at any one time, there will be well
sites in different stages of development.
Why Marcellus Is Different from Shallow Wells
The gas produced from deep well drilling is under a
higher pressure than in shallow or traditional wells,
which necessitates different handling techniques and
equipment. Unlike shallow wells with natural gas
reserves, gas derived from the Marcellus shale is held
tightly within the shale so the method of extraction
is quite different.
Peter
The Marcellus Shale
The Marcellus shale is a deep layer of rock that
lies 5,000 to 9,000 feet underground and runs from
the southern tier of New York through the western
portion of Pennsylvania, into the eastern half of
Ohio, and through West Virginia. In Pennsylvania,
the formation extends from the Appalachian plateau
into the western valley and ridge. While this area has
produced natural gas for years, many gas production
companies are now interested in the Marcellus shale
because of higher energy prices and new drilling
technologies that could recover an estimated 50
trillion cubic feet of natural gas. Conservative
estimates state that the Marcellus shale contains 168
trillion cubic feet of natural gas; in reality, it could
contain as much as 516 trillion cubic
feet. The United States currently
produces roughly 30 trillion cubic feet
of gas a year and demand for this gas
is increasing steadily.
feet. The United States currently
produces roughly 30 trillion cubic feet
of gas a year and demand for this gas
is increasing steadily.
Typical drilling rig and pipe used to drill a deep and long horizontal well.
Where and How Does Drilling
Take Place?
Natural fractures in the Marcellus
shale are important to recovering large
amounts of gas. As heavily organic
sediments were deposited 380 million
years ago, the black shale that makes
up the Marcellus was formed. As the
organic material decayed, methane
and other components of natural gas
formed and are now trapped tightly
in the dense shale.
About 300 million
years ago the pressure of the gas
caused fractures in the formation.
These fractures run as slices from the
northeast to the southwest and are
fairly close together. While a vertical
well may cross one of these fractures and other
possibly less productive fractures, new technology
allows for horizontal drilling, which crosses a series of
fractures and may be more productive.
years ago the pressure of the gas
caused fractures in the formation.
These fractures run as slices from the
northeast to the southwest and are
fairly close together. While a vertical
well may cross one of these fractures and other
possibly less productive fractures, new technology
allows for horizontal drilling, which crosses a series of
fractures and may be more productive.
Gas wells are drilled in locations where a gas
company has obtained the right to explore for and
develop natural gas. Wells are spaced according
to mineral laws and regulations, with the goal of
extracting gas efficiently using as few wells as
possible.
Geologists and geophysicists working
for gas companies use seismic data to interpret the
formations of rock layers underground. If seismic data
suggest a reasonable possibility of efficient gas access,
a well will be drilled in a specific location using long
sections of drill pipe. Depending on the geology, the
drillers may drill vertically for several thousand feet
and then use special joints to turn the shaft 90 degrees
over the course of several hundred feet and continue
drilling horizontally for an additional distance of
up to 5,000 feet.
for gas companies use seismic data to interpret the
formations of rock layers underground. If seismic data
suggest a reasonable possibility of efficient gas access,
a well will be drilled in a specific location using long
sections of drill pipe. Depending on the geology, the
drillers may drill vertically for several thousand feet
and then use special joints to turn the shaft 90 degrees
over the course of several hundred feet and continue
drilling horizontally for an additional distance of
up to 5,000 feet.
A steel casing is cemented in place
to stabilize the surface of the well bore and protect
groundwater resources. Horizontal drilling enables
companies to extract more gas in a cost-effective
manner. In many cases, multiple wells may be drilled
side by side on the same well pad, radiating out in
different directions.
to stabilize the surface of the well bore and protect
groundwater resources. Horizontal drilling enables
companies to extract more gas in a cost-effective
manner. In many cases, multiple wells may be drilled
side by side on the same well pad, radiating out in
different directions.
Natural Gas Well Development
Development of an individual natural gas well site
typically follows this basic timeline, though it may
vary somewhat at any one site. The stages include:
1. Leasing activity, during which land is put under
contract and secured for natural gas exploration
and development. This stage normally lasts four
to six months.
2. Exploration and seismic testing, which is done to
find the areas that will offer the highest potential
natural gas yields. Exploration and seismic testing
typically last about four months.
3. Site preparation and drilling stage, including earth
moving, road grading, and well pad construction
as well as drilling and fracing. This stage lasts
from four to eight weeks. Pipeline is laid to
connect the well to feeder pipelines, allowing the
gas to reach market.
