Oil and Gas Industry News for Mineral Owners

Fort Worth residents object as city approves air-test panel

Maggie Burke — Thu, 11 Mar 2010 16:03:01 +0000

For months, state regulators, neighborhood groups and the natural gas industry have gone back and forth about the level of air pollution produced by natural gas drilling in the Barnett Shale.

The industry has maintained that drilling is generally safe. State officials have sent mixed messages, which prompted Fort Worth officials to pay for their own tests.

But now, even that effort has bogged down. The City Council voted 8-1 Tuesday to appoint a committee to choose the contractor for the tests, only to be met with protests from neighborhood groups that think the committee designing the study has too much input from the gas industry.

“It’s not composed of the right people,” said Fernando Florez, one of about a dozen people who spoke against the idea. “Slow it down for a week or two and let’s do it right.”

Mayor Mike Moncrief defended the process, saying it was his idea to appoint a committee. “That was a decision I made, to make sure that there was inclusion — to make sure we did have representation in that process from the neighborhoods,” he said. “I also know, and I think we all do, that you need to have the industry representation in that process because otherwise it does no good.”

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Future role of natural gas discussed at Houston energy conference

Maggie Burke — Thu, 11 Mar 2010 16:00:32 +0000

U.S. Energy Secretary Steven Chu and ConocoPhillips CEO James Mulva made clear Tuesday that they have sharply contrasting views on the role of natural gas in helping meet the world’s long-term energy needs.

In an address at the CERA Week 2010 energy conference, Chu, a Nobel Prize-winning physicist, characterized natural gas as a significant “bridge” or “transition” fuel in coming decades as the world shifts toward renewable energy and a lower-carbon environment less reliant on fossil fuels.

Mulva, in a subsequent speech, scoffed at such a limited view of the potential of natural gas, which he said will be a prime energy source in 2050, when the world’s population is projected to reach 9.2 billion people, or roughly one-third more than today, putting continued upward pressure on energy demand.

“Natural gas is more than a bridge fuel. It is part of the long-term energy solution,” said Mulva, whose Houston-based company has interests in the Barnett Shale of North Texas. In 2008, the Barnett surpassed the San Juan Basin of New Mexico and Colorado as the leading gas-producing area in the nation.

The issue of natural gas’ future is significant in Tarrant County, the leading gas producer among Texas’ 254 counties, and in neighboring Johnson County, which ranks No. 2.

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Researcher finds methane plumes near natural gas facilities in Barnett Shale counties

Maggie Burke — Thu, 11 Mar 2010 15:55:46 +0000

An atmospheric researcher drove a specially equipped van in several Barnett Shale counties this week and found methane plumes near many natural gas facilities, with one plume in Flower Mound measuring 40 parts per million.

According to Chris Rella, director of research and development for California-based Picarro Inc., scientists consider about 1.8 ppm of methane to be a normal background level in the atmosphere.

The company developed its equipment to read methane for greenhouse gas research. Its equipment, considered the gold standard, Rella said, is in use by the National Oceanic and Atmospheric Administration and others in the scientific community. The company recently adapted its equipment for mobile monitoring of methane and other greenhouse gases. The mobile monitor uses a global positioning system to map measured emissions in real time.

Rella said the maps can show good places for scientists to gather air samples because methane, when being emitted from industry sources, signals where to find other toxic compounds.

“When an industry emits methane, you’re probably going to see some other stuff,” Rella said.

Previous studies of emissions at Barnett Shale natural gas facilities by the Texas Commission on Environmental Quality showed that where there were methane emissions, the agency often also found carcinogens or neurotoxins in the mix.

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What we can learn from Texas: Shale gas drilling do's and don'ts

Maggie Burke — Thu, 11 Mar 2010 15:53:09 +0000

The mayor of Dish, Texas, a small town north of Fort Worth, home of the Dish Network, has become a kind of rock star in natural gas drilling communities.

He’s been on a speaking tour of the Marcellus Shale region in New York and Pennsylvania.

His mission: to offer sagely advice from the good and the bad of the Barnett Shale boom in his hometown.

Calvin Tillman’s message is simple: The Barnett Shale gas drilling brought a lot of wealth and jobs to his area, but its also brought bad air and water.

“If I could do it all over again, I would probably do what New York’s doing, and I would frankly just slow things down quite a bit and think about things and make sure that everything was done in a responsible, respectful, and safe manner,” he told a packed audience in New York that included several state legislators.

An air quality study last year found high levels of toxins and carcinogens, including benzene in the air over Dish.

A study by the Texas Commission on Environmental Quality that came out in January found “elevated levels” of benzene in 21 of 94 rural drilling sites. Tillman has compared his town to the “canary in the coal mine.”

We need to learn from Texas. It is a conservative state with a long history of drilling, but even they are highlighting problems.

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'Monster' wells epitomize what the Barnett Shale has become

Maggie Burke — Thu, 11 Mar 2010 15:50:55 +0000

It’s getting tougher to make the list of the 10 biggest “monster” wells in the Barnett Shale natural gas field in North Texas.

To join that select group, a well’s output must average more than 8 million cubic feet of gas per day during its peak month.

Fewer than 1 in 1,000 Barnett wells has attained such a lofty yield for a month, which is enough gas to meet the heating and cooking needs for about 3,300 homes for a year, based on American Gas Association usage data.

While the Barnett Shale underlies more than 20 North Texas counties, the top “sweet spots” are in Tarrant and Johnson counties. All of the 35 biggest wells are in those counties, according to a new report by the Fort Worth-based Powell Barnett Shale Newsletter.

