Over the past few months we’ve been working to improve this website with a few goals in mind: making it more user friendly, optimizing the search function, and adding a few new components that our members felt would be beneficial in furthering the natural gas discussion – with you, the visitor, in mind.

As you click around on this new site, you’re bound to find something new, like this blog, or the new and improved jobs portal (the most visited page at MarcellusCoalition.Org), while also easily locating content, studies, press releases, fact sheets, and just about anything else from years past.

This blog will provide a platform for MSC members, staff, and other stakeholders to comment on various topics such as legislation, regulations, and news articles, while highlighting new technologies and in-depth analyses on issues of importance. It will also be a place our policy, communications and community outreach teams will keep you updated on their daily travels and interaction with everyone from policymakers, the press, and most importantly, the public.

I also want to briefly highlight some of the subtle, but cutting edge technology we have implemented into this site. If you notice, as you scroll down the page, the main navigation bar remains at the top of your browser. While small, this makes the user experience that much easier. Also, on the home page, there is a social media and news feed that allows for easy access to the most recent information posted on the site. And of course, we have call-out boxes on each page for a few of our priority projects for the year: Marcellus on Main Street, SHALE GAS INSIGHT 2012, and our content-rich recommended practices.

One last note. While we think we have all the kinks worked out, technology sometimes has a mind of its own. So bear with us over these next few days as we work through a few bumps here and there as we get this new site up and running, and be sure to check back often, as we plan to have a very active blog component moving forward.

Take care and thanks again for stopping by.

Katie

Kathryn Z. Klaber
President
Marcellus Shale Coalition

Pennsylvania over the past three years has greatly reduced the number of environmental incidents related to natural gas drilling, and state officials appear fully able to oversee the industry without intrusion from the federal government, according to a study released Tuesday.

Researchers at the University at Buffalo’s newly formed Shale Resources and Society Institute found that regulators in Pennsylvania, the epicenter of the Marcellus Shale boom that’s helped turn the U.S. into the world’s largest natural gas producer, are effectively holding gas companies’ feet to the fire. Environmental violations resulting from the controversial process of hydraulic fracturing, better known as fracking, have dropped significantly since 2008, the report shows.

“This study presents a compelling case that state oversight of oil and gas regulation has been effective,” said Timothy Considine, professor at the University of Wyoming and lead author of the survey. “Now we have comprehensive data that demonstrates, without ambiguity, that state regulation coupled with improvements in industry practices results in a low risk of an environmental event occurring in shale development, and the risks continue to diminish year after year.”

But opposition groups contend the cumulative impact of more and more wells being drilled must be considered: As more wells are drilled, the number of environmental incidents increases. The study shows the overall number of incidents tripled from 2008 to 2011, even though the number per well went down.

The study examined all 2,988 violations cited by the state’s Department of Environmental Protection (DEP) from January 2008 through August 2011, during which time more than 3,500 natural gas wells were drilled.

Nearly two-thirds of the violations were deemed “administrative” in nature and had no physical impact. The remaining violations resulted from 845 “environmental events,” with 25 classified as “major” events such as land spills, well blowouts or site restoration failures.

From 2008 to 2010, the percentage of violations in relation to the number of wells drilled dropped from 58.2 percent to 30.5 percent, the report shows. From January to August 2011, it declined even further, dipping to 26.5 percent.

Pennsylvania’s DEP has regularly fined companies for their violations, and the state adopted new regulatory guidelines last year after Republican Gov. Tom Corbett took office. Collaboration between the industry and state officials, the report says, has led to effective cleanup and “largely mitigated” the environmental impacts of nearly all of the major events examined in the study.

Pennsylvania’s success could serve as a model for New York, which has yet to allow drilling companies to tap its portions of the vast Marcellus Shale deposit. The proposed regulatory framework in the Empire State, if and when drilling begins, would be more than adequate, the study found.

“New York’s current regulations would prevent or mitigate each of the identified major environmental events that occurred in Pennsylvania,” said John Martin, institute director and co-author of the report.

The survey comes at a time when many industry leaders are growing increasingly concerned that federal rules, such as those proposed by the Environmental Protection Agency and the Interior Department, could hamper the development of domestic natural gas.

The Interior Department has proposed a new permitting process for all drilling on federal lands, while the EPA earlier this year released new air emissions standards for natural gas operations and will later this year unveil a widely anticipated draft report on the links between fracking and suspected water contamination.

