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“You told me about the winners of the Marcellus drilling.  What about the losers?”  My friend asked this after scanning an article in the Daily Review about a public hearing on fracing fluid.

I finished the last bite of my Krispy Kreme before answering. “Well, you know, I’m writing a story about the losers, but I can’t seem to concentrate.  Every time I start writing, I get stressed and depressed.  I think I’m suffering from …”

In 2002, Glenn Albrecht, an Australian philosopher visited the Upper Hunter Valley of southeastern Australia, observing the impacts of two decades of open-pit coal mining on the residents. The area, once peaceful, lush farmland, was now enduring blasts from chemical explosives several times a day. Gray dust from the blasts covered homes, crops, and animals for miles around. With high-output lights glaring non-stop, dark night skies were only a distant memory. Trucks, draglines, and idling coal trains provided an unending low-frequency rumble. Rivers and streams were polluted, and the residents of the Upper Hunter were distraught.

In a recent interview with Daniel B. Smith in the New York Times Magazine, Albrecht discussed his observations of the Upper Hunter. (Is There an Ecological Unconscious?).  Excerpts from the article:

“People have heart’s ease when they’re on their own country. If you force them off that country, if you take them away from their land, they feel the loss of heart’s ease as a kind of vertigo, a disintegration of their whole life.” Australian aborigines, Navajos and any number of indigenous peoples have reported this sense of mournful disorientation after being displaced from their land. What Albrecht realized during his trip to the Upper Valley was that this “place pathology,” wasn’t limited to natives. Albrecht’s petitioners were anxious, unsettled, despairing, depressed — just as if they had been forcibly removed from the valley. Only they hadn’t; the valley changed around them.

In Albrecht’s view, the residents of the Upper Hunter were suffering not just from the strain of living in difficult conditions but also from something more fundamental: a hitherto unrecognized psychological condition. In a 2004 essay, he coined a term to describe it: “solastalgia,” which he defined as “the pain experienced when there is recognition that the place where one resides and that one loves is under immediate assault . . . a form of homesickness one gets when one is still at ‘home.’”

So, perhaps I’m suffering from a kind of pre-solastalgia; prematurely anxious about the growing and apparently unstoppable Marcellus assault on rural northeastern Pennsylvania. Heavy trucks already rumble day and night, drilling pads multiply weekly, and pipelines slowly snake their way across more and more miles of farm land. Worrisome news of DEP and DOT violations by gas-related companies foreshadow future assaults on our air, water, and land.

Loss of heart’s ease …   Homesickness one gets when one is still at home …   Will Home always Beckon?

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“Have you been reading anything besides Marcellus Shale gas stuff lately?” my friend asked as we gathered up papers scattered across the conference table.

“Well, gas drilling occupies a lot of my reading time,” I replied, “but last month I plowed through all nine hundred thirty-seven pages of Michener’s “Hawaii” and now I’m in the middle of “Blood Oath” by Jimmy Cherokee Waters. Both books make me think of the Marcellus.”

“What do you mean?” he asked.

I crammed the last file into my briefcase before answering. “Well, the native Hawaiians lost their land and lives to whalers and missionaries and the Cherokee fought and fell to white men greedy for gold and more land. Now, water trucks rule our roads, landsmen lean on landowners, and pipelines cut crossways through corn fields. I wonder who’ll be the winners and losers in this new land rush…

Three years after the first white pickups rolled into Bradford County from Oklahoma, it’s clear that we can’t send them home. And many wouldn’t even if they could. Marcellus promises unimaginable riches with odds of winning much better than a Lotto ticket or the slot machines at the Tioga Downs Casino. The main ticket needed to play this new game of chance is a deed to a few acres of land, but landowners aren’t the only early winners. The drive to drill is helping small businesses in towns like Towanda and Troy where signing-bonus cash is funneling into local economies, fast-forwarding the call for lumber, siding, roofing, paint, paving, cabinets, carpeting, and furniture for home projects to make Martha Stewart and Tim-the-Tool-Man proud.

