Drilling for Answers: The Marcellus Shale

Drilling for Answers: The Marcellus Shale

An economic boom in Pennsylvania, stemming from the 400-million-year-old Marcellus Shale formation and its abundant natural gas-drilling production, continues. The nation’s largest-known natural gas field is reducing our dependence on foreign oil, rocking the region in creation of jobs — 240,000 statewide — and banking $8 billion in annual economic investment, including landowner royalties. With that have come environmental concerns, questions, local appeals, state legislation, and, ultimately, a quest for the truth. The activity has prompted films such as “Gasland,” “FrackNation,” and “Promised Land,” offering a panorama of perspectives. What do you want to know? How do you define your stance? We’ve scoured near and far for the answers to your most frequently asked questions from 29 of the industry’s key players (blue), environmental activists (green), and local lawmakers (red).

Drilling for Answers: The Marcellus Shale

Hear from these expert voices for a deeper understanding.


Drilling for Answers: The Marcellus ShaleIt’s a sedimentary rock buried 5,000-8,000 feet beneath the earth’s surface. It stretches from upstate New York through Pennsylvania to West Virginia and parts of Ohio. Named after the New York town of Marcellus, the black shale contains an abundance of natural gas, which is trapped in tiny spaces and fissures (grooves) within the bedrock. It’s speculated to supply the United States with more than 100 years of natural gas.

 

Drilling for Answers: The Marcellus ShaleAccording to the United States Environmental Protection Agency, it’s a well stimulation process used to maximize the extraction of oil and gas. Simply, the process requires the forcing open of fissures in bedrock by introducing a liquid, which is 99.5 percent sand and water, at high pressures. This process comes after a well is horizontally or vertically drilled, cased, and cemented to protect groundwater and the escape of natural gas and wastewater.

 

Drilling for Answers: The Marcellus Shale

Photograph from Range Resources.

Drilling for Answers: The Marcellus Shale

  • WPX Energy’s record drilling time for a well in Pennsylvania is 10.8 days.
  • Between 2009 and 2013, there have been 3,887 statewide violations issued by the DEP, according to Clean Water Action.
  • Toronto-Dominion (TD) Bank reports $75 billion in utility costs estimated to be saved in 2013 — equivalent to $650 per household — due to drilling activity.
  • Fifty new companies opened in Southpointe in 2012. In Southpointe, there are 8,000 jobs within a total of 280 companies, according to Southpointe Marcellus Shale Chamber of Commerce.
  • Gas cost is currently $3.50 per 1,000 cubic feet in the U.S.; the same fuel, by contract, fetches around $12 in Europe and $16 in Asia, according to TD Bank.
  • In 2012, The Meadows Racetrack & Casino entertained 4 million visitors and Pennsylvania Trolley Museum surpassed 30,000 visitors for the first time — both factors believed to have benefited significantly from the influx of laborers in Washington County, according to Washington County Tourism Promotion Agency.
  • Carbon dioxide emissions in the United States have dropped to a 20-year low, according to the Associated Press.
  • Of $204 million in impact fee payments, 60 percent are to local governments, according to the Pennsylvania Public Utility Commission.
  • The Marcellus Shale Coalition has 300 board and associate members.
  • According to Huntington Bank, 79 percent of respondents say new natural gas industry would bring opportunity.
  • According to the Pennsylvania Department of Labor & Industry (PA L&I), 243,116 jobs are currently supported by the Marcellus Shale industry.
  • $89,116 is the average core salary in the natural gas industry, according to the PA L&I.
  • In a recent agreement with the Allegheny County Airport Authority, CONSOL Energy, Inc. will pay an estimated $500 million over the next 20 years for the right to drill for shale gas on 9,263 acres surrounding Pittsburgh International Airport.
  • According to natural gas emissions data analyzed by the Pennsylvania Department of Environmental Protection, the Marcellus Shale development accounts for less than 3 percent of nitrogen oxide (NOx) and 1 percent of the total volatile organic compounds (VOC) emitted each year.

Number of registered wells in Western Pennsylvania counties, according to FracFocus:

  • Washington — 225
  • Greene — 184
  • Westmoreland — 87
  • Fayette — 68
  • Butler — 54
  • Armstrong — 47
  • Beaver — 15
  • Allegheny — 9
  • Indiana — 9

Why shouldn’t I be concerned with gas drilling activity?

[caption id="attachment_55713" align="alignright" width="218"]Drilling for Answers: The Marcellus Shale Photograph from MDS Energy.[/caption]

We’ve drilled hundreds and hundreds of wells here in Armstrong County, both ourselves and operating as a sub-contractor, and we’ve never had an issue with the water. There are certain places where it’s much trickier to drill due to the geology, like in Northeastern Pennsylvania, where they’ve experienced issues with methane migration. If you don’t properly cement the well, you can have issues with gas getting behind the casing from the shallow formations and having it migrate up into drinking water formations. Here, there is 3,000 feet of solid rock between that formation and people’s water wells. It’s much easier to drill in Western Pennsylvania. It’s actually one of the easier — and safest — places to drill in the whole country.