Industry leaders are mounting a pushback against those efforts, arguing that states such as Pennsylvania, New York and others are far better equipped to craft guidelines specific to their geographic and environmental situations, rather than rely on a one-size-fits-all standard from Washington, D.C.

The Buffalo study provides new evidence, its authors argue, that state governments are able to do the job.

“Pennsylvania is fully capable of being able to manage its oil and gas regulations,” said report co-author and Penn State University professor Robert Watson in a conference call with reporters Tuesday.

NOTE: Click HERE to view this story online and HERE to read more about University at Buffalo’s study.

The state Department of Environmental Protection’s most recent report on gas well permits suggests that the shale drilling boom has yet to arrive in our corner of Pennsylvania.

So far, no shale wells have been drilled or permitted in Erie or Crawford counties.

It’s only a matter of time before that changes, said Kathryn Klaber, president of the Marcellus Shale Coalition, an industry group with more than 300 members.

“There is no reason why the birthplace of the oil and gas industry won’t play a major role,” Klaber said Monday morning during a break from a seminar at Penn State Behrend, sponsored by the coalition, the Northwest Industrial Resource Commission and the Pennsylvania Department of Community and Economic Development.

That’s more than just wishful thinking by drilling advocates.

Erie County residents sit atop two major gas-producing rock formations, the Marcellus Shale and the deeper Utica Shale.

In this region, gas reserves within the Utica Shale are thought to be more plentiful.

Klaber said the fact that the drilling started in other parts of Pennsylvania doesn’t mean that activity won’t expand.

Gas demand and prices, which are low, will likely determine the timetable for when shale drilling does begin here, she said.

That’s already happening in other parts of northwestern Pennsylvania.

Through Sunday, 74 shale wells had been permitted in Clarion County, 179 in Elk County and 211 in Potter County, according to DEP.

But the financial effects of the shale gas already are being felt here, Klaber said.

Ask Karen Thomas, vice president of human resources for Warren-based Pennsylvania General Energy.

She said her company has recently added 70 employees, including technicians, engineers and environmental specialists.

“I see that number increasing,” she said.

Klaber said there’s also a growing need for gas industry-related legal services and higher demand for employees in environmental services.

Monday’s seminar, attended by about 100 people, focused on how manufacturers and other companies can become suppliers to the shale gas industry.

“Erie already has this strong manufacturing tradition,” Klaber said, explaining that manufacturers have an opportunity to land a share of the business related to the industry.

“It’s an opportunity to help businesses understand how to unlock the supply chain,” she said.

In a global sense, Klaber said, this development and the jobs it can create are in our backyard.

“We are developing this in Pennsylvania and Ohio vs. someplace like Texas and Canada,” she said. “Erie is not so far away from the center of this.”

NOTE: Click HERE to view this story online. Also, both WJET-TV and WICU-TV provide supply chain forum coverage.

One key factor? According to a new Associated Press analysis, Pennsylvania mineral owners and family famers received more than $400 million in Marcellus Shale royalty payments in 2011 alone, while the natural gas industry invested several billion dollars in the commonwealth during that time. As Fadel Gheit, a senior oil and gas analyst with Oppenheimer & Co., tells the AP, “We are producing record levels of natural gas.”

This from the AP story:

• Gheit said the real value of shale gas is that the lower energy cost is making American industry more competitive around the world. That opens doors for long-term investments, such as Shell Oil’s plan to build a huge petrochemical plant in western Pennsylvania. “In my view this is much bigger than anything we’ve seen in our lives” as far as a new energy development, Gheit said of shale gas.

• Kathryn Klaber, president of the Marcellus Shale Coalition, said the current low natural gas prices benefit consumers throughout the state. “Every single Pennsylvanian has more money in their pocket today — to save, invest and help make ends meet — as a result of plentiful natural gas development from the Marcellus Shale,” she said.

Natural gas-related consumer savings and economic activity across the region are indeed being broadly realized. But importantly at the same, natural gas producers are taking further steps – anchored in content-rich Recommended Practices – aimed at ensuring that we get this historic opportunity now and for further generations.

From more jobs and a robust manufacturing base, to reducing the environmental impact of natural gas production while identifying new ways to positively leverage America’s abundant natural gas supplies, our industry remains focused on raising the bar and operating in line with our Guiding Principles.

