Thursday, June 30, 2011

Cuomo will seek to lift Ban on Hydraulic Fracturing

HIP HIP HOORAY!!!!


---------- Forwarded message ----------
From: NYTimes.com News Alert
Date: Thu, Jun 30, 2011 at 7:18 PM
Subject: News Alert: Cuomo Will Seek to Lift Ban on Hydraulic Fracturing
To: mhickey@stny.rr.com


Breaking News Alert
The New York Times
Thursday, June 30, 2011 -- 1:15 PM EDT
-----

Cuomo Will Seek to Lift Ban on Hydraulic Fracturing

The Cuomo administration is expected to lift what has been, in effect, a moratorium on hydraulic fracturing, a controversial technology used to extract natural gas from shale, people briefed on the administration’s discussions said.

Administration officials are discussing maintaining a ban on the process inside New York City’s sprawling upstate watershed, as well as a watershed used by the city of Syracuse, according to people briefed on the plan. But by allowing the process in other parts of the state, Gov. Andrew M. Cuomo would open up New York to one of the fastest-growing — critics would say reckless — areas of the energy industry.
Read More:
http://www.nytimes.com/2011/07/01/nyregion/cuomo-will-seek-to-lift-drilling-ban.html?emc=na

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Copyright 2011 The New York Times Company

From- JLCNY

Sent: Wednesday, June 29, 2011 9:53 PM

Subject: Five Fast Reminders...





Dear Coalition Leaders, Landowners, Union Leaders, Workers, Business Leaders, and Natural Gas Supporters Everywhere,








(Please circulate this to any and all pro-gas supporters as soon as you receive this.)

Five simple reminders...




One...


Last fall we suggested that you take your "Friends of Natural Gas/JLCNY" signs inside for the winter. Now we're asking you to please display them proudly once again. It is important to show that support for natural gas is strong and unified throughout our communities, and putting the signs out is one of the best and easiest ways to do that. You can add a nice touch by sticking one, two, or more small 4" x 6" American flags that are in the stores now for the holiday in the top of the sign! If you need a sign please contact your coalition leader who will put in a request to us.



Two...


JLCNY Clambake tickets are still on sale. Click on the link directly below to learn more and purchase your tickets.




http://jlcny.org/site/index.php?option=com_jcalpro&Itemid=88&extmode=view&extid=4



The Clambake is is a fun filled event where we stop talking shop for a while and just hangout and have some fun. A main feature is an auction that is a spirited way to get rid of spare belongings or acquire more while helping the JLCNY out. So come early, eat lots, and stay late.



Three...


In light of our recent successes donating now would help us take advantage of the momentum we've won and fight for you even harder. To donate please use the donate box on the left of the www.jlcny.org website home page or mail a check or money order to…



JLCNY, Inc.

PO Box 2839

Binghamton NY 13902



If you’re in the mood to celebrate you could also purchase a JLCNY Clambake ticket. For details see the flier on the JLCNY home page. It will be a great way to kick back and relax with some good company, dining, music, and fun.



Four...


Speaking of momentum, you can help keep us rolling along by emailing Governor Cuomo. Please see the “Tell the Governor No More Delays” article on the JLCNY home page.



Five...


Have a Safe and Happy Fourth of July Holiday!!!



Sincerely,

Dan Fitzsimmons, President

Joint Landowners Coalition of New York, Inc.

Wednesday, June 29, 2011

Important message from David&Karen for land owners

Below is a letter we sent to Governor Cuomo...as we see it...they legalized same sex marriage, the pressure was on...the antis are going to realize that and continue to put pressure on & up it...we need to keep letters and phone calls to Governor Cuomo and our legislators going...every week...get kids involved...neighbors...friends...even your mother-in-law...we need to keep the pressure on...we are so sick of calling and writing letters...but we can't stop now...let's encourage each other to keep on keeping on....tell him about our rights as land owners...that we don't need anymore public comments periods...as always be polite, but firm...As Ellen taught us...Keep on drillin'...and we might add...until they start drilling...
David and Karen
Part of his reply--written on June 21--As part of this process, DEC will issue a second draft of the SGEIS this summer and accept another round of public comments before finalizing the SEGEIS.
June 10, 2011


The Honorable Andrew M. Cuomo
Governor of New York State
NYS State Capitol Building
Albany , NY 12224
Dear Governor Cuomo,
We read with interest your comments of March 9, 2011 talking about the legislation to legalize “same-sex marriages”. “To me, this is more than just a piece of legislation. This is about the lives of people who I have known for many years, who currently are without the rights to which they are entitled.”
Our question to you…what about the lives of people who have owned land for years, generations in New York, who are having to sell out, live in a constant struggle to make ends meet?? What about their rights to sell the gas underneath them? They have paid taxes on this land every year and now they can’t even harvest what is theirs!!
What about the young couple who ventured out and bought some land to raise their family on? What about their rights?
Do you really care for these struggling people?
We have been patient and our patience is wearing thin. Three years of waiting.
Looking forward to hearing some good news regarding drilling in the Marcellus Shale soon.

Tuesday, June 28, 2011

SCLOC Thanks CHK's response to NYT article.

From: Aubrey McClendon
Sent: Sunday, June 26, 2011 8:37 PM
To: All Employees
Subject: FW: CHK's response to 6.26.11 NYT article on shale gas



Dear CHK Employees: By now many of you may have read or heard about a story in today’s New York Times (NYT) that questioned the productive capacity and economic quality of U.S. natural gas shale reserves, as well as energy reserve accounting practices used by E&P companies, including Chesapeake. The story is misleading, at best, and is the latest in a series of articles produced by this publication that obviously have an anti-industry bias. We know for a fact that today’s NYT story is the handiwork of the same group of environmental activists who have been the driving force behind the NYT’s ongoing series of negative articles about the use of fracking and its importance to the US natural gas supply growth revolution – which is changing the future of our nation for the better in multiple areas. It is not clear to me exactly what these environmental activists are seeking to offer as their alternative energy plan, but most that I have talked to continue to naively presume that our great country need only rely on wind and solar energy to meet our current and future energy needs. They always seem to forget that wind and solar produce less than 2% of America electricity today and are completely non-economic without ongoing government and ratepayer subsidies.



