SUMMeR 2014 | VoL. 4 | ISSUe 3
neW KiD
on The griD
Natural gas makes way for reliable electricity. // Page 14
SUMMeR 2014 | VoL. 4 | ISSUe 3
3 // Walk through Wyalusing
PUBLISHER’S NoTE
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nce upon a time … Pennsylvania got most of its electricity from coal-fired furnaces. // Fairy tales often start this way, but the story we tell in this edition of the NEPA Energy Journal is far from fantasy. With the abundant supply of natural gas, whether you agree with hydraulic fracturing or you’re vehemently opposed to it, the fossil fuel is giving new life to electricity generation in this state. // Two new power plants are going up, and a third is under consideration that would add efficient, low-emissions generation to the mid-Atlantic power grid. The increasingly popular way to create electricity brings a bevy of benefit, including greater generating efficiency, no need for millions of gallons of water to cool reactors, and additional generators feeding into the region’s electricity network. // While it’s unlikely customers will see sweeping reductions to their energy bills, as one industry spokesman Bill Pentak put it, “the most expensive electricity is no electricity.”
some, but not all, in the small town are reaping rewards from nearby gas drilling.
14 // Power Panda-monium
Panda Power Funds is changing the way Pennsylvania generates electricity.
16 // Mountainous growth
OUR TEAm
on THe CoVeR A worker high up in the liberty power station’s cooling units rests for a minute while more workers below stage materials at the new Bradford county power plant to be completed in 2016. Read the story on page 14.
eXeCUTIVe eDIToR George spohr PRoJeCT eDIToR dan Burnett RePoRTeRS James o’malley | Jon o’connell DeSIGneRS Amanda dittmar | Tina murdock PHoToGRAPHeRS Bill Tarutis | Fred Adams ADVeRTISInG eXeCUTIVe Trish Roe | 570-704-3955 | proe@civitasmedia.com
mountain Energy services continues to build company two brothers started in ‘09.
6 // By the numbers: Last year’s impact fee money
10 // Severance tax an unfair burden onindustry Guest commentary | Pa. Rep. Fred Keller
12 // Duke U. study shows financial growth from drilling
13 // Kings College asks:
How much does bad water cost?
20 // Shale news 22 // Atlantic Sunrise brings new horizon for distribution
24 // enact a severance tax now Guest commentary | Tom Wolf
2 // NEPA Energy Journal
A little
Jon o’ConneLL | JocoNNEll@civiTAsmEdiA.com
Wine cheeSe A little
and a place to rest your head
Some small business owners in the historic town of Wyalusing have had a front-row seat to the energy boom.
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WYALUSING — Lee Bendinsky sat alone in his barber shop along Main Street one hot, muggy afternoon. A few fresh hair clippings left on the floor were proof he had at least a few customers earlier. At the sound of the door, the secondgeneration barber looked up from the cellphone at which he was absentmindedly thumbing. His eyes narrowed behind thick-lensed glasses and he wondered if he’d squeeze in another $8 haircut before the day ended. When the drilling boom sounded in Pennsylvania, Wyalusing certainly felt the shock wave, but not all businesses — especially some in the small downtown — have prospered. Nestled off U.S. Route 6, about 25 miles northwest of Tunkhannock and 15 miles southeast of Towanda, the
“
sleepy Bradford County town is along a main artery and a prime pivot point for drillers making their way through the Marcellus Shale region. The initial boom has subsided, a handful of business owners around town and Wyalusing Chamber Director Wendy Gaustad said. “I think we had a real rush in the beginning. It’s not as intense as it was,” Gaustad said. “But there’s still lots of activity.” The tractor dealers and heavy-machinery merchants situated along Route 6, jolted to life by farmers with leases who now can afford to upgrade their equipment, are obvious and lingering proof that natural gas production has bolstered the Wyalusing economy. Meanwhile, the historic Main Street is scraping by. EMPTY STOREFRONTS “Our Main Street’s struggling right now,” Gaustad said. “Retailers really cannot make a living in Main Street storefronts.” A massive welcome sign along Route 6 heading into town entices guests to give Main Street a shot. But apart from a beautiful old hotel taken over, restored and retrofitted 15 years ago, a few insurance agencies, a consignment shop and Bendinsky’s barber shop, the quaint
I would say what we see more than anything is a better macroeconomic benefit for the area.” — Jeff Homer, owner Grovedale Winery and Vineyards
buildings are mostly vacant. During the boom, Bendinsky gained new and regular customers, fellows with deep Southern accents and widebrimmed hats. They would sit in his shop and chat among themselves while under his barber scissors worked. The small talk grew redundant, but he liked it, he said. “Where you from?” “How long you been up here?” “When was the last time you saw your family?” “Yeah, I miss my kids, too.” As the industry matures, many of the transient Southern drillers have moved on, letting a rising local workforce fill in the gaps and keep the ship afloat. Along with the drillers’ business, Bendinsky said he misses their company in town. “I kinda miss some of the fellas,” he said. “You know, just seeing them out on the street and saying ‘Hello.’” Gas has been good for Wyalusing, he said. And, at least by the only metrics he has, folks have more expendable income. “They’re maybe getting their hair cut a little more often,” Bendinsky said. Across the street, Chris Woodruff was coming off the daily lunch rush in the Wyalusing Hotel, where he said traffic grew during the boom and has since slowed, but to a comfortable and sustainable level. HOTEL ANNEX The increase in revenue and drillers’ demand for overnight
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New Kid on the Grid // 3
accommodations gave Woodruff the resources to construct a second building, called The Annex, down the street that added 24 new rooms to the hotel’s original 11. A local policeman interrupted Woodruff with a hearty handshake. “As always, the food was great,” the cop said before returning to finish his shift. The brief exchange was reminiscent of congenial times when officers doublechecked storefront doors every night and were on a first-name basis with the local shop owners. It’s something that appears to remain alive and well in Wyalusing. Woodruff bought the hotel about 15 years ago, well before anyone anticipated the deluge of activity that befell northern Pennsylvania. National Public Radio’s State Impact database reports Bradford County leads the state for most wells in production. With 1,140 of them, it trumps runner-up Washington County by more than 300 wells. Woodruff spruced up the inside of his establishment with thoughtful dining rooms and a spacious sunken barroom preserving original beams and fixtures from a bygone era. He employs a total of 38, with 16 working full time to keep the restaurant, hotel and annex running. “I think it’s been good for the area,” Woodruff said of natural gas production. Opportunities for folks, especially farmers, have risen that never would have surfaced if not for the cash influx brought by the industry, he said. Just outside town, Jeff Homer said his business, Grovedale Winery and Vineyard, never saw a direct increase in business because of the boom. His product caters to a niche audience, and the folks who venture into his tasting room are usually those touring the Endless Mountain Wine Trail. The 26-year-old Homer planted his vines on family property in 2005. A sev-
Bill Tarutis | For NEPA Energy Journal
Wyalusing Hotel proprietor Chris Woodruff was able to build an annex to his historic hotel to keep up with the growth courtesy of natural-gas production near the small Bradford County community.
