Friday, November 5, 2010

Wayne County Natural Gas Perspectives

This is not my work
Article Source :

"Palmyra (W) Twp., Pa. — Township officials from Wayne County at their recent fall convention, heard an unashamed message about how natural gas drilling can rescue the local economy.

Thomas J. Shepstone addressed the Wayne County Association of Township Officials’ 98th annual convention, held at Lukan’s Farm Resort. Shepstone operates a planning and market research consulting business based in Honesdale.

Shepstone began by painting a dire picture of the Wayne County area economy. He stressed that the boom years are past in the Northeast. “Wayne County and the area is in deep trouble,” he stated. “The economy is dead in the water. There is zero growth other than the federal prison, in the last couple years.”

Income is 30 to 60 percent below other areas in the region. School enrollment is dropping. We have a growing senior population, and we are in need of attracting younger people and families to stay in the area, he said. Construction is minimal. The national economy has resulted in fewer people migrating here from New York City.

“The good news,” Shepstone continued, “is that natural gas can address all this.”

He noted that lease bonuses may have already contributed $200 million to $250 million to the county’s economy. Royalty income in Sullivan County has been as little as $5000/acre, per year. This figure could be doubled for others. With at least 200,000 acres where gas may be profitably drilled in northern Wayne, Shepstone figured that even if a tenth of that was developed, the county economy could see about $200 million a year.

In addition to benefiting lease holders, a parade of real jobs will be supported, from hotels and services to welders and truckers.

A reasonable severance tax levied by the state, he added, should be allocated for townships and the Pa. DEP to directly address impacts of the gas industry. A concern exists that the taxes would support environmental special interest groups that would work against the gas industry.

With the much larger Utica Formation beneath the Marcellus Shale, Shepstone said the potential exists for a “lifetime of opportunity” from Pennsylvania’s gas deposits.

“Don’t be intimidated by special interests,” he told the supervisors, “that want to keep this area their playground” and don’t care about the local jobs that would be generated.

Referring to the “environmental hysteria,” he said he was concerned that the staff of the Delaware River Basin Commission (DRBC) favor these special interest groups. The DRBC commissioners, however, want to do it right, he added, but it may be a “torturous” path. DRBC is expected to release their long-awaited gas industry regulations this week.

The impact of the gas industry, Shepstone stated, would be minimal thanks to growing technology. One well can serve 640 acres, or one square mile. A well pad taking only five acres of land, can serve two to five square miles. Horizontal drilling can access gas Without disturbing natural areas that are particularly sensitive.

Water can be recycled at well pads, drawing down on the amount of water needed to be extracted, and thus less water impact and less impact from trucking. The technology, he said, “is racing ahead of environmental issues.”

Despite protests heard, he stated that there are no cases in the US where fracking was shown to spoil water resources. Pennsylvania currently has about 121,000 active wells.

Township officials shouldn’t be intimidated when questioned if they have an interest in gas leasing at stake. “No apology is needed, as long as you disclose where you’re at,” he said.

Asked about the “million gallons” of water needed for fracking or each well, Shepstone reminded that this isn’t really that large a number. Golf courses, he said, can use more than that.

He advised township supervisors who have zoning, to treat gas drilling as a “Principal Permitted Use” which carries certain standards. Townships, he said, are open to law suits, should they try and apply conditions on drilling operations. On the other hand, zoning can direct what areas in the municipality where drilling can occur.

Townships also do well to regulate related activities such as compressor stations and work camps, he added. Negotiate with the gas companies about repairing roads affected by their trucks.

“That’s where the real impact is, not this phony baloney about fracking,” Shepstone declared.

“I’m not neutral,” Shepstone underlined."

1. Think the actual number for royality income was 5 to 10 K per acre.
2. Hoping the royality owners consider supporting regional economic and environmental issues and help to protect the regional surface and groundwater quality - by installing and improving existing private wells and stormwater infrastructure

Just my thoughts

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