During the past seven years, Chesapeake has helped create an extremely disruptive and valuable technology in the form of shale gas, and now shale oil is on the way, and hopefully it too will be as disruptive, and will lead to lower oil prices, a stronger economy and fewer foreign military entanglements. Since the shale gas revolution and resulting confirmation of enormous domestic gas reserves, there has been a relatively small group of analysts and geologists who have doubted the future of shale gas. Their doubts have become very convenient to the environmental activists I mentioned earlier. This particular NYT reporter has apparently sought out a few of the doubters to fashion together a negative view of the U.S. natural gas industry. We also believe certain media outlets, especially the once venerable NYT, are being manipulated by those whose environmental or economic interests are being threatened by abundant natural gas supplies. We have seen for example today an email from a leader of a group called the Environmental Working Group who claimed today’s articles as this NYT reporter’s “second great story” (the first one declaring that produced water disposal from shale gas wells was unsafe) and that “we've been working with him for over 8 months. Much more to come. . .”



But I wanted you to know that this reporter’s claim of impending scarcity of natural gas supply contradicts the facts and the scientific extrapolation of those facts by the most sophisticated reservoir engineers and geoscientists in the world. Not just at Chesapeake, but by experts at many of the world’s leading energy companies that have made multi-billion-dollar, long-term investments in U.S. shale gas plays, with us and many other companies. Notable examples of these companies, besides the leading independents such as Chesapeake, Devon, Anadarko, EOG, EnCana, Talisman and others, include these leading global energy giants: Exxon, Shell, BP, Chevron, Conoco, Statoil, BHP, Total, CNOOC, Marathon, BG, KNOC, Reliance, PetroChina, Mitsui, Mitsubishi and ENI, among others. Is it really possible that all of these companies, with a combined market cap of almost $2 trillion, know less about shale gas than a NYT reporter, a few environmental activists and a handful of shale gas doubters? I seriously doubt it and I expect you do as well.



It is also ludicrous to allege that shale gas wells are underperforming as we sit awash in natural gas, with natural gas prices less than half of what they averaged in 2008. I also note that CHK and other shale gas producers are routinely beating our production forecasts – how can shale wells be underperforming if shale gas companies are beating their production forecasts and as US nat gas production has recently surged to new record highs (in fact, in 2009, thanks to shale gas, the US passed Russia as the largest natural gas producer in the world). Also, isn’t it completely illogical when this reporter argues that shale gas wells are underperforming, yet acknowledges that gas prices are less than half the price they were three years ago. Today gas shale production represents 25% of US natural gas production, if it were underperforming, how come gas prices are so low when US gas demand is at a record high?



This reality of generations’ worth of natural gas abundance is also supported by virtually every credible third-party expert, such as the U.S. Energy Information Administration, the Colorado School of Mines’ Potential Gas Committee, the Massachusetts Institute of Technology, Navigant Consulting and others. You also need to know that all these facts and others were provided to the newspaper by our media team well in advance of publication and the NYT predictably choose to ignore them.



By analyzing actual Chesapeake well performance, we know that the initial productivity associated with a majority of our shale gas wells have been steadily improving over the years in all of our gas shale plays, both in initial production rates and the expected ultimate recoveries of natural gas. We fully expect that the majority of these wells will be productive for 30-50 years, or even longer. In fact, the industry has vertical Devonian Shale wells in Appalachia that have been producing natural gas for more than 100 years, and I believe it is quite likely many of our horizontal shale wells will produce for a similar length of time. Further, there is no reason to believe that shale gas wells will have shorter lives than our conventional wells – some 8,000 of which are 30 years old or older.



As far as accounting practices, we follow full-cost accounting rules to the letter and routinely have our filings reviewed by the U.S. Securities and Exchange Commission, as is typical for any public company of our size. The same holds true for the rest of our industry – our reserve accounting techniques are strong and have stood the test of time for decades. In 2008 in fact, the SEC recognized that the prior rules regarding direct offset wells were too restrictive, especially in shale plays where producing horizontal wells typically prove up larger areas for development. Once a shale gas play becomes well-defined by drilling results, exploration can be more accurately described as a manufacturing process because well outcomes become very predictable, substantially reducing risk. We believe that the new modernized SEC rules very reasonably reflect the advancements in our industry’s ability to predictably produce oil and natural gas resources from unconventional formations.



In summary, you work for a great company and a great industry that is changing our country (and someday our world), much for the better. We have detractors out there, as any successful company or person has, but there are other, more prestigious and less biased, publications that really do understand the big picture as you can read today on myCHK.com and through the links I have provided below. Again, thank you for all your hard work in building our company and in delivering to all Americans a brighter future through more affordable energy, more American energy, more clean energy and more job and wealth creation. Sure, it's become a little noisier in the media since we started moving some folks’ cheese, but we will remain committed to state of the industry performance in all that we do and we will now re-double our efforts to educate as many people as possible so that they may know the truth from us rather than distortions and dishonesty from others.



We hope that every Chesapeake employee can be part of our public education outreach. At more than 11,000 strong, we are an army of “factivists” – people who have knowledge of the facts and the personal knowledge and ability to spread them. You can do this by talking to your families, friends and others in your spheres of influence (schools, churches, civic organizations, etc) about the kind of company you work for and the integrity of what we do every day for our shareholders, our communities, our states, our nation, our economy and our environment. You don’t have to be an expert to stand up and tell folks that Chesapeake is committed to doing what’s right – and that commitment is expressed every day by you and your colleagues across the company.