— Michael Knapp, Vice President, Land and Public Relations, MDS Energy Development, LLC

 

 

How can I get involved in Marcellus Protest?

Drilling for Answers: The Marcellus ShaleOur website is a vital link for “fracktivists.” Likewise, we have very lively, newsy, and opinionated Facebook and Twitter accounts. There’s rarely any slack — there’s always something going on! We began meeting and networking. Our first event, a protest during a “fracking” convention in November 2010, was successful beyond our wildest dreams — 600-plus people from throughout Southwestern Pennsylvania attended. The following week, Pittsburgh City Council voted unanimously for the “fracking” ban — the first U.S. city to enact such a ban. From that time, we became ‘known’ and are frequently the go-to group for “fracktivists,” journalists, and academics in the U.S. and abroad. Visit marcellusprotest.org for more information.

Gloria Forouzan, member, Marcellus Protest

 

What is on the horizon for the oil and gas industry in Pennsylvania?

[caption id="attachment_55717" align="alignright" width="216"]Drilling for Answers: The Marcellus Shale Photograph from Buchanan Ingersoll & Rooney, PC.[/caption]

The industry works in three basic segments — the production segment (i.e., the companies that find the gas and extract it from the ground), the transportation and processing segment (i.e., the companies that take the gas from the well, treat it so it can be used, and transport it to market), and the end-users (e.g., utilities that generate electricity or supply gas, manufacturing plants, etc.). The development of shale gas resources in the U.S. has created a natural gas glut, which has led to historically low gas prices. On the production segment, since natural gas extraction is very expensive — more than $5 million per well — low prices make it difficult for many producers to make money. This makes it possible for only the largest of companies, who have the financial staying power, to stay in business. This will lead to consolidation in the production side of the industry. Even at low gas prices, gas is a valuable commodity and, for a variety of reasons, gas production will continue to rise and will need an avenue to get to market. So, from the transportation/processing perspective, which is paid on a fee-for-services basis (and receives its fee irrespective of gas prices), we will continue to see the transportation and processing industry continue to develop in Pennsylvania. The potential developments to the end-user segment is probably the most interesting and least known at this point. To be sure, cheap gas and environmental regulations will lead to the continued retirement of coal fire power plants and development of gas plants. Cheap gas will help lead to an increase of manufacturing, which uses natural gas and related products as both a fuel source and feed stock. As consumers, all of our natural gas bills have decreased dramatically, so we all have benefited and should continue to benefit for a while in that way. One really interesting possibility is the widespread adoption of natural gas vehicles. You would also be able to plug your car into a natural gas line in your garage and refuel it overnight while you are sleeping.

Sean Moran, Energy Practice chair, Buchanan Ingersoll & Rooney, PC

What impact does the Marcellus Shale have on the meetings industry in the region?

[caption id="attachment_55718" align="alignright" width="214"]Drilling for Answers: The Marcellus Shale Photograph from VisitPittsburgh.[/caption]

Marcellus Shale has a significant impact on the meetings industry in our region — and the region’s bottom line. From 2009, when the first Marcellus Shale conference took place here, to the conferences booked in 2014, Marcellus Shale-related meetings will result in an estimated direct spend of $35 million. And, we are seeing an increase in the pace of Marcellus Shale meetings and convention bookings. It’s also worth noting that other technical meetings and conventions in the energy sector have seen an increase in attendance, thanks to the Marcellus Shale professionals. For example, the American Institute of Chemical Engineers’ meeting on energy (International Congress on Energy) set an attendance record when it was in Pittsburgh in 2012. Marcellus Shale has also benefited the hotel business, particularly in suburban locations. Hotels have actually been built to accommodate meetings and overnight stays for Marcellus Shale workers and executives.

Craig Davis, President and Chief Executive Officer, VisitPittsburgh

 

Does America really have that much natural gas? Will shale gas really make us energy independent?

