On May 29, 2013, WV Governor Ray Tomblin announced the establishment of the Appalachian Petroleum Technology Training Center, which will include joint programs hosted by West Virginia Northern Community College and Pierpont Community and Technical College and is supported in part by the oil and gas industry. Students will have the opportunity to earn a two-year associate degree or a one-year certificate program in the field of petroleum technology through the program, which opens next fall. The Center will have hands-on facilities, including indoor and outdoor drilling simulation laboratories. Corky Demarco, Executive Director for the West Virginia Oil and Natural Gas Association, noted that “Having business and industry involved in the curriculum and facility planning gives us confidence that graduates will have the skills and hands-on training needed for industry careers.”
Last month District Court Judge Irene Keeley, sitting in the Northern District of West Virginia, sought to have the West Virginia Supreme Court of Appeals (WVSCA) rule upon whether West Virginia law permits a natural gas producer to use a surface owner’s property to sink horizontal wells that draw gas from neighboring tracts. The decision in this case will have far reaching economic consequences in West Virginia. Now, the Court is slowing down the process through which the WVSCA may decide the novel issue. According to the San Francisco Chronicle, Judge Keeley has requested the record be supplemented with additional facts before the question is submitted to West Virginia’s highest court. Under this second order, it is unclear when the WVSCA may be called upon to determine this drilling issue.
NPR reports that two producers and the Department of Conservation and Natural Resources (DCNR) are negotiating the right to access sub-surface gas deposits in the Loyalsock State Forest. The Loyalsock State Forest consists of about 100,000 acres and stretches across Bradford, Lycoming, and Sullivan counties and sits above deposits of the Marcellus Shale. Anadarko and Southwestern Energy Company own the sub-surface mineral rights under about 18,000 acres where the DCNR owns the surface. There is an additional 7,000 acres in the Loyalsock State Park where the producers appear to own both the surface and sub-surface rights. The ongoing negotiations between the producers and the DCNR have riled environmentalists seeking the preservation of the special plants, endangered birds and animals that reside in the area. With heightened pressure on DCNR to respond, a public meeting on the drilling in Loyalsock will be scheduled for June.
As profiled in an article by Pam Kasey in the West Virginia State Journal, Charleston-based Appalachian Basin natural gas operator Triana Energy, LLC has meet the stringent environmental standards required to achieve ISO 14001 certification. To achieve certification, Triana established a comprehensive environmental management system for its operations. The company claims to be one of the first oil and gas exploration and production companies in the U.S. to receive ISO 14001 certification, which requires internal environmental controls and standards that are more demanding than current regulatory requirements.
Range Resources argued in the Court of Common Pleas of Washington County, Pennsylvania this week that it was improperly denied conditional use permits to place well pads in Robinson Township. Counsel for Range Resources argued that the Township Supervisors did not follow the correct process, actively sought members of the public to speak out against Range Resources at public hearings, and held the proposed wells to a higher standard than required by the Township for wells approved in 2010. The Township’s counsel stated in the hearing that Range resources did not provide enough information in its conditional use applications.
On February 8, 2013, federal District Court Judge John Preston Bailey struck down a lawsuit attempting to void an oil and gas lease agreement. The lessors argued that the lease should be voided based upon an inconsistency in the “commencement” date in the lease document according to the West Virginia Record. Judge Bailey refused to void the lease stating “the appropriate remedy in this case is to resolve the discrepancy [of the commencement date] by endorsing the date supplied by Range.” The Lessors have appealed the District Court’s ruling and opening briefs before the Fourth Circuit Court of Appeals are due by April 22.
The Marcellus shale play reached a production rate of more than 7 billion cubic feet per day, making it the largest gas-producing play in the United States, IHS reports. This is despite the fact that due to low natural gas prices, the number of active drilling rigs in the Marcellus shale play declined by one-third to approximately 80 rigs during 2012. However, the Marcellus still has more gas-directed rigs running than any other play in the United States. The most active counties in the Marcellus shale play were Bradford, Lycoming, Susquehanna, Tioga and Washington.
