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October 28, 2010

Firms still committed to gas drilling

Despite drop in natural gas prices, companies high on Marcellus Shale drilling.

Though natural-gas prices have dropped sharply since their record-breaking highs early this summer, the industry remains primed to drill into the gas-laden Marcellus Shale.

In Pennsylvania, while the industry has groused at regulators’ resistance to easing permit requirements for the costly extraction process, the sides have been seeking common ground and producing signs of cooperation.

Drilling the shale, which runs at least a mile underground from upstate New York to West Virginia, requires technologies developed in Texas that have increased potential for both production and environmental degradation over traditional drilling.

Hydraulically fracturing the shale layers, for example, to release gas can use three times as much water as conventional drilling.

This summer, the Susquehanna River Basin Commission, which oversees water use along the waterway, responded by warning drillers it required water-withdrawal permits, and state Department of Environmental Protection ordered the partial shutdown of two sites for not having them.

DEP added a permit addendum for shale wells that required accounting of water acquisition, consumption and disposal.

The zeal to drill continued. DEP has approved 353 shale-drilling permits this year alone, up from 93 in the five years prior.

“Because of the increase in price of the natural gas, there’s been a sort of a rush to drill,” DEP press secretary Teresa Candori said. “We haven’t seen it slow down.”

The ramp-up has created a domino effect at DEP. More and larger applications bog down permit reviews, while the industry demands the process be expedited and environmentalists want more site inspections.

“If a certain type of application is taking longer … that does tend to put a lot of pressure on the system as a whole,” Candori said.

Erosion and sedimentation, wastewater and water-withdrawal permits are “what we’re interested in working on,” said Stephen Rhoads, the president of the Pennsylvania Oil & Gas Association. “There’s just all these new permit requirements, and we want to get them streamlined, transparent and efficient,” he said.

The bureaucracies have offered to let drillers pay to speed up the process. The SRBC changed its fee from about $20,000 for an entire leased tract to about $10,000 per well site to cover oversight fees. It is also considering giving drillers the chance to pay to contract out the work.

DEP has begun seeking approval to raise application fees to pay an additional 60 employees, 13 of them slated for its Williamsport office.

The industry recognizes the increases’ intentions, Rhoads said, but continues to lobby to remove obstacles to permitting.

Candori said DEP is open to discussions. “We’ve been taking industry input throughout the whole process,” she said.

Rory Sweeney, a Times Leader staff writer, may be reached at 970-7418.







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