A few questions have plagued the prospects of gas drilling. One of the most significant is what to do with the contaminated water that remains after the fracking process has been completed. Fortuna Energy may have an answer. The Press & Sun Bulletin reports that the company is looking into pumping waste water from a new well back down into an older, non-productive well:

Company officials are testing a process to pump wastewater back into the ground at the site of an unproductive well near the northern border of Tioga County and Chemung County, said Mark Scheuerman, manager of media relations. The plan calls for injecting waste from another well which is tapping a gas reserve in the Trenton Black River formation.

…Waste water intended for the site is being separated from gas flowing from a productive well, Scheuerman said. The company is testing to see whether the proposed disposal well, called the Mallula1 well on Rumsey Hill Road in Van Etten, is suited to handle the volume and pressure from the process.

“We want to make sure we have all of the geology understood,” Scheuerman said.

Drilling waste can contain metals, brine and sometimes elements that pick up traces of radioactivity after passing through certain kinds of rock formations. Scheuerman said waste water proposed for the Mallulal well contains brine and certain minerals and metals, but no radioactive material.

Unproductive wells similar to the Mallulal well also could be used as repositories for other kinds of drilling waste, said Maureen Wren, a spokeswoman for the DEC.

Even if this pans out, there are still problems to be solved. One significant one is where to get the vast amounts of water in the first place. Our region is rich in water resources but they are in a delicate balance, considering the fish, the water use by NYC, etc. Another question is possible leakage from the wells.

It took 18 months, a bit longer than planned, but the 182-mile-long Millennium Pipeline is open for business as of Monday. PressConnects.com tells us:

Crews may still be visible at various points of the project, which bisects Tioga and Broome counties, as work to reseed and restore the land over the pipeline and control erosion is expected to continue through next year, said Mike Armiak, a spokesman for the company.

The new 30-inch-diameter line replaces the outdated Columbia A-5 line, which is 12 inches in diameter. The old line, which runs mostly parallel with the Millennium, will be left in the ground through Broome County.

This isn’t gas-related, but the work of the Hancock Partners ought to be of interest to all of us. They have forwarded me this notice:

The Hancock Partners Inc Invite You

Please join us at 7:30 PM on Monday, December 8^th in the HCS auditorium. Alan Sorenson will present the Hancock Economic & Development Plan

We have seen some progress with our Main Street project and a few welcoming signs.We all know that there is much work to do and that it will be expensive.

This plan deals with these issues in a logical way and identifies sources of outside funding.This plan clearly states that we must pull together as a community to make the necessary improvements.

We guarantee that you will leave this meeting with a condensed version of the plan in your hands.We hope that you will leave the meeting with a desire to encourage local government to be optimistic and seek improvement.

Hancock will continue to change over the next few years. We ask that you invest an hour of your time on December 8^th to see how you can help direct this change.

The projects contained with this Development Plan will require extensive local support. Please bring a friend with you to this meeting.

RSVP:

In order to for us to have enough handouts please let us know if you will be able to join us at 7:30 PM on Monday, December 8^th at the HCS auditorium..# attending:________

Please bring along any friends who have an interest in Hancock.

A local meeting on Monday the 17th provided a forum for county officials and the public to sound off on gas drilling issues. NewsChannel34 reported on the event:

Many municipal leaders and area gas coalition members want the DEC to expedite the process of drawing up the guidelines to review drilling applications in one of the world’s largest natural gas plays — the Marcellus Shale, which we sit on top of.

They believe drilling can be done safely and be a big economic boost as long as the proper environmental checks are in place. One concern is that drilling could be delayed while additional studies on how drilling could affect the New York City Watershed are done.

Binghamton Town Supervisor Tim Whitesell represented many coalitions at the meeting.
And, says the DEC needs to look at our area separately from the city. Whitesell says, “That has a direct impact on all of upstate New York. It needs to be addressed on a separate issue, removed from the current GEIS, so that we can move everything forward.”

Other things Broome County is asking the DEC to carefully look at are noise concerns and where waste from drilling is kept. The county is against keeping it in earthen pits and favors steel tanks.

Drillers over in Pennsylvania are scaling back their Marcellus plans. This isn’t because of any natural or technological issues, but because of government bureaucracy. And that governmental interference isn’t solely a matter of environmental protection. Much of the difficulty seems to stem from simply bureaucratic delays and red tape, and uncertainty about the regulatory process.

We’re not advocating an attitude of “damn the environment, full speed ahead”. The point is that we must avoid flushing potential money down the drain just because of bureaucracy. Let’s be sure that the process is as efficient as possible. If drilling companies have to waste money waiting for extra signatures, or have expensive equipment left idle waiting for a bureaucrat, that’s less money they’ll be able to pay landowners, or pay to employees, etc.

CNNMoney reports:

[Gas drilling executives] say the economic windfall expected from the Marcellus shale may not come to pass if Pennsylvania doesn’t get its regulatory house in order.

Industry officials complained Tuesday about a time-consuming and lengthy permitting process and cumbersome regulations that, on top of plummeting natural gas prices and the credit crisis, is making it difficult for them to operate in Pennsylvania.