[caption id="attachment_55719" align="alignright" width="217"]Drilling for Answers: The Marcellus Shale Photograph from MarkWest.[/caption]

Technology advances over the last four or five years have rapidly increased drilling productivity and the ability to reach America’s abundant natural gas and oil reserves. When we think about the industry’s transformation from the use of vertical wells to horizontal wells with fracturing, it’s truly phenomenal. Our belief is that the U.S. is really fortunate to be sitting on top of huge amounts of gas and oil, especially in Pennsylvania and Ohio. From our perspective, fracturing is a proven and safe practice. Our producer customers take significant care to insure that what occurs 8,000-10,000 feet below the surface will not work its way through hundreds of layers of bedrock and contaminate the land we all share. Once the gas reaches the surface, MarkWest is committed to delivering best-in-class midstream services and contributes to the development of environmentally clean energy while complying with, or exceeding regulatory requirements. Our growth plans in the Marcellus Shale are expected to result in thousands of construction-related employment opportunities for the development of natural gas processing facilities, fractionators, compressor stations and pipelines, and hundreds of permanent, full-time, highly compensated positions. We currently employ more than 250 full-time employees in the Marcellus Shale.

Randy Nickerson, Senior Vice President and Chief Commercial Officer, MarkWest

Why is natural gas important to Southwestern Pennsylvania?

[caption id="attachment_55720" align="alignright" width="216"]Drilling for Answers: The Marcellus Shale Photograph from Pennsylvania House of Representatives.[/caption]

Safe and responsible development of our natural gas resources not only has the potential to support 1 million new jobs in transportation, power generation, chemicals, and manufacturing, but it can also free us from our dependence on the Organization of the Petroleum Exporting (OPEC) nations. To accomplish these goals, while protecting our environment, we must have a highly qualified and trained workforce. Local workers who live in our region, send their children to school here, and are part of the community have a vested interest in seeing things done right. We’re fortunate that Southwestern Pennsylvania has training programs that produce skilled workers who are second to none at no cost to the taxpayer to keep these jobs local.

Congressman Tim Murphy (R-Upper St. Clair), 18th Legislative District, Chairman of the House Energy and Commerce Subcommittee on Oversight and Investigations

 

 

Is drilling safe?

[caption id="attachment_55721" align="alignright" width="216"]Drilling for Answers: The Marcellus Shale Photograph from Sam Malone.[/caption]

It’s a loaded question because no one really actually has enough information, in our opinion, at this point to make a judgment whether it can be done safely all the time. Granted, we’ve seen it done safely. We’ve seen it done hastily, irresponsibly, and there have been accidents and incidents where pollution has occurred. That has to be factored into the larger debate of whether it’s safe. So, normally what we say is based on what we’ve seen. We have seen that it has improved in terms of the rate of violations for every well has gone down — then again, drilling activity isn’t as intense as it was maybe a year and a half ago before the gas prices fell. Generally, it’s always sort of a roundabout answer — we don’t know, no one can actually tell you whether it’s safe or not, but that’s what were working on to look at the data and help us understand and make decisions based on the actual facts, rather than an agenda, a perspective, or an opinion.

Sam Malone, Manager of Science & Communications, FracTracker Alliance

Drilling for Answers: The Marcellus Shale

With domestic natural gas prices having fallen over the past few years, have we passed the peak of the Marcellus Shale development in Pennsylvania?

[caption id="attachment_55722" align="alignright" width="218"]Drilling for Answers: The Marcellus Shale Photograph from Steptoe & Johnson.[/caption]

No. Many companies have shifted their attention to the liquid-rich areas of the shale play and the Utica Shale. However, having invested millions of dollars in leases, personnel, and infrastructure, they will return to drill in dry-gas areas throughout the Commonwealth in greater numbers when either prices rebound or the Department of Energy expands its ability to export liquefied natural gas.

Kristian White, Managing Member, Steptoe & Johnson — Southpointe

 

 

 

 

Can ‘fracking’ be done in a way that is safe for the environment and safe for people’s health?

[caption id="attachment_55723" align="alignright" width="215"]Drilling for Answers: The Marcellus Shale Photograph from Clean Water Action.[/caption]

I think the answer is, honestly, ‘I don’t know.’ There are clearly instances where ‘fracking’ has been done and it’s been done great — perfectly in individual cases. There have also been cases where it has not been done well and clearly people have suffered for it, whether it had been with water contamination or air quality issues. Right now, from my perspective, I don’t think we have strong regulations in place — also a lack of regulations. And, if you look at the violations that the industry is racking up in Pennsylvania, it’s proof that they are not doing it well on a consistent basis. Right now, it’s a 50/50 shot. Another concern is how the industry disposes of the toxic flow-back water. The worry surrounds those who don’t recycle and reuse the water on the next ‘frack’ job. The other options are to take it to a treatment facility for discharge back into our rivers and streams, or to take it to an underground injection well — both options have their issues.

Steve Hvozdovich, Marcellus Shale policy associate, Clean Water Action

 

Explain natural gas prices.

