JLCNY In the News
Date Published: Thursday, August 11th, 2011 NewsInferno

A federal judge says the U.S. government can move to have a hydraulic fracturing lawsuit filed by the New York State Attorney General dismissed. The New York lawsuit, which was filed in May, seeks to stop fracking from commencing in the Delaware River Basin until an environmental impact study is completed.

As we’ve reported previously, the Delaware River Basin Commission (DRBC) is preparing to adopt new drilling regulations that would allow fracking in the environmentally sensitive area. The commission estimates that its proposed regulations will result in 15,000 to 18,000 gas wells being drilled within the Basin, most of which are expected to be developed by fracking.

The Basin, much of which sits atop the natural gas-rich Marcellus shale, encompasses parts of Delaware, Pennsylvania, New York and New Jersey and provides drinking water to 17 million people on the East Coast. It covers 58 percent of the land area of New York City’s watershed west of the Hudson River, and the city has spent almost $1.5 billion to protect the drinking water it obtains from the watershed.

New York Attorney General Eric Schneiderman filed suit against the federal government in U.S. District Court in Brooklyn, claiming that the National Environmental Policy Act requires a full environmental review prior to the adoption of any new drilling regulations.
Schneiderman further called for this review to include an evaluation of the cumulative impacts of widespread fracking within the Basin as well as the alternative of not authorizing natural gas development within the portion of the Basin that includes New York City’s West-of-Hudson watershed. According to a report from Bloomberg News, two of 10 federal agencies sued by New York State — the National Park Service and the U.S. Fish and Wildlife Service — agree with Schneiderman and have called for a review of fracking in the watershed.

Earlier this week, we reported that the Justice Department had informed U.S. District Judge Nicholas G. Garaufis that it would seek dismissal of the New York lawsuit. According to Bloomberg, the judge said yesterday that the government may do so.

“There are constitutional issues,” Garaufis said. “It’s regulatory. It’s statutory. It’s quite a mix of arguments.”

Industry groups are supporting the government in its quest to have the lawsuit dismissed, Bloomberg said. The American Petroleum Institute, the Independent Petroleum Association of America and the US Oil & Gas Association said they asked to intervene in the case because their members will be economically impacted by the outcome. Court papers filed by trade groups contend the New York lawsuit ‘might shut down gas development in the Delaware River Basin “for many years to come.”

A separate lawsuit brought by the Delaware Riverkeeper Network that makes the same claims against U.S is also pending in Brooklyn, according to Bloomberg. Yesterday, Garaufis said it was likely that it will be consolidated with the New York lawsuit.

Damascus Citizens for Sustainability, an environmental group based across the border in Pennsylvania, also plans to file a similar lawsuit in the same court, Bloomberg said.

What he said!!!! JLCpulse It applies to the whole issue of development of Natural Gas in our area.

Guest editorial: Pennsylvania natural gas pipeline will spark Northern Tier jobs, growth

By Anthony J. Ventello
Published: August 11, 2011  The Daily Review .com
The people of rural Pennsylvania don’t need an expert to tell us that our economy has been flat on its back.   Or that our young people, discouraged about job prospects, are leaving our communities in droves.  But hope is not lost.

DEP shuts down Laser pipeline in wake of spills

Published: August 13, 2011

The State Department of Environmental Protection has shut down the construction of a major natural gas pipeline in Susquehanna County.

Scott Perry, director of DEP's Bureau of Oil and Gas Management, said Friday afternoon that Laser Northeast Gathering Co. "has been told we are idling their rigs until at least Monday" when Laser can meet with DEP Secretary Michael Krancer and create a plan on how to proceed.

Mr. Perry said DEP had received complaints of at least four spills in the high-value Laurel Lake Creek in the vicinity of Snow Hollow Road in Silver Lake Twp. since July 29.

On Wednesday, drilling mud - a mixture of bentonite clay and water - erupted again through natural weaknesses in rock and soil as subcontractors for Laser Northeast Gathering Co. were boring a path for the pipeline.

Similar spills took place in Laurel Lake Creek on July 29, Aug. 2 and Monday.

It is not clear how much mud spilled or was recovered from the latest spill. Laser did not return calls Friday afternoon.

Laser had referred to previous incidents as "inadvertent returns." Kevin Marion, Laser's director of pipeline engineering services, earlier this week acknowledged the difficulty with the Susquehanna County terrain has led to inadvertent returns "more often than any other place I've ever worked."

Mr. Perry estimated that closing down all 25 rigs on the Laser project in Susquehanna and Wayne counties would cost the company about $600,000 a day.

DEP spokesman Daniel Spadoni said that the drilling mud used is nontoxic and there is no indication that the earliest spills impacted drinking water or aquatic life.

A biological survey is under way to document whether there was an impact.

The 30-mile Susquehanna Gathering System will transport gas tapped from the Marcellus Shale through Susquehanna County and Broome County, N.Y., where it will connect with the Millennium interstate pipeline. The project has been under construction since February.

Laurel Lake Creek is part of the Silver Creek watershed, which includes Salt Springs State Park.

Portions of the watershed have been determined to have "exceptional value" by DEP - the designation for the state's most pristine streams and one that carries extra protections from environmental harm.

This is a cautionary tale for those of you who believe you can negotiate your own lease and still take all of the steps necessary to protect your interests. You should cover no costs out of your royalty check except taxes!!! Get in a good active coalition, and benefit from your contributions of time and funds. Read a lot, write to your representatives a lot, be cautious! Your job is to protect your families interests and optimize your revenue stream once you ink a deal. JLCpulse

By Jack Z. Smith Star- Telegram Aug 10, 2011

About 20,000 royalty owners who have Barnett Shale natural gas leases with Chesapeake Energy will likely see their royalty checks slashed by roughly 25 percent after the company deducts expenses associated with post-production, such as gas gathering, compression and transportation.

