Tom Shepstone
Natural Gas NOW
The PA DEP Annual Oil and Gas Report capsulizes what’s happening in the industry but, better yet, what’s not happening (unless you’re a fractivist).
Someone e-mailed a question early this morning and, in digging around for the answer on the web, I found the Pennsylvania Department of Environmental Protection’s 2014 Annual Oil and Gas Report. I’m not sure when it was released (this is DEP’s second such report) but I had missed it, so I took a look and found some pretty interesting perspectives, some new information and a lot that simply wasn’t there (a good thing). It’s rather well done, for a governmental report, and well worth perusing. Let me share a few highlights:
The first couple of pages are the usual blather one finds in such reports but on page 3 comes the first interesting piece of data; Pennsylvania DEP increased its oil and gas staff by 12% in 2014 to reach 227 positions. This was while the number of wells stayed flat. There were, in fact, 2,163 combined conventional and unconventional wells drilled in 2014, versus 2,173 in 2013. Combined wells drilled are a full 33% off the 2011 number, though, when unconventional well drilling peaked. They’re 56% below the combined number for 2007 (some 4,952 wells drilled). Meanwhile, oil and gas inspections reached a new high in 2014, as this chart depicts so well:
Let there be no doubt Pennsylvania has an effective enforcement program, despite the frequent protests of fractivists whose real goal is to destroy the industry, not improve it our protect the environment.
The shift in the makeup of Pennsylvania’s oil and gas industry is also quite revealing. Here are two charts showing the stats for conventional and unconventional drilling:
The two charts are virtual mirror images of each other and it’s way past time we changed the nomenclature, as the “unconventional” overwhelmed the “conventional” in 2010. What was “unconventional” five years ago – shale gas and oil – is now the industry as we know it. This doesn’t mean conventional oil and gas wells (mostly oil) don’t have a future. They do, particularly in Northwest Pennsylvania where the oil industry was born and one hopes DEP, in its zeal to regulate shale gas doesn’t destroy what’s left of the Commonwealth’s traditional oil industry by now regulating it to death. Most of the companies involved are smaller independents and can’t bear the burdens regulators, seeking to appease fractivists, keep foisting on the shale industry.
Two more very cool charts illustrate where the drilling is taking place:
Notice how Susquehanna County in the Northeast and Greene and Washington Counties in the Southwest stand out for shale gas activity, while Warren, McKean and Venango Counties in the Northwest are the center of the oil industry in Pennsylvania (Venango County is where Oil City is located and John D. Rockefeller had his original office). The oil and gas industry reaches three corners of the Commonwealth and also has the potential to make Philadelphia, the fourth corner, the next Houston.
Perhaps the most interesting chart, though, is this one, showing where Utica Shale wells have been drilled and the biggest player county-wise is not along the western border with Ohio’s prolific Utica Shale region but in Tioga County, right there on the northern border of Pennsylvania adjoining New York. Those are the Shell wells, of course, and they stand out as a reminder of what enormous potential may yet exist for Utica Shale development in both Pennsylvania and New York.
What’s still more interesting is what’s happened as DEP staffing and enforcement have increased. Here’s the pattern with shale wells:
Violations are less than a third of what they were in 2010, despite increased enforcement. More to the point; there were 0.8 violations per well in 2010 versus 0.5 violations per well in 2014, even though the number of compliance inspections for unconventional wells was up 115% (that means they more than doubled for those of you who are math-challenged fractivists).
The three best charts from the report, however, follow. They all relate to “stray gas” or methane migration and they’re largely self-explanatory:
Stray gas or methane migration is what happens when drilling a gas, geothermal or water well creates a pathway for naturally found methane in the ground to migrate or stray into other areas and occasionally into a water well. This is what fractivists always cling to when they are forced to confront the fact hydraulic fracturing has never polluted a water supply anywhere in the US – they simply extend the definition of fracking to include hydraulic drilling as well as hydraulic fracturing, count methane as a pollutant (even though it’s not among the EPA’s primary drinking water standards) and imagine they’ve proven us wrong. They’re wrong, of course, but that’s not to dismiss the issue of methane migration either. The gas industry has always acknowledged it can and does happen. Its also correctly said it would be less of a problem going forward as operators learned how to deal with it better in areas like our own where shallow methane is common and hogsheads fly.
Scene from “Truthland” where homeowner not near any fracking lights his faucet on fire.
The first chart shows the number of investigations has decreased by 59% since 2010 when there were 41. The second chart shows the number of confirmed cases has fallen by 92% since 2010, when there were 26. Those related to shale wells dropped from 12 down to two or 83%. That’s two cases in all of Pennsylvania for an entire year and, as the third chart demonstrates, only seven wells were impacted as a result of those two cases, which is also down from 57 in 2010 – an 88% decline. Moreover, as the report also notes:
The Oil and Gas Act of 2012 presumes that an operator of an unconven onal well is responsible for pollu on of a water supply when the source is located within 2,500 feet of the unconven onal well and when the pollu on occurred within 12 months of the drilling, altering, s mula on or comple on of the unconven onal well. For conven onal wells, an operator is presumed responsible for pollu on of a water supply when the source is located within 1,000 feet of the conven onal well and when the pollu on occurred within 6 months of drilling or altering the well. Unless the operator can successfully demonstrate that the pollu on was not caused by its ac ons based on specific statutory defenses, the operator must restore or replace the affected water supply with an alternate water source.
The operator, in other words, is, absent evidence to the contrary (guilty until proven innocent), responsible for correcting the problem. The fractivist hoopla about fracking damaging water supplies is just so much bunk, as this data clearly shows.
There is still more to the report, including, for example, the fact shale gas production reached a new high of 2,129,829,see Mcf for July to December, 2014, but readers can peruse those facts on their own. The bigger point is that enforcement is up, violations are down and methane migration has been largely solved as an issue. It’s a beautiful thing!