[caption id="attachment_55724" align="alignright" width="216"]Drilling for Answers: The Marcellus Shale Photograph from PricewaterhouseCoopers.[/caption]

They’ve been at historically low levels for the last two years. That’s got a positive aspect when you look at the manufacturing world and a negative aspect if you look at the oil and gas producers. In a trading environment, it’s highly subjective to a number of different factors and the financial markets as well. But, I think that it’s a win for the local economy. Low prices mean more opportunity for manufacturers in the Pittsburgh area, and high prices mean better returns for the oil and gas producers. I think that over time, prices will stabilize to exactly whatever that level is, given the time and resources.

Steve Haffner, Partner, PricewaterhouseCoopers

 

 

 

We’re excited about the job and economic benefits, but is gas drilling being done right? Are we protecting the water, air, and land, and do we have the resources and inspectors to oversee the industry?

[caption id="attachment_55725" align="alignright" width="215"]Drilling for Answers: The Marcellus Shale Photograph from Pennsylvania Governor’s Office.[/caption]

Protecting public health and our natural resources is my highest priority, and we have made significant progress. Last year, we did a comprehensive update to our oil and gas law for the first time in nearly three decades. We’ve increased transparency and public notification, so people can see what activity is happening in their community. We’ve enhanced protections for drinking water supplies, adopted new emergency response standards, and enacted new pipeline safety standards. Working with the General Assembly, we are also providing nearly $205 million in impact fee revenue directly to counties and municipalities to make sure that taxpayers don’t shoulder costs in their local communities. The Marcellus and Utica Shale hold tremendous opportunity for Pennsylvania — from jobs and lower energy costs for everyone, to increasing our nation’s energy independence. I am committed to maximizing these benefits, while ensuring that we protect and enhance our environment.

— Pennsylvania Governor Tom Corbett

 

For those relocating to the area for work, what is there to do and see in Washington County? How is drilling benefiting the county?

[caption id="attachment_55726" align="alignright" width="214"]Drilling for Answers: The Marcellus Shale Photograph from Ed Reiker Photography.[/caption]

Go to our website, get one of our visitors’ guides, check out a calendar of events, go to our sources of information, and come by our office or visitor information center at Tanger Outlets. [Marcellus Shale] has benefited by bringing a whole lot of people to the county that otherwise would not be here. From an employment standpoint, from an investment standpoint, from a hotel-stay standpoint, obviously it’s contributed greatly to the health of the lodging industry here in the county. There are also other tangible benefits that you can see on a day-to-day basis: the new construction, the offices that have located into Southpointe, the business that has been brought to a lot of the smaller businesses throughout Washington County, and the benefit to the landowners. I think the message from tourism is that we’re in a very healthy stage. The experts have told us that there are several phases to the development of this natural gas industry here, and I think we’re seeing that move through from leasing, to drilling, to development, and to a production standpoint. There are still leases being signed, there is production that’s being done, there’s corporate build-up, where offices are being brought in and staffing is being brought up. I think we’re seeing more folks moving into the area now and locals being hired, which was always a big concern from the start. It’s a great time, really, which means nothing but good for the county. Likewise, as we’re maturing, I think the legislation is catching up. I think environmentally we’re catching up. I’m big on balance, and I think we all have to understand that sustainable, regulated, reliable, and responsible growth is what everybody really wants.

J.R. Shaw, President, Washington County Tourism Promotion Agency

Why should we be interested in using natural gas?

[caption id="attachment_55728" align="alignright" width="215"]Drilling for Answers: The Marcellus Shale Photograph from EQT Corporation.[/caption]

In 2010, the industry understood how much natural gas there was in the shale place across the United States, but the general public, and the people that could really benefit from it — someone who could use it in transportation, an off-road application, manufacturing — didn’t understand until more recently how this homegrown natural resource can really lead to an energy Renaissance and energy independence. At first, when we started to try gaining acceptance to build a natural gas-fueling station in the Strip District, people weren’t interested. They didn’t believe that there was this much gas there; that they could save their money, that it was sustainable. Today, after we’ve built the station — and really we built it for our own fleet, which started out to be 100 percent of the use, and today it’s 25 percent of the use — those same people are now operating natural gas vehicles in their fleet. So, the best advertising we could have done was post a sign that says the price of natural gas, which today is $1.89. They’d drive by it every day, do some investigating, and now they’re using it. I think that there’s a strong belief, and that studies show, that natural gas is probably the cleanest-burning fossil fuel, relative to any petroleum-based fuels, diesel and gasoline, and even coal used in power generations.

David Ross, Vice President of Demand Development, EQT Corporation

[caption id="attachment_55761" align="aligncenter" width="620"]Drilling for Answers: The Marcellus Shale The premiere natural gas-fueling station in the Strip District. | Photograph from EQT.[/caption]

I always hear natural gas being clean energy, is it not? Has there been any contamination of water quality because of ‘fracking’?