Marcellus is also breathing life into hometown hotels, restaurants, grocery stores, equipment companies, gas stations, and appliance stores. Local dealers are selling shiny new trucks and tractors in reds, greens, and blues to landowners happy to shed newfound bonus cash. Royalty payments promise to speed this spending spree, fueling an economic boom in northeastern Pennsylvania, an area dependent for the past hundred years on farming, forestry, and a few local industries.

For now, most workers actually on the drill, frac, and pipe sites are non-locals; industry-hardened types from west of the Mississippi, but locals will surely edge into some of the better-paying jobs as this gas play unfolds. Local entrepreneurs with keen eyes see Marcellus paydays in new businesses like hauling water, digging gravel, storing equipment, and seeding drill sites. Tax accountants and financial planners, for years finding limited clientele in this rural community, now hustle to work with new clients unfamiliar with inheritance taxes, trust funds, and income spreading.

All that gas cash is also helping people to pay off old mortgages, reduce school loans, and keep up with nagging hospital bills. Local schools are sure to benefit from higher property taxes levied on farm land now valued at ten times the amount assessed three years ago, and may collect added dollars as drilled land drops out of Clean and Green. Gas companies are adding to this local boom by plowing feel-good money into local charities.

Taking a broader view, Marcellus offers a pipeline to partial independence from the Middle East’s grip. Our unending thirst for oil continues to place our sons and daughters in harm’s way, providing the underlying driver for our presence in conflicts in that region. Latest estimates suggest that Marcelllus could provide enough gas to support current U.S. consumption rates for 20-25 years, easing demand on foreign oil imports. Substituting one non-renewable fossil fuel with another won’t solve our long-term energy problems, but it might help to keep our troops home in the future.

The Marcellus promises one more positive outcome. Natural gas is the cleanest-burning of all fossil fuels, spewing 30% less carbon dioxide into the atmosphere than oil and almost 45% less than coal. The principal component of natural gas, methane, is itself a greenhouse gas, but according to the EPA, the reduction in overall greenhouse gas emissions from increased natural gas use strongly outweighs the negative impact of increased methane emissions. Emitting much lower concentrations of toxic nitrogen oxides and sulfur dioxides, and 90 and 99% less soot and ash than oil or coal, Marcellus gas offers fewer smog-covered days and acid-rain nights.

As we headed for our cars, my friend shook his head. “You sound like an advertisement for the gas industry, so I don’t understand your connection between the Marcellus and the Hawaiians or the Cherokees. You must have changed your mind about the drilling. Have you signed a lease yet?””

“Well, the Marcellus is making a lot of people happy, and I understand why, but I really haven’t changed my mind much,” I replied. “Remember, I’ve only given you half of the story – the winners’ side – the missionaries, whalers, and white mans’ side. Give me another day, and I’ll tell you what may be in store for the Marcellus losers. And no, we haven’t signed a lease, but, I’m running out of let’s-not-sign-a-lease-yet stall tactics. We’ve passed on $100, $500, and $1,500 an acre, plus twelve and a half percent royalty, but recently the offer skyrocketed to $5,750 and 20%. Now, the pressure ’s really on and…

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“You haven’t mentioned the Marcellus Shale to me since we talked about China,” my friend says as we settle at a table in the Weigh Station Café. I hesitate, not sure that I want to spend our lunchtime talking about natural gas, but can’t resist. “Well, I got sidetracked by the election, and then the holidays, but I’ve been reading a lot about it again lately. And no, I haven’t gotten any cozier with Marcellus over the past few months.