You can also get involved by joining Chesapeake Fed PAC, our political action committee. Our opponents are extremely well funded and organized. We need to make sure our voice is heard in Washington, DC and with elected officials who are making decisions that affect our industry, our company and our ability to operate in the many states in which shale gas and oil have been discovered. The Chesapeake Fed PAC is an important way to reach the decision makers who can impact our business for better or worse. Please look out for more information on this effort soon inviting you to support this important effort with a contribution. Thanks to each of you for making Chesapeake a leader in all we do. Aubrey



PS: please see the links below for further information:

http://johnhanger.blogspot.com/2011/06/statement-about-todays-nyt-front-page.html?spref=tw

http://finance.yahoo.com/news/Gushers-highlight-potential-apf-3807643486.html?x=0

http://www.nohotair.co.uk/component/content/article/139-shale-gas/2020-new-york-times-no-wiki-leaks-of-shale.html

http://online.wsj.com/article_email/SB10001424052702303936704576398462932810874-lMyQjAxMTAxMDIwNjEyNDYyWj.html



PSS: never forget a few other important facts:

1) The US natural gas industry is providing a direct daily economic stimulus to the economy of $250 million through lower gas prices from 2008. The indirect economic effects are likely many times this amount.

2) The US natural gas industry has created more than 500,000 jobs in the past 7 years of the gas shale revolution and created tens of billions of $ in economic value at the same time, plus reduced the amount of coal and oil burned in the US – I ask you, what value has the NYT or environmental activists created during these same past seven years? You either create value in this world or you consume/destroy it – we are value creators, please never forget that and know that you are on the right side of history, they are not, so always stand tall and proud for CHK and our industry.

Monday, June 27, 2011

SCLOC Thanks Tom Reed

Bipartisan Group of Nine Congressman Tell Obama to Get Fracking – Now

Five Democrat and four Republican Congressman have written a joint, bipartisan letter to President Obama encouraging him to move forward with developing natural gas in the United States, particularly by using “unconventional” hydraulic fracturing. Yes, you read that right. Democrats and Republicans together, agreeing on something—and that something is fracking.

The letter states in part:





As members of both political parties and as citizens in support of your call to get serious about a long-term policy for secure and affordable energy, we urge you and members of your administration to take a leadership role in encouraging the continued development and utilization of our nation’s vast natural gas resources by any means necessary, but most specifically, by unconventional shale gas recovery.

In referring to the State Department’s Global Shale Gas Initiative, a project that seeks to export American technology to other countries to help them develop their own shale gas resources, the Congressman say:


While we are doing this important work abroad, it would be the height of contradiction to place unwarranted restrictions on both the locations and methods by which we attempt to recover our own 2,552 trillion cubic feet of natural gas in the United States.

The committees the Congressman are members of include: the House Armed Services Committee, Select Intelligence Committee, Judiciary Committee, and Homeland Security Committee. The Congressman are:
•Texas: Michael Conaway (R), Mac Thornberry (R), Henry Cuellar (D)
•Pennsylvania: Mark Critz (D), Jason Altmire (D), Bill Shuster (R)
•Ohio: Tim Ryan (D)
•New York: Tom Reed (R)
•Oklahoma: Dan Boren (D)

Friday, June 24, 2011

Dominion Buffer Zone

SCLOC is beginning to receive phone calls and requests for information and advice regarding the proposed expansion of the buffer zone of the Dominion Gas Storage Field in Woodhull. A committee is being formed to coordinate the details. They are Terry Towner,--359-2314, John Crane---359-2190--Office--359-3227 and Lisa Robinson--525-6329. This will be the Gas Storage Committee. Current plans are to have a meeting for those who will be affected sometime in mid July. If you have questions or can help please contact them.

Letter to Corning Leader

SCLOC is responding to the June 24 Letter to the Editor in Corning Leader by Tim against Fracking.
A single natural gas well tapped through the drilling method known as horizontal hydraulic fracturing, or hydrofracking, could generate significant tax revenue for Ulster County local governments, school districts, libraries and fire companies, an industry representative says.

Scott Cline, a petroleum engineer who spoke in favor of hydrofracking as a panelist at an Ulster County Community College forum last month, said the assessed value of the drilling operations would be based in part on a rate set by the state on the number of cubic feet of natural gas produced. Separately, local governments would assess property associated with the operations.

At last month’s forum, Cline, representing the Independent Oil and Gas Association of New York, said a standard Pennsylvania well in the Marcellus Shale region, which extends to the western Catskills of Ulster County — produces 3 million cubic feet of natural gas per day. On that basis, he applied the low end of New York state’s assessment rate of $9.80 to $12.12 per 1,000 cubic feet of natural gas drawn; an equalization rate of 57 percent — recognizing that many municipalities are not assessing at full value — and then applied property tax rates for the Otsego County town of Worcester.

One that basis, Cline said a well would generate $50,083.04 in taxes for the town, $29,235.60 for the county, $181,192.96 for the school district, $943.31 for a library district, and $13,660.54 for a fire district, for a total of $275,115.45 in the first year.

By comparison, Ulster County, whose property tax rate of $3.86 per $1,000 of assessed value is lower than Otsego County’s, would see between $41,891 and $51,808 in county tax revenue. Revenue to towns, school districts and special tax districts would vary, depending on the location of a well.

Cline noted that the highest production from a well is during the first 12 months, and then it declines rapidly.

“You’re probably looking at a well life of about 20 years, but it is a steep decline,” he said. “It starts off at a high rate and then goes down linearly pretty quickly and then levels off over a long period of time. I would say the (second year) this well might average 2 million cubic feet a day instead of 3 million and the next year it might be down to one (million cubic feet per day) and then it probably would stabilize with something less than 500,000 to 700,000 cubic feet for a long period of time.”

He said companies seek to offset the production decline by increasing the number of wells.

“Typically one pad will have up to eight wells,” he said. “You’re drilling more wells to make up for your decline. Over time you’ll ramp up and you’ll reach a peak at some point in the future.”