STRENGTHENING U.S. COMPETITIVENESS, DRIVING AN AMERICAN MANUFACTURING REBIRTH

• “Manufacturers Tie Ohio Plant Investments to Shale Gas Expansion”: U.S. Steel added 200 jobs at its Lorain Tubular Operations to provide seamless steel pipe for oil and gas producers, said Doug Matthews, vice president of U.S. Steel’s Tubular Operations. Prior to the recession, the company was trying to find a direction for the Lorain plant. At the time, most of the market for its seamless pipe had moved away and the facility wasn’t equipped to produce products for the energy industry, Matthews said. By 2010, the shale gas boom had begun in Ohio and U.S. Steel decided to invest in the Lorain facility to supply the industry’s growth in the region. Shale gas has also reduced input costs for U.S. Steel, which is a heavy consumer of natural gas, Matthews said. “It’s a catalyst for a revitalization of U.S. manufacturing,” he said. (IndustryWeek, 5/2/12)

• Washington Post columnist David Ignatius: America is entering a new era of energy security. … Robin West, a friend who is chairman of PFC Energy, argues that, because of the rapid expansion of oil and gas production from shale, America is likely to become by 2020 the world’s No. 1 producer of oil, gas and biofuels — eclipsing even the energy superpowers, Russia and Saudi Arabia. West explains that the natural-gas boom will mean a dramatic change in energy imports and, thus, the security of U.S. energy supplies. … “This is the energy equivalent of the Berlin Wall coming down,” contends West. “Just as the trauma of the Cold War ended in Berlin, so the trauma of the 1973 oil embargo is ending now.” The geopolitical implications of this change are striking: “We will no longer rely on the Middle East, or compete with such nations as China or India for resources.” (Washington Post op-ed, 5/4/12)

• Mark Williams, the Downstream Director of Royal Dutch Shell PLC: “Low prices for natural gas offers manufacturers a powerful competitive advantage.” (Dow Jones, 5/3/12)

• “Cheap shale gas is giving American chemical companies a competitive edge over foreign rivals.” (The Economist, 5/4/12)

• The Washington Post writes that responsibly expanding global market access to clean-burning American natural gas would “improve the country’s trade deficit, produce returns on domestic energy projects, increase state and federal tax revenue, support construction and maintenance jobs, [and] reduce the leverage of gas-rich international bullies such as Russia.” (Washington Post editorial, 5/6/12)

POWERING OUR TRANSPORTATION FUTURE

• “Gassing up With Natural Gas Might be in NEPA’s Future”: Instead of going to the pump to gas up vehicles, people may soon be going to the “valve” to fill up on a different type of gas – compressed natural gas. … Even though the U.S. has the world’s largest natural gas reserve, it has less than half a percent of the world’s CNG vehicles. … The greatest benefit of CNG vehicles will come to large, high-mileage fleets such as bus systems, trucking firms and waste haulers. With the gallon equivalent of natural gas at about $2, half the price of gasoline and diesel, interest is at a high point.  … Ford offers a line of CNG-ready vehicles that can be taken to company-approved up-fitters and remain under warranty. The options are often less costly than CNG vehicles off the assembly line, said Cynthia Williams, Ford environmental policy manager. (Times-Tribune, 5/5/12)

• “Getting Natural Gas-Powered Cars in Use”: “CNG we see as a long-term-viable fuel and we will continue to make our products capable to run on natural gas,” Cynthia Williams, Environmental Policy Manager for the Ford Motor Co. said. … “I think natural gas is definitely the way of the future,” Luzerne County Transportation Authority executive director Stanley Strelish said. (Times-Leader, 5/5/12)

TECHNOLOGICAL ADVANCEMENTS REDUCING ENVIRONMENTAL FOOTPRINT

• “Removing Water Trucks From Road”: A pipeline designed to transport water directly to natural gas drilling sites in Lycoming County went into operation in early April. As of the end of that month, the pipeline reduced by about 2,000 the number of truck trips required to support drilling operations in the area, according to Karl Kyriss, president of project developer Aqua Capital Ventures LLC. … “Water trucks haul an average of 5,000 gallons. Our pumping rate at Jersey Shore is 500,000 gallons per day, so every day we’re pulling about 100 trucks off the road,” Kyriss said. (Williamsport Sun-Gazette, 5/7/12)

• “This is an industry that is constantly evolving with technological innovation,” said Matt Pitzarella, Range’s Cecil-based spokesman. (Pittsburgh Tribune-Review, 5/5/12)