enth-generation funeral director, Homer counts on his grapes, a Minnesota variety known for its hearty resistance to subzero temps, to be revenue source for dry times. Wyalusing proper and the surrounding Wyalusing Township is home to only about 2,000 people spread across about 30 square miles. “I realized very quickly why my father had multiple jobs,” Homer said. “When you live in a small town, work as a funeral director can be slow at times.” Since he opened the vineyard, business has tripled, so Grovedale’s producing about 3,000 cases of wine each year, the chief vintner said. In 2013, Homer collaborated with brewer Thor Trowbridge to open the River Barge Brewing Co. complete with in-house brew pub. Grovedale wines aren’t in any state-run wine and spirits stores, but he does sell to a few restaurants. Twigs in Tunkhannock and Fire & Ice in Kingston Township both stock bottles of his wares. Like Bendinsky, Homer said that while his business may not be nourished directly by dollars from drilling, a rising tide lifts all ships. “I would say what we see more than anything is a better macroeconomic benefit for the area,” Homer said.
CHEESE WITH WINE A little north of Wyalusing, in LeRaysville, where most highways are Bill Tarutis | For NEPA Energy Journal marked with signs warning of horse-andAward-winning wines are on display in Jeff buggy rigs, at the end of Cheddar Lane, Homer’s Grovedale Winery and Vineyards tasting the LeRaysville Cheese Factory shares a room in Wyalusing.
4 // NEPA Energy Journal
Wyalusing A small borough about eight-tenths of a square mile sits tucked inside Wyalusing Township. The combined municipalities total: • 29 square miles • 1,940 residents • 805 households • $44,000 median family income • 53 percent of population of working age • 20 percent of population older than 65 • 27 percent of population younger than 18 • Five villages — Browntown, Camptown, Homets Ferry, Lime Hill, Merryall Source U.S. Census Bureau, www.bradfordcountypa.org
similar story. A crew of eight runs the little factory led by cheese maker Herman Nissley, a quiet young Amish man, who brings with him traditional cheese-making know-how. Factory and retail manager Charity Dunbar said that while the occasional drilling rig operator might stop by for a pound of Holy Cow! It’s Hot Cheddar to take home, the business has gone largely untouched by the industry. There is a small retail store out front that sells cheese by the pound and tradi-
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Bill Tarutis | For NEPA Energy Journal
Bill Tarutis | For NEPA Energy Journal
Grovedale Winery & Vineyards owner Jeff Homer explains natural-gas pro- Lee Bendinsky says the natural-gas boom in Wyalusing has subsided. The duction hasn’t directly improved his business, but the plentiful resource second-generation barber inherited his father’s shop along Wyalusing’s Main certainly has helped the community as a whole. Street, where he has worked for 55 years.
The cheese factory uses only milk from LeRaysville cows, Dunbar said. Heavy-truck traffic past Cheddar Lane has been light amid gas development in Bradford County, Dunbar said. But she hasn’t gone unaffected. There’s a rig now in mid-frack across
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from her home that has created an unending stream of truck traffic past her front door. “The sand and water trucks, there’s like 10 of them going by every five minutes,” Dunbar said. “It’s crazy.” n
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New Kid on the Grid // 5
Counties that received the most impact fee dollars ALLEGHENY $201,300 ARMSTRONG $597,450 BEAVER $207,800 BEDFORD $6,490 BLAIR $38,960
BRADFORD $6,990,000 BUTLER $1,570,000 CAMBRIA $38,900 CAMERON $103,900 CENTRE $305,200 CLARION $110,400 CLEARFIELD $915,600 CLINTON $513,000 COLUMBIA $13,000 CRAWFORD $19,500 ELK $350,700
FAYETTE $1,300,000 FOREST $116,900
GREENE $3,590,000 HUNTINGDON $6,500 INDIANA $259,750 JEFFERSON $194,800 LACKAWANNA $6,500 LAWRENCE $201,300
LYCOMING $4,990,000 MERCER $168,850 POTTER $376,650 SOMERSET $123,400 SULLIVAN $532,500
SUSQUEHANNA $5,420,000 TIOGA $4,360,000 VENANGO $32,450 WARREN $19,500
WASHINGTON $5,920,000 WESTMORELAND $1,360,000 WYOMING $1,150,000
6 // NEPA Energy Journal
The greatest impact Jon O’Connell | joconnell@civitasmedia.com
Impact fee garners greatest yield yet
Annual impact fee revenues jumped from 11 percent from 2012 to 2013. In June, revenue collected in 2013 was tallied and distributed to counties. Many in Harrisburg are boasting of the total $630 millionplus generated from the yearly fee drillers pay to put each well in the ground during the last three years. The state began collecting the impact fee in 2011. “I have a check in my hand right now for $1,176,354.92,” Wyoming County Commissioner Thomas Henry said July 1. “We just received it a few days ago.” The impact fee has paved the way for Wyoming County to provide special training for its emergency responders to handle emergencies on gas well pads or along pipelines. It has helped to offer affordable housing to its residents and alleviate the overcrowding at the county’s prison. Impact-fee dollars also paid for a $350,000 upgrade — a computerized dispatch system — to the county’s 911 center, Henry said. “We’re not the biggest county when it comes to drilling,” Henry said, “but the money helps.” A good bit of Wyoming County’s $1.2 million will go into a capital reserve fund, Henry said. So far, the impact fee has helped add infrastructure to the county’s corrections system by bolstering the parole offices and monitoring technology so low-risk inmates can rehabilitate in the community as opposed to taking up a bed in the crowded prison. The county also developed programs to help renters find affordable housing in spite of rising rental rates due to the influx of industry workers. And it eliminated a nuisance $10 per capita tax, about $90,000 in revenue, because of the impact fee. Admittedly, $10 per person isn’t much, but at least there’s some tax reduction, Henry said — and no increases. Currently, lawmakers are looking to shake up the way drillers give
the Commonwealth its share of the pie. Largely opposed by Republicans, Harrisburg Democrats are looking to tax producers for the gas they extract. Whether the impact fee is eliminated to make way for a new tax, or the state levies a new tax on gas in addition to the impact fee, Henry knows the revenue as it has been received for the last two years could change. “We don’t want to have to rely on that,” he said. “We’re spending it on one-time things that don’t have to be maintained.” HOST COUNTIES In addition to permit fees and corporate income tax, natural gas drillers pay an impact fee levied by Act 13. Per the law, much of the money is to be handed back to the communities affected by drilling operations. The whole state pot totals about $225 million to be split among those communities that play host to natural gas drilling and state agencies that oversee the industry. A few deductions are made off the top before the funds get split up among the 40 counties where natural gas drillers work. There are 17 counties in Pennsylvania where there is no gas drilling. Here’s how the revenue was separated: • $82 million went into the Marcellus Shale Legacy Fund, a pool of cash available for all counties to use on conservation and beautification projects. • $17 million went to fund state agencies that function, in some capacity, with the industry: Department of Environmental Protection, Pennsylvania Emergency Management Agency, the Public Utility Commission, the state fire commissioner and the Pennsylvania Fish and Boat Commission. • About $123 million is divided among county and municipal governments for specific projects. The PUC, which is in charge of
distributing the cash, has standards for the kinds of projects the impact fee money can support. While natural gas companies must bond the roadways they use where their trucks exceed posted weight limits, and many pay to resurface routes, local governments still often get stuck with the bill. So they’re allowed to use impact fee money to repair roads and bridges. Other permitted uses of the impact fee are broad and include: • Storm water and sewer system construction and repair. • Low-income housing projects. • Improvements to social services, including domestic relations, drug-and-alcohol treatment and job training. • Technology upgrades for geographic and geologic recordskeeping. • Preserving or reclaiming above- and below-ground water supplies. • Offsetting judicial system costs. • Emergency management training, recruiting and equipment. • County or municipal planning. MARCELLUS LEGACY FUND Drillers pay an impact fee for each well they drill, with the highest amounts paid when the well is spud, or first tapped, and the amount diminishes annually. Some often complain the impact fee goes only to serve counties where natural gas drilling is happening, while the counties that are still host to the growing infrastructure and unending truck traffic are ineligible to receive impact fee revenue. But Marcellus Legacy Fund dollars are granted for all counties to use on conservation and recreation projects. The legacy fund accounts for 40 percent of all impact fee revenue. Some of that money is set aside for state projects and to give an added boost to the state DEP. But much of it also goes to conservation efforts, and, in many cases, legacy fund payments exceed a county’s impact fee revenue.
Lackawanna County, where there is little drilling, received only $6,500 to be split among its producing municipalities; however, it got $202,000 in legacy funds. In Wyoming County, $27,000 of their allotment must go to recreation or conservation. Luzerne County received none of that flexible impact fee money; however, it was granted $308,000 for conservation and recreation improvements from the legacy fund. Use of the legacy fund dollars often is a point of contention in Luzerne County. Officials already have earmarked $40,000 to improve the existing 18.5-mile trail that runs from Edwardsville to Shickshinny.
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At a June 17 Luzerne County Council meeting, Councilman Steven A. Urban surprised council with a motion to use $2 million in borrowed money to rehabilitate the county’s dilapidated Moon Lake Park, and prop up improvements with the legacy fund dollars. While council Chairman Rick Morelli doesn’t think the money should go to fund the 650-acre park (he would rather see the state parks department take over Moon Lake), he said Urban’s surprise proposal sparked conversation on how the segregated dollars should be used. “The bottom line is: Where is the money going to be most effectively spent?� Morelli said. n
It’s a one-time ďŹ x, and that’s what we have to look at and see where the money is going to be well spent.â€?
- Rick Morelli, Chairman Luzerne County Council
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New Kid on the Grid // 9
rep. vies to preserve tax structure
GUeST CoMMenTARY State Rep. Fred Keller, Republican, 85th Legislative District
Assertions oil and gas companies aren’t paying taxes or their “fair share” are dead wrong. Calls for new severance taxes or changing the federal tax code to unilaterally target energy firms for new revenue are policies that will have devastating, widespread economic consequences.
— Fred Keller
In Pennsylvania the signs of our energy economy and bright energy future are constantly apparent. These signs might be literal, reading “help wanted,” or visible via new equipment on our farms, new manufactures moving into the state, or evident in new cars and trucks running on “CNG” or “LNG.” From the prolific-producing natural gas wells of the northeast to the “wet gas” investment in the southwest to the infrastructure build-out happening commonwealth-wide, the seeds of our revitalized energy economy are continuing to sprout and multiply. This is what an economy buttressed by a strong energy sector looks like. And you don’t have to work in the energy industry to enjoy the benefits. Thanks to the energy sector, our economy — from employment to revenue collections to lower energy costs — has been critically bolstered at a time when other states have not fared as well. With the right state and federal policies in place, the economic and social benefits of the development of our shale gas reserves are set to continue for many years. As Gov. Tom Corbett has routinely said, we are just in the first inning of realizing Pennsylvania’s natural gas potential. And although early in the game, revenue collected from the oil and gas industry has been astounding. Looking at just Pennsylvania’s impact fee, Gov. Corbett recently announced that the state expects to collect over $220 million this year. Add that to 2012 and 2013 collections, and total impact fees paid will total more than $630 million in just three years. Even areas without development are enjoying these fees. For example in my district, Union and Snyder counties together have received more than $140,000 in the first two years the impact fee has been collected. OTHER COLLECTIONS Along with impact fees are the hundreds of millions in ordinary state (and federal) taxes the energy sector pays, including personal taxes, business taxes and royalty payments. In 2012 alone, oil and gas activity contributed over $1.2 billion to state and local taxes, and another $1.7 billion in federal taxes. Thus, assertions that oil and gas
10 // NEPA Energy Journal
companies aren’t paying taxes or their “fair share” are dead wrong. Calls for new severance taxes or changing the federal tax code to unilaterally target energy firms for new revenue are policies that will have devastating, widespread economic consequences. In Washington there’s been a robust debate on tax reform. However, in this debate, some are suggesting new tax increases on oil and natural gas producers. There is mention of peeling back a host of tax deductions for energy companies — even when these are widely used by other manufacturing industries. New energy taxes aren’t just absorbed and paid by “big oil.” Rather, they are a cost of doing business that’s collected and passed down through the energy supply chain. The new catering start-up, growing construction company, or safety equipment seller will all eventually bear the brunt of singling-out the energy sector with new taxes. Tens of billions of dollars in new taxes on energy companies will stifle job creation and production. Moreover, it would send the wrong message to investors who must be willing to make big bets on risky drilling projects. If we can keep the right policies in place, by working collaboratively at all levels, the Keystone State can remain an energy superpower. KEEPING ON COURSE By staying the course Gov. Corbett has laid out, by 2020 shale gas development will contribute nearly $14 billion in economic activity to Pennsylvania and generate nearly $5.6 billion in federal, state and local taxes. All across our state, towns and rural areas that very recently faced an unpromising future are now filled with hope. Farmers with mineral rights have new-found prosperity, families are saving on utility costs, young people are finding careers — not just jobs — without leaving the state, and the list goes on and on. But let’s not kid ourselves. Playing politics with our tax policies and imposing massive new energy taxes won’t help anyone. Without question that would throttle new investment, kill jobs and produce less revenue for the programs and projects needed today by our families and businesses. n
