B USINESS
Section
D
SUNDAY, MAY 5, 2013
MARCELLUS SHALE
Expanded oversight demanded
Inspections increase, violations decrease BY STEVE FERRIS
State inspections of Marcellus shale natural gas wells such as the well in the photo at left in Franklin Township have increased over the last few years, but the number of violations has decreased.
sferris@heraldstandard.com
David Headley of Springhill Township, carrying a sign and speaking into microphone, and his wife, Linda (left), participate in a rally outside of the state Department of Environmental Protection’s (DEP) Pittsburgh office on Earth Day, April 22. The rally was one of six held at DEP offices across the state that day to urge the DEP to increase oversight of the Marcellus shale natural gas industry.
Well compliances reported BY STEVE FERRIS sferris@heraldstandard.com
Compliance reports from state Department of Environmental Protection’s (DEP) Bureau of Oil and Gas Management inspections of unconventional Marcellus and conventional natural gas wells offer a glimpse of how the state oversees the industry. Most reports say whether DEP inspectors went to the wells for routine or well-completion inspections or in response to complaints, incidents or spills reported by property owners and operators. Some details about the violations inspectors encountered also are provided in most of the reports.
However, one report about a brine discharge, which was caused by cows knocking a cap off a tank at a gas well in German Township and resulted in a fine, did not identify the well operator. The only inspection conducted this year in Fayette County was a routine inspection at a conventional well operated by The Production Co. in German Township on Jan. 16. The DEP issued a notice of violation for failing to restore the site within nine months of completing the well. The well was completed on July 28, 2011, but the site had unlined and unstabilized storage pits, according to a DEP compliance report. The violation was resolved in March and no
fine was assessed, according to the report. Last year, the DEP assessed five fines for violations found during inspections. An unnamed well operator was fined $4,000 after 19 barrels of brine spilled when cows knocked the drain cap off a tank at a conventional well in German Township on July 23. The DEP assessed a $1,000 fine against Oil and Gas Management Inc. for failing to report the completion of a conventional well in German Township within 30 days following a March inspection. An $800 fine for a similar violation was assessed against The Production
REPORTS, Page D2
An increase in inspections of Marcellus shale natural gas wells across the state has resulted in fewer violations, which indicates that drillers are doing a better job of complying with regulations, a state Department of Environmental Protection (DEP) official said. The pattern of more inspections and fewer violations holds true locally, but more wells are now being inspected in Fayette County than in Greene County, even though Greene County has more than twice the number of wells. In Fayette County, two violations were found during 194 inspections of 71 unconventional wells in 2010; 17 violations were reported during 604 inspections of 113 wells, and 11 violations were found in 642 inspections of 160 wells last year, according to the DEP’s Bureau of Oil and Gas Management compliance reports. As of Wednesday, no violations were found in 209 inspections of 126 wells. There are 308 Marcellus wells in the county. Violations found at all natural gas wells in Fayette County resulted in seven fines in 2010; eight fines in 2011; five fines last year and none so far this year. In Greene County, 25 violations were found during 344 inspections of 148 unconventional wells in 2010; 15 violations were
JOEL BREWTON| HeraldStandard
reported in 324 inspections of 189 wells, and 13 violations were found in 514 inspections of 281 wells last year. So far this year, nine violations were found in 166 inspections of 132 wells. There are 676 Marcellus wells in the county. Violations found at all wells in Greene County resulted in five fines in 2010; six fines in 2011; three fines last year and none so far this year. Statewide, 1,277 violations were found during 5,244 inspections of 2,001 unconventional well in 2010; 1,216 violations
were reported during 10,521 inspections of 3,930 wells in 2011, and 712 violations were found in 12,572 inspections of 4,841 wells in 2012. As of Wednesday, 260 violations were found during 4,272 inspections of 2,624 wells. “We saw a decrease in violations in unconventional wells, meaning the performance by operators has been improving,” said DEP spokesman Kevin Sunday. “They’re improving their site management practices, being more responsible about
INSPECTIONS, Page D2
Local gas drilling peaked in 2011 Local is healthier BY STEVE FERRIS