• “Water Pipeline Supplies PA Shale Drill Sites, Eliminates 2,000 Truck Trips From Roadways”: A newly constructed private pipeline supplying fresh water to certain natural gas producers drilling in the Marcellus Shale in north-central Pennsylvania is now fully operational, according to an announcement from Aqua America Inc. (NYSE: WTR) and Penn Virginia Resource Partners, L.P. … In less than a month of operation, the pipeline has already eliminated more than 2,000 water truck trips over rural roadways. In addition, this project supported the creation of approximately 100 local jobs over the course of construction. (Water World, 4/30/12)

GENERATING MUCH-NEEDED REVENUES

• Williamsport, Pa. “Tax Revenues up $487,000”: The city saw a $487,000 increase in business privilege and wage tax revenues between 2010 and 2011, according to the city finance committee that met Wednesday. “The revenue reflects increased economic development. Some of it is likely to be a result of increased activity directly or indirectly related to Marcellus Shale industries,” said City Councilman Jonathan Williamson, chairman of the city finance committee. (Williamsport Sun-Gazette, 5/3/12)

• MSC president Kathryn Klaber: “Every single Pennsylvanian has more money in their pocket today — to save, invest and help make ends meet — as a result of plentiful natural gas development from the Marcellus Shale.”

PITTSBURGH—Marcellus shale gas wells in Pennsylvania generated about $3.5 billion in gross revenues for drillers in 2011, along with about $1.2 billion in West Virginia, according to an analysis by The Associated Press.

But experts say that a sharp drop in wholesale prices over the past year means that in the future much more money will be made — and more jobs created — by petrochemical companies that process the gas into other industrial and consumer compounds.

The Marcellus is a gas-rich rock formation thousands of feet underground in large parts of Pennsylvania, New York, Ohio, and West Virginia. Over the past five years, advances in drilling technology made the shale accessible, leading to a boom in production, jobs, and profits — and a drop in natural gas prices for consumers.

In 2011 the formation produced just over 1 trillion cubic feet of gas in Pennsylvania, and about 350 billion cubic feet in West Virginia. Ohio has almost no Marcellus production, but is exploring other gas fields. New York hasn’t allowed drilling.

“We are producing record levels of natural gas,” said Fadel Gheit, a senior oil and gas analyst with Oppenheimer & Co. in New York. Gheit expects the trend to continue, because the industry has mastered horizontal drilling deep underground. That means the wells don’t just go down, but also out thousands of feet through the gas-rich shale.

Just a few years ago drillers were being paid $4, $5 or even $6 for each 1,000 cubic feet of gas. Now the price is about $2.50, meaning industry revenues may drop this year even as production grows.

The AP estimated 2011 revenues using an average wholesale price of $3.50 for that year. But at current volumes each $1 drop in price costs the drilling industry a billion dollars or more, in Pennsylvania alone.

Drillers are slowing production in an attempt to boost prices, but Gheit thinks the trend of plentiful, cheap natural gas will continue, mostly because the industry continues to find new, deep underground fields that can be profitably drilled.

“We’re really just at the tip of the iceberg,” he said, since at least 10 new and previously unknown gas fields will go into production over the next year around the country.

Gheit and others note that the gas that’s produced represents only part of the money generated.

Patrick Creighton, a spokesman for the Marcellus Shale Coalition, an industry group, estimated that it costs the industry about $5 million to bring a well into production. With about 2,200 active wells in the state, that comes to $11 billion in additional investments, mostly over the last four years. The industry is also building or planning billions of dollars of new pipeline construction.

Creighton said the minimum royalty in Pennsylvania is 12.5 percent of well revenues, meaning property owners here were paid more than $400 million last year.

Gheit said the real value of shale gas is that the lower energy cost is making American industry more competitive around the world. That opens doors for long-term investments, such as Shell Oil’s plan to build a huge petrochemical plant in western Pennsylvania.

“In my view this is much bigger than anything we’ve seen in our lives” as far as a new energy development, Gheit said of shale gas.

Kathryn Klaber, president of the Marcellus Shale Coalition, said the current low natural gas prices benefit consumers throughout the state.

“Every single Pennsylvanian has more money in their pocket today — to save, invest and help make ends meet — as a result of plentiful natural gas development from the Marcellus Shale,” she said.

NOTE: Click HERE to view this story online.