Marcellus Shale in Pennsylvania: The Road to ACT 13 (Part 1)

Posted By Rogan Law || 10-Jan-2013

American Energy Independence

As the "war on terror" rages perpetually across the globe, our nation's leaders have begun to take a proactive role in precluding hostile nations from having a vice grip over our nation's energy supply. Nations such as Saudi Arabia, Libya, Iraq, and Venezuela have controlled an alarming portion of America's oil supply for decades. These same nations have funded organizations hostile to American interests and even supported terrorist groups who have attacked innocent civilians. As Americans became more aware of the Faustian Pact that ran the engines of our nation, growing discontent and political pressure led to the push for American energy independence.

The past decade has seen an increase in the call for energy independence in presidential election cycles as well as in State of the Union addresses. Phrases such as "drill baby drill" or "North American energy independence" are now commonplace on MSNBC and FOX News. The movement is growing and according to recent estimates, America's dependence on foreign oil has declined from 60% in 2006, down to 45% in 2011. This drastic drop of dependence upon foreign nations to power our economy is proof that our nation is moving in the right direction.

This blog series will focus primarily on the effects of the "gas boom" in Pennsylvania and the legal aspects of Pennsylvania law which will govern this booming industry.

National Energy Policy

Despite the dropping dependence upon foreign oil, our nation's energy policy is far from ideal, and lacks clarity as to how to tackle the ever-growing crisis of global warming by reducing carbon emissions. The Department of Energy (DOE) website outlines the mission and goals of the nation in an extremely vague nature. The mission is as follows:

"The mission of the Energy Department is to ensure America's security and prosperity by addressing its energy, environmental, nuclear challenges through transformative science and technology solutions."


Natural Gas in America

A large factor in America's ability to reduce foreign dependence has been the recent technological advancements in natural gas drilling in the United States. For years, our nation has known about massive amounts of natural gas trapped within shale rock deep below the surface, but engineers were unable to find an economically viable path to tap the natural gas until recently. Advances in the process of hydraulic fracturing, "fracking", as well as improvements in horizontal drilling have opened the floodgates for private drilling companies to tap the "gaseous gold."

Natural Gas Productivity

The northeastern portion of the United States has large quantities of natural gas within what is known as the Marcellus Shale region. States such as New York, Pennsylvania, Ohio, and West Virginia are now booming with production, leasing of private land, and construction of pipelines to transport the newly tapped energy source. The U.S. Energy Information Administration's Annual Energy Outlook 2013 Early Release projects U.S. natural gas production to increase from 23.0 trillion cubic feet in 2011 to 33.1 trillion cubic feet in 2040, a 44% increase. Almost all of the increase in domestic natural gas production is due to projected growth in shale gas production, which is projected to increase from 7.8 trillion cubic feet in 2011 to 16.7 trillion cubic feet in 2040.

Natural Gas Production in Pennsylvania

As the nation continues to recover from the Great Recession, many people yearn for the rapid expansion of any industry which will produce jobs and keep thousands of more people from facing the hard reality of foreclosure, unemployment, and financial ruin. The timing of the eruption of natural gas suppliers moving into Pennsylvania to tap the once impossible source of energy has been met with fear, anger, and the open arms of desperation for those people suffering from joblessness or dire financial straits. The competing emotions of fear and excitement have created many lawsuits, battles between neighbors, and an endless media barrage of any and all accidents or mishaps that are a result of the new industry in town. Towns that were once quiet pockets of people tucked away in the mountains have seen thousands of trucks, hefty royalty payments, and even contaminated drinking water as a result of natural gas drilling.

Several factors including an increase in natural gas prices, technological advancement in horizontal drilling, and developments in the process of hydraulic fracturing made the Marcellus Shale natural gas profitable and thus desired by private gas companies. The first well drilled in Pennsylvania's Marcellus Shale region was the "Renz" well drilled in Washington County in 2004. Since 2004, the number of unconventional wells has grown to over 5,200 as of December 2011. The drilling is most concentrated in northern Pennsylvania and also in the southwestern counties.

The next portion of this blog will cover the evolution of Pennsylvania Laws and Regulations leading up to the implementation of ACT 13.

NOTE

All sections of the 5-part series are cited in original document titled The Effect of the Natural Gas Boom in Pennsylvania by Dan Mulhern. Written in 2012.

Categories: Marcellus Shale