I’m not alone. Recently, representatives from thirteen organizations (see below) signed a letter addressed to John Hanger, Acting Secretary of Pennsylvania’s Department of Environmental Protection. The first paragraph of the letter follows here:

“We understand that natural gas drilling could potentially be a major new source of revenue and business development in Pennsylvania. At the same time, however, the undersigned organizations are concerned that this drilling must be done in a manner that does not damage our state’s natural resources, particularly our water resources and the plants and animals that they support. If the rush to drill is allowed to go forward without adequate permit conditions and oversight, it could irreparably and unnecessarily harm habitat and water sources, de-watering streams, damaging water and air quality, fragmenting forests and impacting threatened and endangered species in some of the most pristine parts of our state.”

In order to avoid or minimize serious negative consequences to our land, water, air, and wildlife, the letter asks that the DEP be proactive in handling Marcellus Shale drilling issues. As the drilling rigs begin to multiply across the state, what should DEP tackle? These organizations specifically outline areas of concern: water withdrawals and treatment, discharge of back flows, habitat destruction, erosion and sediment runoff from drill sites, road and pipeline construction, air emissions from drill sites, truck traffic, chemical additives, and adequate DEP staffing. To illustrate one specific area of concern, the letter writers remind Mr. Hanger of recent trouble in southwestern Pennsylvania:

“The recent incident of TDS (total dissolved solids) overloading in the Monongahela River, which resulted in the Department advising 325,000 people to use bottled water, is clear and undeniable testimony that the state’s sewage facilities cannot handle the wastewater currently being produced by gas drilling and development. While not the only cause of the recent TDS overload, gas and oil drilling wastewater has been identified by the Department as a significant contributor, leading the state to order a mandatory reduction in the amount of gas well wastewater the sewage treatment facilities can take. This situation begs the question, “How will the wastewater from the current and planned expansion of natural gas well development be safely treated and disposed and who will bear this cost?” Certainly, the cost to the public, to water suppliers, and municipal wastewater facilities has been great in the Monongahela River region. This question must be adequately and fully answered before the industry moves forward with well development, or the story of the Mon (Monongahela) is doomed to be repeated throughout the Commonwealth.”

A more recent incident provides another real example of the organizations’ concerns. Earlier this month, an explosion at a private well in Dimock Township drew DEP officials to northeastern PA. After finding elevated natural gas levels in four water wells, DEP sent letters to twenty homeowners in the area outlining the dangers of gas trapped in water wells, suggesting that they vent them. The official source of the gas is undetermined at this time – possibly a natural phenomenon or perhaps a result of nearby drilling by Cabot Oil & Gas, which operates several Marcellus Shale drilling sites near the explosion site. While DEP conducts its tests to determine the source, Cabot is providing water to the four affected homes.

We must wait for DEP’s test results to discover whether natural gas drilling caused this particular case of contamination. Regardless of the results though, questions arise about the impact of gas leaks into water supplies. While several news reports about the Dimock situation stated that the gas in the water wells did not pose a threat for drinking, the official DEP news release seems less reassuring. According to DEP, “drinking water standard limitations have not been established for natural gas and associated health risks have not been identified.” Like so many other questions posed by The Marcellus, we must wait for a clear answer.

Finished with lunch, my friend and I step out onto the deck of the Weigh Station, looking across the street to the Susquehanna River flowing by, already offering up its waters to the great Marcellus thirst. We part ways, only after he promises to send a letter to the DEP. As I climb into my car, I start imagining my own letter…Dear Mr. Hanger…

With enormous economic potential at stake, voices clamor loudly across Pennsylvania for full-speed-ahead drilling in the Marcellus. Equally vocal voices are needed to protect our drinking water, our streams and rivers, our land, and our air quality from the impacts of natural gas drilling. Please add your voice for caution and vigilance by sending a letter to Mr. Hanger.

