Sunday, February 24, 2013

Pa. Marcellus Shale and Energy News Updates, Feb. 20-24

As always, click the headlines to read the complete stories.

Western Pa. inches closer to goal of energy independence
The once-distant concept of energy independence, given a national spotlight in the 2012 presidential race, is closer to becoming a reality on a regional level, energy analysts say.
Pennsylvanians rely on in-state sources for at least 64 percent of their energy, a relatively high figure among states, according to the Washington & Jefferson College Energy Index. Its most recent numbers show a one-year surge of nearly 10 percentage points from 2009 to 2010, driven by the popularity of domestic natural gas in manufacturing, transportation and power generation.
“I think it's safe to say those trends in general would be expected to continue,” said Robert Dunn, one developer of the index. “Natural gas will definitely impact all the other fuels.”
Interest in wind energy on rise, experts say
Electricity generated by wind farms powered more than 350,000 Pennsylvania homes last year, and that number is expected to grow.
“There's demand,” said Titus North, executive director of Squirrel Hill-based Citizen Power.
Citizen Power teamed with TriEagle Energy in August 2011 to offer renewable wind electricity service to residential customers. By the end of last year, its territory covered nearly all of Pennsylvania, North said.“We're seeing basically two sources of demand,” he said. “There's a lot of people concerned about the environment, and then there's a lot of people signed up to save money.”
Op-Ed:  Fracking foes play with a stacked deck, and DEP knows 'when to run'
Somebody is not telling the truth.
At issue is whether deliberate actions by state officials are letting Texas gas industry robber barons do more damage to the environment than was done by coal industry robber barons in the last century, and are endangering people's health in the process.
This past week, there was an opportunity for opposing sides in that debate to meet face-to-face and put their cards on the table. Gov. Tom Corbett's oddly named Department of Environmental Protection, it seems, contemplated the lyrics of "The Gambler" and reacted in a disturbingly revealing way. "You gotta know when to hold 'em, know when to fold 'em, know when to walk away and know when to run," says the song. DEP officials anticipated a stacked deck and chose the last option. (They have played with their own stacked deck for two years and I guess they're not about to fiddle with the odds.)
Monongahela River traffic halted by damaged barge
Commercial boat traffic was halted all day Friday after a loaded coal barge was intentionally run into the bank of the Monongahela River at mile 59.6 below Brownsville, Fayette County to prevent the barge from sinking, according to the U.S. Coast Guard..
The towboat Francis J. Blank, operated by Towline River Service in Elizabeth, was pushing a loaded, three-barge tow down river when the lead barge hit bottom and began taking on water, according to the Coast Guard account of events. The towboat pushed the barges to shore at about 6:45 a.m., and the river was closed to commercial traffic in the area at 7:24 a.m.
No coal was spilled into the river but the coal transfer operations closed the river to commercial traffic all day while a crane barge unloaded the lead barge into a hopper barge that was brought to the scene. The Coast Guard expected the river would reopen to commercial traffic by 8 p.m.
The shale phenomenon: fabulous miracle with a fatal flaw
In 2000, the experts were unanimous: American oil and gas production was in terminal decline. By 2015, it was said, we’d need 10 supertankers a day, carrying 12 million barrels of crude, plus 10 billion cubic feet of liquefied natural gas.
Since 2005, however, this scarcity meme has been toppled. Domestic oil and gas production has grown 35 percent in seven years. Natural gas production is at record highs, and oil production has climbed almost 2 million barrels a day, faster here than anywhere on the planet...
Last fall, a Reuter’s analyst went so far as to suggest that North Dakota’s Bakken field might someday rival Ghawar, the largest oilfield on the planet.
That is not hype, it is a hallucination. Meanwhile, the oil and gas industry has launched its own euphoric ad campaign, assuring TV viewers that we have a “century’s worth of gas,” an unfounded contention, but one that President Obama seems eager to spread.
To make sense of the shale gale, we must celebrate what industry has accomplished. Then we must grasp how such a fabulous miracle may ultimately prove fleeting.
Cabot Oil & Gas Corporation Increases Proved Reserves 27 Percent to 3.8 Tcfe
Cabot Oil & Gas Corporation (NYSE: COG) today reported year-end 2012 proved reserves of 3.8 trillion cubic feet equivalent (Tcfe), an increase of 27 percent over year-end 2011. This is 100 percent organically generated growth and represents the third consecutive year of reserve growth exceeding 20 percent, after adjusting for the sale of its Rocky Mountain properties in 2011. Total reserve replacement from all sources was 417 percent at a finding cost of $0.87 per thousand cubic feet equivalent (Mcfe). "In spite of a 33 percent decrease in the benchmark natural gas price used in calculating proved reserves in 2012, we grew year-end proved reserves significantly without an increase to our PUD percentage," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "Our all sources finding cost of $0.87 per Mcfe is our lowest in 15 years and further highlights the capital efficiency of our portfolio."
Cabot's reserve growth was primarily driven by its drilling programs in the Marcellus Shale, Eagle Ford Shale and Marmaton oil play, which resulted in 926.8 billion cubic feet equivalent (Bcfe) of additions for the year.
As EPA delays new coal ash rules, residents turn to the courts for relief
Sabrina Mislevy is tired of the odors, the way they “hit” her as she drives by the blue-tinted lake, the way they burn her nose. Like many of her neighbors, Mislevy has grown weary of living near the nation’s largest coal ash pond, Little Blue Run, which straddles the Pennsylvania, West Virginia and Ohio state lines.
In Little Blue Run and beyond, coal ash, waste from the production of electricity, has fouled water supplies and endangered public health. “We want action,” said Mislevy, of Georgetown, Pa., explaining why she has joined some 200 other area residents in launching legal challenges against FirstEnergy Corp., the owner of Little Blue Run.
Her community is just one across the country pursuing legal challenges against coal-ash ponds, landfills and pits — a grassroots onslaught stoked, in part, by slow regulatory action by the Environmental Protection Agency.
DEP Secretary Krancer hit on Marcellus Shale, smallmouth bass

