Marcellus Shale
Natural Gas
Roundup
Potter County, Pennsylvania
July 2011
Top Story:
‘Gas Rush’ Series Kicks Off In Potter County
Who’s going to benefit from the natural
gas rush? Mineral rights owners, jobseekers, motel operators and supply
companies, for starters.
And at what cost?
Those answers were fuzzier as three
experts shared their findings to kick off
of a series of workshops being held
across the state to help local
government officials and community
leaders. Penn State professor Dr. Tim Kelsey (above) cautioned that building
hotels/housing units, expanding schools and making other long-term changes could
backfire. The gas industry tends to create a larger volume of short-term jobs and many
of them require frequent relocations.
About 75% of the jobs do not require a college degree, although many do require
specialized training. Average annual salary of gas-related jobs is nearly $70,000, Kelsey
said, but in many cases the work is hard and requires travel and flexibility.
Dr. Jason Weigle from Mansfield University said rents and real estate prices have risen
dramatically in Bradford and Tioga counties. He suggested that local leaders develop
housing strategies and other measures to prepare.
Jerry Walls, a community planning consultant, emphasized the need for township and
borough officials to coordinate their efforts and be aware of the measures they can use
to control the impacts. Among options is a zoning ordinance that minimizes impacts on
neighboring properties, the environment, roads and other infrastructure.
The men listed demands that could be placed on local services: sewage permitting;
housing; reuse of vacant land and buildings; drilling pads and staging areas which need
to operate 24/7 with extensive lighting and outdoor storage; high volumes of heavy truck
traffic; road improvements and repairs; increased police and emergency management
services; and use of water sources and treatment plants.
“There are a series of trade-offs coming,” Weigle said “Your job, as community leaders,
is to maximize the positives and minimize the negatives, to the extent that you can.”
County Awarded Grants To Support Water Quality Programs
Potter County is taking steps to protect its water
resources, in partnership with several
stakeholder groups. The county was recently
awarded two grants to support this mission. As
the site of the only “triple divide” watershed in
the eastern United States, Potter County has
strategic significance to a broad variety of
agencies and organizations with an interest in
water quality.
Headwaters of the Allegheny, Genesee and
Susquehanna rivers can all be traced to the
same plateau in northern Potter County. Nearly
70 percent of the county’s streams are classified
as “high value” or “exceptional value” by the Pa.
Dept. of Environmental Protection. Many
communities in Pennsylvania and New York rely
on these watersheds for clean drinking water.
In an effort to most effectively monitor and protect these resources, the Potter County
Board of Commissioners has pulled together watershed associations, conservation
organizations, county agencies, Penn State Extension, school districts and others to
form a Water Quality Workgroup.
A separate and affiliated group, the Triple Divide Watershed Coalition, addresses similar
issues from the perspective of public water suppliers. (See the May 2011 edition of
Natural Gas Roundup for more details on the coalition.)
Mission of the organization is to coordinate efforts to most effectively monitor water
quality and address any issues that may arise from industrial activity or other threats.
The Water Quality Workgroup’s goals are risk reduction, early detection of problems,
and sharing of information.
Although the organization is in its formative stages, its credibility was recently confirmed
by the awarding of two competitive grants to help support its mission. One is from the
Water Resources Education Network and the other through the Colcom Foundation.
Funds will primarily be used to purchase water monitoring equipment for volunteers,
acquire and install 12 in-stream monitoring systems, pay for chain-of-custody testing for
public water supplies, and develop educational materials.
Key elements of the workgroup’s plan include:
 collecting baseline data and monitoring water quality;
 creating a database that can be shared;
 educating students, the public, and professionals from various industries,
including natural gas, on local water issues.
Water quality data and irregularities will be shared with state agencies and industry, with
a goal of early detection and corrective action if needed. The Water Quality Workgroup
is also exploring various options to provide long-term sustainability of these efforts after
the grant funds are expended.
Local ‘Well Walk’ Focuses On State Forest Land
About two dozen people turned out for a tour of gas drilling sites on state forest land in
the heart of Potter County. Forestry Bureau personnel participated in the “well walk,”
organized by local concerned citizens, to discuss issues related to leasing of state forest
land. The group toured a site on Denton Hill and observed a pipe that carries water from
an impoundment on the Irish farm. Participants also toured a well site at Horton Run.
Seneca Resources has leased 7,440 acres between Denton Hill and Fox Hill, for an
initial bonus payment of $23.3 million. Penn Virginia paid $13.9 million for 3,640 acres in
Eulalia and Roulette townships. The state will also receive 18% royalties. Other state
forest land has been leased, as have some tracts of state game lands. Additionally,
subsurface rights on a significant portion of the more than 250,000 acres of state-owned
land in the county are privately owned and subject to drilling. (Photo by Curt Weinhold)
Job Training Opportunities Available Locally
Gas companies are looking for trained
workers for a variety of jobs. Once pipelines
and other infrastructure are in place, job
opportunities will abound, from field
workers, welders and truck drivers to
professional careers such as biology,
geology, accounting, law and engineering.