4. Site reclamation activities, during which stage
the active well site is stabilized and vegetation
is established. Site reclamation lasts about two
weeks.
5. Extraction and transport of natural gas from the
well, which can potentially last from five to thirty
years (depending on the productivity of that individual
well). Wells receive active maintenance
throughout their lifespan, which means ongoing
access is required. In addition, it is possible
that the well may be refraced at some later date,
temporarily bringing back much of the equipment.
6. Closure plan, a procedure that is influenced by
the landowner’s leasing terms, during which the
inactive well is closed and the site restored.
When their role on an individual site is completed,
the different crews typically move to a new well site
nearby to do site prep and drilling. Thus, within any
one community at any one time, there will be well
sites in different stages of development.
Why Marcellus Is Different from Shallow Wells
The gas produced from deep well drilling is under a
higher pressure than in shallow or traditional wells,
which necessitates different handling techniques and
equipment. Unlike shallow wells with natural gas
reserves, gas derived from the Marcellus shale is held
tightly within the shale so the method of extraction
is quite different.
Current technology uses significant
quantities of water under very high pressure to
fracture (frac) the shale. Due to the fact that wells are
quantities of water under very high pressure to
fracture (frac) the shale. Due to the fact that wells are
horizontally drilled to access more shale, the amount
of water required for fracing these wells is significant,
between one and five million gallons or more per
well. This quantity of water required for fracing may
contribute to a significant number of issues in affected
communities.
of water required for fracing these wells is significant,
between one and five million gallons or more per
well. This quantity of water required for fracing may
contribute to a significant number of issues in affected
communities.
Marcellus Shale: What Government Needs To Know
The following is an excellent article describing the many aspects of a the Marcellus Shale Gas Play. It is designed to inform local government officials, but it is valuable to anyone with an interest in geology, engineering, economic impacts, and more. The article is written and made available by Penn State University. It is a long article in .pdf format, so will present it here in stages. The entire article can be viewed here.
Peter
Marcellus Shale: What Local Government Officials Need To Know
www.naturalgas.psu.edu From Penn State University
Natural gas has been extracted from underground
sources in Pennsylvania since the early 1800s,
with the state currently hosting about 40,000
active gas wells and approximately 4,000 new wells
drilled each year. Most of these wells tap gas reserves
a few thousand feet below the earth’s surface, but
new technologies—in particular, horizontal drilling
and hydraulic fracturing—are making gas extraction
from deep reserves such as the Marcellus shale more
economically feasible.
Increasing demand for cleaner
domestic energy will bring about continuing exploration.
The gas industry is seeking points of access
to high-volume reservoirs of natural gas, called
“plays,” that lie far below the hills and valleys of
Pennsylvania.
The potentially large economic impact of natural
gas exploration and extraction, with estimates of up
to $500 billion in recoverable gas in Pennsylvania,
could be a valuable economic stimulus for Pennsylvania
communities. As landowners receive
compensation for the use of the resource and as the
gas industry develops the regional drilling infrastructure,
the economic gains can pose significant
benefits for the entire community.
Yet there will be
challenges and costs accompanying these benefits;
the scale of drilling activity may increase the local
population, pressuring local housing markets,
schools, and local government services. There will
be environmental impacts, particularly on water use
and quality, forest defragmentation, and wildlife.
Local leaders and communities need to be aware of
how natural gas drilling may affect them and their
residents, how these disturbances may occur, and how
to manage them.
It’s Important to Remember...
While the gas industry can greatly benefit a
community and its residents, it is vital throughout the
interest and development of the Marcellus for citizens,
local officials, and community members to constantly
remember that this is a nonrenewable natural resource.
If this natural gas “play” evolves as people suggest, it
could have economic benefits for Pennsylvania for the
next thirty to fifty years. Throughout this time, local
leaders and citizens should be thinking about how the
short-run opportunities and benefits of these plays can
both benefit and distress their local communities and
the state of Pennsylvania in the long run. The large
amounts of income and capital that may be generated
from Marcellus give communities and citizens the
chance to invest for the extended future, not just for
short run gain.
While these opportunities unfold, it is
crucial that local communities remain aware of the
effects drilling activity will have on the environment
and on the social fabric of their areas.