According to the Charleston Gazette, Denver-based Energy Corporation of America (ECA) will build a three-story office building Northgate Business Park in Charleston. The building will have more than 5,000 square feet of space and house 100-200 employees. It will replace the company’s current eastern regional headquarters in the Kanawha City neighborhood of Charleston. ECA has operations in the United States and New Zealand, and is actively engaged in natural gas exploration and production in the Marcellus Shale play.
As a result of the booming gas market in Pennsylvania’s Marcellus shale, Columbia Gas Transmission Group submitted plans Monday with the Federal Energy Regulatory Commission (FERC) for a $210 million expansion to its Philadelphia network, the Philadelphia Inquirer reports. Columbia’s plans include installing a 20-inch-diameter pipeline on a 7.5-mile route in Gloucester County and a 26-inch-diameter pipeline for 8.9 miles in Chester County. Columbia expects FERC approval of the East Side Expansion Project by June 2014.
FirstEnergy Corp. believes demand for power may increase quickly in the near future if shale gas development from the Marcellus and Utica shale spark a “manufacturing renaissance.” Chief Financial Officer James Pearson recently told analysts that he thinks that the manufacturing and industrial industries may grow at far greater rates than in the past because of the economic development potential of the Marcellus and Utica shale.
Despite a drop in the number of rigs within the Commonwealth, the Pocono Record reports that Pennsylvania gas production doubled in 2012. In 2011, there were 110 drilling rigs in Pennsylvania. That number dropped to 84 in 2012. Despite this, Pennsylvania produced 1.1 trillion cubic feet of gas, or roughly 9% of the country’s daily demand, between July and December 2012. Continuing with past trends, the vast majority of the top producing wells were in Northeastern Pennsylvania, and Bradford was the top producing county.
Chesapeake Energy, the No. 1 driller in Ohio’s Utica Shale formation, projected an estimated ultimate recovery (EUR) of 5 billion to 10 billion cubic feet of equivalents over the lifetime of each of its wells drilled into the Utica Shale in Carroll County and the surrounding areas. Those EUR estimates are pointedly higher than what has been reported from wells drilled in the Marcellus Shale formation in Pennsylvania, where Chesapeake Energy has only reported EURs as high as 4.2 billion cubic feet of equivalents and the U.S. Geological Survey has reported an average EUR of 1.1 billion cubic feet of equivalents.
Geisinger Health Systems has announced that it was awarded a $1 million grant by the Degenstein Foundation to study health impacts of Marcellus shale drilling. The grant funds are expected to be primarily used to create data-gathering infrastructure, with the balance going to develop studies of the data gathered. Geisinger expects to collaborate on its efforts with Guthrie Health of Sayre and Susquehanna Health. Preliminary results could be available next year, with long-term results expected to follow in the coming years. AP has more.
INNOVA Commercialization Group, a West Virginia early-stage investment program, has announced that it will provide financing to Alternative Fuel Solutions of West Virginia, LLC for the construction of a facility in Morgantown that will convert aftermarket vehicles to operate on compressed natural gas (CNG), propane, and other alternative fuels which have been made abundant by shale gas development, reports The State Journal. West Virginia’s 2011 Marcellus Gas Manufacturing and Development Act has made aftermarket conversion, which can require a substantial investment, a more attractive option: West Virginians who convert vehicles to operate on certain alternative fuels, such as CNG and propane, may qualify for state tax credits of 50% of the cost of conversion up to $7,500 for conventional vehicles, or up to $25,000 for large industrial vehicles. At current prices, fleet owners may save an average 35 percent on fuel costs after switching to CNG, before accounting for state tax credits like those available in West Virginia.
West Virginia, Pennsylvania, Ohio and New York could benefit from more than $10 trillion dollars in new economic activity as a result of the full development of the Marcellus and Utica shale plays, according to an analysis from New York-based Kroll Bond Rating Agency that was reviewed by Business First. Kroll’s economic prediction is based on the sale of shale gas and indirect economic benefits, such as higher employment, increased tax revenues and improved infrastructure.