Potter County Education Council, Penn
State Extension and Seneca Highlands
Career and Technical Center are
sponsoring training courses to prepare area
residents for employment. Upcoming
classes include:
 Certified Well Tender and CDL Certification, Aug. 1 to Sept. 23, or Sept. 26 to
Nov. 18;
 Introduction to Pipe Welding, Sept. 12 to Dec. 14.
Anyone interested in learning more about job training opportunities should call the
Education Council at (814) 274-4877.
Complexities Of Pipelines Detailed For Gas Task Force
Members of the Potter County Natural Gas Task Force
heard a detailed presentation on the complex issue of
gas pipelines. Penn State Extension educator Jim Clark
discussed the growing network of pipelines being laid
across the region, from the smaller gathering lines
carrying gas away from individual wells, to the massive
interstate pipelines that usher it to a market that
stretches around the world. Pennsylvania, as the
epicenter of the Marcellus Shale gas rush, will see a
flurry of pipeline construction. “The gas is here and it is
going to be taken to market,” Clark said. “The
infrastructure is being created and we are going to be
seeing a lot of activity.” He detailed some of the
environmental and aesthetic impacts of pipelines that
can be mitigated and cautioned property owners who
are being approached about right-of-way leases to
become educated on their options. Clark also distributed a fact sheet, “Negotiating
Pipeline Rights-Of Way in Pennsylvania.” (Copies are available by calling 814-8656713.) He mentioned that the regulatory structure for pipelines has some gaps, including
a lack of oversight on gathering lines in Pennsylvania, which may be addressed soon by
the state legislature.
District Forester Chris Nicholas said the Bureau of Forestry has compiled a list of best
management practices for pipeline construction in forested areas. He noted that impacts
could be minimized if companies building the pipelines would work together.
Greg West (Gas Field Specialists) pointed out that pipeline builders must comply with a
series of regulations from DEP, County Conservation Districts and the Pa. Public Utility
Commission. Energy companies often face lengthy delays in obtaining pipeline
approvals from the regulatory agencies, said Bruce Sampson, a representative of
Pennsylvania General Energy Company of Warren, one of the region’s active drillers.
What’s Shakin’? Seismic Testing Continues In Region
An army of ground-shakers is
descending on the region to get a
better idea of what lies two miles or
more beneath us. Seismic testing is
underway in Potter, Cameron, Elk and
McKean counties by contractor
Geokinetics. Soon, a crew of about 40
will join the advance team with large
“thumper” trucks. Work zones will
require that one traffic lane be closed.
Companies are anxious to learn more
about the region’s geology as they prepare to harvest gas from not only Marcellus Shale,
but =other shale formations. Penn State University’s Tom Murphy emphasized that the
seismic tests are just part of the research. Core samples are also taken and data are
analyzed to determine angles, veins and other subterranean characteristics.
How Much Gas?: It’s All About The ‘Sweet Spots’
Reports from companies that have tapped the Marcellus Shale in different parts of
Pennsylvania underscore the vast differences in natural gas yields. Two especially
productive wells in northeastern Pennsylvania caused quite a stir in late June. Days
later, much more modest reports came in from three Potter County wells. The lesson
was clear: the amount of gas that deep wells generate will fluctuate widely, based on
geology and other factors. Cabot Oil & Gas Corp. reported wells in Susquehanna County
capable of producing 30 million cubic feet per day -- believed to be a record for the
Marcellus. Meanwhile, in a June 26 news release, Penn Virginia reported “disappointing
production rates” on its first three horizontal Marcellus Shale natural gas wells, all in
Potter County. Average daily production of two wells on the Risser farm and a well on
the Dunn farm was 2.1, 1.7 and 2.7 million cubic feet, respectively. H. Baird Whitehead,
the company's chief executive, said the test wells in the central part of Penn Virginia's
35,000-acre position in Potter and Tioga counties are expected to be connected to
pipelines in August, when natural gas sales will begin. "We will monitor longer-term
production once these wells are turned into the pipeline and determine if the reserves
can support a development program in this immediate area," Whitehead said. He added
that company's initial results are not unusual for operators drilling in areas outside of the
"sweet spots" of the Marcellus Shale. Production rates can vary, depending upon the
quality and thickness of the shale. Penn Virginia said an additional well in the western
part of its acreage is waiting on completion, and it plans to drill several vertical test wells
later this year. Operators are working to gain a greater understanding of the complicated
geology of the Marcellus, allowing them to land their drill bits in its most productive
sections. They're drilling horizontally at greater distances, giving them access to more of
the gas locked within the rock. And they're tweaking how they break apart the shale.
