Speakers say road work emerging issue in Marcellus development

Nick Snow
OGJ Washington Editor

STATE COLLEGE, Pa., Oct. 13 -- Speakers at the 2010 Marcellus Summit continued to emphasize the importance of steady and open communications will all interested parties as the conference at Penn State University moved into its second and final day. Road work is a critical issue, two producers said.

“Traffic becomes a major issue as we encroach on more populated areas,” observed Jim Cannon, public affairs manager for Range Resources Corp. in Cannonsville, Pa. “We work with local governments to hire flagmen to direct traffic.” Road construction bonds cost $12,500/mile “which barely gets the driver out of the truck,” he continued. Range works with local governments directly to solve the problem, he said.

George Stark, external affairs director for Cabot Oil & Gas Corp. in the region, said that the Houston independent producer concentrated its Marcellus shale holdings in Susquehanna County, where it has drilled 120 wells. “We're spending $8 million on roads there this year alone,” he said. “Several miles of roads there were badly deteriorated before we arrived. We would like to see some understanding from Harrisburg about work we've done before our trucks could use them.”

A day earlier, state regulators also told conference participants that roads had become a problem. “If there's been one complaint, it's that they weren't designed to handle the heavy trucks necessary to develop the shale gas,” said Louisiana Conservation Commissioner Jim Welsh. “The industry had to pitch in and do some repairs.”

The problem apparently stems from not having road impacts covered in oil and gas or environmental regulations. New York encourages producers to work with local governments on developing road plans before they arrive, according to Brad Field, director of the mineral resource division in the state's Department of Environmental Protection.

And in Ohio, which is in a much earlier Marcellus development stage than Pennsylvania or New York because it's near the formation's edge, state officials are working with counties on bonding issues and road safety issues, noted Richard Simmers, statewide enforcement manager in the Department of Natural Resources' mineral resources management division.

Communications critical
Such issues make full and open communications critical, panelists agreed at an Oct. 12 session on the oil and gas industry's perspective. “We face a huge challenge because we are fundamentally dealing with a lack of good information,” said American Petroleum Institute Chief Economist John C. Felmy. “Our opponents are heavily organized and ready to do street theater or try to bamboozle state legislatures. We have to get out in force.”

When an audience member asked him if he wasn't being overly dramatic himself using such expressions, Felmy replied: “That's what I've seen at several hearings. I, for one, am not going to sit back and see nonsense performed without calling it that.”

Insensible, also, is the severance tax that Pennsylvania's House recently passed, Felmy stated. “It would contribute to a slowdown in the growing activity here, particularly if it's combined with the $40 billion of taxes on the oil and gas industry which the Obama administration has proposed,” he said.

Range, which pioneered Marcellus production with a vertical well in 2004, now works with officials from 28 southwestern Pennsylvania townships, Cannon said. “It can be a problem when your lease is in two townships and each has different procedures and attitudes toward the industry,” he said. “Communications is the key. We've solved several problems by simply picking up the phone and asking someone, 'What's bothering you?'”

Stark said Cabot is encouraging Pennsylvania counties where gas production is growing to find ways to use it locally. Procter & Gamble drilled some wells for its plant in Wyoming County and produced enough that it could sell some gas to UGI Corp., the local utility, he noted. “If P&G decides to expand its product manufacturing capacity, it probably will look first at Wyoming County because its operation there has become so profitable,” he said.

“We need to keep working on our image,” said Felmy. “We have the opportunity to do something really great up here. If we all work together, we have a chance to be part of one of the biggest success stories in our nation's history.”

The 2-day Marcellus Summit was cosponsored by the Interstate Oil & Gas Compact Commission.

Contact Nick Snow at nicks@pennwell.com.

Related Articles

WAFWA: Aerial survey finds lesser prairie chicken population grew

07/06/2015 A recent range-wide aerial survey found the lesser prairie chicken population rose 25% from 2014 to 2015, the Western Association of Fish & Wil...

Buru awarded onshore Canning licenses

07/06/2015 Buru Energy Ltd., Perth, and Mitsubish Corp. have been granted two production licenses for Ungani oil field in the onshore Canning basin of Western...

Cenovus sells royalty business for $3.3 billion

07/06/2015 Cenovus Energy Inc., Calgary, inked an agreement to sell its wholly owned subsidiary Heritage Royalty LP to Ontario Teachers’ Pension Plan for gros...

CERI: Energy, operational efficiencies possible in Canadian oil, gas

07/06/2015 Measures can be taken by operators in the expanding resource-intensive Canadian oil and gas sector to improve both energy efficiency and operationa...

AGL Energy to scale back upstream gas operations


Gas retailer AGL Energy Ltd., Sydney, says it will exit the oil business and massively scaling back its upstream gas operations.

Macondo settlement seen ‘positive’ for BP

07/06/2015 BP Exploration & Production Inc.’s recent agreement to settle federal and state claims related to the 2010 Macondo blowout and spill improves t...

Newfoundland, Labrador prepare for deepwater exploration

07/06/2015 Canada-Newfoundland and Labrador Offshore Petroleum Board's (C-NLOPB) most recent call for bids for the Eastern Newfoundland Region is coming to a ...

Group suggests principles for Alberta royalty review

07/06/2015 The Canadian Association of Petroleum Producers (CAPP) has suggested that four principles guide Alberta in an oil and gas royalty review planned by...

Linn Energy, Quantum complete AcqCo deal

07/06/2015 Linn Energy LLC, affiliate LinnCo LLC, and Quantum Energy Partners have signed definitive agreements to fund the acquisition and development of oil...
White Papers

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by
Available Webcasts

OGJ's Midyear Forecast 2015

When Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

When Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.


On Demand

Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!


Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected