Drilling fee decision in county today
By Ben Klein
The Warren County Commissioners will vote whether to enact the unconventional natural gas well fee at their meeting this morning.
Marcellus Shale Coalition President Kathryn Klaber, who was in Warren County Tuesday, says the legislation signed by Gov. Tom Corbett recently has brought a sense of “closure and completion.”
Implementing the new regulations at a time of historically low prices for natural gas will be a “heavy burden” due to the cost and labor associated with the new regulations, but it will raise an estimated $200 million that will be paid by a “relatively small number of companies,” she said.
“So it hasn’t come without some casualties in terms of drilling rigs that have and will be moved out of the commonwealth, but the fundamentals of the play are strong enough that the industry’s not going to pick up and leave, but certainly some rigs have picked up and left, and that is a result of all that’s gone on,” she said.
The quality of the Marcellus shale geologic formation in Warren County is not as high as it is throughout the rest of the state, but that doesn’t mean the area isn’t resourceful to industry.
Klaber said the Marcellus shale covers 95,000 square miles and other formations such as the Utica shale and the Rhine Street shale that are being discovered and tested will be valuable depending on the supply and demand for oil and natural gas.
“The point is we know how to get to a wide variety of different layers and you see areas that may not have been developed with just one layer, but if you find other ones that are economical, you have a vertical play and all of a sudden it makes sense to be investing those dollars in building the extensive pad development and roads to be able to access that resource,” she said.
Legal counsel for Pennsylvania General Energy Craig Mayer said shale plays across the state are not “homogeneous” and many well sites in the region are test sites.
Mayer said one of the features of the coalition is the associated membership of support industries that provide business besides the primary drilling companies, such as control and automation. Three of these support industries have recently joined the Warren County Business Chamber of Business and Industry, he said.
Potential shale plays, including the Utica shale in Warren County will be explored eventually, Mayer said, but is dependent on a number of factors such as transportation costs and the availability of the rig equipment.
“We only have so many rigs and so many engineers available,” he said. “You can’t do it all at once, but I think you can expect all of these potentials will be certainly explored.”
Klaber said the Marcellus shale in Beaver County on the Ohio border hasn’t been a very productive location for the Marcellus shale, but there are “very productive” Utica shale wells there now.
BP agreed to a 84,000-acre land lease with the Associated Landowners of the Ohio Valley to drill in the Utica Shale on Tuesday, according to the Associated Press.
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