Mr. John Hanger
Acting Secretary
Department of Environmental Protection
Rachel Carson State Office Building
Harrisburg, PA 17105

Signatures on the letter to DEP mentioned earlier in this post represent these organizations:

Pennsylvania Campaign for Clean Water
Center for Coalfield Justice
Center for Healthy Environments and Communities
Chesapeake Bay Foundation
Citizens for Pennsylvania’s Future
Clean Water Action Justice
Damascus Citizens for Sustainability
Delaware Riverkeeper Network
Mountain Watershed Association
PennEnvironment
PA Chapter of the Sierra Club
Pennsylvania Trout Unlimited
Youghiogheny Riverkeeper

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“I like him.” my friend said, somewhat defensively, referring to the landsman who talked with him about signing a gas lease in the Marcellus Shale. “Well, I like him too,” I shot back, “but remember, he probably won’t be around here next year, and who knows what company you’ll be dealing with down the road…

Waste water, well spacing, fracing chemicals, wildlife habitats, lease assignments – all issues worth sparring about with my friend whose eyes are firmly focused on future fortunes to be made from the Marcellus Shale. Marcellus divides us like no other topic. He, the perpetual pessimist, and I, the eternal optimist, suddenly exchange places when debating this on-coming drill fest.

Consider lease assignments… You’ve carefully researched the gas companies before choosing your best deal, becoming comfortable with your landsman, his company’s history, and its financial situation. Now, you’re just marking time until your company’s rigs arrive. Unfortunately your carefully chosen company may abandon you before the ink is dry on your contract or any time business goals take them elsewhere. These multi-billion dollar gas and oil companies craft new deals often, buying and selling drilling rights as they manage their total portfolios.

Recent deals include XTO Energy’s who announced in April plans to acquire 152,000 net acres in the Appalachian basin from Linn Energy. Similarly, Dominion Resources plans to assign drilling rights on 205,000 Marcellus acres to Antero Resources. In cases like these, landowners signed leases with one company, but now, most without any input or choice, will have new partners who possess the legal power to impact their land usage.

Even the natural life cycle of a gas well could contribute to ownership shifts. The output of a typical well drops drastically after the first couple of years of operation and then gradually lessens over the full life. If the Marcellus Shale follows the path of other gas plays around the country, older wells may become candidates for sale to smaller, less financially stable gas companies.

In a standard lease agreement, the original lease follows the sale. You will be dealing with the new company, with few, if any rights to go after the original company should things go badly – capping of old wells, gas leaks, water issues, etc. Some contracts carry addendums stating that the gas company must notify you if they assign your lease to another company. An addendum declaring that the lease cannot be sold or assigned without your approval may offer a bit more protection.

But no matter how carefully you negotiate the terms of your lease agreement, the reality is sobering: you are no longer sole owner of your land. You are no longer lord or mistress of all you survey. You are no longer in total control of what happens to your little heaven on earth. Your newfound prosperity carries a hefty cost – a dramatic loss of ownership and independence.

Consider this extreme, but possible lease ownership shift. A short Reuters article from Hong Kong appeared on-line in July. “China National Petroleum Corp (CNPC), China’s top state oil firm, is thinking of bidding for minority stakes in shale gas assets of Chesapeake Energy Corp… Chesapeake is looking to raise as much as $5 billion this year from selling minority stakes in its Arkansas and Pennsylvania shale gas properties, the South China Morning Post reported.” Will this happen? I don’t know, but it’s enough to know that it’s possible.

“Well, maybe China National is a good company,” my friend offers. “Yeah, I did some research on it,” I replied, “and it looks like it is, but that’s not the point. We’re already drinking Belgian/Brazilian Budweiser, facing Korean- or Chinese-owned GE appliances, and getting used to the idea of Abu Dhabi owning the Chrysler building. What’s more difficult to imagine is that our neighbors’ private, personal properties could someday belong to China or any other country courted by the gas companies.”

“OK, I can see your point,” my friend said, as the sun slipped from view over the hilltop beyond the valley. As I looked out over the lush, green fields bordered by century-old stone walls, I spied a couple of deer stepping cautiously out from the wood’s edge. I made a mental note to take more pictures over the next few months, capturing on paper this beautiful land as it was before Marcellus awoke.