Cline said the industry has also increased royalty rates for property owners.

“Historically in New York it was one-eighth royalty,” he said. “Now those royalties are actually approaching 20 percent. They are going up because it’s actually more competitive.”

Geoffrey Gloak, a spokesman for the state Department of Taxation and Finance, said the taxable value of wells is not set until the January after production begins.

“The unit of production value is based literally on the data that’s provided by the producers,” he said.

Confusion over assessing property under speculative sales of natural gas rights led the state Department of Taxation and Finance’s Office of Real Property Tax Services to issue guidelines for determining land value in March 2010.

“We have recently received questions concerning the treatment of short-term leases of the rights to search for and extract natural gas,” the agency said in its memo. “The particular questions concern leases for five-year periods. These leases can be for as much as $5,000 per acre, a price far in excess of what land similar to the leased land had sold for previously. The leases also contain a royalty payment if gas is extracted.”

The agency said that although it is possible to separately assess oil and gas rights, “we strongly recommend against doing so” because regulations have not been set for drilling.

“Separately assessing the lease would of course require the assessor to determine what the value of the lease is,” the agency said. “A one-time payment for these rights does not establish the value of the lease itself. Similarly, it would be unsound appraisal practice to assume that this one-time payment establishes the value of the land subject to the lease in an open market transaction. It would be even more unsound to assume these payments establish the market value of other properties.”

The agency suggested that assessors “monitor land sales to see if these leases are having any effect on sales prices.”

“Even if an assessor determines that the possibility of extracting gas has come to permeate a market, as with any other factor the assessor would also have to consider whether this factor has any effect on the value of particular parcels,” the agency said.
By William J Kemble, Correspondent
Tim’s assertion that the gas and oil industry are exempt from federal environmental laws; the Clean Air Act and Clean Water Act, every part of it, is false. The oil and natural gas industry is regulated under every single one of these laws — under provisions of each that are relevant to its operations.
The process of hydraulic fracturing has never in its 60-year history been regulated under the Safe Drinking Water Act (SDWA). It has, however, been regulated ably and aggressively by the states, which have compiled an impressive record of enforcement and oversight in the many decades in which they have been engaged in the practice.
Far from being “pushed through Congress by Dick Cheney,” the Energy Policy Act of 2005 earned the support of nearly three-quarters of the U.S. Senate, including the top Democrat on the Energy Committee; current Interior secretary Ken Salazar, then a senator from Colorado; and a former junior senator from Illinois named Barack Obama. In the U.S. House, 75 Democrats joined 200 Republicans in supporting the final bill, including the top Democratic members on both the Energy & Commerce and Resources Committees.

Wednesday, June 22, 2011

Another Great Letter To The Editor, Thanks Jeff

To the editor:

The last few days have seen a flurry of letters and editorial comments that are "anti" gas drilling. Those of us who are "pro" drilling have been fighting these same half-truths statements for three years now, while watching fourteen other states using horizontal hydrofracing and enjoying all the economic and financial benefits. Beyond all the obvious local and state benefits we need to bear in mind that gas drilling will lead to improvements to the environment; that it will decrease our dependence on imported oil; it could improve our trade balance by selling LNG to China(with money flowing into the US for a change) and it would decrease our funding of terrorists intent on our death and destruction.



We are hard pressed to "reason out" why the "antis" continue to make these half-truth statements in spite of all the historical and scientific evidence. Their designs might best be compared to the design of the bikini: revealing point of interest, while covering up all the vitals.



Space here will not allow total coverage(oops!). But let's look at a few of their more interesting points. The most prevalent one runs in effect: "it could ruin our water". Now that is a generalization that will get your interest. But that conceals some vitals. Over 40,000 wells have already been horizontally hydrofraced, a total of over a million have been hydrofraced in one form or another. How many of these wells have led to any verified water contamination according to the EPA or any state DEP? As a matter of fact, not one! That's right, not one. Now that really is a vital point.



The "point of interest" that seems to be the current favorite is a real beauty: 'there's radiation down there and they're bringing it up to the surface, trucking it into our back yards, and depositing it in our children's play boxes! Now, the fact that there is radiation in the drillings is a point of interest. The fact that the concentration level is TOTALLY insignificant is vital. Remember: sacarin can cause cancer--you only have to drink 700 cans of diet soda a day to get it!



So, if the whole truth is not in them, and in the Dale Carnegie tradition we have to recognize that the antis are sincere, what is their objective? It would seem fairly obvious that they simply don't want any drilling. They really want to be just like California-a train wreck! Since NY is second only to California in its financial status, can we assume that our environmentalist don't like being second?



Jeff Heller

Sunday, June 19, 2011

Another great article about Natural Gas Drilling. Thanks,Scott

Move forward with NY drilling



Since moving back to the Finger Lakes region after a 20 year career as a geologist and petroleum engineer in other states, I have been astounded by the NY opposition to drilling. What may have begun in NY as an inquiry into the science of shale gas development has now devolved into emotional and irrational behavior calling for one unnecessary moratorium after another. Yes, occasional drilling accidents are inevitable as with any human endeavor but unquestionably the technology is already in place to minimize any onshore occurrence or impact and DEC will soon ensure its implementation.



Fears of environmental ruin are exaggerated and examples often have no relevance to shale gas technology. A narrow 5 ½ diameter horizontal hole over a mile beneath the surface, sealed with multiple layers of casing and cement, stimulated by a time proven technology of creating micro-fractures no more than 150 feet in height presents no danger to those of us on the surface. And while the public still debates and frets about surface fluid handling and footprint, industry is already quickly approaching near 100% reuse and recycling of waste water in closed loop systems which minimize the surface spill risks and well pad spacing is now two miles apart, not the 80 acres popularly depicted. In reality shale gas development has evolved into primarily a traffic nuisance.