The premier producer, hands down, is the Day Kimball Hill A1 well in Arlington in far southeast Tarrant County, which averaged 12.97 million cubic feet of gas per day in October. It’s the only well averaging more than 10 million cubic feet daily, but all of the top 10 wells averaged 8.2 million or more daily, and all of the top 35 averaged more than 6.3 million daily, which is triple what many typical Barnett wells produce.

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Forum to address costs and benefits of shale gas extraction

Maggie Burke — Thu, 11 Mar 2010 15:47:38 +0000

A forum on the benefits and costs of Marcellus shale natural gas extraction is the subject of a forum Saturday at the Hughes Library in Stroud Township.

The forum, sponsored by the Monroe County League of Women Voters, will be held from 10 a.m. to noon at the library’s community room. Registration and light refreshments begin at 9:30 a.m.

The League is in the midst of a one-year study to determine the benefits and costs of extracting natural gas from Marcellus shale in Pennsylvania.

The study will focus on the effects the project would have on water, air, infrastructure, agriculture, forests, tourism and economy.

The largest-known pocket of natural gas in the United States is in Marcellus shale, nearly a mile below the Appalachian Mountains and covers nearly two-thirds of the state.

Depending on how much gas can be extracted, there is enough locked in the Marcellus shale to meet the needs of the U.S. for years to come.

The project presents the potential for increased revenue through leasing property and mineral rights and would create thousands of jobs in the area, though most of these jobs will only last until the conclusion of the project.

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Marcellus shale deposit: Buried treasure, hidden costs

Maggie Burke — Thu, 11 Mar 2010 15:45:11 +0000

Parts of the Poconos sit atop a massive natural gas deposit that could bring prosperity to northeastern Pennsylvania.

That includes jobs, long-term income for some property owners and a new, domestic energy supply.

But concerns over environmental destruction have made developing these deposits controversial.

The gas lies in a field called the Marcellus shale deposit. It stretches from New York to Kentucky and covers two-thirds of Pennsylvania, including Monroe, Wayne and Pike counties.

Until recently, it wasn’t economically possible to develop this field as a source of fuel. The gas is trapped about a mile deep in dense bedrock; recovering the material would be too expensive.

But new technology now makes these fields viable, and exploration and drilling, close to home, has begun.

The pros? A new energy source. Jobs. Licensing and royalties to landowners for the rights to explore and extract on their property.

The cons? Environmental contamination and destruction. Few will benefit directly, while many will have to live with the impact on the environment.

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Marcellus Shale gas mining discussed at forum

Maggie Burke — Thu, 11 Mar 2010 15:43:43 +0000

Should natural gas be mined from the Marcellus Shale formation, all safeguards against groundwater contamination must be in place, Congressman Maurice Hinchey told a forum in New Paltz Monday evening.

A panel was organized in part by the SUNY New Paltz Environmental Task Force for the purpose of allowing both pro and con opinions to express their arguments regarding gas drilling in the region.

According to Hinchey, a member of the Natural Resources Committee, what’s most important is that the proper standards and regulations are in place to prevent contamination of any population’s drinking water and to ensure that the process of drilling for natural gas will not spawn health problems in the future.

“This kind of drilling really can’t take place within the confines of New York City’s unfiltered drinking water supply,” said James Gennaro of the New York City Council’s Environmental Protection Committee.

“It’s not the appropriate kind of activity that could ever take place safely within an unfiltered water supply.”

Vice President of Chesapeake Energy Scott Rotruck clearly stated that his company would never be drilling in areas affecting the watershed. However, he did speak very highly of the potential for economic benefit that extracting natural gas would bring to the state.

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Penn Virginia plans Marcellus Shale pipelines

Maggie Burke — Thu, 11 Mar 2010 15:41:13 +0000

A Pennsylvania-based oil and gas partnership has plans to build natural-gas gathering pipelines and compression facilities to service some of Range Resources’ wells on the Marcellus Shale formation.

Penn Virginia Resource Partners LP said Wednesday that it envisions spending $170 million to $200 million over five years on the system in northcentral Pennsylvania.

The lines would provide more than 700 million cubic feet per day of capacity and cover Range Resources’ production in Lycoming, Tioga and Bradford counties.

The agreement provides Range capacity in the system, while Penn Virginia will be paid based on the volume of gas it handles. Penn Virginia, of Radnor, also says it can sell excess capacity on the system.

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Ky. landowners, gas drilling companies settle suit

Bill Sinclair — Tue, 09 Mar 2010 18:24:54 +0000

A federal judge has approved a $28.75 million settlement between more than 8,000 eastern Kentucky landowners and a group of natural gas drilling companies in a dispute over royalty payments.

The class-action settlement released Thursday ends more than two years of litigation over royalties from drilling in Martin and Pike counties.

The landowners sued Chesapeake Appalachia LLC, NiSource Inc., and Columbia Energy Group over allegations of shortchanging royalty payments and providing inaccurate statements about royalty payments to the landowners.

The settlement covers royalty claims from Feb. 5, 1992, through April 23, 2009. U.S. District Judge Karen Caldwell says the settlement is fair to all parties because there was no guaranteed outcome for either side at trial.

"Given the unsettled nature of the law with respect to certain claims, a resolution of these issues by the Court would have constituted a significant risk for the class," Caldwell wrote. "Undoubtedly, this relief is preferable to the possibility of a smaller recovery, or none at all, after an expensive and protracted trial and appeal are completed."

The settlement does not cover any acts after April 23, 2009, Caldwell noted, leaving the companies potentially liable for any underpaid royalties since then.

Messages left Thursday morning for Indiana-based NiSource, which merged with Columbia Energy, and Oklahoma City-based Chesapeake were not immediately returned. Messages left for John Famularo, the attorney for the plaintiffs, were not immediately returned.

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