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Study on natural-gas drilling finds more financial pluses than minuses James O’Malley | jomalley@civitasmedia.com A Duke University Energy Initiative study concluded natural-gas drilling has positive financial effects for many of the communities it impacts. Co-author and associate researcher at the Duke University Energy Initiative Daniel Raimi said the study was conducted to address anecdotal evidence concerning the effects of drilling on local-level finances, both positive and negative. “We wanted to take a systematic look at the issue and decided that assessing public finances would be a helpful and measurable way to understand how local governments are managing new issues associated with oil and gas activity,” he said. The study, funded by the Alfred P. Sloan foundation, surveyed county and municipal governments in eight states, including Pennsylvania. According to the report, drilling has created mostly modest expenditures for Pennsylvania governments thus far, with new revenues vastly outweighing them. However, results were not always the same in all places. “We knew there would be a lot of variation from state to state, but it was interesting to see how much the effects could vary even for neighboring local governments,” Raimi said. For example, he added, two neighboring counties in Colorado have felt opposite effects due to differing geography, infrastructure and policy. “Finding such differences between neighbors was very interesting,” he said. Results in Pennsylvania were mostly consistent. Since the state does not levy a severance tax, new revenues were mainly limited to impact fees created by Act 13 of 2012. Impact fees are imposed on unconventional (non-vertical) gas wells, beginning at $50,000 per well and decreasing every year. The money collected is then distributed among state and local governments. Through Act 13 disbursements, rural Bradford County paid off the entirety of its outstanding debt, the study found, and Tioga County upgraded its EMS facilities and government buildings. It said Tioga County also invested
12 // NEPA Energy Journal
$400,000 of its disbursements into affordable housing. On the municipal level, townships initially experienced increased road maintenance cost, as infrastructure took a beating from an influx of new traffic, the study said. However, it also reported that many townships have since entered road maintenance agreements with the gas companies, alleviating repair costs. The most common costs on both the county and municipal levels, the study found, were in staffing, as governments created new positions to deal with increased workloads for social services and law enforcement. Though the study did not determine if all increases were directly attributable to drilling, many have been brought on by expanding populations. According to the study, most local lawmakers were extremely pleased with the effects of drilling in their communities, and in multiple cases whistling a tune to the effect of, “I wish I had a gas well on every road.” At time of writing, Pennsylvania legislators were considering the institution of a severance tax to help close a budget gap, and legislation already exists to create one. But critics of the tax say it will lead drillers away from the state, decreasing Pennsylvania’s competitive edge in a booming industry. The Marcellus Shale Coalition, a Pittsburghbased industry group, was part of a trio of organizations that warned state lawmakers about the economic repercussions of instituting a severance tax in a letter last month. The coalition is a public mouthpiece for most major gas companies in Pennsylvania. Its website says it was founded in 2008 and disseminates information about the positive effects of “responsible natural gas production.” On its blog page, it shared a link to the Duke study. “Uncompetitive, short-sighted new energy taxes on one of our most promising industries will lead to fewer jobs, lower energy production and less tax revenues,” said Marcellus Shale Coalition president Dave Spigelmyer in a prepared statement via email. “We
must continue to lead and demonstrate to the country and the world that Pennsylvania is and will remain the Keystone State.” Adam Garber, field director of PennEnvironment, a Philadelphia-based environmental advocacy organization, said the Duke study doesn’t give a full picture of the costs of drilling. Harvesting of natural resources is unsustainable and prone to boom-andbust economic cycles, he said, and Pennsylvania is on a trajectory to be left high and dry. “They say this time will be different, but as a state we’ve heard it all before,” he said. Garber believes that in a few years’ time, the drilling companies will abandon the state, as the timber and coal barons before them, taking with them the jobs and flourishing local economies, he said. “Even if you’re seeing a boom now, the question is: What does three years from now look like? What does five years look like? What does 10 years look like?” Garber said. And much of drilling’s impacts can’t be easily quantified, he said, especially the effects on the health and quality of life in the communities where drilling occurs. Not enough research has been done into those effects in Pennsylvania, he said, pointing to gags on health officials. And though legislation was passed to conduct such research at a state level, necessary funding was never appropriated, he added. “We only know the tip of the iceberg in health effects,” Garber said. “And that tip is dark and ugly.” Meanwhile, studies into the economic effects of gas drilling are “a dime a dozen,” he said, but its true impact can’t be measured on a purely economic scale. Raimi said the study was only meant as a “‘snapshot’ of current conditions,” and the Duke Energy Initiative intends to continue monitoring conditions as they develop into the future. He said it also plans to conduct a similar study looking at eight more states in the next year. n
King’s College
to survey Mehoopany this Fall James O’Malley | jomalley@civitasmedia.com
Royce Vaughn, a King’s College economics instructor, plans to lead a survey this fall aimed at water wells in the Mehoopany area. The survey will examine the number of water wells actually contaminated and those perceived to be contaminated by releases from natural gas drilling. It will also try attempt to estimate the new costs and financial effects on those who would normally use a well. The survey questions look at basic family data and ask about water testing. Its centerpiece inquires “In your opinion, has your well water quality been reduced as a result of gas drilling activities in your area?” It then offers a spectrum of answers from “Definitely yes,” to “Definitely no,” and “Don’t know” or “Can’t legally comment.” Next, the survey asks about the sources and monthly expenditures for water used for drinking, bathing, cooking, crops and
livestock. From there, Vaughn said, “we can loosely attach a dollar amount” called the “Total Averting Cost,” or how much a household spends on clean water due to damage or the perception of damage. He said the study was inspired by the Back Mountain-based Gas Drilling Awareness Coalition and grew out of a biennial class he teaches at the college. The class, called Environmental Economics, seeks to calculate the value of resources with no inherent dollar value. “You can’t really go out and purchase clean air,” he said, “or a scenic view.” Many King’s College students are passionate about the subject, Vaughn said, so he doesn’t imagine there will be a shortage of them willing to participate in the study. Vaughn is sure some wells have been contaminated, he said, but he believes the vast majority of damage is merely perceived. He
said he is in favor of gas drilling as long as it is done responsibly. “I’m not opposed to using any environmental goods available to us,” he said, but he believes environmental economic theory should be consulted. Specifically, he cites the Marginal Damage Function, which compares the benefits and damages of a particular action. On a graph, the function is identical to the supply and demand function, except the intersection of the two curves represents the point at which damage outpaces monetary benefits. Check future editions of the NEPA Energy Journal for more on the King’s College study. n
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Bill Tarutis | For NEPA Energy Journal
A contractor works on the mounting block for the Liberty Power Stationâ&#x20AC;&#x2122;s Siemens H-Class generator. The Siemens generator provides cutting-edge eďŹ&#x192;ciency in creating electricity.