[caption id="attachment_55732" align="alignright" width="216"]Drilling for Answers: The Marcellus Shale Photograph from Sierra Club.[/caption]

We need to go back to the best available science. The simple answer is it’s a fossil fuel. ‘Fracked’ gas, natural gas that’s extracted through the process of ‘fracking,’ has a very high carbon footprint and so there are environmental impacts. There’s evidence all over the country of people’s source drinking water supplies that have been contaminated. It’s a caveat the industry likes to use: wordplay. When the industry says there’s never been any contamination due to ‘fracking,’ they’re talking about one very small, specific piece in a large industrial process. In reality, there have been numerous amounts of water impacts because of the process of extracting natural gas using ‘fracking,’ of which state regulatory agencies have documented and the industry has had to pay significant amounts of penalties and fines for that contamination. That’s where coming back to stories and real experiences of people whose lives have been devastated because of the impacts of ‘fracking’ to their drinking water highlights the problem and really does show that the natural gas industry is not being straight up with the American public.

Deborah Nardone, Director, Beyond Natural Gas Campaign, Sierra Club

How do I as a corporation, businessman, sales representative, or service engineering company integrate into the Marcellus Shale industry?

[caption id="attachment_55733" align="alignright" width="216"]Drilling for Answers: The Marcellus Shale Photograph from Redford Photography.[/caption]

It’s not an easy answer because it’s a monumental business — there are billion-dollar corporations. You don’t just walk into Southpointe, knock on a door, and get an interview. You have to earn your way in, and the way we do it is through our chamber. We have networking lunches and trade shows, including 200 vendors, 1,200 executives, 280-plus businesses, and 52 buildings. The annual tradeshow has become the highlight of the year as far as a quick exchange of shaking hands and meeting somebody who’s a decision maker.

Don Hodor, founder, Southpointe Marcellus Shale Chamber of Commerce

 

 

 

What happens when you sign your mineral rights over to an oil and gas company, and how long does the process take to make money?

[caption id="attachment_55734" align="alignright" width="215"]Drilling for Answers: The Marcellus Shale Photograph from TheMarcellusShale.com.[/caption]

At first, you have to be on top of the Marcellus or Utica Shale. You have to own the mineral rights, which some people do not own. Even though they’ve had their home and their family for many years, you can separate the mineral rights from the surface owner rights. So, if you do have your mineral rights and you have larger amounts of acreage, the oil and gas company will want to produce natural gas from your land. They would give you a sign-on bonus and a royalty minimum, and after ‘X’ amount of time, they will drill a well on your property, and you’d get the royalty streams until the well is dry.

Tejas Gosai, founder, TheMarcellusShale.com

 

 

 

Why does this gas well have to be drilled now? How has ‘fracking’ impacted the services provided by the DEP?

[caption id="attachment_55735" align="alignright" width="220"]Drilling for Answers: The Marcellus Shale Photograph from PA DEP.[/caption]

This can be complicated, involving lease and rights-of-way issues and agreements with landowners; a company’s overall plan of development; well spacing or setback requirements in the law; topographic considerations; zoning laws (currently under consideration by Commonwealth Court); municipal regulations; pipeline availability; market prices; rig and equipment availability; weather; and I am sure, many more variables. We have incredible reserves of a clean-burning fuel source that can help us grow our economy and give us cleaner air. Pennsylvania is truly the keystone in helping make the United States energy independent, and [the] DEP is working to make sure we get this right. ‘Fracking,’ incidentally, is a practice that has been done in Pennsylvania for decades. Every day, the department works to reduce air pollution; protect the water quality in our rivers and streams; make certain our drinking water is safe; make sure that waste is handled properly; promote advanced energy technology; and assist people in complying with the Commonwealth’s environmental regulations. We permit and inspect gas wells in the state with a team of dedicated professionals. Our first priority is to protect the environment. We work to regulate the industry with some of the most stringent standards for drilling in the country. We also understand the importance of energy to our economy and way of life, so we work with the industry to help them reach this valuable resource safely and efficiently. When we need to make changes to our regulations or staffing levels, we do not hesitate to do the right thing — and if a drilling company breaks the rules, we don’t hesitate to take action there either.

John Poister, Media Relations Coordinator, Pennsylvania Department of Environmental Protection

Is the industry really interested and does it really care about the environment and communities?

[caption id="attachment_55736" align="alignright" width="215"]Drilling for Answers: The Marcellus Shale Photograph from Allegheny Conference.[/caption]

The Marcellus industry has matured over the last few years in the region. It’s now dominated by a number of major, international players who’ve moved in here, including Exxon, Shell, and Chevron, and of course companies like Chesapeake and Range. We work with all of these organizations. They have a strong ethic and value system about doing this right. They want to do it profitably, but they also want to do it right. They all have community teams that work on this. They’ve been active in policy development, as we have. They advocated for improved environmental and safety regulations, and their industry representative, the Marcellus Shale Coalition, has a very active best practices initiative, where it tries to identify what are the best practices around the development of this resource and how can we propagate that out to as many of our companies as we possible can.