business plan, and we expect to continue to operate in this region for decades,” Chevron spokesman Nate Calvert said. Marcellus shale natural gas drilling peaked in As of Wednesday, the four wells Chevron drilled most of the area in 2011, according to state Dein Fayette County are in Luzerne Township. partment of Environmental Protection spud reports. Last year, Chevron drilled 46 of the 47 wells that In Fayette County, 47 unconventional wells were were drilled in the county, including 13 in Luzerne drilled last year; 54 in 2011; 44 in 2010 and four so Township. far this year. Chevron drilled nine in Jefferson Township, six In Greene County, 105 wells were drilled last year; in Franklin Township, five in Perry Township, four 121 in 2011; 103 in 2010 and 36 so far this year. in Redstone Township, three in Menallen Township, In Westmoreland County, 42 well were drilled last three in Nicholson Township and two in Washington year; 59 in 2011; 49 in 2010 and 14 so far this year. Township. The exception is Washington County, where 195 Burnett Oil Co. Inc. drilled one in German wells were drilled last year; 155 in 2011; 166 in 2010 Township. and 68 so far this year. In Greene County, four exploration companies Chevron Appalachia has been the primary driller drilled eight wells in Washington Township, seven in in Fayette County for the last few years. Chevron Dunkard Township, six in Jackson Township, four in drilled all four new wells this year and the majority Cumberland Township, four in Center Township and of the wells in the last two years. two in Greene Township. A spokesman declined to discuss the specifics of Last year, 47 wells were drilled in Center, 11 in the company’s exploration but said it plans to conMorris Township, nine in Cumberland, eight in tinue working in the area for many years. Morgan Township, five in Franklin Township, three “Fayette, Greene, Washington and Westmoeach in Aleppo, Jackson, Dunkard, and Greene reland counties are part of our core operating area townships; two in Springhill Township and one each in southwest Pennsylvania. We have a long-term in Jefferson and Richhill townships. sferris@heraldstandard.com
I’m spending the day at the spa with my mom. It’s a muchneeded day of relaxation after a busy work week and working at the Greensboro Farmers market yesterday. While the other local farmers’ markets don’t start until July, the one in Greensboro, Greene County runs every Saturday from 9 a.m. to 1 p.m. at Gazebo Park. Make sure you come out and visit us next week. And if you are interested in being a vendor at any of the farmers markets in the area, call Jennifer Kooser at 724-437-7913 or email her at jenniferk@faypenn.org. Purchasing your produce at farmers’
Lori Scott markets not only helps your local farmers, which are local business owners, but it also is healthier. According to localharvest.org most produce in the United States is picked four to seven days before being placed on supermarket
LORI, Page D2
Business briefcase UBSI earnings increase
EQT makes acquisition
United Bankshares reported increased first quarter earnings over the first quarter of 2012. First quarter earnings were $21.6 million, or 43 cents per diluted share, which is higher than $21 million, or 42 cents per diluted share, from the first quarter last year. This year’s first quarter earnings produced a 1.05 percent annualized return on average assets and an 8.72 percent annualized return on average equity. In last year’s first quarter, the average assets return was 1 percent and the average equity return was 8.63 percent.
(BUSINESS WIRE) — EQT Corp. has signed an agreement to buy 99,000 net acres in southwestern Pennsylvania and 10 horizontal Marcellus shale natural gas wells in Washington County from Chesapeake Energy Corp. and its partners for about $113 million, subject to closing conditions. The acreage includes 67,000 Marcellus acres and 32,000 dry Utica acres. Of the total purchase price, $60 million is allocated to the undeveloped acreage, while the remaining $53 million is for the
existing Marcellus wells. The transaction is expected to close on May 30, 2013. The acquisition includes about 25,000 acres within EQT’s core Marcellus development areas of Washington, Greene and Allegheny counties. The remaining 42,000 Marcellus acres are unlikely to be developed. Three of 10 the Marcellus wells are producing, and the remaining seven will start producing by the end of the year. Upon close of the transaction, EQT anticipates drilling four wells on the new acreage this year.
Business Briefcase policy The Herald-Standard publishes news in the Business Briefcase column each Sunday. Items can include new business openings, changes in business management, location and hours, retirements, executive level promotions or professional hirings and most nonpromotional business events. Photos of businesspeople will be published as long as they are clear and sharp. Black and white and color photos are accepted. For more information on the Business Briefcase column, call business writer Steve Ferris at 724-439-7562 or e-mail sferris@heraldstandard.com.