While natural gas is not the perfect answer to a carbon free utopia, it can provide an abundant and inexpensive bridge fuel with capability to make significant inroads into both electrical generation and transportation fuel at the expense of dirtier oil and coal. Natural gas is the cleanest fossil fuel with no SO2, mercury or particulates, 80% less NOx and 50% less carbon dioxide than coal and 30% less than oil. The simple transition of the tractor trailer fleet from diesel to compressed natural gas can reduce our oil imports by 50% alone!



It is also a national security and economic issue. Have we already forgotten the past, present and likely future economic, environmental, political and security consequences of our unsustainable and dangerous dependence on oil? Obstructionists with no practical energy or economic alternatives fiddle from their ivory towers while typical upstate New Yorkers and communities struggle in quiet desperation epitomized by what a local struggling farmer recently told me; “We are in the fight of our lives for our economic survival and our basic mineral rights.”



There is no technical reason to continue the endless moratorium cycles. Let our eminently competent DEC simply complete their unparalleled comprehensive analysis that will result in NY requiring and enforcing the latest already proven technical practices and then begin measured Marcellus drilling in NY. It’s time to move forward rather than hinder this exceptional economic opportunity for our state and the miraculous opportunity to help our nation transition away from oil and coal.



Scott B. Cline

BS Geological Science

MS, PhD Petroleum Engineering









Dr Cline, retired from the oil and gas industry, has over twenty years of world-wide exploration and production experience. His research also includes the reservoir engineering aspects of horizontal drilling in fractured reservoirs. He holds a BS in geological science from Penn State and both MS and PhD from University of Oklahoma . He resides in the Finger Lakes region of upstate NY.

Saturday, June 18, 2011

Good article on NG drilling. Thanks EZ.

Interesting article in the Albany Times Union.....

Gas drilling pays big benefits

by BERNARD L. WEINSTEIN

Published 12:25 a.m., Wednesday, June 15, 2011



Page 1 of 1





Twenty years ago, the Barnett Shale in North Texas was all but unknown. Today, it's the largest producing natural gas field in the United States with output exceeding 4 billion cubic feet a day. It has added a new dimension to the Texas economy, supporting thousands of jobs and generating millions in tax revenue for local governments and school districts.

Imagine such an energy-driven economic boom in New York.

A recent study prepared for the Fort Worth Chamber of Commerce found that drilling and production activity in the Barnett was supporting, directly and indirectly, more than 110,000 jobs across the region. And a study by this author a few years ago calculated that Barnett wells and related equipment had added $6 billion to the local property tax base. In South Texas, where new oil wells are being drilled in the Eagle Ford shale, the unemployment rate has fallen to half the state average while sales tax receipts have jumped 70 percent.

This is not to suggest that the growth of shale gas drilling and extraction has occurred without controversy. In particular, concerns have been raised about the use of hydraulic fracturing, which uses a high-pressure mix of water, sand and chemicals to force gas out of rock formations. This process utilizes huge quantities of water, and the spent fluids must be disposed of properly in order to avoid surface-water contamination. Similarly, because all wells are drilled through the groundwater table, care must be taken to ensure that the well casing is sufficiently reinforced to prevent any migration of gas or fluids into the water supply.

Fortunately, accidents related to shale gas extraction have been extremely rare in the Barnett, with only a handful of surface water contamination incidents in the completion of more than 14,000 wells. In those cases, responsible companies have provided clean water and compensation to affected families. What's more, careful studies by the Environmental Protection Agency and the Ground Water Protection Council haven't revealed a single case of ground water contamination from shale gas drilling itself.

Today, most local drilling companies are utilizing "greener" fracking fluids and reprocessing them many times before final disposal into specially designated wells. In addition, the Texas Legislature recently passed a bill requiring oil and natural gas companies to disclose the contents of their fracturing mixture on a publicly accessible data base.

In terms of potential output and economic impact, however, the Barnett and Eagle Ford are dwarfed by the Marcellus Shale formation that stretches across large swaths of New York, Pennsylvania and West Virginia.

New York, with an effective moratorium on shale gas drilling, continues to hemorrhage jobs along its Southern Tier.

Pennsylvania, meanwhile, is already benefiting mightily from shale gas production. Several studies have documented the huge economic boost to the state in term of jobs, income and tax revenue. One study found that nearly 48,000 jobs related to Marcellus Shale activity have been created in Pennsylvania over the past year.

The experience of Texas has shown that oil and gas extraction from shale formations can be accomplished with minimal environmental degradation while generating huge economic and fiscal benefits.

Is producing, gathering, processing and delivering oil and natural gas from shale formations completely risk free?

Of course not. But these minor risks must be weighed against the huge economic and national security benefits that can be realized by fully developing America's and New York's energy resources.

Bernard L. Weinstein is associate director of the Maguire Energy Institute and a professor at Southern Methodist University's Cox School of Business in Dallas. His was formerly on the economics faculty at Rensselaer Polytechnic Institute. His email address is bweinstein@cox.smu.edu.

Wednesday, June 15, 2011

Poll: Strong support for gas drilling in Pennsylvania

June 15, 2011

HARRISBURG (AP) — Pennsylvania voters support natural gas drilling in the Marcellus Shale by a 2-to-1 margin, according to a new poll that also shows strong backing for an extraction tax on energy companies.

The Quinnipiac University poll released Tuesday shows that 63 percent of Pennsylvanians say the economic benefits of drilling outweigh the environmental impacts, while 30 percent express the opposite view.



Related Stories
Gas drilling fee advances in state Senate

The poll appears to reflect the prosperity that drilling has brought to economically struggling regions of the state. Drilling firms and related industries added 72,000 jobs between the fourth quarter of 2009 and the first quarter of 2011 — at an average salary higher than the statewide average, according to the state Labor Department.

Meanwhile, 69 percent told pollsters they support a drilling tax on gas companies, unchanged from an April survey. Pennsylvania remains the largest gas-drilling state without an extraction tax. The state Senate plans to debate a bill as early as next week that would impose an "impact fee" on natural-gas drilling.