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“You’re just being pessimistic. It won’t be that bad,” my friend said, referring to my concerns about the gas boom from the Marcellus Shale. “No,” I replied. “I’m just being cautious. We know the money will be good, but there’s a whole lot more to think about besides the money.”

A year ago, I refused to sign a gas lease. I didn’t want anyone walking on, driving on, drilling on, piping on, being on…you get the picture! And, at $100 an acre, my husband humored me. Now, money calls out a whole lot louder. “We can’t stop the drilling all around us, so we might as well sign,” my husband says, as he nudges me a little bit harder. We can sign a lease with a no-surface rights clause – drill horizontally under us, but don’t tread on me! It solves the “not on my land!” problem, but I’m still losing sleep thinking about the bigger picture.

Consider what we’ve learned so far. When representatives from Anadarko, Range, Chesapeake, Cabot, Chief, and others came into the area, they acted as their shareholders expected them to act:

• Pay as little as possible to the landowners.
• Don’t advise people about the sure-to-happen-soon price run-up.
• Offer contracts with legal protections only favoring the company.
• Don’t advise the landowners to seek legal help before signing.

Like it or not, these actions are typical and legal business strategies. So, keep in mind: the gas companies, with their big bucks and heavy political clout, will always approach the Marcellus strictly as a business. Just because they act legally, does not mean that they will act in the best interests of landowners or others who live in our communities. We must be vigilant and vocal in our call for responsible drilling.

“I’ve seen a few drill sites around here over the years and you hardly notice them,” my friend said, trying to put a positive spin on the subject. I shook my head. “Those were vertical wells, and they didn’t produce much. It’s a new ball game now. Energy costs are up, plus they’re pretty sure that they can get at the gas with horizontal drilling and fracing…

Consider just two causes for concern: the impact of well spacing and surface damage due to drilling sites. Landsmen from two companies spun the same story to me: “Horizontal drilling means that wells can be further apart than vertical wells. There could be one well drilled per square mile or per 640 acres.” What they hadn’t answered yet is my question about why Marcellus will be different than the horizontal drilling taking place in the Barnett Shale in Texas. Even horizontal drilling with fracing can not capture enough of the gas in shale, so companies are increasing their recovery in the Barnett by infill drilling their horizontal wells (drilling in between existing wells) with spacing as close as one well per 20 acres.

Let me repeat that…as close as one well per 20 acres! Apparently, Pennsylvania has lax rules on well spacing (please leave a comment if you have specifics). Will we see dense drilling in the Marcellus? Probably. How dense? I don’t know, but it’s an issue that should be discussed and researched by everyone living in the Marcellus play, landowner or not.

What about surface damage at the well sites? Horizontal wells require approximately four acres of land (versus 1 ½ for vertical wells) for the drilling pad, storage pit, equipment, etc. Each pad must be placed on a level surface, so excavation of hillsides is inevitable; especially as well spacing becomes denser. Add to that the access roads carved into the land to every drill site and the miles of pipelines. And, although companies are supposed to return drilling areas to a similar state as before drilling began, if Marcellus follows Barnett’s lead, many wells will be refraced several times over their lifetime. Surface destruction will happen more than once at each site.

My scenario may be the extreme, but even with regulations, gas companies in other states have easily received variances to allow them to reduce well spacing. Remember: the gas companies will be focused on recovering billions in lease investments and on maximizing their future profits. They won’t walk away from profitable gas extraction just because you don’t want to see a wellhead out every window. If you haven’t signed a lease yet, consider this issue. If you have signed, think about it the next time you negotiate. If you don’t own land, realize that this gas play impacts you too.

