A rapid expansion is underway in Pennsylvania and West Virginia to tap into vast amounts of natural gas lying deep beneath the earth’s surface.  Companies have invested billions and are increasing the number of wells rapidly. With the increase in drilling comes an increase in legal activity, from attorneys who help landowners with leasing issues to lawyers involved in disputes over roads and noise to those drafting industry rules and regulations.

Kathryn Klaber, president of the Marcellus Shale Coalition, says the industry welcomes the scrutiny.  ”I challenge you to name another industry this transparent,” she said. “Have you ever seen any industry that has more easy access to information?” Klaber’s organization represents nearly 40 drillers and many other related businesses, many of which are facing legislative hurdles.  New York has issued a temporary moratorium on new drilling permits, and many in West Virginia are calling for legislative action to protect the public and the environment.

More than a dozen law firms have joined the Marcellus Shale Coalition, as partners in the oil and gas industry.  Several firms have designated teams of attorneys who work solely on Marcellus Shale issues and litigation. Industry lawyers say their clients are stepping up to the plate when it comes to issues such as noise, road damage and site restoration.  

Plaintiff attorney Michael Rosenzweig in Pittsburgh says there are a number of cases right now against local municipalities and the states for damage to the roads. “The state is just left holding the bag when these drillers come in and put all this heavy traffic on these roads,” he said. “It’s a recipe for disaster.” Industry lawyers say many companies are making repairs themselves, particularly to landscaping on property once they are finished with a well. Many municipalities are considering charging drillers impact fees to make necessary repairs.

You probably can refuse a horizontal well on your land.  The West Virginia Surface Owners Rights Organization (WV-SORO) believes that a surface owner who does not own the gas rights under their land cannot be forced to have a horizontal well pad on the surface  unless the horizontal well will only be draining the gas lease tract under the surface owner’s land.  Generally, lawyers who work for the industry agree with this (although the companies and local landman may not realize it yet).  Although there are no cases on this in West Virginia, legal encyclopedia’s of gas law say that this is “clearly” true and that the reason that there are no appellate court cases on the point is that such “veto powers” are generally assumed.

WV-SORO generally favors horizontal drilling because one well site, access road and pipeline replaces three or four.  Moreover, if horizontal wells are drilled from centralized well pads, one well site, access road and pipeline can replace more than 20 vertical well sites, etc.  However, this does not mean the rights of the surface owner of the land where the wells are being drilled should be ignored or that the surface owner should not share in the financial benefits of producing the gas.

Daniel Yergin, Chairman, Cambridge Energy Research Associates

 A recent article in the Wall Street Journal by Daniel Yergin provides an historical and comprehensive view into fracking, horizontal drilling and so-called unconventional gas from diverse shale formations. What has become known as the “unconventional-natural-gas revolution” has turned a shortage into a large surplus.  This revolution has arrived, moreover, at a moment when rising oil prices, sparked by turmoil in the Middle East, and the nuclear crisis in Japan have raised anxieties about energy security.

As late as 2000, shale gas was just 1% of American natural-gas supplies. Today, it is about 25% and could rise to 50% within two decades. Estimates of the entire natural-gas resource base, taking shale gas into account, are now as high as 2,500 trillion cubic feet, with a further 500 trillion cubic feet in Canada. That amounts to a more than 100-year supply of natural gas, which is used for everything from home heating and cooking to electric generation, industrial processes and petrochemical  feedstocks.

Mitchell Energy’s  light sand fracking,  which breaks up hard shale rock, was combined with the horizontal drilling techniques of Devon Energy, starting in 2002. “At that time,” said Larry Nichols, the chairman of Devon, “absolutely no one believed that shale drilling worked, other than George Mitchell and us.”

In 2003,  Devon Energy drilled 55 wells in the Barnett Shale of Texas, optimizing the combination of fracking and horizontal drilling. The know-how was applied across North America, in such shale formations as Haynesville, mostly in Louisiana; Eagle Ford in South Texas; Woodford in Oklahoma; Horn River and Montney in British Columbia; Duvernay in Alberta; and the “mighty Marcellus,” the huge formation that spreads from Pennsylvania and New York down into West Virginia.

In his energy speech this past week, President Barack Obama said, “Recent innovations have given us the opportunity to tap large reserves—perhaps a century’s worth—in the shale under our feet. The potential here is enormous.” And, in an era of heightened environmental awareness, any incident, even involving a single water well, can become a national event.  As a recent analysis from the MIT Energy Initiative put it, “With over 20,000 shale wells drilled in the last 10 years, the environmental record of shale-gas development is for the most part a good one.  Nevertheless, one must recognize…the damage that can be caused by just one poor operation.”

What many analysts expect to see is the emergence of a set of “best practices,” endorsed by both regulators and industry and tailored to the specific characteristics of the diverse basins across the country.  For shale gas production to succeed on a massive scale, public confidence will be essential.