"'Drill, baby, drill,' is the call from Pennsylvania voters, and 'tax, baby, tax,' is the follow-up as voters see natural gas drilling in the Marcellus Shale as an economic plus more than an environmental negative," said Tim Malloy, assistant director of the Quinnipiac University Polling Institute. "They also see added taxes on gas drillers as one of the few acceptable ways to help balance the budget."

Gov. Tom Corbett, who promised in his 2010 campaign not to increase taxes or fees, has said recently he would consider a fee that helps drilling communities cope with the impact.

The Quinnipiac poll also shows that Pennsylvanians' views of Corbett differ markedly along gender lines as he approaches six months in office.

Pennsylvanians as a whole remain divided over Corbett, with 39 percent approving of the job he's doing and 38 percent disapproving. The numbers are similar to April's poll results.

But men and women have much different impressions of Corbett's performance. Tuesday's results show 30 percent of female respondents approved, compared with 48 percent of men. The 18-point gap is more than twice the 7-point margin in the April 29 poll.

Tuesday, June 14, 2011

Great support by SCLOC at landfill forum

SCLOC had a good turn out last night at Bath Landfill forum.The SCLOC thanks Public Works Commissioner Vincent Spagnoletti for his excellent presentation.
Another great article about NG.






The United States in 2010 continued to lead the world in natural gas production, boosted by massive shale deposits, according to the latest statistical review by BP plc.

The United States also was the world's biggest gas consumer last year, according to the 60th annual BP Statistical Review of World Energy, which was unveiled on Wednesday. The review covers all forms of energy use worldwide and is considered an objective, global energy data report that is used by business, academics and governments to inform policy and decision making.

Worldwide gas output rose a record 7.3% y/y, or 217 billion cubic meters, with nearly one-third of the gains (31%) originating in the former Soviet Union, followed by the Middle East. U.S. gas production rose more than 4%.

"Production exceeded the 10-year average growth rate in all regions," the report noted. "The U.S. remained the largest producer for a second consecutive year, with supply of unconventional gas continuing to grow. In Europe, output reversed previous declines and was the highest since 2008."

North American proved reserves at the end of 2010 totaled 350.8 Tcf (9.9 trillion cubic meters), with the United States accounting for 272.5 Tcf. Canada had an estimated 61 Tcf, while Mexico had about 17.3 Tcf.

Global natural gas reserves in 2010 increased by 5 billion cubic meters (0.3%) to 187.1 trillion cubic meters, according to BP's data. The 2010 global reserves/production (R/P) ratio was 58.6, a decline from 62.7 in 2009.

"World natural gas proved reserves in 2010 were sufficient to meet 58.6 years of global production," said Christof Ruhl, BP Group's chief economist. Ruhl was in charge of compiling the data.

"R/P ratios declined for each region, driven by rising production. The Middle East once again had the highest regional R/P ratio, while Middle East and former Soviet Union regions jointly hold 72% of the world's gas reserves."

Unconventional gas grew "despite weak North American natural gas prices," which traded at record discounts to crude oil. The United States also had the world's biggest increase in volumetric gas consumption, rising by 5.6% to a new record high.

"The shale gas revolution in the U.S. and massive changes in LNG [liquefied natural gas] markets are reshaping the world of natural gas," said Ruhl.

Because of the massive amount of shale gas in North America many gas U.S. producers and LNG import facilities are working on ways to export excess gas supplies.

According to the BP data, global LNG supplies in the last five years have grown by a cumulative 58%, which is three times faster than total gas production, the economist noted. In 2010 "the supply of LNG expanded by an unprecedented 22.6%," or 55 billion cubic meters.

The worldwide natural gas trade saw robust gains overall last year, jumping by more than 10%, with LNG shipments alone recording a 23% gain. Qatar's LNG shipments were up by more than half (53.2%). Among LNG importers, the largest volumetric growth was in South Korea, followed by the United Kingdom and Japan.

"LNG now accounts for 30.5% of global gas trade," Ruhl noted. "We see how as a result of the shale gas revolution in the U.S. and the amount of LNG available globally, now there's competition between gas and coal, with gas increasingly replacing coal and power generation in many countries.

"And because of this big difference now between oil prices, kept high by OPEC, and gas prices kept low because of abundant supplies, we see countries switching."

One of the biggest findings in the latest report is the "tremendous energy demand growth, the highest growth rates...for primary energy since 1973, the highest energy consumption ever, highest energy consumption per capita," said Ruhl. A worldwide economic recovery in 2010 resulted in robust energy growth, with "the strong bounce back, in particular, of the industry sector," Ruhl noted.

For the first time, China overtook the United States as the world's largest energy consumer, according to the review.

"Energy intensity -- the amount of energy used for one unit of GDP [gross domestic product] -- grew at the fastest rate since 1970," said Ruhl. "And so, when all the accounting is done, planet Earth -- we all -- consumed more energy in 2010 than ever before."

Overall, gas consumption by members of the Organization for Economic Cooperation and Development (OECD) jumped by 6.4% y/y, or 93 billion cubic meters, "with consumption attaining all-time highs." Developing countries' gas consumption also grew, jumping by more than 7% -- 63% higher than in 2000. India's gas demand was up by the largest margin y/y, rising 21.5%.

China gained the lead in a year in which a rebound in the global economy drove consumption higher and "at a rate not seen since the aftermath of the 1973 oil price shocks," said BP CEO Bob Dudley. The growth in energy consumption was broad-based, he said, with both mature, developed economies and developing countries growing at above-average rates.

Sunday, June 12, 2011

Natural Gas Report From MIT.

