Friday, October 28, 2011

Pennsylvania Research Study Finds Marcellus Activities Having Little Impact On Water Sources

A new study by Penn State researchers finds that Marcellus drilling and production activities are having little impact on rural water supplies. The study, The Impact of Marcellus Gas Drilling on Rural Drinking Water Supplies, was recently released by The Center for Rural Pennsylvania. The Center for Rural Pennsylvania is a bipartisan, bicameral legislative agency that serves as a resource for rural policy within the Pennsylvania General Assembly.

The center’s research findings note that “statistical analyses of post-drilling versus pre-drilling water chemistry did not suggest major influenc¬es from gas well drilling or hydrofracturing (fracking) on nearby water wells, when considering changes in potential pollutants that are most prominent in drilling waste fluids.”

The research looked “to provide an unbiased and large-scale study of water quality in private water wells in rural Pennsylvania before and after the drilling of nearby Marcellus Shale gas wells.” The study also looked to document both the enforcement of existing regulations and the use of voluntary measures by homeowners to protect water supplies.

As part of the study, the researchers evaluated water sampled from 233 water wells in proximity to Marcellus gas wells in rural regions of Pennsylvania in 2010 and 2011. Among these were treatment sites (water wells sampled before and after gas well drilling nearby) and control sites (water wells sampled though no well drilling occurred nearby).

Click to read the study's report.

Surface Use Amendments To Be Considered During Next Meeting Of Marcellus Study Group

The co-chair of the Legislature's special Marcellus regulation study group is hoping to hold another meeting next week. Delegate Tim Manchin said he expects the group to take up four remaining amendments during this meeting. Two of the amendments deal with surface use/owner issues. According to an article in today's The Register-Herald, Manchin said the amendments would induce operators work out issues (well location, impoundments, roads, etc.) with surface owners:

Manchin said property owners have long sought a mandatory sit-down with operators to spell out just where they intended to set up well sites, impoundments and roads, and secondly, to negotiate terms of compensation. “That’s never been mandatory,” the delegate said.

“There are some states where it is mandatory. In our first proposed amendment, we made it mandatory. The amendment under consideration does not make it mandatory. It attempts to induce the operators to do so through the use of attorneys’ fees being awarded in a subsequent disagreement over compensation.”

If a surface owner prevailed in litigation, Manchin explained, under normal circumstances, they receive the fees. “If the operator had attempted to utilize the surface owner agreement process, even if it wasn’t successful, as long as they give them notice, provided them a copy of the code section dealing with compensation, gave them some other information in that part of the process — even if they didn’t reach agreement on where it should be located, or the compensation — then, in order to get attorneys’ fees, the surface owner would have to prevail by more than 15 percent,” he said. “In other words, they would have to get 115 percent of whatever the last best offer was by the industry.”

The amendment also requires the surface owner to provide a 30-day notice of intent to sue so the industry isn’t ambushed, allowing time to make a best offer before being taken into court.

Click to read the entire article.

Monday, October 24, 2011

Prospects Unlikely For Marcellus Special Session In November

Legislators developing a proposed Marcellus regulatory bill still are attempting to reach consensus on a number of key issues, including a new permit fee on horizontal drilling. As a result, the outlook for a special session in November seems to be fading.

Members of the special Marcellus legislative study committee had hoped to complete their work in time so a special session could be called in November...possibly as part of the November interim meetings (Nov. 13-15). However, during the November interims the special committee is expected to continue work on its proposed bill. And, any final proposal will need to be provided to Governor Earl Ray Tomblin for his consideration. The governor has stated he won't call a special session until an agreed bill is ready, and there must be consensus on key provisions.

Industry groups and horizontal producers have expressed concerns about a number of new provisions that have been adopted in the past couple of months by the special committee. LGCR is closely monitoring the deliberations.

Click to read related news commentary in the October 23 edition of The Herald-Dispatch.

Thursday, October 13, 2011

Special Marcellus Legislative Committee Continues Work On Proposed Regulatory Bill

Members of the Legislature's special Marcellus study committee are meeting this week in Charleston, and the committee continues to make modifications to a proposed bill. This week the committee changed the buffer zone distance requirements involved with drilling. The committee also may reconsider a proposed $10,000 drilling permit fee...and change this to be $5,000.

The joint committee has been examining a wide range of regulatory issues related to Marcellus Shale drilling and production.

Click to read news articles:

Marcellus Shale Committee Approves Well Setback Standards
The State Journal, October 13, 2011

Legislative panel cuts buffer for Marcellus drilling
The Register-Herald, Oct. 13, 2011

Monday, October 10, 2011

Recent Pennsylvania Intermediate Court Decision Not Cause For Panic In West Virginia

On September 7, 2011 the Superior Court of Pennsylvania issued an opinion, reversing and remanding a decision by the Court of Common Pleas of Susquehanna County Pennsylvania, styled Butler v. Charles Powers Estate et al. 2011 PA Super 198, which has caused consternation throughout the Marcellus Shale development community. In Butler, the Superior Court in Pennsylvania indicated that it was willing to entertain an argument that gas trapped within the Marcellus Shale formation was similar, for title purposes, to coal bed methane.

In Pennsylvania, West Virginia and a number of other jurisdictions with both coal and gas resources under development, courts have applied different rules of construction to the conveyance of coal bed methane, and the right to develop the same, than to so-called ‘conventional gas.’ As a result, the willingness of the Pennsylvania Superior Court to consider an alternate treatment for title to the gas trapped within the Marcellus Shale formation has sent developers scrambling.

West Virginia’s existing precedent on the key element of the Butler analysis is distinguishable and, in conjunction with the preliminary nature of the Butler decision, does not justify a panic among developers of the natural gas trapped within the shale in West Virginia.

Click to read an analysis prepared by Lewis Glasser Casey & Rollins PLLC.

Wednesday, October 5, 2011

Earl Ray Tomblin Elected West Virginia's Governor

Earl Ray Tomblin, who has been serving as Acting Governor in West Virginia, was elected the 35th Governor last evening following a special gubernatorial election. Tomblin will continue to serve as the state's chief executive and complete the remainder of the term formerly held by Joe Manchin. That term will run until Janaury 2013. Governor Tomblin now will need to run for a full four-year term during the upcoming 2012 election cycle.

Tomblin has been a strong supporter of the state's natural gas industry, and his administration is working energetically to get an ethane cracker located in the state. Tomblin also has been working to provide balance to calls for added regulations and fees on the state's shale production industry.