Dennis Yablonsky, Chief Executive Officer, Allegheny Conference

 

When is the Marcellus Shale ‘boom’ going to end?

[caption id="attachment_55737" align="alignright" width="216"]Drilling for Answers: The Marcellus Shale Photograph from Burleson LLP.[/caption]

First of all, I do not believe that the development of unconventional gas, including Marcellus Shale gas, is a boom. Although to many, the Marcellus Shale development has appeared virtually overnight, the reality is that so-called “unconventional” development has been in the works for some time. The first Marcellus well was completed in 2006, several years into the Barnett Shale development in Texas. Twenty years ago, the United States built port terminals to import its natural gas from other parts of the world. Now, those terminals are being reversed because of the abundant supply of domestic natural gas we have in places like Appalachia. We’re fortunate that this natural gas serves our existing industrial needs, as a fuel for manufacturing and as a feedstock. There’s an abundant market for shale gas. I see the oil and gas industry making lasting, long-term investments in Western Pennsylvania, Ohio, and West Virginia — commitments to people and infrastructure — bricks and mortar sort of stuff (and pipes, too!). I tell them that we’re in the right place, not just at the right time, but for a long time. Our region’s investments in education, technology, infrastructure, and manufacturing are just beginning to realize the potential of the Marcellus. And while this all might sound like just a ‘boom,’ I assure you, it’s a lot more than momentary noise.

Kevin Colosimo, Managing Partner, Burleson LLP

How important is gas drilling to our region?

[caption id="attachment_55738" align="alignright" width="215"]Drilling for Answers: The Marcellus Shale Photograph from Allegheny County.[/caption]

I think it’s probably the biggest thing since the invention of the steel industry over a century ago. The [Pittsburgh International] airport agreement (details in The Facts on page 60), is a billion-dollar investment without any taxpayer dollars going into it. It also allows us to use those resources to help with the airport by not having to put taxpayer dollars into the airport to lower the costs and do capital improvements, etc. From that standpoint, it’s obviously very, very big. But, what it also means is there is going to be a resurgence of manufacturing and jobs in this region. That’s really what I think the big thing is. We lost so much population; so many people moved away over basically a 30-year period from 1980-2010. The last couple of years that has reversed. And, I think it will continue to keep people here and actually attract more people because of the Marcellus Shale.

— Allegheny County Executive Rich Fitzgerald

 

 

Can you really develop natural gas resources safely and protect the environment?

[caption id="attachment_55739" align="alignright" width="215"]Drilling for Answers: The Marcellus Shale Photograph from WPX Engergy, Inc.[/caption]

Yes, you can do both. The process of drilling and completing a well is loaded with precautions and equipment designed for this type of operation. We have very highly trained personnel on location. We have drilling rigs that are designed with fewer-moving parts. On the environmental side, we single- and double-line almost everything that’s out on a site, whether it’s the site itself or anything under the rigs — any fluids that could potentially spill. Anything and everything is lined so that earth is actually not perturbed at all. And, the well construction itself is rock solid and is something that has been developed over centuries really on how to put steel casing in the well and how the wells are cemented — the engineering behind it is rock solid, the pressure it can withstand and so forth. We use a bio-degradable mineral oil basically for drilling fluid, which is 99.5 percent sand and water, and three to four kinds of additives, which is pretty much dishwashing liquid and a scale inhibitor like what’s used in a swimming pool. We’re doing a study on fast-growing seed mixes for vegetation to cover when you build a drilling pad or an access road. We work in conjunction with some environmental groups — the National Wild Turkey Federation is one — to design some seed mixes for that erosion and re-vegetation. We also recycle all of our water after a hydraulic fracturing operation and use a tank system to move it to its next site.

Dean Tinsley, Director of Operations, WPX Energy, Inc.

Is drilling providing everything it was promised to, as far as revenues? Is it creating jobs?

[caption id="attachment_55740" align="alignright" width="214"]Drilling for Answers: The Marcellus Shale Photograph from Pennsylvania House of Representatives.[/caption]

It has thus far, but not quite to the level we thought it would. Right now, [the drilling] isn’t as active as it has been — that will change with time, I’m sure. The biggest concern is environmental. I voted against Act 13 because I firmly believe that local municipalities should be able to set their own zoning ordinances. If you have it in your district, you’re going to reap some financial benefits; if you don’t, you’re not going to have those rewards that are coming through Act 13. We should have the ability to say, ‘If we don’t have it here, we don’t want it here,’ which Act 13 took away, but it’s now been overturned in the courts. The biggest concern is personal property rights — being able to say, ‘I don’t want that in my backyard.’