State lawmakers hit Pennsylvania’s top environmental officer hard with questions about issues from Marcellus Shale to smallmouth bass.
In the third day of budget hearings Thursday, Department of Environmental Protection Secretary Michael Krancer took his turn facing Republicans and Democrats in the Senate Appropriations Committee.

He said he expects his department to remove a backlog of 6,000 applications for permits related to oil and gas wells, mining and water by summer.
At least one lawmaker expressed disappointment in the agency’s enforcement of Marcellus Shale violators.
Firm accused of bullying fracking foes
When a Texas landowner took his fear that a gas driller had poisoned his well to federal regulators, the company, Range Resources Corp., turned around and sued him for conspiring "to harm Range."
Critics say the Fort Worth-based company, which pioneered the use of hydraulic fracturing in Pennsylvania's Marcellus Shale, has taken a hard line with residents, local officials, and activists. In Pennsylvania it stopped participating in town hearings to review its own applications to drill because local officials were asking too many questions and taking too long...
Range filed two applications to drill in Robinson Township, near Pittsburgh, last year. As the town moved to review those bids, Range said it faced a series of hurdles to get clearance to drill, and it filed a letter with the town saying the delay "violates Range's due-process rights."
Range's lawyer declined to answer questions at a township hearing in December to discuss its own application. Robinson was unfairly dragging out the process and should just approve its application, the company said in documents filed with the township. Pitzarella blamed the delays on the township attorney, who has a private practice taking on drillers, including Range.
Pipeline Protests Shift From Courts to Direct Action
Two protestors in northeast Pennsylvania are trying to halt the clearing of trees to make way for an expanding natural gas pipeline in Pike County.
Allison Petryk and Alex Lotorto handcuffed themselves to a gate in the Delaware State Forest on Monday and Tuesday, blocking access to tree felling crews. The Tennessee Gas Pipeline Northeast Upgrade project would expand an existing 13,900-mile natural gas pipeline that begins in the Gulf of Mexico and serves the Northeast region. The expansion would add almost 40 miles of additional pipeline in Pennsylvania and New Jersey to transport Marcellus Shale gas to the lucrative East Coast market.
The protests follow a series of failed legal efforts to halt the project. Environmental activists say the expanded pipeline will scar the landscape, and cause irreparable harm to sensitive watersheds. The upgrade project includes loops around existing pipelines, traveling through wooded forests and across wetlands.
Pennsylvania Marcellus gas production doubles in 2012 to 6.3 Bcf/d
Natural gas production from Pennsylvania's Marcellus Shale more than doubled to 6.3 Bcf/d last year from 2011 despite a declining rig count in the region, the state Department of Environmental Protection said late Tuesday.

