Gas at a glance

ULTRA PETROLEUM CORPORATION TO BUY 80,000 ACRES IN MARCELLUS SHALE

Ultra Petroleum Corp. plans to pay $400 million to buy 80,000 acres in the Pennsylvania Marcellus Shale, from an unnamed private company, as reported in the Wall Street Journal’s “Marketwatch.” Following the acquisition, Ultra Petroleum will hold approximately 250,000 net acres in its core region around Tioga, Bradford, Lycoming, Potter, Clinton and Centre counties in north central Pennsylvania, with the potential for 1,800 net drilling locations. The Houston-based natural gas producer expects the transaction to close in late February 2010.

REPORT OUTLINES COST OF NYC WATER FILTRATION PLANT

The New York City Independent Budget Office (IBO) has released a report outlining the impact on the city’s water rates if it becomes necessary to build a filtration plant in the Catskill/Delaware watershed to protect drinking water from potential contamination by natural gas drilling. Approximately 90 percent of the city’s water comes from the watershed. As reported in the Epoch Times, the state and the city have allocated $630 million spread over 10 years, for a preventative filtration plan in order to avoid the estimated $10 billion cost of building a filtration plant. According to IBO estimates, single-family homeowners could expect to pay an additional $367 on their water bill per year if the plant is built.

DCNR CHIEF SAYS AGENCY LACKS RESOURCES TO POLICE STATE FOREST DRILLING

As reported in the PA Environment Digest, the Department of Conservation and Natural Resources (DCNR) Acting Secretary John Quigley told the Senate Environmental Resources and Energy Committee this week his agency does not have the resources to police State Forest Marcellus Shale natural gas drilling as it ramps up over the next few years. He said drilling will cover one-third of the state forest system and involve thousands of new wells and thousands of new miles of collection pipelines and roads that will fragment forest land. He noted Bureau of Forestry staff has effectively been cut in half with the 2009-10 budget cuts.

He said DCNR currently leases about 660,000 acres of state forest land for well drilling, which will increase to over 700,000 when the current year leases are finalized. Quigley said he anticipates going out for a third round of Marcellus Shale leases in the middle of next year, once the current second round is completed.

DCNR is planning a summit next year with the oil and gas industry, Quigley said, to explore ways in which the agency can partner with the industry to develop best management practices and other tools that could reduce the staff needed to police the leases.

Quigley expressed concern about the extent of forest land fragmentation that will result from introducing thousands of new miles of natural gas collection lines and roads into state forests, saying they will have to find new and creative ways to manage these impacts. Visit mjwhite.pasenategop.com/environmental/2009/121509/Senate-%20ERE.pdf to see a copy of Quigley’s remarks.