By WENDY STIVER
LOCK HAVEN - "We need jobs!"
Those were the words of an area resident to natural gas drilling professionals at a public meeting Tuesday evening.
"This county needs jobs!" he said.
Louis D. D'Amico, executive director of the Independent Oil and Gas Association of Pennsylvania, presented an informational program about drilling in the Marcellus Shale layer, which was followed by questions from the public. Employees of Anadarko Petroleum Corp. and Range Resources Corp. helped D'Amico address issues that ranged from pollution to radiation.
Deep well extraction of natural gas at the depth of the targeted shale layer - 8,500 feet in some places - is a high-tech project that will take a decade or more to reach its peak, D'Amico said.
A study by two Penn State professors earlier this year shows activity surrounding deep shale formation resulted in a positive $2.2 billion economic impact in the state last year.
That figure is predicted to rise to $8.2 billion next year and to $13.5 billion in 2020. Of that, $238 million last year was in the form of state and local taxes, a figure they predicted to increase to $871 million in 2010 and to $1.4 billion in 2020.
The industry also brought 29,200 jobs to the state last year and could employ 107,000 next year. That could peak at 175,000 in 2020, according to the study.
Anadarko (APC), which is the single largest lease holder in Clinton County, appears to be in this for the long haul.
The corporation is working with the Pennsylvania College of Technology to ensure its graduates will possess the basic skill set needed to start working in the field, according to Michael J. Beattie, geoscience manager of APC's Appalachia exploration project.
While APC currently employs its share of Penn State graduates (and Trout Unlimited members) who would love to live and work here, according to Beattie, at least one of its subcontractors plans to hire Pennsylvanians and eventually build a core of employees who already live in the region.
The Marcellus Shale formation runs 575 miles from Kentucky and West Virginia through Pennsylvania and into New York State. Pennsylvania's wide swath of it, from Pittsburgh in the southeast to Susquehanna County in the northwest, is 95,000 square miles.
It's part of a black shale formation and as such, it contains organic matter.
To the uninitiated, it doesn't look much different than any other shale. But, it's a hotbed of excitement for drillers and for the land owners who collect royalty checks.
"It's a source rock," Beattie said, "the kitchen where hydrocarbons are cooked into natural gas."
The Marcellus Shale formation rises above ground in the Finger Lakes region of New York and is named for Marcellus, N.Y., where there is an outcropping.
The formation also can be seen south of Lock Haven, Beattie said, and he gets a kick out of being able to drive through all the layers APC is currently drilling through.
The corporation used data from wells drilled in the 1960s and '70s to pick its drilling points.
It's also common practice to use seismic trucks that vibrate the ground to collect data, according to the industrial association.
APC's three exploratory wells in Sproul State Forest - two in Clinton County and one in Centre County - should find "the trend," Beattie said, "what we call the sweet spots" where wells will produce the most.
The rigs are on Eagleton Road, Marsh Creek Road and Pat's Ridge Road off Hyner Mountain Road, Rich Kugel, Sproul assistant district forester, reported.
He said he chose the option of placing the rigs close to a main road, where drivers can see them, so the entrance roads to the sites are short and more unbroken forest lies behind them.
A NEW ANGLE
Unlocking the natural treasure in the dense Marcellus Shale has been a century or so in coming, D'Amico said. Only now do companies have the technology to get to it, meet the state's environmental regulations and still turn a profit.
To maximize extraction, companies will first drill down into the formation, then change the direction of the well and curve it into a horizontal path which can run for 6,000 feet, all through the rich shale.
The entire bore is encased to protect the freshwater aquifer which lies about 3,000 feet above the Marcellus formation in some locations, according to APC. Five sizes of pipe are installed in the well, in concentric rings. The gaps between Layers 1 through 4 are filled with cement.
The horizontal section of the well is then perforated with a "perf gun" that uses electrical current to zap cuts through not just the well casing, but also out into the shale.
To further crack the shale and release the gas, water is forced into the bore and through the perforations, in a process called hydraulic fracturing, or fracing. It uses millions of gallons of water mixed with sand, citric acid and lubricants.
The sand props open the fractures in the shale so the gas can flow out. It makes up 9.95 percent of the fracking water, D'Amico said.
The lubricants, according to D'Amico, make up .05 percent of the fracking water and include soap, a substance similar to Lime-Away, and biocides such as can be found in antibacterial cleaners.
Fracking sites include ponds where the drill cuttings and fluids are stored.
APC's operations use their frack water over and over, with 12 frackings per well, Beattie said. The corporation also is looking into creating a closed-loop system so it won't need holding ponds anymore.
Once the six wells on a pad are opened and producing, the used frac water could be taken to another site or to a treatment plant that has a permit to deal with it.
Further, APC is using specialized "crawler" drilling rigs that reduce the drilling footprint on the environment.Doug D'Amore, district forester for the Sproul State Forest, said APC has been flexible in meeting limitations while working within the state forest.
"We have no issues so far," he said, noting, for example, that if foresters don't like where APC wants to site a compressor station on its leased state land because of an ongoing habitat study, the company moves the the site.
A lot of emphasis was put on the state Department of Environmental Resources and its role in regulating the drilling companies and subcontractors.
Company officials said the pace of drilling was slowed in the last two years because of the regulatory environment. But in the past year, DEP has worked to "stabilize" regulations - whether for sedimentation control or site permitting - so more drilling is now taking place.
D'Amico, APC and Range Resources officials said operations are strictly controlled by DEP, from clearing sites for drilling to monitoring substances coming from the wells to the handling of wastewater. There are adequate, permitted sites for drilling wastewater treatment in Pennsylvania and nearby, D'Amico said.