“OK, OK,” my friend said. I’ve heard enough for one day!” I took a long breath and said, “OK, I’ll stop, but someday soon I want to tell you about drilling mud and produced water and the Clean Air Act and compressing stations and pipelines and lease assignments and wild life and deer hunting and water supplies and…

I mentioned my concerns to someone else last week and felt my stomach churn with his reply. “I don’t care if they ruin this area,” he said. “I’ll just take my royalty checks and move somewhere else.” He left me momentarily speechless and deeply discouraged. Later, I reminded myself that many others also love the beautiful Appalachian Mountains region of Pennsylvania. Our challenge? To find a balance between our newfound prosperity and the natural surroundings that enrich our small-town and quiet country lives.

]]> http://www.homebeckons.com/2008/07/26/marcellus-shale-a-plea-for-caution/feed/ 2 http://www.homebeckons.com/2008/07/10/marcellus-shale-at-what-price/ http://www.homebeckons.com/2008/07/10/marcellus-shale-at-what-price/#comments Thu, 10 Jul 2008 20:19:14 +0000 DeeCee http://www.homebeckons.com/?p=17

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“Marcellus, who’s she?” I asked. “It’s not Marcellus who,” my friend said. “It’s Marcellus what. It’s the Marcellus Shale and it’s going to make a lot of people around here really rich.” And so began my introduction to a potentially life-altering phenomenon…

The Marcellus Shale formation runs from the southern tier of New York, through central and western Pennsylvania, eastern Ohio, and through most of West Virginia. Hidden mainly 5,000 to 10,000 feet below ground level, the Marcellus slept relatively unnoticed for over 300 million years. Noticed and named just within the past two hundred years, geologists studied Marcellus and oilmen hungered after her. The rest of us unknowingly waited for an introduction.

The early ones heard a knock on the door. “Hi, my name’s Mr. Gasman, and I work for Range Resources (or Chief Oil & Gas or Chesapeake Energy or a number of other companies). There’s a possibility of getting natural gas from the Marcellus Shale that runs through this area. We’re interested in leasing your land for gas and oil drilling rights.” Many people approached in the past to sell rights for five dollars an acre or less were now drawn in by new offers of $20 or $30 an acre. Money enough to paint the barn… Money enough to catch up on mortgage payments… Money enough to buy a new truck… Money I didn’t expect… Where do I sign?

Gas. Natural gas. And lots of it. Known for years to contain natural gas deposits, Marcellus stubbornly refused to give up her stores until recently when technology and rising energy costs allied to work against her. New horizontal drilling, proven effective in the Barnett Shale in northern Texas, offered the promise of finally extracting the before-untouchable Marcellus riches. Friends and neighbors suddenly learned a new vocabulary – hydrofracing, drilling mud, coalbed methane, shut-in, pooling, blow outs, rule of capture, delay rental, sour gas, recompleting, plugging back. Offers climbed to $100, $500, $1,000, up to $2,500 per acre in a little over a year, with added incentive of future royalties from producing wells.

Good news, right? Well, maybe. Rather than a sense of excitement about the good fortunes coming to our country community, I feel a nagging sense of foreboding about this gas boom. The Beautiful Endless Mountains. The local Chamber of Commerce uses this phrase to snag tourists into our part of the Appalachians in northeastern Pennsylvania. Will that description still fit ten years from now? Besides the money, what will Marcellus bring to us and leave for us?

Will our beautiful landscape be scarred with drill sites even after the drilling is done? What is the risk for fouling our air with methane or the rotten-egg smells of H2S? How many water wells will be polluted? Will the quantity of water required for hydrofracing endanger our local rivers, streams, and ponds? What happens to the contaminated wastes generated by the drilling? How much noise do drilling and well operations create? What impact will the drilling and wells have on wildlife? What will the total price be for our new-found prosperity?

After refusing to sign last year, my husband and I will meet with Chesapeake Energy again next week to talk about our few acres. We’ll ask these questions, expecting to hear the upside and positive, while the real story plays out over the coming years. Will we sign a lease? I’m not sure, but whether we do or not, we’re sure going to get to know Marcellus.