— Pennsylvania State Rep. George Dunbar (R-Westmoreland), 56th Legislative District

Drilling for Answers: The Marcellus Shale

How does drilling activity benefit me?

[caption id="attachment_55741" align="alignright" width="217"]Drilling for Answers: The Marcellus Shale Photograph from Range Resources.[/caption]

Shale is an international game changer. It’s not yet fully appreciated here, but, if you travel abroad, foreign countries are deeply concerned that they will lose the manufacturing jobs they took from the U.S. decades ago because of our newfound abundance of clean, affordable, and abundant natural gas. Without the spike in energy prices of the Kyoto Protocol, the U.S. doubled the carbon reductions of the rest of the world over the last 20 years — in one year alone because of shale, and we did so in a way that saved consumers billions of dollars. From Hillary Clinton to Tom Ridge to former CIA director John Deutch, the experts all agree that shale is the key to international diplomacy by allowing our allies to buy energy from us instead of OPEC and Russia. There are countless federal, state, and international studies that all say this industry is safe and not harming the environment. In fact, natural gas improves the environment. And, it’s all happening right here. If natural gas fulfills the opportunity as the clean energy, global fuel of the future, then Western Pennsylvania is poised to benefit the most. We need to think of this as living through the innovation of the light bulb, printing press, antibiotics, and the microprocessor. Shale has that degree of significance in terms of how we get energy.

Matt Pitzarella, Director, Corporate Communications and Public Affairs, Range Resources Corporation

How big is this, and how does my company get involved?

[caption id="attachment_55742" align="alignright" width="215"]Drilling for Answers: The Marcellus Shale Photograph from Marcellus Shale Coalition.[/caption]

Obviously that encompasses both the education that we, in this part of the country, have very rapidly understood — just how significant this is in terms of the global positioning of the U.S. There are geo-political ramifications of energy security, of being able to control our supply of energy — having it be a clean-burning source of electricity, of home heating, and raw materials and feedstocks for businesses. As everyone’s learned about the true scope of what’s happening right here close to home, there’s obviously a very big appetite for entrepreneurs to innovate further. The community has started to appreciate that this is much larger than anything we’ve seen in terms of industry growth in our lifetimes here in Pennsylvania. The truth is coming out. We, in this part of the country, understand industrial development. And, we understand also with a plethora of environmental consulting firms and people involved in managing health and safety issues that we can do just that — we can manage it. Does that mean that there’s zero risk and that there’s no possibility of human error? Absolutely not. But, I think the reasonable, rational people in Pittsburgh know that we’re very capable of managing those risks and designing the systems to do this right. I see the predominance of people who care about this realize it can be done well and safely.

Kathryn Klaber, President & CEO, Marcellus Shale Coalition

What would you want people to take away from ‘FrackNation’?

[caption id="attachment_55743" align="alignright" width="214"]Drilling for Answers: The Marcellus Shale Photograph from Phelim McAleer.[/caption]

There is no scientific evidence anywhere of ‘fracking’ ever having polluted water. The EPA has told Congress that twice under oath. There are a lot of allocations, a lot of anecdotes, but no scientific evidence. In ‘Gasland,’ I was surprised by the unethical journalism of Josh Fox — how he got things wrong and knew they were wrong. He withheld evidence that people did light their water on fire before ‘fracking.’ The media has done a pretty bad job of representing the whole ‘fracking’ issue. So people are starting to do their own social media and the media is starting to be a bit more interested in the story. I think money is the least issue in this. It wouldn’t be worth it to ‘frack’ if it damaged your water or polluted your environment. The fact is, is that it doesn’t — the money is almost a red herring. People have always liked ‘fracking’ and the oil and gas industry because it’s been there for 100 years. It’s just that the media has started to interview those people and recognize those voices. There were 11 litigants in Dimmick, Pa. — 11 families — 1,500 people signed a petition saying ‘fracking’ had not damaged their water and the water was the same as it always was.

Phelim McAleer, journalist and documentary filmmaker, “FrackNation”

What is the right way to drill? It’s a question we are all collectively asking ourselves right now. Who is being honest?

