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

07/06/2015

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

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

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
Available Webcasts


Operating a Sustainable Oil & Gas Supply Chain in North America

When Wed, Oct 7, 2015

Short lead times and unpredictable conditions in the Oil & Gas industry can create costly challenges in supply chains. By implementing a LEAN culture of continuous improvement you can eliminate waste, increase productivity and gain end-to-end visibility leading to a sustainable and well-oiled supply chain.

Please join us for this webcast sponsored by Ryder System, Inc.

register:WEBCAST


The Resilient Oilfield in the Internet of Things World

When Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.

register:WEBCAST



On Demand

Taking the Headache out of Fuel License and Exemption Certificates: How to Ensure Compliance

Tue, Aug 25, 2015

This webinar, brought to you by Avalara, will detail the challenges of tax document management, as well as recommend solutions for fuel suppliers. You will learn:

-    Why it’s critical to track business partner licenses and exemption documents
-    The four key business challenges of ensuring tax compliance through document management
-    Best practice business processes to minimize exposure to tax errors

register:WEBCAST


Driving Growth and Efficiency with Deep Insights into Operational Data

Wed, Aug 19, 2015

Capitalizing on today’s momentum in Oil & Gas requires operational excellence based on a clear view of what your business data is telling you. Which is why nearly half* of oil and gas companies have deployed SAP HANA or have it on their roadmap.

Join SAP and Red Hat to learn more about using data to drive process improvements and identify new opportunities with the SAP HANA platform running on Red Hat Enterprise Linux. This webinar will also show how your choice of infrastructure impacts the performance of core business applications and your ability to achieve data-driven insights quickly and reliably.

*48% use SAP, http://go.sap.com/solution/industry/oil-gas.html

register:WEBCAST


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