Many Marcellus wells are not running at full tilt, since the infrastructure required to take
the gas from wellhead to market is not fully in place. An oversupply of natural gas and
the availability of crews to fracture the wells are other limiting factors. (Source:
Associated Press)
Natural Gas Resource Center Takes Shape
Potter County has established a Natural Gas
Resource Center, in partnership with the Potter
County Education Council. Primary purpose of the
center is to serve as an information clearinghouse,
particularly for economic development and business
interests. Referrals are also made on other topics. To
reach the Natural Gas Resource Center, call 814260-5625. On a related note, commissioners from Potter, McKean and Cameron
counties have joined forces to establish a website pulling together a broad variety of
resources related to Marcellus Shale natural gas development and related topics. More
details on that multi-county project will be announced.
Outdoors Groups Join Forces; To Meet With DEP
A new coalition of outdoors groups is
emerging in the debate over natural gas
drilling. The Sportsmen Alliance for
Marcellus Conservation seeks to protect
streams, forests, and wildlife. One of the
group’s goals is to build a water quality
database. Members of the Sportsmen
Alliance are scheduled to meet this month
with DEP Secretary Michael Krancer to
discuss proposals such as new regulations
protecting wild trout waters and designation
of some environmentally sensitive areas as
off-limits to drilling. Meanwhile, University of Pennsylvania biologist Margaret
Brittingham, with support from the Pa. Game Commission, has started a study of how
drilling changes forest habitat and how it could impact wildlife.
‘Impact Fee’ Proposals Run Aground
State lawmakers have stalled in their efforts to enact
an “impact fee” on Marcellus Shale natural gas
extraction. Under the threat of a veto by Gov. Tom
Corbett, they’ve opted to wait for the report from a
gubernatorial commission reviewing Marcellus Shale
drilling issues later this month. No action is expected
until this fall at the earliest. Many proposals have been
considered, including a House bill that would distribute
37.5 percent of the revenue to the host counties, 25
percent to host municipalities, 17.5 percent to all
municipalities within a host county, 10 percent to
county conservation districts, and the final 10 percent to host counties strictly for use by
first responders and emergency medical services.
News And Notes Of Interest
Frac Treatment/Salt Plant Plan Announced. Plans for a
combined frac water treatment plant and salt manufacturing
operation have been announced for a site near Clearfield. Officials
from Integrated Water Technologies said the plant will be located in
the Clearfield Firemen's Commerce Park, just off Route 879. An
access road is being constructed by the Clearfield Foundation. The
plant will have double-lined ponds with floating liners to hold the frac
water. Trucks will deposit the used water and pick up clean,
processed water. DEP’s decision to have traditional water treatment plants discontinue
taking and treating the frac water has forced gas drillers to ship water to other states.
The Clearfield plant will treat the frac water and process the chlorides to manufacture
salts that can be used on roads in the winter as well as salt pellets to use in water
softeners.
Attention, Townships & Boroughs. A Municipal Checklist has been prepared for
townships and boroughs in Potter County to help them deal with issues that could arise
as the result of natural gas drilling. Planning Director Charlotte Dietrich has compiled the
document. Each township and borough could have special circumstances that would
require it to consider local regulation or to seek technical or legal guidance. The checklist
provides estimated timelines for different aspects of a drilling operation. Among
ordinances they might consider are those affecting road bonding, hauling and road
maintenance, mandatory 9-1-1 addresses, holding tanks for sewage, temporary work
camp regulations and others. Townships and boroughs are being asked to inform the
County Planning Department on the impact of each gas well site on the municipality -traffic, roads and infrastructure, employment, housing. ripple effect on local business,
economics, issues involving surface rights owners and contiguous properties, etc.
Coast-To-Coast On Natural Gas. Pittsburgh residents Murry and Cindy Gerber
made a coast-to-coast tour to highlight capabilities of natural gas vehicles. They were
greeted in Washington by Sen. Bob Casey, who said, “Increased use of natural gaspowered vehicles can create jobs in Pennsylvania and decrease our dependence on
foreign oil. Converting vehicles, especially commercial vehicles, to run on natural gas
could create new industry and new jobs in Pennsylvania.” The Gerbers drove a natural
gas-fueled Hummer across the U.S. Along the way, the Gerbers visited middle schools
to give a short presentation on the subject of natural gas vehicles and donated $2,500 to
help each school’s science and engineering programs.