“I have great hopes for what the Marcellus shale play might still hold for Pennsylvania. Unfortunately, my experience to date does not lead me to be very optimistic,” [said] Wendy Straatman, president of Exco-North Coast Energy Inc.

A report in the Pittsburgh Tribune-Review relates a similar story:

Atlas Energy Resources LLC of Moon, for example, shifted 40 percent of its well-drilling program for the winter and spring — $100 million in investments — elsewhere, primarily to Michigan, Indiana and Tennessee.

“That’s too bad for Western Pennsylvania,” CEO Richard Weber said but, “When there is this much regulatory uncertainty, it makes it hard to budget.” Applying for permits in Pennsylvania can be a time-consuming, costly process, he said, forcing the company to wait for months. …

Companies hoping to tap the Marcellus region still compete with drillers in other states. In Texas or Louisiana, producers can submit a one-page application, promise to adhere to thick manuals and start drilling the next day, said Matt Pitzarella of Fort Worth-based Range Resources LLC, whose Washington County office has expanded from 20 workers to 150 in the past year.

“Here it’s like you are writing sections of that manual every time, and that’s where the delay is,” he said. “People would say we want (permits) faster because we want less regulation, and that’s not the case.”

State officials are aware of the problem.

State Sen. Mary Jo White, R-Venango, said she hopes the permitting process for companies using new well-drilling technologies can be streamlined.

“This is a wonderful opportunity, and we don’t want to blow it,” White said….

Terry Engelder, a Pennsylvania State University geoscientist who recently estimated Marcellus could hold more than double the gas previously thought, agreed the process for permitting horizontal wells could be made easier.

“The regulations do evolve in time — they had to for vertical wells,” he said. “Suddenly this new technology came along and everyone had to do a double take to adjust to the horizontal drilling rules.”

This is echoed in the CNN article:

Sympathetic GOP senators pressed acting Environmental Secretary John Hanger for answers, warning that Pennsylvania can’t afford to scare off an industry that has promised to create tens of thousands of new jobs.

The state needs to be “careful we are not killing the goose that’s laying the golden egg,” said Sen. Mary Jo White, R-Venango.

Hanger agreed that regulations need to be streamlined and said his agency is working on it, but added that most applications are processed within 45 days.

“There has to be a smart way to protect what we need to protect, and at the same time (prevent) a delay that really serves no purpose,” he said. “I believe there’s a learning curve here for everyone involved.” …

Part of the problem may be a lack of DEP manpower to cope with a record number of natural gas applications. The agency is on track to issue 8,000 permits in 2008, up from 2,000 in 1999, yet staffing in the agency’s oil and gas division has remained stable at about 80. The DEP has proposed to raise fees on drilling companies to pay for additional staff to process applications and inspect wells.

Of course, we know that however few workers the PA DEP has, New York’s DEC has far fewer. So it stands to reason that here we’ll have a worse problem in this respect.

Drilling company East Resources is invoking the fine print of their leases, putting payments to landowners on hold. They’re claiming that they’re unable to make payments because of tight fiscal times, and apparently there’s a clause in the contracts that allow them to defer payments. Luckily, that same clause allows the landowners to terminate the lease at their own discretion.

In late October, East Resources of Warrendale, Pa., mailed about 1,000 letters to those with whom it has lease agreements….

The affected parcels total about 40,000 acres, he said.

In part, the letters state, “Because recent economic conditions in the nation’s financial markets have reduced our ability to obtain extensions of credit, we are at this time not in a position to make payment to you.”

Leaseholders are given the option of voiding their leases with the company or extending the payment terms.

At this stage, [John Sieminski, the drilling company's general counsel] said, most of the respondents are willing to extend the payment terms. He also said there is no time limit in which the landowners must reply.

“No time limit was imposed, just as we hope they wouldn’t impose one on us,” he said.

However, [Elmira attorney Christopher] Denton says he would advise his clients to void their leases with East Resources and start over again, with a keener eye on long-term planning.

“You can’t worry about the money that’s lost. You don’t know if you will get the money anyway because ‘as soon as possible’ is not a legal term,” said Denton.

Considering the hardball that the gas companies play, it seems to be asking a lot, expecting land owners to sit tight.

A Norwegian company, Statoil, is paying $3.375 billion for about a 32.5% interest in Chesapeake’s Marcellus operations. According to Reuters,

StatoilHydro, the second-largest supplier of natural gas to Europe, said it would pay Chesapeake $1.25 billion in cash and pay $2.125 billion in drilling costs for a 32.5 percent stake in the Marcellus prospects in the Appalachia region in the northeastern United States. …

The deal, which covers 1.8 million acres of land, will ease tight funding at Chesapeake, which labours under a heavy debt burden. …

The transaction is expected to close by year end. …

StatoilHydro also exports liquefied natural gas to the U.S. from its Barents Sea field.

StatoilHydro said Chesapeake planned to continue acquiring leases in the Marcellus shale play and that it had the right to a 32.5 percent participation in any such additional leasehold.

I find it interesting that they import gas from the Barents Sea. I had understood that transportation of gas was difficult, which is why pipelines are being built all over the place.

It’s also interesting that CHK will continue to acquire leases, considering that they’ve curtailed them this fall.