The Commonwealth already has prime examples
of what happens when the long run is forgotten and
is now paying the price as it tries to remediate the
negative impacts resulting from acid mine drainage
and abandoned coal mines. The method of extraction
used for Marcellus shale is a young technology that
may harbor repercussions that have yet to be documented
or encountered.
The challenge, but also the
opportunity for local officials and citizens, is to do
the most we can to help the Marcellus drilling leave
Pennsylvania better off once it has played out.
An important economic factor in whether or not
communities experience beneficial impacts depends
critically on how many of these new dollars stay
within Pennsylvania communities.
Will it be Pennsylvanians
who get the jobs? Will workers from other
states move into Pennsylvania and become active
members of their communities or will they simply
commute? Will the gas companies and supporting
industries locate in Pennsylvania? To what extent will
Pennsylvania businesses provide the services that the
gas companies require? Will the wages workers earn
and the royalties landowners receive be spent within
Pennsylvania or will they go elsewhere? The answers
to these questions are vital in helping communities
grasp how and why they must prepare and plan for
the growing gas industry in a way that will enable
them to fully benefit.
Peter
Marcellus Shale: What Local Government Officials Need To Know
www.naturalgas.psu.edu From Penn State University
Natural gas has been extracted from underground
sources in Pennsylvania since the early 1800s,
with the state currently hosting about 40,000
active gas wells and approximately 4,000 new wells
drilled each year. Most of these wells tap gas reserves
a few thousand feet below the earth’s surface, but
new technologies—in particular, horizontal drilling
and hydraulic fracturing—are making gas extraction
from deep reserves such as the Marcellus shale more
economically feasible.
Increasing demand for cleaner
domestic energy will bring about continuing exploration.
The gas industry is seeking points of access
to high-volume reservoirs of natural gas, called
“plays,” that lie far below the hills and valleys of
Pennsylvania.
The potentially large economic impact of natural
gas exploration and extraction, with estimates of up
to $500 billion in recoverable gas in Pennsylvania,
could be a valuable economic stimulus for Pennsylvania
communities. As landowners receive
compensation for the use of the resource and as the
gas industry develops the regional drilling infrastructure,
the economic gains can pose significant
benefits for the entire community.
Yet there will be
challenges and costs accompanying these benefits;
the scale of drilling activity may increase the local
population, pressuring local housing markets,
schools, and local government services. There will
be environmental impacts, particularly on water use
and quality, forest defragmentation, and wildlife.
Local leaders and communities need to be aware of
how natural gas drilling may affect them and their
residents, how these disturbances may occur, and how
to manage them.
It’s Important to Remember...
While the gas industry can greatly benefit a
community and its residents, it is vital throughout the
interest and development of the Marcellus for citizens,
local officials, and community members to constantly
remember that this is a nonrenewable natural resource.
If this natural gas “play” evolves as people suggest, it
could have economic benefits for Pennsylvania for the
next thirty to fifty years. Throughout this time, local
leaders and citizens should be thinking about how the
short-run opportunities and benefits of these plays can
both benefit and distress their local communities and
the state of Pennsylvania in the long run. The large
amounts of income and capital that may be generated
from Marcellus give communities and citizens the
chance to invest for the extended future, not just for
short run gain.
While these opportunities unfold, it is
crucial that local communities remain aware of the
effects drilling activity will have on the environment
and on the social fabric of their areas.
The Commonwealth already has prime examples
of what happens when the long run is forgotten and
is now paying the price as it tries to remediate the
negative impacts resulting from acid mine drainage
and abandoned coal mines. The method of extraction
used for Marcellus shale is a young technology that
may harbor repercussions that have yet to be documented
or encountered.
The challenge, but also the
opportunity for local officials and citizens, is to do
the most we can to help the Marcellus drilling leave
Pennsylvania better off once it has played out.
An important economic factor in whether or not
communities experience beneficial impacts depends
critically on how many of these new dollars stay
within Pennsylvania communities.
Will it be Pennsylvanians
who get the jobs? Will workers from other
states move into Pennsylvania and become active
members of their communities or will they simply
commute? Will the gas companies and supporting
industries locate in Pennsylvania? To what extent will
Pennsylvania businesses provide the services that the
gas companies require? Will the wages workers earn
and the royalties landowners receive be spent within
Pennsylvania or will they go elsewhere? The answers
to these questions are vital in helping communities
grasp how and why they must prepare and plan for
the growing gas industry in a way that will enable
them to fully benefit.
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