Gas at a Glance

PETITION TO DEC TO STRENGTHEN DRILLING REGS APPROACHES 7,000 SIGNATURES

Nearly 7,000 individuals and organizations have signed a petition asking Governor David Paterson to withdraw New York State’s recently drafted regulations on natural gas drilling, saying the state’s regulatory framework needs to be strengthened before more drilling occurs.

Walter Hang, president of Toxics Targeting, has posted a list of 270 spill reports from the NY Department of Environmental Conservation’s (DEC) own database. The list can be viewed at www.toxicstargeting.com .

“DEC’s own data document systematic, on-going failures to prevent oil and gas drilling pollution impacts or to clean them up. It is imperative that DEC resolve those regulatory shortcomings prior to issuing new drilling permits,” the petition states. Visit www.toxicstargeting.com/MarcellusShale/coalition_letter to view the petition.

A team of Cornell University lawyers and students, who tackled the 800-page regulatory proposal as a class project, has also concluded that the DEC is ill-equipped to oversee natural gas drilling and the 187 new tasks it has identified. The pro bono work was done by Cornell Law School’s Water Law Clinic. Their findings question how 17 inspectors in the DEC’s Division of Mineral Resources will handle the multiple tasks associated with the swiftly expanding industry. The public has until December 31 to submit written comments regarding the plan.

BILLS INTRODUCED TO PROTECT LAND, WATER, GAS ROYALTIES

Rep. Camille “Bud” George (D-Clearfield), Majority Chair of the House Environmental Resources and Energy Committee, will introduce two measures designed to protect the Commonwealth and landowners as gas drilling expands in Pennsylvania’s Marcellus Shale deposit. The legislation seeks to mitigate the risks to land and water and to protect landowners’ royalties in gas and oil leases.

Rep. George is seeking House cosponsors for his Land and Water Protection Act. The legislation would:

• Require the Pennsylvania Department of Environmental Protection to inspect Marcellus well sites during each drilling phase;

• Extend to 2,500 feet, from 1,000 feet, the presumed liability of a well polluting a water supply;

• Require full disclosure of the chemicals used in the hydraulic fracturing process;

• Update bonding requirements to cover the costs of decommissioning a well; and

• Clarify local governments’ traditional authority to reasonably regulate oil and gas activities.

The second measure being drafted by Rep. George, the Lessor’s Royalty Protection Act, would protect landowners’ royalties in oil and gas leases. The legislation would exclude all post-production expenses, which have been loosely defined to include processing, transportation and marketing costs, when calculating royalty payments.

DRUG TESTS LEAD TO GAS DRILLING WORKERS SUSPENSION

Cabot Oil & Gas made an unannounced drug inspection at drilling sites in Dimock Township, PA, following a tipoff from an employee concerned about drug and alcohol use, according to Cabot spokesman Ken Komoroski. Some workers have been removed from the job due to preliminary blood test results that showed they may have been using drugs. Although not involved in the enforcement action, Bill Strong, a detective for the Susquehanna County District Attorney’s Office, noted that law enforcement officials are aware that drug problems such as methamphetamine use can accompany transitory crews working long shifts for extended periods of time. Komoroski said that Cabot is vigilant of drug-abuse problems and acts promptly to address them. The testing was conducted by a third party and also utilized drug-sniffing dogs.

TUSTEN VOTES TO SIGN WITH DELTA ENGINEERING

As one of his last acts in office, outgoing Tusten supervisor Ben Johnson at the town meeting on December 14, asked the board to approve moving forward with developing a contract with Delta Engineering of Binghamton, NY to provide services to the town through the multi-municipal gas drilling task force. If the other six towns in the task force agree, the firm will help the towns create road-use agreements, which will help pay for repair of roads damaged by heavy truck traffic.

The supervisors of the other towns unanimously voted to go forward with Delta at the last meeting of the group on December 9. The supervisors must now get approval from their boards.

The task force has drawn interest from outside of Sullivan County with three towns from the Southern Tier near Ithaca expressing interest in joining the task force. By banding together to form road-use agreements, the towns will save substantial amounts of money through using the same engineering firms and lawyers.

EXXON-MOBIL LEAPS INTO THE GAS DRILLING GAME

The biggest publicly traded energy company of them all, Exxon-Mobil, said Monday December 14 that it has agreed to buy XTO Energy, a gas drilling company, in an all stock deal valued at $31 billion, according to an article in The New York Times. It will be the biggest oil and gas deal in four years. The purchase allows Exxon-Mobil to expand into shale gas exploration. The move by Exxon-Mobil highlights the prominence of natural gas in resolving the energy needs of the nation.

Because natural gas expends only half the amount of carbon as oil and coal, Exxon-Mobil president Rex W. Tillelrson sees drilling for gas as a priority for the next 20 to 30 years. Gas prices tumbled during the recent recession, leaving many smaller drilling companies out of the money necessary to drill extensively. This will change now that Exxon-Mobil is getting into the act.

What may be emerging, industry analysts say, is a marriage between companies with deep pockets that will step into the picture and take over drilling that could not be done by smaller companies.