14 // NEPA Energy Journal
poWer Up nATURAL-GAS eLeCTRICITY IS THe neW GeneRATIon
I
Jon o’ConneLL | JocoNNEll@civiTAsmEdiA.com
n the not too distant past, power plants fueled by natural gas were considered a back-up, a source of electricity at peak times to support coal- and nuclear-generated supplies. Those times are quickly passing. With natural gas supply cheap and at the ready, and an improving infrastructure to move it just about anywhere, natural gaspowered electricity generation is starting to look like a viable main option. “It’s a complete game-changer,” Bill Pentak, vice president of investor relations for Panda Power Funds, said. “We’ve not seen changes like this in the power industry in 30 years.” Panda, based in Dallas, Texas, is building two nearly identical natural-gas power plants in Pennsylvania. One is going up near Towanda in Asylum Township, Bradford County. The second is being built in Williamsport, Lycoming County. “For most of my career in the power business, and for most of the general partners here at Panda, natural gas was always seen as an intermediate or peaking fuel,” Pentak said. Drawn out on a bell curve, coal and nuclear
had always satisfied the base-load power needs for most of the country. In Pennsylvania, it mostly has been coal supplying the minimum demand because cost of fuel here is low, Pentak said. Natural-gas power is ready at the flip of a switch, but it has long been seen as inefficient and, until now, more expensive than coal. Coal-fired plants usually take about three days to get up and running. A nuclear power plant, between two and three weeks. “Because of shale gas, for the first time ever, natural gas is now being seen as a baseload fuel,” Pentak said.
THe PLAnTS
It was sweltering day in June and the Liberty site near Towanda was swarming with about 300 workers welding enormous hunks of steel and tooling around on heavy equipment. Panda Power contracted with two companies, Gemma Power Systems of Glastonbury, Connecticut, and Lane Construction of Cheshire, Connecticut, to erect both stations.
See POWER | 18 New Kid on the Grid // 15
Jon o’ConneLL | JocoNNEll@civiTAsmEdiA.com
From a molehill to a mountain
Mountain Energy Services spent the last five years building a company 40 times greater than when it began TUNKHANNOCK — Ask Matt Andrews how it feels to run a thriving company that appears to be growing unfettered, and his face probably will grow stern. “It’s not me who keeps this going,” he’ll correct you time and time again. “There’s a core group of workers here who really keep the business up and running.” Ryan and Matt Andrews founded Mountain Energy Services in 2009. The brothers had helped run two family businesses – Deer Park Lumber and Shadowbrook Inn & Resort – both in Tunkhannock. But they found their niche in hauling water for drilling companies to use in hydraulic fracturing operations, and they’ve been wedging that niche wider ever since with a growing portfolio of driller services. “Being here in Tunkhannock with Deer Park Lumber, it was a great way to diversify the family business,” Ryan Andrews said. “It was here, it was starting to happen, and we wanted to be part of the growth of the natural gas industry.” With a crew of 165 employees, a fleet of about 100 water trucks, water storage tanks and specialty equipment, Chief Operating Officer Rob Coleman shared Matt Andrews’ faith in
Bill Tarutis | For NEPA Energy Journal
Mountain energy Services driver J.J. Cobb peers out of the cab of his winch truck.
But the Andrews brothers seem to have immunity to that, they said, maybe something their father instilled in them. “We don’t know 91 CoRPoRATe any other way,” Ryan CLIenTS Andrews said. “It The Andrews brothers started with just two started as a family business with our father. We employees, but in the started working with last five years they’ve him, and we’ve always sold services to 91 corworked together from porate clients. About 30 percent of those still day one.” The entrepreneurs get water delivered, rent had to learn quickly that equipment or hire winter plow trucks from the drilling companies work on a time table much difcompany regularly. ferent than any saw mill Working with family or country club. brings its own set of “One of the biggest challenges. challenges in the natural Corporations have crumbled at the hands of gas business: the 24-7 needs,” Matt Andrews bickering siblings who said. “It just doesn’t can’t get past a prank stop.” one pulled on the other To meet clients’ back in grade school. their workers; Mountain Energy would be nothing but for the drivers and technicians behind the wheel, he said.
We wouldn’t be here if we didn’t love our job and love working for this company.”— Mandy Wilmot, Manager, Mountain energy Services 16 // NEPA Energy Journal
demands, the team had to make some adjustments. All of them arrived from 9-to-5 workplaces, but when a frack is in full swing, water trucks often must be lined up around the clock. Just about everyone spent late nights and many weekend hours organizing crews and coordinat-
ing with clients. Coleman has a management team of seven, and each one is no stranger to a non-stop, seven-day work week until the job gets done, he said. Mandy Wilmot, Mountain Energy’s compliance manager, said they each found balance between work and home. “We manage it,” she said. “And we wouldn’t be here if we didn’t love our job and love working for this company.” The Andrews brothers never faltered in their vision, never doubted they made the right decision to build a company to support the industry, they said. “It’s actually quite the opposite,” Coleman said. “The service that we offered early on, combined with meeting the demands of the customers, really prevented that. It’s been a steady position of growth.” Matt Andrews chimed in, “And we’re just getting started.” n
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Mountain Energy Management Team ETHAN GREENLEY Age: 23 Hometown: Tunkhannock Mountain Energy start: 2011 Position: Manager of Service Delivery/Logistics “I was in college for a year and decided that wasn’t for me,” Greenley said. Greenley worked for car dealership after leaving school, but Matt Andrews approached him about working for Mountain Energy, and he never looked back. Greenley works as a truck pusher and oversees the company’s hi-vac trucks. CHRIS SNYDER Age: 48 Hometown: Wyalusing Mountain Energy start: 2010 Position: Manager of Service Delivery/Logistics “At first I thought it was a fad or a passing thing,” Snyder said of the natural gas boom. He owns Snyder’s Machine Shop in Wyalusing, which still is run by his employees.
He was looking for a career change, something to liven up his day-to-day, when he found Mountain Energy. Snyder lives in Wyalusing with his wife. He has two daughters, and, like Greenley, he is a truck pusher and the company’s expert on propane superheaters used to control frack water temperatures. “I get satisfaction, a big breath moment, when I can put 20 things to bed,” Snyder said. “It’s like, ‘Yeah, we did it again.’”
and their clients. Each drilling company has their own unique expectations, Wilmot said, and each driver must be an expert in all of them before sliding behind the wheel. Wilmot lives in Clarks Summit with her husband, son and daughter.