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—Mr. Daniel Yergin is chairman of IHS Cambridge Energy Research Associates, an energy research and consulting firm. His new book “The Quest” will be published in September. He received the Pulitzer Prize for his book “The Prize: The Epic Quest for Oil, Money and Power.”

The WV Legislature did not pass bills in the 60 day Session just completed for the regulation of the new horizontal drilling and hydrofracking of deep shales for natural gas production. So, the acting Governor Tomblin proposes to proceed administratively.  [This would have many shortcomings, according to many of our Senators and Delegates].

 “Unfortunately, the Legislature was unable to agree upon a regulatory approach to drilling in the Marcellus shale. Nevertheless, this issue is too important to West Virginia for me to wait any longer,” Tomblin said. “Therefore, instead of calling a special session, I will be directing DEP Secretary Randy Huffman to use his inherent statutory power and rule-making authority to regulate this industry.

  “In addition to protecting the environment, [predictable and reasonable regulations] is the reason that I will direct DEP Secretary Randy Huffman to utilize his existing statutory authority to promulgate legislative rules addressing Marcellus drilling. I am committed to fostering a climate in which companies will invest capital in West Virginia to develop the Marcellus shale in an environmentally responsible manner.”

This threat from Governor Tomblin to regulate this industry on his own has given rise to much talk by legislators for a “special session” of the legislature to resume consideration of SB 424.  Acting Senate President Jeff Kessler has already spoken out in support of this idea.  The Governor’s Office can be reached by phone at 304-558-2000 and by email at governor@wv.gov.  The members of the Legislature can be reached on www.legis.state.wv.us

This past year there were 433 new drilling permits issued for the Marcellus shale, some 58 were completed; this is a booming industry bringing many trucks with much road wear and road damage, many acres of disturbed land, many noisy days and nights and many tons of emissions. When will our State government face up to these challenges? Are you doing your part to help out?  Come out and join in at the next meeting of the WV/PA Monongahela Area Watersheds Compact set for Wednesday, March 23rd at 1 pm, at the Morgantown Airport Annex.

Many US EPA scientists are alarmed, warning that drilling waste is a threat to drinking water in Pennsylvania as well as in West Virginia. Their concern is based partly on a 2009 study, never made public, written by a US EPA consultant who concluded that some sewage treatment plants were incapable of removing certain drilling waste contaminants and were probably violating the law. US EPA studies and a confidential study by the drilling industry have revealed significant dangers from the radioactive material. 

The New York Times has reviewed  more than 30,000 pages of federal, state and company records relating to more than 200 gas wells in Pennsylvania, 40 in West Virginia and 20 public and private wastewater treatment plants. Of more than 179 wells producing wastewater with high levels of radiation, at least 116 reported levels of radium or other radioactive materials 100 times as high as the levels set by federal drinking-water standards. At least 15 wells produced wastewater carrying more than 1,000 times the amount of radioactive elements considered acceptable.  Federal drinking water standards were exceeded by 42 wells for their radium content and 41 for their benzene content. 

This newspaper report was also carried in the Pittsburgh Post Gazette. The NY Times has provided an interactive video entitled “Extracting Natural Gas from Rock” and a continuous video clip is  titled ”Natural Gas and Polluted Air“.  An interactive map is also provided that specifies locations where radioactive wasterwater samples have been measured.  And, more detailed information is provided in a spreadsheet titled “Contaminants in Samples From More Than 200 Wells.”

This past Friday, Wetzel County Sheriff James Hoskins testified in Charleston before the WV House Judiciary Committee.  He said the main issue is the influx of drilling company activity to the area which is “disturbing a way of life that people are used to.”  Hoskins said Wetzel County is “Ground Zero” when it comes to studying the effects of the Marcellus Rush on West Virginia.  He is worried about “oversized and over-width” trucks driving on Wetzel County’s narrow country roads, with steep grades and sharp turns. 

“We have caught 13 undocumented workers in the last few years, several of whom were working for drilling contractors in the area,” said Sheriff Hoskins.  The unemployment rate increased from 12.5 percent in November to 14.4 percent in December, prompting Hoskins to note, “When we have high unemployment around here, we should be giving these jobs to our workers.”

The US EPA has issued four or more citations for possible violations of the Clean Water Act in Wetzel and Marshall counties to Marcellus drillers.  Also, State environmental regulators have issued citations for “failing to prevent the release of natural gas and the potential pollution of waters of the state.”  Hoskins also spoke to the committee about concerns regarding water contamination, fires, explosions and other problems.

Read the full article in the Wheeling Intelligencer.

In the news, Dimock, PA may be included in a 2-year EPA fracking study.  18 wells were contaminated with methane there.   Full story.

This same conclusion from testing for methane in Wyoming has been reported.  Now here it is in Dimock, PA.