Pennsylvania state Senator Daylin Leach (D-Montgomery County) recently circulated a memorandum to state senators stating that he would re-introduce legislation in the 2013-2014 Regular Session to amend portions of Act 13 of 2012 that relate to disclosure of confidential hydraulic fracturing constituents to health professionals. Act 13 contains provisions regarding when chemicals used in hydraulic fracturing and considered proprietary by an operator may be disclosed to health professionals and limiting the disclosures. In his memorandum, Senator Leach stated that the provisions of Act 13 on this issue are “poorly drafted” and that his bill would provide “clarifying language” regarding circumstances when such information can be requested and disclosed by a health professional.
Houston-based energy company, Carrizo Oil and Gas, Inc., announced its 2013 capital spending plan for land, seismic, and related activities. The plan includes the purchase of additional acreage in the southern Utica play. After the purchase, Carrizo will own approximately 14,000 acres predominantly located in Guernsey, Noble, and Tuscarawas Counties, Ohio. Carrizo is encouraged by recent drilling results and expects an increase in production.
The 30-day public comment period for the New York Department of Environmental Conservation’s (DEC’s) proposed regulations regarding hydraulic fracturing activities ended on Friday, January 11, 2013. The DEC rejected earlier calls to extend the comment period up to 90 days. The DEC currently faces a February 27, 2013 deadline to finalize the draft regulations or allow them to expire.
CONSOL Energy Inc. announced today that it expects to invest $835 – $935 million in its gas operation in 2013. According to a press release from CONSOL, (i) an estimated $160 million will be used to maintain production; (ii) $600 million will be used to develop Marcellus Shale assets; and (iii) $122 million will be invested in the CONSOL/Hess Corporation joint venture in the Utica Shale. According to the press release, CONSOL projects its gas production to increase by 8 to 15 percent in 2013 to approximately 170-180 Bcfe.
Drilling for oil and gas in the Utica shale underlying eastern Ohio has led to an increase in plentiful, well-paying jobs in the region, with established operations actively seeking local workers rather than outsiders. While some companies used experienced workers from other states to begin drilling operations, jobs for drivers, welders, diesel mechanics and other trades will be going to local workers in areas where wells have been drilled. Utica shale development has been credited as a factor in Ohio’s unemployment rate dropping from 8.6% in 2011 to 6.5% in November of 2012, and there are projections that development of the Utica will generate more than 140,000 jobs in Ohio by 2020.
As shale gas development continues to fuel economic activity in Ohio, one group of companies already experiencing business growth is the railroad industry. In December 2012, Hannibal Real Estate and Carload Express announced plans to revive a short line in Monroe County, Ohio. Now, more railway companies, such as Norfolk Southern Railway and CSX Transportation, are touting the benefits of Utica gas wells for their short line rails. Not only are trains hauling sand and other aggregates to development sites, but wet gas and oil production presents the opportunity to haul products from the well site to industrial centers. The demand for rail services is expected to increase in 2013 and 2014 as the number of wells drilled in the Utica grows.
The State Journal reports that average residential utility bills decreased 5.3 percent in West Virginia in 2012. According to a January 9 report from the Public Service Commission of West Virginia’s Consumer Advocate Division, a decline in natural gas utility rates was the main driver for the decrease. Consumer Advocate Division Director Byron Harris indicated that the average bill in January 2011 for electricity, gas, and telephone service was $292.81 per month, and the current average is $277.22.
Natural gas production and consumption rose nationwide according to new statistics published by the U.S. Energy Information Administration’s Natural Gas Annual and the West Virginia State Journal. Of particular note, natural gas production in West Virginia rose approximately 50 percent in 2011 over previous years, with Shale production representing 58 percent of WV’s production. Statewide the number of WV producing natural gas wells rose to 56,800 in 2011, a 4, 300 well increase from 2010’s production levels. No new estimates were given for the natural gas reserves believed to be underlying the Mountain State.