[caption id="attachment_55744" align="alignright" width="216"]Drilling for Answers: The Marcellus Shale Photograph from Pennsylvania House of Representatives.[/caption]

At this point, what we are focusing in on is a two-part approach — one part is identifying best practices. The Marcellus Shale Coalition talks about recommended practices, and the question is, ‘Are they doing things because it’s the best way to do them or because it’s the cheapest way to do it?’ That’s a huge distinction for those of us who are living next to these impoundments and having this activity going on in our communities. So, we are looking at what companies are active in the Marcellus Shale and making a legitimate effort — not just environmental practices, using the newest and best technology to minimize impact, but who’s hiring local workers. We get a lot of propaganda, a lot of PR. Certain players aren’t being honest with us. We come from coal country — we understand dirty work. What we want more than anything is just real accountability, transparency. We want to knock off the games, the public meetings that are held for show, the manipulating in the press, and the lawsuits against communities. I have never called for a ban on drilling. I have never called for a moratorium. At the same time, I think I’ve demanded more countability from this industry than anybody in Harrisburg.

— Pennsylvania State Rep. Jesse White (D-Cecil), 46th Legislative District

How can we restore local control to communities that do not enact exclusionary zoning?

[caption id="attachment_55745" align="alignright" width="215"]Drilling for Answers: The Marcellus Shale Photograph from Pennsylvania House of Representatives.[/caption]

I happen to be a fan of local control, as long as the development of gas wells does not insult the fabric of the community. I’ve had a number of homeowners comment to me that they’re amazed they’re paying so much less for gas today than they were three years ago. Prices are dramatically down — probably 80 percent. One of my goals is to make sure that the systems the state has to monitor are continually upgraded. It’s not to say the concerns are gone, but the volume is certainly muted from last year at this time. I think that people are experiencing the benefits of increased natural gas production in their heating and electric bills, and that they’re understanding that having plentiful energy production on their doorstep has benefits, but also consequences. It’s also encouraging hearing the stories of those who aren’t just coming home for a job, but to build a business. In addition, most people think the drilling equipment is permanent to the landscape; however, as soon as the drilling is done, the tower is removed.

— Pennsylvania State Rep. John Maher (R-Upper St. Clair), 40th Legislative District

Drilling for Answers: The Marcellus Shale

Is it possible to get experienced legal representation from one law firm to help with everything from environmental regulations, title searches, and municipal and land use laws to lease disputes, construction practices, and pipeline safety?

[caption id="attachment_55746" align="alignright" width="214"]Drilling for Answers: The Marcellus Shale Photograph from Babst Calland.[/caption]

Yes. While there are not many law firms with teams of lawyers having deep experience in each of these technical disciplines, Babst Calland has a multi-disciplinary team of highly experienced attorneys in each of these practice areas. As a result, we have represented a significant number of the exploration/production and midstream energy clients operating in Pennsylvania, Ohio, and West Virginia over the past few years. Selecting legal counsel with a solid understanding of the myriad state and local laws affecting shale development, and intimately familiar with horizontal well development operations, can provide the client with greater opportunities for efficient and practical legal representation.

Joseph K. Reinhart, Esq., Shareholder and Chairman of the Energy and Natural Resources Group, Babst Calland

 

 

How does the Marcellus Shale benefit the average person in this region?

[caption id="attachment_55747" align="alignright" width="214"]Drilling for Answers: The Marcellus Shale Photograph from Peoples Natural Gas.[/caption]

Marcellus Shale is a huge economic advantage for this region for many reasons. For the average person in this region, our natural gas prices for heating our homes as well as our electric prices are significantly lower because of the Marcellus Shale gas. Gas is a commodity where the greater amount of supply you have, the lower the price of the commodity will be. While most people understand how that lowers their heating bill in the winter, what most people are surprised about is that lower natural gas prices also lower the cost of producing electricity in this region. Almost all of the peak electricity we use comes from natural gas-powered plants. In fact, this is a growing portion of our electricity production. Natural gas is not only cheaper, but it is also environmentally cleaner than coal. The Marcellus Shale is also a huge competitive advantage for this region when we compete for manufacturers and large users of energy against other regions of the country — and the world — to locate their plants and companies here. Large users of energy recognize that being closer to their energy source is a competitive advantage in lowering their fuel costs. So having this development in our backyard will help keep large manufacturers and large energy users here in this region more competitive than their competitors elsewhere. This same economic advantage will also help attract more employers here by attracting new manufacturers and large energy users to this region. With those companies come more jobs for people here in this region. Having more jobs to support our families here makes us a stronger and healthier region. And, finally, by attracting new companies to this region, we will also bring more tax dollars that will help support and strengthen our state and local governments here.

Morgan O’Brien, CEO, Peoples Natural Gas


We understand this hot-button issue is infinitely abundant. As Pennsylvania and the Marcellus Shale are at the epicenter of the drilling debate, The White House’s Department of the Interior is weighing matters to determine the governing rules on federal and private acreage. From the state Legislature to landowners, the conversation continues — and we’re right there with you. If you’d like to be a part of our investigation to be published in an upcoming issue, please email shale@whirlmagazine.com.


This article is featured in the March 2013 issue of WHIRL Magazine. Click here to browse the archive.