Saturday, March 6, 2010

Marcellus Shale drilling pumping up in PA

So, just how bullish is the natural gas industry in Pennsylvania?

Try this metric:

In the 28 days of February 2010, 26 new wells were drilled in Bradford County, PA alone.

Meanwhile, Chesapeake Appalachia of Oklahoma City is ready to begin drilling a total of five wells, two in North Fayette, Beaver County, and three in neighboring Robinson Township in
Washington County.

The latest surge in drilling applications and operations adds to the already bustling activity in Pennsylvania.

All this hasn't escaped the notice of international investors. According to the Pittsburgh Business Times, several international firms have signed joint venture agreements to fund the development of Marcellus Shale acreage held by U.S. companies with regional operations.

More are likely to follow, as firms active in the shale, like Atlas Energy, seek such partnerships.

The upsurge of economic activity has one Democratic State Senator in Pennsylvania calling for a new tax on gas drilling. The Daily Times reports:

"Sen. Andy Dinniman, D-19th, of West Whiteland, has introduced legislation that would impose a tax on Marcellus Shale natural gas extraction and use the revenues from that tax to give Pennsylvania homeowners property tax rebates. Dinniman said a 5 percent tax on the natural gas from the state's Marcellus Shale reserves would, by 2014, provide the average homeowner $148 each year in property tax relief. "

The other side of the Marcellus boom--environmental impacts

Some 63 environmental organizations, concerned by the potential negative impacts of a controversial drilling method called hydrofracking, used to extract natural gas from the Marcellus Shale, have called on the federal EPA to investigate the technique.

The petition comes on the heels of reports of environmental risks associated with the drilling. A good primer on the subject is Natural Gas Drilling: What We Don’t Know by the independent investigative journalism organization, Pro Publica.

Some environmental critics say that Pennsylvania, seeking to plug holes in the state's budget and add create jobs in a time of economic stress, has been too accommodating to the gas industry--especially in the number of state drilling leases allowed in thousands of acres of state forests.

What do you think? Should Pennsylvania slow down the awarding of drilling permits until more state oversight and environmental safeguards can be put into place? Is New York State's more deliberate approach in adopting environmental regulations governing Marcellus operations preferable? Should Pennsylvania continue to increase the number of drilling leases awarded in state forest lands? Should the state impose a tax on natural gas drilling? And, if so, where should the money go? To balance the state budget? To beef up DEP oversight? To provide property tax relief to all state residents? Other uses?

Share your thoughts in the opinion box below. If one isn't visible, activate it by clicking on the tiny 'comments' line. You can attach your name or respond anonymously.

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