Confident in the future of the Utica Shale play, Kansas based Lario Oil & Gas Company has acquired an interest in 25,000 acres situated in the oil-rich northern portion of the Utica/Point Pleasant Formation in eastern Ohio with an un-named industry partner. The announcement comes on the heels of Lario’s recent drilling success in North Dakota and Colorado. In a statement released via its website, Lario detailed that it intends to drill a scientific well in the second quarter of 2013, with horizontal wells to drilled later.
Don S. Wardius, head of Renewable and Alternative Feedstocks Development at Bayer Material Science, said Bayer wants to see a research and development consortium organized to explore turning methane, a main component in natural gas, into benzene, as reported by the Tribune-Review and Pittsburgh Business Times. Bayer uses benzene as a raw material for the polymers in high-performance plastics. Wardius spoke at the Manufacturing Renaissance Series held in Pittsburgh on Thursday, which was a gathering of chemical executives, academics and lawmakers to discuss the attractive economics around using natural gas to create compounds required in plastics and other industries.
According to the revised reporting instructions available on its website, the Pipeline and Hazardous Materials Safety Administration (PHMSA) has agreed to extend the deadline for gas transmission line operators to submit their 2012 annual reports from March 15, 2013 to June 15, 2013. This change is significant because PHMSA is collecting data in these reports on the pipeline segments in densely populated and other high consequence areas which lack sufficient records to confirm their established maximum allowable operating pressure (MAOP). This effort is mandated by the MAOP verification requirements in the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, the most recent reauthorization of the nation’s pipeline safety laws.
A report published in Environmental Practice this month contends that the Pennsylvania Department of Environmental Protection undercounted the number of unconventional wells in the state when assessing well impact fees for 2012. The report suggests that the state failed to include between about 15,000 and 25,000 wells that qualified under the threshold for an impact fee contained in Act 13. The DEP disputed the report’s claims and indicated that its authors failed to understand which wells could be assessed an impact fee. The Scranton Times-Tribune has more.
On January 9, 2012, the Pennsylvania Department of Environmental Protection released a final White Paper regarding the use of “mine-influenced water” in oil and natural gas operations. According to the White Paper, mine-influenced water “may include water contained in a mine pool or a surface discharge of water caused by mining activities that pollutes, or may create a threat of pollution to, waters of the Commonwealth,” and it “may also include surface waters that have been impacted by pollutional mine drainage.” The White Paper outlines (1) the process for DEP review and evaluation of proposals for use of mine-influenced water, (2) the storage options (impoundments, pits, tanks, etc.) for mine-influenced water prior to use by the oil and gas industry for natural gas well development, and (3) the DEP’s “potential solutions” to long-term liability issues related to the use of mine-influenced water. The DEP has set up a webpage on its Bureau of Abandoned Mine Reclamation website regarding the White Paper, including a searchable database of mine-influenced water discharges in Pennsylvania.
The Ohio Department of Natural Resources (ODNR) reports that during the week of December 30, 2012 through January 5, 2013, it approved 8 new horizontal well drilling permits, 4 of which were issued to Gulfport Energy Corporation for operations in Harrison County, bringing the total up to 63 Utica/Point Pleasant Shale well permits issued for activity in Harrison County. Through January 5, the ODNR has issued 487 horizontal well permits, and 205 horizontal wells were drilled under such permits, 47 of which are in production.
The West Virginia Department of Environmental Protection (DEP) has hired nine new oil and gas inspectors to handle increased natural gas drilling activity in the state. DEP initiated the hiring search for additional inspectors after the state legislature passed the Horizontal Well Act in December 2011. Since that time, DEP’s Office of Oil and Gas (OOG) has increased its total staff from 28 to 49. According to a DEP spokeswoman, there are still two open inspector positions, and the OOG enforcement section will expand to 30 staff when these vacancies are filled. The DEP spokeswoman said that the agency’s gas well permitting process slowed down during the hiring search, as DEP staff were temporarily diverted from the permitting process to interview prospective inspectors.