Concern Voiced in Cameron County. The Cameron County Board of
Commissioners has contacted the Susquehanna River Basin Commission and other
regulatory agencies to express concern over the potential impact of water withdrawals
from the Driftwood Branch of Sinnemahoning Creek. Seneca Resources plans to pull
water from the Driftwood Branch for two gas wells in Rich Valley, while Keystone
Clearwater Solutions (a division of ARM Oil and Gas Solutions) wants to withdraw water
from a location at the foot of Maple Street in Emporium and transport it for
hydrofracturing.
EPA Studying Hydrofracturing. The U.S. Environmental Protection Agency has
named seven geographic regions in which it will do case studies as part of its
assessment of the potential effects of hydraulic fracturing on drinking water. Field work
in some of the regions will begin this summer. The studies will be broken into two study
groups: prospective (meaning looking at their future possible effects) and retrospective.
The two prospective studies will look at the hydraulic fracturing process throughout the
life cycle of a well. These will be done in Louisiana (Haynesville Shale) and Washington
County (Pa.) in the Marcellus Shale. The five retrospective case studies will look at
areas where hydraulic fracturing has already occurred for any effect on drinking water
resources. Included in those studies are Bradford, Susquehanna and Washington
counties in Pennsylvania. The fracking study was first announced in March 2010. The
broad scope of the study, which will look at the impact on drinking water beginning with
selection of a drilling site through production and well abandonment, has drawn criticism
from the oil and gas industry. Many officials in the EPA and the industry contend that
state monitoring of hydrofracturing is adequate, but Congress wants more information.
Shale Gas: How Many Jobs? Conflicting reports on the number of jobs generated
by the natural gas industry in Pennsylvania have fueled a high-profile debate played out
in the media. The Keystone Research Center, describing itself as “a nonprofit,
nonpartisan research organization that promotes a more prosperous and equitable
Pennsylvania economy,” issued a news release claiming that some of the highly
publicized reports on Marcellus-related jobs from 2007 to 2010 were inflated. A copy of
the center’s policy brief, "Drilling Deeper into Jobs Claims: The Actual Contribution of
Marcellus Shale to Pennsylvania Job Growth," is available online at
keystoneresearch.org. Marcellus Shale Coalition executive director Kathryn Klaber shot
back on behalf of the gas industry with a detailed statistical summary of greater job
growth and economic impact, while accusing the Keystone Research Center of twisting
figures for political purposes.
St. Marys May Limit Drilling. St. Marys City Council continues work on an ordinance
that would limit natural gas drilling in the city. Officials said they do not plan to approve
the measure until they have a better idea of how local regulation of the gas industry
could be affected by Senate Bill 1100, which contains a natural gas impact fee and a
potential model zoning ordinance.
Free Gas Rights Lease Guide Available. Property owners faced with a decision
about leasing mineral rights have a new tool to help them understand their options and
make more informed choices. Pennsylvania Environmental Council has developed the
Marcellus Shale Lease Guide. It identifies issues to consider in a lease, summarizes the
types of approaches that have been used to address these issues, and offers options for
handling issues in a more protective lease, using best management practices. It also
provides specific advice on such issues as farmland use, erosion control, emergency
response plans, impacts to existing structures, fencing, noise control, pollution
prevention, seismic testing, property access rights by gas company personnel, impact on
wildlife and timber, and many other issues. The Lease Guide is available online at
www.pagreenlease.org.
Potter County: Slowdown In Drilling During Second Quarter
After a hectic start to 2011, permitting of gas wells in the Marcellus Shale has slowed
considerably. There were 46 wells permitted during the first three months of the year.
Since then, only four wells have been permitted -- none in April, one in May, and three
during June. According to DEP's spud report, operators began drilling on nine Marcellus
wells in Potter County so far during 2011. Eight of those wells were new, and one was to
extend an existing well deeper. Cause may be the low wellhead price for natural gas,
coupled with the lack of pipeline and storage capacity, and an abundant gas supply
resulting from wells brought online during 2009 and 2010. The chart below demonstrates
the extent of Marcellus Shale natural gas drilling in Potter County. Activity is expected to
pick up in the coming years, although the pace of growth is difficult to predict. (Chart
produced by Bob Volkmar/Trout Unlimited)
80
New Marcellus Wells Permitted 2006-2010
Potter County
70
73
New Well Permits
60
50
50
40
30
28
20
10
0
4
2006
7
6
2007
2008
Year
2009
2010
2011
Note: does not include permit renewals or permits to drill
existing wells deeper.
The website pottercountypa.net features a Marcellus
Shale/Natural Gas section containing a wealth of information.
Remaining 2011 Task Force meetings: Sept. 13 and Nov. 8.
This publication is produced by the Public Education Committee of the Potter
County Natural Gas Task Force. Anyone with story ideas for this newsletter or
comments should contact Paul Heimel ([email protected]).