TOM ‘T.J.’ JOHNS Age: 42 Hometown: Wyalusing Mountain Energy MANDY WILMOT start: 2011 Age: 34 Position: Dispatch Hometown: Clarks Summit Supervisor Mountain Energy “I was looking for something a little start: 2010 more challenging,” Johns said. He had Position: Manager worked for Cargill Meat Solutions, a of Environmental meat-packing plant in Bradford County, Health and Safety, Human Resources, for 22 years and had climbed the ladder Transportation, Compliance to a supervisory role, but it was growing “I wouldn’t trade this for that job again,” mundane, he said. she said of her exodus from teaching preJohns lives in Wyalusing with his wife school. and four daughters. Wilmot had been substitute teaching With four dispatchers working under and felt her career was spiraling downhim, Johns said his job stays interesting ward when she arrived at Mountain with daily interactions with folks from Energy. around the country and “just keeping up Now she teaches drivers how to follow with the demand and the pace of the disquality standards from the government patch side of it in a cost effective way.”
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PoWeR From page 15 At the peak of construction, the companies will have as many as 600 union workers and contractors on site at one time to push the project through to meet the March 2016 deadline, Gemma assistant project manager Daniel Ward said. No matter how they create electricity, power plants generally work the same way: They generate heat to make steam to make turbines spin. Beneath a tent, out of view from other workers, contractors from the German tech company Siemens Energy assembled the second of two state-of-the art H-Class singleshaft natural-gas turbines. Because the technology is so new, unprecedentedly efficient and the market is wildly competitive, Siemens keeps it all wrapped up until the turbine is completely assembled. Turbine 1 rested atop its mounting block, fully assembled. It looks like a giant green pill capsule. Beyond the turbine generators, two super cranes worked in tandem to slowly pull a 90-foot-tall heat recovery steam generator module from its delivery truck. The two crane operators at the controls have worked together for more than a decade, and the chemistry they have with each other makes them an invaluable team, Ward said. The heat-recovery steam generators (often just called HRSG) recycle excess heat from the turbines to create steam, providing additional force to spin the turbines in what is called a combined-cycle process. Installing just one module — there are 30 of them between the two towers — was expected to take all day, Ward said. But they aspired to gain momentum and possibly install two the following day. The generators also are air cooled, which means minimal water is needed for production, unlike nuclear or coal plants. While the occasional plume of steam will rise from the
18 // NEPA Energy Journal
stacks, natural-gas plants create very little exhaust. There are a few water storage tanks on the site, which sits very near the Susquehanna River, for operations; however, the water is to remain in a closed loop. The air-cooled generators mean no water must be pulled from the river and, more important, no water will be discharged to disrupt the waterway’s ecosystem. Liberty, which is nearly identical to its sister, Patriot, in Williamsport, is to have the output capacity of 829 megawatts. To compare with other stations, the Hunlock Power Station near Shickshinny, has a 130 megawatt output capacity. Susquehanna Steam Electric Station near Berwick, a nuclear power plant with dual generating units, has a 1,300 megawatt output capacity. Liberty and Patriot are to generate enough electricity to power 1 million homes each. Currently, Moxie Energy — the company that first began the Patriot and Liberty projects then sold them to Panda — is in the pre-planning stages for a third plant. The Moxie Freedom Project to be constructed along the Susquehanna not far from the PPL nuclear plant. Freedom would have the capacity to produce 900 megawatts.
eMISSIon STAnDARDS
In June, federal Environmental Protection Agency Director Gina McCarthy unveiled a proposal for new standards on power-plant emissions that could ring the death knell for many U.S. power stations. If it clears a mound of red tape, the 645-page order drafted as part of President Barack Obama’s Climate Action Plan will require power plants to reduce emissions by a combined 30 percent by the year 2030. This could be damning news for coal plants run by companies that lack capital to apply emissions-scrubbing technology. Gas-fired plants, on the other hand, burn with minimal emissions. Think of it this way, it’s clean enough that we burn it in our homes, Pentak said, so
despite the new standards Dan Ward will do nothing different to bring his apparatus into compliance. Add in the Siemens H-Class generators that operate at about 60 percent efficiency, and HRSG steam generators that retain about 85 percent of water used in a closed-loop system, and Panda’s two plants have an advantage even above other gas-fired plants. “So, no, we’re not concerned about (the new regs) at all,” Pentak said. “Every other natural gas power plant, really in the U.S., will have to catch up with us in terms of efficiency.” The power generated at the Panda plants will be uploaded to the PJM Interconnection, also known as the Mid-Atlantic power grid, where in effect it will serve FirstEnergy utility’s customers. PJM is one of the United States’ largest power grids. Its collective plants have the capacity to produce 70,000 megawatts of electricity. Electricity generated in Pennsylvania, like water flowing along the path of least resistance, could be used to supply any market within the PJM experiencing an outage or increased demand. Pentak said adding those two plants to the grid does not guarantee customers will pay less for power. However, “the most expensive power is no power,” he said. “So what you don’t want is where you have demand that starts to outstep supply.” The additional generators apply “downward pressure” to the spot price, but ultimately, Liberty and Patriot are updating what Pentak called an aging fleet of power plants throughout the PJM. Looking at the greater economic impact, Pentak said the consistent supply creates a fertile environment for corporations looking to expand and put down roots. “That is something that is incredibly important for economic development,” he said. “Businesses are not going to locate to Pennsylvania if there’s not going to be enough power to run their factories.” n
Bill Tarutis | For NEPA Energy Journal
Construction continues on the air-cooled condenser units at the Liberty Power Stationâ&#x20AC;&#x2122;s natural gas-fueled, 829-megawatt combined-cycle generating station in Asylum Township, Bradford County.
New Kid on the Grid // 19
Shale NEWS WASHInGTon TWP.