The semi-annual production report, compiled from producers' reports, only covers dry gas from unconventional wells; it does not include natural gas liquids or condensate volumes.

Sequentially, the DEP data showed a 45% increase in gas production between the first half of last year and the second half, to 6.3 Bcf/d.from 4.36 Bcf/d, as more wells were completed and other infrastructure came online.
Lawmaker: DEP Chief Michael Krancer Denies Climate Change
Democratic State Rep. Greg Vitali, chairman of the House Environmental Resources and Energy Committee, says Department of Environmental Protection Secretary Michael Krancer refused to acknowledge climate change during a House budget hearing on Wednesday. In a release, the Delaware County legislator says Krancer avoided his questions on climate change, and was later grilled by other lawmakers.
Krancer repeatedly told the lawmakers that he does not acknowledge the validity of climate change and said he does not know Gov. Tom Corbett’s position on the issue. Vitali said he has been unable to find any public statements Corbett made about climate change during the governor’s first two years in office.
Activist investors put climate-change issue up for vote at bank
Activist investors have succeeded for the first time in placing a shareholder resolution on the risks of greenhouse-gas emissions up for a vote at a major bank, a step toward making climate change an important consideration for corporations.
The resolution, which follows years of protests over banks financing certain coal operations, is to be included in proxy material being sent to shareholders of PNC Financial Services Group of Pittsburgh before the bank's April 23 annual meeting.
It asks PNC to assess and report back to shareholders on how its lending results in greenhouse gas emissions that can alter the climate, posing financial risks for its corporate borrowers and risks to its own reputation.
PNC is the only major bank based in Appalachia, a region where coal and gas extraction is a major business. It has long lent to mining companies, including those engaged in mountaintop removal, which involves blowing up peaks to reach coal seams below and has been blamed for degrading landscapes, destroying habitat and polluting streams.
Geologist’s provocative study challenges popular assumptions about ‘fracking’
With debate over hydraulic fracturing or “fracking” running at a fever pitch, it seems the only thing everyone can agree on is that, for better or worse, there is plenty of natural gas down there for the taking.
Now a provocative analysis of unconventional fuel reserves in the United States aims to slap a big question mark over that assumption. In a comprehensive look at all the major shale gas plays currently being tapped across the U.S., the study focuses on the rapid decline of individual gas wells, along with entire fields, and concludes that optimistic projections for a long-running boom that will unleash cheap gas for decades to come are unwarranted.
“The hype around shale gas is just that,” said David Hughes, a geologist and former research manager with the Geological Survey of Canada who authored the study, which was release on Tuesday.
Dr. Hughes is not exactly reporting from neutral ground. The study was sponsored by the Post Carbon Institute, a California-based think tank that promotes sustainable energy. Yet, Dr. Hughes says, the numbers are there in black and white, drawn from a widely used industry database.
Pittsburgh International Airport drilling contract OK'd
Drilling is set to come to Pittsburgh International Airport, but if Tuesday's vote by Allegheny County Council is any indication, it still isn't entirely welcome.

County council voted in favor of accepting a contract from Consol Energy to drill for natural gas in the 9,000 acres surrounding the airport, a deal that proponents say could bring nearly $1 billion to the area.

But that came over the objections of four council members, some of whom voiced concerns about the deal's high velocity through council. And it certainly was not favored by the dozen-odd residents who showed up in masks and with placards to protest shale drilling, saying the county hasn't given thought to long-term risks.

"I'm not completely convinced that we've done what we've needed to do in the short amount of time we've been given," said council member James Burn Jr., D-Millvale. He joined Barbara Daly Danko, D-Regent Square; Amanda Green Hawkins, D-Stanton Heights; and William Robinson, D-Hill District, in voting against the contract.

Victory went to members such as Robert Macey, D-West Mifflin, who held aloft the banner of jobs. His constituents in former steel towns are tired of losing their careers, he said. He is not going to deny them the chance to work again.

"There are so many jobs that are related to this in my neck of the woods, and I haven't heard of one person who has told me to vote against this," he said. "I'm voting for this because it means a heck of a lot to our communities."

Heather Heidelbaugh, R-Mt. Lebanon, abstained, saying her law firm has represented Consol. The balance of the board voted for the deal.

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