Report: Natural gas can play major role in greenhouse gas reduction
The cleanest of fossil fuels, it is far more abundant than previously thought and can have significant impact at little cost, MIT study finds.
David L. Chandler, MIT News Office


June 9, 2011




Natural gas is important in many sectors of the economy: for generating electricity, as a heat source for industry and buildings, and in chemical feedstock. Given the abundance of natural gas available through extensive global resources and the recent emergence of substantial unconventional supplies in the United States, worldwide usage of the fuel is likely to continue to grow considerably and contribute to significant reductions of greenhouse gas emissions for decades to come, according to a comprehensive, multidisciplinary study carried out over the last three years by MIT researchers.

The study — managed by the MIT Energy Initiative (MITEI) and carried out by a team of Institute faculty, staff and graduate students — examined the scale of U.S. natural gas resources and the potential of this fuel to reduce greenhouse gas emissions. Based on the work of the multidisciplinary team, with advice from a board of 18 leaders from industry, government and environmental groups, the report examines the future of natural gas through 2050 from the perspectives of technology, economics, politics, national security and the environment.

An interim report with some of the study’s major findings and recommendations was released in June 2010. The full report, including additional data and extensive new analysis, was released by MITEI this week.

Because it has the lowest carbon content of all fossil fuels, natural gas can play a critical role as a bridge to a low-carbon future. The study’s economic analysis of the effects of a national policy calling for a 50 percent reduction in greenhouse gas emissions shows that such a policy would result in widespread substitution of natural gas for coal in electricity generation. However, in order to achieve even greater reductions in carbon emissions — which may be mandated in coming decades — natural gas will in turn need to make way for other low- or zero-carbon sources of energy. It is in this sense that natural gas may be seen as a “bridge” rather than as the ultimate long-term solution itself.

The report says that it is important to continue a robust program of research and development on other energy alternatives, which can be used to take the place of natural gas later in the century if and when emissions regulations become stricter. Henry Jacoby, MIT professor of management and co-chair of the study, said that such research is crucial because “people speak of [natural] gas as a bridge to the future, but there had better be something at the other end of the bridge.”

The study found that, contrary to best estimates of a decade or so ago, natural gas supplies are abundant and should be ample even for greatly expanded use of the fuel in coming decades. This is largely the result of the development of “unconventional” sources, such as shale gas. Because of its abundance, widespread distribution and advantages in cost and emissions, use of natural gas is expected to increase substantially under virtually all scenarios involving national policies, regulations and incentives, the study notes.

“Shale gas is transformative for the economy of the United States, and potentially on a global scale” because it has so dramatically increased the amount of gas that can be economically produced domestically, Anthony Meggs, a visiting engineer at the MIT Energy Initiative and co-chair of the study, said at Thursday’s press conference introducing the report.

Concerns have been raised about the possible environmental effects of developing shale gas using a controversial process called “fracking” (for hydro-fracturing), which involves injecting fluids into deep horizontal wells under pressure. The ultimate disposal of those fluids after they are pumped back out, and the possibility that they could contaminate water supplies, have been the subject of lawsuits and legislative attempts to limit the practice. The study found that “the environmental impacts of shale development are challenging but manageable,” and that some cases of the gas entering freshwater tables were “most likely the result of substandard well-completion practices by a few operators.”

Meggs said that in the small number of cases where there has been contamination, the problem has stemmed from improper cementing of the well casings. “The quality of that cementing is the area where the industry, frankly, has to do a better job,” he noted. But even so, he said, the study found only 42 documented incidents of such problems, out of tens of thousands of wells drilled. “It is not trivial,” he said, “but neither is it all-encompassing.” And, he added, even where there are problems, it is possible to go back and fix the well casings later.

The study recommends that to address these concerns, “it is essential that both large and small companies follow industry best practices; that water supply and disposal are coordinated on a regional basis and that improved methods are developed for recycling of returned fracture liquids.” Government funding for research on such systems should be “greatly increased in scope and scale,” the report says.

The robust supply situation enhances the opportunities for natural gas to substitute for other fuels. Using very efficient natural gas power plants to replace coal-fired plants is “the most cost-effective way of reducing CO2 emissions in the power sector” over the next 25 to 30 years, the report says. Natural gas will also play a central role in integrating more intermittent renewable sources — wind and solar — into the electricity system because they can easily be brought in and out of service as needed.

The study also finds important opportunities for cost and emissions reduction in industry by switching to very high-efficiency natural gas boilers, and for more efficient energy use in commercial and residential buildings through new standards that would provide consumers information on end-to-end energy use of space- and water-heating alternatives. Furthermore, the current large price difference between oil and natural gas, if sustained, could lead to increased use of gas as a transportation fuel, either directly or through conversion to liquid fuel.

The study group suggests that U.S. national security interests will be served by policies that encourage integration of the presently fragmented global natural gas markets, and calls for better integration of such issues into foreign policy.

The report includes a set of specific proposals for legislative and regulatory policies, as well as recommendations for actions that the energy industry can pursue on its own, to maximize the fuel’s impact on mitigating greenhouse gas.

In addressing public concerns about the environmental impact of natural gas drilling operations, the industry could be taking a much more active role, said Ernest Moniz, director of MITEI and chairman of the study. The study makes many specific recommendations for improving well-development procedures, including full disclosure of chemicals used in the hydro-fracturing process and regional coordination on water-use issues. “An endorsement [of these policy recommendations] by industry would be very welcome,” Moniz said. “If industry actively promotes them, that can certainly help overcome” these public and legislative concerns.

Ironically, the study found that “public and public-private funding for natural gas research is down substantially,” even as the fuel is being recognized as a major contributor to strategies for lowering greenhouse gas emissions, said Melanie Kenderdine, executive director of the MIT Energy Initiative. The study recommends a substantial increase in such research.



June 10, 2011

Wednesday, June 8, 2011

Good article for all pro drilling advocates to read.