State fines Houston oil company for spillage The Pennsylvania department of Environmental Protection has fined a Houston, Texas, oil and gas drilling company for two incidents involving spilled production fluids last year in northern Wyoming county. carrizo marcellus llc, a subsidiary of carrizo oil & Gas, is to pay the department $192,000 after one incident march 13 at the company’s yarasavage 1H well and another April 30 at its mazzara well pad, the department said in a news release. Both well pads are in Washington Township. Agents from the department’s oil and gas bureau determined carrizo violated the state’s clean streams law when a leaky frack tree — apparatus that connects the water pumps to the borehole
— possibly released between 800 to 1,100 gallons of production fluid per hour between the early evening march 13 and noon the following day. For fear gas might escape through the faulty apparatus, the surrounding area was evacuated. on April 30, at the mazzara well, about 9,240 gallons of production water spilled outside the company’s containment area and spread to fields where livestock graze. it also leaked into one residential basement, the department said. carrizo told the department its workers did not follow procedure when transferring fluids by hose during that incident. carrizo has hydraulic fracturing operations in Wyoming, susquehanna and sullivan counties, and more in central Pennsylvania. carrizo has rolled out new technical changes for its fracking
additive that, when spilled, is hard to clean up. The attorneys are seeking reimbursement, saying the state paid millions of dollars to clean up gasoline spills from underground storage tanks between the 1970s and 2005, paying more because the gasoline contained the additive methyl tertiary butyl ether (mTBE). Gasoline producers stopped mixing in mTBE in 2005. The attorneys argue after 1994, more than 3,000 spills occurred across Pennsylvania. The suit alleges oil companies HARRISBURG knew of mTBE’s risk to groundKane, Corbett team up water, but used it as an additive in in suit against big oil gasoline sold in Pennsylvania anyPennsylvania Attorney General way. The suit explains that mTBE Kathleen Kane and James schultz, is more persistent and mobile in an attorney for Gov. Tom corbett, groundwater, which increases the have named about 35 major oil size, complexity, duration and cost companies in a suit for damages of mTBE gasoline clean-ups, many claiming the companies were of which are ongoing. negligent in mixing a chemical small amounts of mTBE render
operations after the incidents, including more frequent checks of its apparatus during production, the department said. “These were serious incidents that resulted in environmental degradation and the evacuation of citizens from their homes,” dEP oil and gas operations director John Ryder said. “The department has been working closely with carrizo during the past year to ensure the company implements changes that will greatly minimize a recurrence of these incidents.”
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water non-potable due to foul and putrid smell and taste. Other states have filed similar suits against the oil companies that used MTBE in their gasoline.
HARRISBURG
Drillers paying more in state permit fees The state Department of Environmental Protection increased permit fees for unconventional wells in June, hoping to add an extra $4.7 million to revenue. DEP’s Environmental Quality Board adopted a final increase for unconventional well permit fees. The new fees took effect June 14. “Under the Corbett administration, there has been a strategic, proactive approach to the oversight of this industry,” DEP Secretary Christopher Abruzzo said in a news release. “The efforts to date have been unprec-
edented, and this fee increase will give us the ability to continue to grow and strengthen our program along with the growing industry.” The expected additional revenue is to support new information technology projects related to oil and gas, including streamlining electronic review, mobile digital inspections, upgrades to reporting systems and modernization of forms and databases. The new revenue will also be used to hire additional DEP staff to complete oil and gas site inspections, policy and program writing and permitting. The final rule fixed the fees for unconventional wells at $5,000 for non-vertical natural gas wells and $4,200 for vertical natural gas wells. Prior to the fee increase, the fee varied and was charged based on wellbore length. As a result of this change, the
permit fee for an average unconventional well — wells that are fracked — will increase by about $1,800 per non-vertical natural gas well and $1,300 per vertical natural gas well. The permit fees for conventional oil and gas well operators will remain the same. The last fee increase took effect in 2009, increasing the fee from $100 to a sliding scale based on wellbore length.
WASHINGTON, D.C.
Supreme Court rules EPA overreached on air quality While the Environmental Protection Agency is pushing through a massive overhaul on greenhouse gas emissions from the nation’s power plants, the U.S. Supreme Court ruled June 23 that the EPA had overreached while enforcing the old rules. In a 29-page opinion, the Supreme Court placed limits on
the sole Obama administration program already in place to deal with power plant and factory emissions of gases blamed for global warming. The justices said the EPA lacks authority in some cases to force companies to evaluate ways to reduce carbon-dioxide emissions. This rule applies when a company needs a permit to expand facilities or build new ones that would increase overall pollution. Carbon dioxide is the chief gas linked to global warming. The decision does not affect EPA proposals for first-time national standards for new and existing power plants. The most recent proposal aims at a 30 percent reduction in greenhouse gas emissions by 2030, but won’t take effect for at least another two years. n The Associated Press contributed to some of these reports.
New Kid on the Grid // 21
Pipeline project
brings new possibilities for gas market
Jon O’Connell | joconnell@civitasmedia.com Mike Thatcher holds the prism rod on a point to be recorded along the proposed route of the Central Penn Line.
Fred Adams | For NEPA Energy Journal
Atlantic Sunrise proposes to increase Transcontinental Pipeline’s capacity by 20 percent. What could you do with 1.7 billion cubic feet of natural gas? Well, for starters, you could: • Service about 18,000 homes with heating and cooking fuel every day for a year. • Or you could drive 352 million miles in a Honda Civic GX natural gas-powered vehicle. • You could sell it for $4.6 million. • Or ride one of LA Metro’s natural gas buses from Bel Air, through the Sunset Strip to Echo park 360,000 times. Not too shabby, right? With a new pipeline in the works, the Atlantic Sunrise Expansion Project, the operator says it will ship that much gas from the Marcellus Shale to
southern states every day. Williams, the Houston, Texas, pipeline company that works heavily in the Marcellus Shale region, is in the preplanning stages of developing a 172-mile pipeline that is to start in Susquehanna County; travel down through the eastern part of Wyoming County; move west across five Luzerne County municipalities; turn south in Columbia County and continue on until it reaches the main lines of the Transcontinental Pipeline, or Transco, in Lancaster County. In addition to adding an additional 20 percent capacity to Transco, the Atlantic Sunrise also includes upgrades to the existing Transco infra-
structure that will do something never done before. The Transco was built in the 1950s to send gas in one direction from the fields in Louisiana and Texas to customers in New York City. For the first time, natural gas supply in the Marcellus Shale is beginning to outpace the southern front runners, and there’s demand for the gas also to be shipped south. Improvements, including additional compressor stations and pipeline loops that will give the Transco bi-directional flow, and customers along the eastern seaboard
Fred Adams | For NEPA Energy Journal
Justin Clark looks through surveying equipment while sighting out a possible route for the Central Penn Line of the Atlantic Sunrise pipeline expansion along Old State Road in Sweet Valley. To gain federal approval, Williams must prove its pipeline route will not pose harm to the environment or nearby communities.
22 // NEPA Energy Journal
as far south as Georgia will be served Marcellus Shale gas from it. Williams has identified a route through Pennsylvania it deems best suited to render the least impact to environment and pockets of community along the way; however, it must go through a lengthy pre-filing process with the See Pipeline | 26
New Kid on the Grid // 23
Share and share alike submitted photo
Tom Wolf, the Democratic candidate for governor, believes a 5 percent severance tax on natural gas is the responsible way to protect Pennsylvania’s environment and bolster its school system.