The actual percentage and dollar amount decreases in royalty checks will vary monthly based on natural gas prices, post-production costs and output from wells.

Affected royalty owners were notified of the new company policy in recent letters. The changes took effect with July royalty checks that were based on May production, according to Julie Wilson, Chesapeake vice president for urban development and the top executive in its Fort Worth regional office.

Chesapeake is the No. 2 producer in the natural gas-rich Barnett Shale, which underlies more than 20 North Texas counties.

Henry Hood, senior vice president and general counsel for Oklahoma City-based Chesapeake, said post-production costs run from 70 cents to $1 per 1,000 cubic feet of gas produced. Natural gas prices have recently been around $4 per 1,000 cubic feet.

At that price, royalty checks will be "about 25 percent lower," Hood said.

Wilson said about 75 percent of Barnett Shale royalty owners with Chesapeake leases received letters advising them of the change.

The royalty owners whose monthly checks won't be affected are those who have lease provisions precluding assessments for post-production costs, Hood said.

As a general rule, large property owners who hired attorneys to help them negotiate leases and residents who are members of neighborhood associations that negotiated carefully crafted leases appear much more likely to have provisions precluding those charges.

Roger Venables, assistant director of community development and planning for the city of Arlington, said it has lease provisions barring Chesapeake from assessing post-production costs.

Representatives for the city of Fort Worth, Tarrant County and Dallas/Fort Worth Airport were not immediately able to confirm late Wednesday whether they have such provisions.

Hood said Chesapeake did an exhaustive internal audit of all its Barnett Shale leases to determine which could be assessed the post-production costs.

The audit took about six months, he said.

The post-production costs are routinely assessed against royalty owners in Texas unless lease provisions prohibit it, he said.

Chesapeake said in its letter to royalty owners that they will not be retroactively assessed any charges for post-production costs that the company incurred before its policy change.

"Please be assured that we do not intend to recoup these charges on past production," the letter said. "However, effective with the July 2011 check, your payments will reflect those charges going forward."

Both in its letters to royalty owners and in an explanation of the new policy on its website, Chesapeake did not provide specific information about how much royalty owners' checks might be reduced as a result of the new policy.

Hood said the company's decision to begin assessing royalty owners for post-production costs was triggered by its agreement with Total, the French oil giant, which paid $2.25 billion for a 25 percent interest in Chesapeake's Barnett Shale operations.

Total was about to begin deducting post-production costs from royalty owners' checks based on its share of the Chesapeake wells' production, so Chesapeake also decided to begin assessing for the costs, Hood said.

Otherwise, payment to royalty owners would have required two separate checks, and "it didn't make any sense to have two different checks from two different companies," Hood said.

Marcellus report revives water well issue

Published: August 15, 2011

HARRISBURG - A special state commission recommends setting statewide construction standards for new private water wells, resurrecting an issue that has been debated for the past two decades.

The Governor's Marcellus Shale Advisory Commission included the recommendation in last month's report to guide the development of the deep pockets of natural gas in the Marcellus Shale formation. The commission also recommended doubling the distance separating a gas well from a water well from 250 feet to 500 feet. Sen. Gene Yaw, R-23, Williamsport, is considering introducing legislation to set standards for new water wells.

More than 3 million Pennsylvanians rely on about 1 million private wells for drinking water.

Methane contamination of drinking water such as occurred last year in Dimock Twp., is one of the most volatile issues surrounding the hydrofracking operations used in the deep gas wells in Northeast Pennsylvania. Cabot Oil and Gas Corp. agreed to pay $4.1 million to Dimock residents affected by methane contamination attributed to faulty natural gas wells.

Some 20,000 new water wells are drilled each year in the state, yet for all this reliance on well water, Pennsylvania is one of the few states without private well regulations. The commission kept its water well standards recommendation general in scope, while referring to a 2009 study by the Center for Rural Pennsylvania, a legislative research agency, which concluded that 40 percent of private water wells have failed to meet at least one health-related drinking water standard. The commission noted pointedly that poorly constructed water wells can be pathways for bacteria and contaminants such as naturally occurring shallow methane gas to migrate into water supplies.

Groundwater aquifers can be polluted by failing septic systems, fertilizer runoff and mining, the center study found, while individual wells can be contaminated by exposed well casings, or having a loose fitting well cap or no cap at all, allowing surface water to enter a well.

The study recommended passing state laws requiring testing of new water wells by a certified lab and standards for new well construction and education programs for homeowners.

The Marcellus Shale drilling has led people to call for protection of water supplies, said Mr. Yaw. The senator said there have been a few problems, but they have to be viewed in the context of hundreds of gas wells drilled in recent years.

He said setting water well standards is one way to allay public concerns.

"If there's a concern people have, let's do something about it," Mr. Yaw said.

In a related vein, the federal Department of Energy's Shale Gas Production Subcommittee recommended last week that requirements be set to do testing for background levels of existing methane in nearby water wells prior to gas drilling.

The Pennsylvania State Association of Township Supervisors is opposed to a statewide well construction standard and prefers letting municipalities handle the issue through local ordinances.

Supervisors in some regions are concerned it will lead to state regulations on how property owners use their well water or even metering of wells, said Elam Herr, the association's deputy director.

The last major push for regulation of private water wells came in 2001-02 when a drought led to enactment of a state water resources planning law. The House approved a water-well bill, but it didn't become law.

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