In response to a question from an attendee, Chris Dwyer, a Bald Eagle Township landowner who has a private lease with Range Resources, said an application was filed with the Susquehanna River Basin Commission to draw water from Fishing Creek for fracking. The Express previously reported that LHP Management, LLP, of Montoursville, filed that permit request with the SRBC to draw water from Fishing Creek.
Several members of the public brought up past horrors of coal mining and chemical companies that have damaged streams in the region.
There are enough polluted streams here, one area resident pointed out, that exceptional quality waterways such as Fishing Creek shouldn't be part of the equation.
Chris Doyle, general manager for Anadarko's Appalachia exploration project, explained good water is key to a good well. Water impacted by acid mine drainage causes problems in the holes, he said, because it introduces the elements that polluted the stream in the first place.
In 10 or 11 years, D'Amico said, when Marcellus Shale operations are expected to reach their peak, Pennsylvania could host 2,500 to 3,000 natural gas wells and fracing procedures could use 30 million gallons of water per day. Just one nuclear power plant uses 61 million gallons per day, he said, a similar amount to what it would take to water all the golf greens in the state.
Range Resources, represented Tuesday by Bruce Snyder, was one of the first companies to drill into the shale in Pennsylvania. It now has ongoing operations in Washington County and is the largest such operator in the state.
APC is following suit and has drilled more than 20 horizontal wells, according to Doyle, with 90 percent of its leases on state forest land.
Anadarko is looking to build three "pads" with six wells each in Sproul State Forest. The corporation is leasing the deep drilling rights at the spots where NCL already has the lease for shallow drilling. Roads are already in place, and APC can lay its pipeline through NCL's pipeline cut, which lessens the impact on the forest.
The roads will get a little bigger, the pipelines a little wider, according to Kugel.
"We've been doing gas since around 1981," Kugel said of the state forest, "so we have a lot of infrastructure in place."
APC is planning another exploratory well on Larrys Creek Fish and Game Club land and also plans to work with other private land owners.
Each "pad" encompasses four acres, Beattie said. It will take APC and its subcontractors about two years of drilling and fracing activity to break the shale and get things moving, he said. After this phase is complete, the pad will contain six well heads with solar panels and automated operations that communicate with APC's local office, which probably will be in Williamsport.
The site will be pretty quiet, he said, but someone will drive there regularly to make sure everything is working properly.
After the wells on a pad have fulfilled their purpose, which could take decades, APC is required to reclaim the land.
Fracing also is a fairly quiet operation on the surface, Kugel said.
"It's like watching grass grow," he said. "I went to one fracing and I watched a computer screen for the better part of an afternoon. It's not the big, exciting sploosh you see on TV."
RISK & REWARD
A woman who resides near the Wayne Township Landfill read from what she said was an EPA report that determined the sludge from Marcellus Shale drilling contains radon and gamma radiation. Radiation exposure is so risky because it accumulates in the body, she said.
Beattie said the state Department of Environmental Protection has found no radiation at either shallow or deep drilling sites, and the sludge must be disposed of at a permitted disposal site.
Part of the drilling process involves testing for radiation by lowering an instrument into the hole that is more sensitive than a geiger counter but works in a similar way, he said.
Bob Myers, an LHU English professor who has written letters to the editor of The Express about the risks of deep natural gas extraction, said he sees wells proliferating in this county.
He offered copies of a list of incidents he collected, including:
n A nurse who had to spend 30 hours in the intensive care unit after reportedly being exposed to fracking fluid
n The basement of a house in Ohio that exploded after natural gas moved out of a poorly sealed well and migrated into bedrock
n Complaints of methane-contaminated drinking water in Roaring Branch in Lycoming County.
Myers' list includes two incidents in which Range Resources is reportedly at fault - it is charged with taking water from a creek without a permit and with polluting a tributary of Cross Creek Lake - but none involving APC.
According to Myers, Range Resources itself told its investors three years ago that the risks of oil and natural gas operations are: "well blow-outs; craterings; explosions; uncontrollable flows of oil, natural gas or well fluids; fires; formations with abnormal pressures; pipeline ruptures or spills; pollution; releases of toxic natural gas..."
Private water wells near a drilling site can see turbidity for "a day or two" during drilling operations, D'Amico said, but methane gas pollution of drinking water has yet to be proven in this state.
In Dimock, near Montrose, a number of property owners report methane in their wells, as Myers pointed out, but that problem could have existed before the drilling, D'Amico replied.
He also said "the biggest companies in the nation" are involved here, not small companies like the one that was at fault when the basement in Bainbridge Township, Ohio blew up.
Pennsylvania is known as a state with difficult regulations, he said, but it attracts drillers because it contains an estimated 500 trillion cubic feet of natural gas waiting to be released, enough to power the country for 20 years.
Gov. Ed Rendell supports natural gas exploration, and DEP recently streamlined its paperwork process for drillers. However, D'Amico said, that was just working out kinks in the red tape - the requirements and standards the industry has to meet are still the same.
Pennsylvania has been the third most active drilling state in the nation over the past five to seven years, he said, and has the potential to be a top producer. It currently imports 75 percent of its natural gas, but that could change in the coming years.
His association predicts jobs will be created in drilling, engineering, surveying, construction, earth-moving, environmental protection, transportation, equipment maintenance, the legal field and other service fields.
Operations in Pennsylvania could attain an economic output of $7.1 billion a year, he said, and industry wages increased by 27 percent from 2005 to 2007.
Natural gas profits are down right now, but the larger companies have faith they will rebound. They have invested $4 billion in leases, D'Amico said, so they are moving ahead to find out exactly what Pennsylvania's black shale holds for the future.
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