Tuesday, May 29, 2012

Penn. Marcellus News Update 5/29/12

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Pa. Commonwealth Court says compressor stations are essential to production
The Commonwealth Court has ruled that the operation of a compressor station falls within the definition of "gas production" as used in a township's zoning ordinance, and thus cannot be banned by a township in areas where gas production is otherwise permitted.
The ruling could be an important one as Pennsylvania municipalities seek to control certain aspects of Marcellus Shale-related natural gas development.
A three-judge panel led by Judge Mary Hannah Leavitt reversed McKean County Common Pleas Senior Judge William F. Morgan's ruling, which affirmed an order of the Bradford Township Zoning Hearing Board that held that a compressor station was not a permissible use in the township's "forest, slope and residential district" despite the fact that oil and gas production is allowed there.
The North Carolina General Assembly is considering whether to legalize natural gas extraction through fracking, while the city of Creedmoor recently passed an ordinance banning the practice in advance of any legislative approval. On May 21, Gov. Bev Perdue issued an executive order for the formation of a workgroup to create regulations for shale gas exploration and production in our state.
The debate is eerily familiar. My parents’ farm, which has been in our family since the mid 1800s, sits on a prime gas drilling location in New York’s Delaware Valley directly across the state border from the economically challenged northeastern Pennsylvania counties at the national epicenter of natural gas extraction...
....But the debate about fracking is deeper and more complex than the simple “cheap domestic energy that creates jobs” versus “centrality of environmental stewardship” dichotomy that is typically played out in the media. The Marcellus Shale sits under a rural and impoverished swath of the upper Appalachians, and the money provided by natural gas leases can be an economic lifeline for struggling farm families.
Make no mistake about the amount of money potentially in play here. Lease rates fluctuate wildly, but offers of several thousand dollars an acre plus a 12-15 percent royalty for extracted gas are not uncommon.
These landowners are not “Beverly Hillbillies” who will take the money from gas companies and move to mansions in the Hollywood Hills. They are people living on farms, struggling day to day. Allowing energy companies to drill for natural gas can help close the gap between what a homeowner earns and what he owes the bank every month.
It’s a drilling com­pany, the second-largest nat­ural gas extrac­tor in the country.
Chesa­peake is an energy pro­ducer that focuses on uncon­ven­tional onshore oil and nat­ural gas plays in the U.S. The company’s roots are in nat­ural gas: Chesa­peake is the nation’s second-largest nat­ural gas extrac­tor, and oper­ates nearly 200 pro­duc­ing gas wells in Penn­syl­va­nia. How­ever, near-record low prices for nat­ural gas have forced the com­pany to shift focus to oil and pro­duc­tion of other valu­able liquids.
Chesa­peake employs about 13,000, accord­ing to the company’s Secu­ri­ties and Exchange Com­mis­sion fil­ings. About 4,600 peo­ple work at the company’s cor­po­rate head­quar­ters in Okla­homa City.  Chesa­peake also has regional cor­po­rate offices in Texas, West Vir­ginia and Louisiana, as well as 60 field offices through­out the U.S.
As recent news reports have pointed out, Chesa­peake is also some­thing of an invest­ment firm. The com­pany reg­u­larly flips the land it pur­chases, sell­ing it to other drilling companies.

Chesa­peake is an aggres­sive spender and has con­tin­ued to expand, despite the fact that nat­ural gas prices are at a ten-year low. That expan­sion is a big rea­son why the com­pany holds more than $13 bil­lion in debt.
Although there is little chance anyone will begin drilling for natural gas in Upper Pottsgrove Township any time soon, the commissioners nevertheless voted unanimously May 21 to support a resolution opposing a new state law that would result in them having no say in the matter should it happen.
Their vote represents one voice among a growing municipal chorus opposing Act 13, enacted on Valentine’s Day by the Pennsylvania General Assembly, that would, among other things, exempt any kind of gas or oil drilling operation in Pennsylvania from most kinds of local control.
The fortunes of renewable energy sources always have been tied to prices for conventional fuels. Wind, solar, biomass and other sources become more attractive as prices for fossil fuels rise and make alternatives more competitive.
Yet, according to the PJM Interconnect - the power grid covering Pennsylvania, 12 other states and the District of Columbia - more than 1 gigawatt of electricity is produced by solar power across the grid even as natural gas from the Marcellus Shale drives down prices. A gigawatt is 1 billion watts, enough to power 800,000 homes.
According to energy expert John Hanger, solar, wind, biomass and hydroelectric sources have generated 40 gigawatts of power across the PJM grid since 2005 - the year that exploratory gas drilling began in the Marcellus Shale.

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