Gubernatorial candidate Tom Wolf says the state budget needs not starve while industry thrives
GUeST CoMMenTARY Tom Wolf Candidate for governor
24 // NEPA Energy Journal
It’s time to pass a responsible, reasonable severance tax. Our schools are underfunded, our economy is stagnant and we are not investing in Pennsylvania’s future. For years, Gov. Corbett has refused to implement a severance tax to help fund our schools. Instead of making the responsible decision, he has overseen a $1.4 billion budget deficit all while we see layoffs and program cuts at our schools and rising property taxes. School districts across Pennsylvania are on break for summer, but we should all
be alarmed at what our kids and teachers will return to once school resumes in the fall. Pennsylvania schools will begin another year without the resources needed to provide our kids the kind of education that will give them the skills necessary to take advantage of an ever-changing, highly competitive economy. There is no greater risk to Pennsylvania’s future. And it’s time for the Legislature and governor to finally act to impose a severance tax on natural gas extraction with an effective rate of 5 percent.
The result of such a tax will mean billions of additional dollars in the coming years. Let’s put politics aside – and let’s act now. Don’t wait for the coming elections. Don’t wait for a new governor or a new Legislature. Our kids deserve immediate attention. The natural gas industry is vital to our state’s economic future, but right now Pennsylvania is the only major gas-producing state without a severance tax — this is unacceptable. Our state has an abundance of natural gas, and the development of this resource
“
Let’s put politics aside — and let’s act now.
Don’t wait for the coming elections. Don’t wait for a new governor or a new legislature. Our kids deserve immediate attention.” — Tom Wolf
offers the Commonwealth the opportunity to expand prosperity across our entire economy. A responsible, reasonable 5 percent severance tax will provide certainty for the industry, will help Pennsylvania’s schools and could go a long way to making sure that the industry has a strong workforce that is grown and educated right here in Pennsylvania. A severance tax can help mitigate some of the damage to the environment and our infrastructure by allowing us to provide the tools necessary to take advantage of this resource without destroying our environment.
The revenue generated from a severance tax will help Pennsylvania stay on the cutting edge of new energy economy. We must take advantage of this resource and use it to build a renewable energy future. Pennsylvania should be a leader in renewable energy, but we need to start discussing how we can build a sustainable energy sector that includes oil, gas, wind, solar, hydro and other energy sources. This is the urgent challenge facing our state leaders, now and into the future, and we must manage our remarkable natural gas resource so that the citizens of Pennsylvania broadly share its benefits
for many years to come. If this is done right, individual citizens and businesses will benefit from the large reserves of natural gas trapped in the Marcellus Shale for many years, but not making gas companies pay their fair share while our schools are suffering and Pennsylvania families are feeling the burden benefits no one. Making sure we do it right, therefore, should be on the top of everyone’s mind, and a 5 percent severance tax — in line with other states in the region — is the way to accomplish this. This is especially true given the well-documented challenges facing Pennsylvania’s budget,
which includes a $1.4 billion deficit. Now is the time to get to work and craft a plan that lays out how to best share in the benefits of the Marcellus Shale to enhance our economy. With the revenue generated from a 5 percent severance tax, we can give our kids the tools they need to succeed and build economic security for generations of families across the Commonwealth. We can build a 21st century infrastructure that will lead to long-term job growth. And we can protect our most important natural resource — our environment. With the many challenges facing our state, it is more important than ever to make sure we are maximizing our resources. By finally instituting a 5 percent severance tax, we can help fund our schools, protect our environment and ease our budget woes responsibly and effectively. n
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Pipelines From page 22 Federal Energy Regulatory Commission (FERC) before workers can start digging. As part of the pre-filing process, FERC requires a series open houses where the general public could ask questions and pose issues with Williams proposed pipeline path. Williams officials plan to formally apply for the certificate in early 2015.
Fred Adams | For NEPA Energy Journal
Survey site foreman Rich Freit records the data gathered in a log book in late June along the proposed Central Penn Line in Sweet Valley. Williams planners have suggested running the new pipeline along existing Transco pipelines in Luzerne County. Only about eight miles of right of way in Luzerne County would need to be clear cut. However, most of the path through Wyoming and Susquehanna counties must be cleared.
FERC COMMENTS FERC requires two things of the operator before it grants a Certificate of Public Convenience and Necessity: Williams first must prove it has the supply to validate a new pipeline. Second, Williams must prove the pipeline will not have significant impact on the environment or communities it passes through. Officials say counting shipping commitments from gas producers, the new pipeline is at 100 percent capacity.
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Property rights experts advise landowners to get involved with the process early to voice their concerns, and they likely will have a better chance of seeing their wishes met. When and if FERC grants the certificate, Williams will be given eminent domain authority to secure land easements. At that point, Williams can pay resistant landowners whatever a local judge deems fitting, which usually is the land’s assessed value, Williams spokesman Christopher Stockton said. Williams has used eminent domain to secure land in 5 percent of its easement acquisitions, Stockton said, and it strives to avoid such action. So far, hundreds of folks have submitted comments to FERC. Most are in outright opposi-
tion to the pipeline traveling through their communities. Many of them are submitted from residents in Lancaster County, where much of the pipeline is to travel through uncharted territory. Comments were enough for Williams to change course in order to skirt around two nature preserves, Shenk’s Ferry Wildflower Preserve and Tucquan Glen Nature Preserve, both in Lancaster County. Folks who live near existing Transco lines have been notably quiet.
scrutinizes the industry on her blog at www.cogentpa.org. She attended the Williams open house at Tunkhannock Area High School and left feeling confident all her questions were answered, she said. Many residents at a similar meeting in Lake-Lehman High School were familiar with Transco. In Luzerne County, the proposed path follows an existing Transco right of way, and they said they have no qualms with Williams. In fact, Williams has been transparent in sharing concerns with residents and keepFEDERALLY REGULATED ing them informed, several Emily Krafjak is a blogger folks at the open house said. from Mehoopany who has been When it comes to pipelines, working to have gathering Transco is treated differently pipelines more closely reguthan the hundreds of miles of lated by the state. pipeline connecting well pads Krafjak has leased some of to compressor stations. As an her land to drillers, but still interstate pipeline, Transco is
beholden to the feds, not state enforcement, which offers a little more peace of mind in projects like this, Krafjak said. Folks in Wyoming County have learned to get along with industry, she said. While some may not like to see their quiet, rural life pockmarked with booming rig sites and pipeline operations, the opposition has simmered. Of most importance, Krafjak said she wishes folks will speak up during the planning stages to make sure the pipelines go in the safest places. ”All pipelines don’t fail. They are the safest mode of transportation for this resource, but they do (sometimes) fail,” Krafjak said. “They fail through mismanagement, and you don’t want to be affecting more people than necessary.” n
Fred Adams | For NEPA Energy Journal
Surveyors Rich Freit, Mike Thatcher and Justin Clark mark out a possible route for the Central Penn Line of the Atlantic Sunrise where it would pass by Old State Road in Sweet Valley. Williams plans to file a formal application with the federal government in the spring of 2015.
New Kid on the Grid // 27
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