Marcellus Benefits Far Outweigh Environmental Concerns, Says Report
June 8, 2011
The economic benefits of developing shale natural gas resources in the state of New York are "enormous" and vastly outweigh the "small" environmental costs, according to a new report by the Manhattan Institute's Center for Energy Policy and The Environment.
"The Economic Opportunities of Shale Energy Development," which was issued on Tuesday, was compiled by Timothy J. Considine, who directs the Center for Energy Economics and Public Policy at the University of Wyoming. He previously worked at Pennsylvania State University (Penn State).
Co-author Robert W. Watson of Penn State also chairs the Pennsylvania Department of Environmental Protection's (DEP) Oil and Gas Technical Advisory Board. Nicholas B. Considine, also a co-author, is an analyst at Natural Resource Economics Inc.
"Our findings suggest that the current shale gas drilling moratorium imposes a significant and needless burden on the New York state economy," the authors said. "In short, the economic benefits of developing shale gas resources in New York state are enormous and could be growing, while the environmental costs of doing so are small and could be diminishing if the moratorium is lifted and if proper policies are put into place."
New York has had a de facto hydraulic fracturing (fracking) moratorium in place since 2008 after former Gov. David Paterson directed state regulators to prepare a supplemental generic environmental impact statement (SGEIS) to update drilling regulations (see Daily GPI, July 28, 2008). Paterson last December vetoed an outright fracking ban but extended until July 1 the SGEIS (see Shale Daily, June 1; Dec. 14, 2010).
State legislators also continue to push for a ban on fracking. Late Monday the state's Assembly approved legislation to limit fracking; the state Senate has yet to act (see related story).
The Manhattan Institute's report said the moratorium is a mistake.
"Directional drilling and hydraulic fracturing have unlocked vast new reserves of natural gas in the United States," the report said. "Development of these resources is now well under way in Pennsylvania and West Virginia. Unlike their neighbors to the south, however, New York residents are not directly benefiting from natural gas development as the result of a government-imposed moratorium, itself a response to environmental concerns surrounding hydraulic fracturing."
According to their research, the authors said the net economic benefits to the state from gas drilling would be huge:
An end to the moratorium would spur more than $11.4 billion in economic output.
Between 15,000 and 18,000 jobs could be created in the Southern Tier and in western New York, regions which, according to the state's Department of Labor, lost an estimated 48,000 payroll jobs between 2000 and 2010.
Another 75,000 to 90,000 jobs could be created if the area of exploration and drilling were expanded to include the Utica Shale and southeastern New York, including the New York City watershed -- assuming a regulatory regime is in place to protect the water supply but permit drilling.
Localities and the state stand to reap $1.4 billion in tax revenues if the moratorium is allowed to expire.
The authors also reviewed the public records of environmental violations reported by the Pennsylvania DEP between 2008 and 2010, where extensive Marcellus Shale drilling is under way. The researchers then quantified the impact of these violations on land, water and air resources.
"The costs of these environmental impacts are then estimated on the basis of the value of the environmental amenities at stake," the authors said. "Our main finding is that the cost of these environmental impacts is far smaller than the economic benefits that drilling can provide."
As they explained, a "typical Marcellus Shale gas well generates about $4 million in economic benefits" while the economic damage resulting from the environmental impacts of a typical shale gas well comes to $14,000.
"The expected environmental costs are so low because the probability of an environmental event is small, and those that do occur are minor and localized in their effects," the report stated.
Environmental problems that have arisen in Pennsylvania in connection with fracking "in no way call into question the soundness of that procedure. In reality, they result from improper drilling and well-casing technique and defective formulation of cement. Such errors and flaws allow wells to penetrate shallow gas deposits, permitting the gas within them to escape and enter groundwater supplies.
"Marcellus gas resides far below these deposits and any aquifers. More stringent design standards should be adopted, and more active regulatory oversight should be exercised. These steps would reduce the incidence of such problems." Copyright © 2011 Intelligence Press Inc. All rights reserved

Please send this report to any New York Politician who wants to extend the moratorium. For the full report go to http://www.manhatta-institute.org/html/eper_09.htm
Neil

Tuesday, June 7, 2011

June 7, 2011

There is lots of news to report, Lorin Cooper , who has been Chairman of the SCLOC Political Action Committee, has announced that he has become a member of a new Limited Liability Company that is based in Livingston County, seeking to represent landowners for various purposes related to gas leasing and drilling. His new business activities will mean that Lorin will no longer be in a leadership role in SCLOC. Lorin will be greatly missed by all of us at SCLOC. We appreciate his long and active service. We wish Lorin the best in his future endeavors. The other news is, the executive committee of the SCLOC has asked Jeff Heller to replace him. All the members of the coalition congratulate Jeff and wish him the best of luck. There will be more appointments announced at the next SCLOC meeting.

Until next week, Neil

Saturday, June 4, 2011

June 4, 2011

Jeff and Kathy Heller and Karen Ballard did a fantastic job on the posters & handouts

I submitted a copy of the handout to Carl Alberts, a Cornell Cooperative Extension Agent in Steuben County. It was published in the June issue of Agricultural News, which is sent to most farmers in Steuben, Schuyler, and Chemung Counties. Thank You Carl..

Ellen Zver did an outstanding job in her letter to the editor in the Corning Leader on June 2nd. This was very relevant to what occurred at the anti gas forum at West High School in Corning. Good job Ellen!


The JLCNY will have a tent at this Sunday's Big Splash Concert which is being put on by anti-gas protestors and Mayor Matt Ryan in the city's Recreation Park. More specifically this is in the middle of Binghamton's west side, surrounded by Beethoven St., Schubert St., Laurel Ave., and Seminary Ave. and will be from 11:00 AM to 9:00 PM, weather permitting. JLC will be setting up educational displays and handouts so that all the people can learn the real facts about natural gas issues. Tom Shepstone from EID Marcellus may be there as well to share his unique insights. This will be a great opportunity to educate the public about how safe and responsible natural gas development will benefit our communities. They would like coalition members to attend this event. Neil