Unconventional Gas Activity in Pennsylvania

Recently, the Pennsylvania Department of Environmental Protection (PADEP) Office of Oil and Gas Management changed a column on a variety of their data that they distribute. Now, instead of indicating whether or not a well is permitted or drilled into the Marcellus Shale, we are given data as to whether or not it is an unconventional well. This is a move likely designed to incorporate the Utica Shale, and perhaps other formations as well. PADEP defines unconventional wells as:

An unconventional gas well is a well that is drilled into an Unconventional formation, which is defined as a geologic shale formation below the base of the Elk Sandstone or its geologic equivalent where natural gas generally cannot be produced except by horizontal or vertical well bores stimulated by hydraulic fracturing.

Historically, of course, the lion’s share of unconventional wells in Pennsylvania have been drilled into the Marcellus Shale, although I have encountered the odd report about activity in the Utica.  Interestingly, just across the state line in Ohio, the situation is more or less reversed; evidently operators in the Buckeye State find the Utica to be more enticing than the Marcellus. In Pennsylvania, these distinctions will unfortunately be lost for us moving forward because they will be lumped together as unconventional, but really, the process is the same and the associated concerns are too. We just won’t be able to effectively compare the two black shale formations to each other in Pennsylvania.

I always feel like changes in data are a good opportunity for a retrospective. Here, perhaps for the first time ever, is a single chart with permits, violations, and drilled wells, dating back to 2005:

Obviously, June 2012 is not yet over, and the data though the 25th represents only about 83% of what we would expect for month long totals.  However, the decline in recent months is notable on all three fronts.  Let’s zoom in, so to speak, and take a look at the last 12 complete months, and add some Excel generated trend lines while we are at it:

While there is obviously significant fluctuation on a month to month basis, the negative slope of the trend lines show that these three indicators of activity for unconventional wells in Pennsylvania are all well down over a one year period.

Here is the data spatially (with violations upload pending):

Unconventional Wells and Permits in PA (large)

Notes:  At the risk of being redundant from post to post, I always like to say a few a words about how I worked with the data, just in case you want to try this at home and your graph looks a little different. The permits require a bit of preparation, because there can be multiple items listed for the same well. While that data can be valuable, it’s not really what we are looking for in this analysis. I have resolved this by using the earliest permit action for any given well API number. The drilled wells are unchanged from the original, as each well appears on the downloaded dataset exactly once. The violations are also unchanged from the original in terms of the number of records used. This results in a number of actions greater than the official DEP count of violations, which are apparently tallied by the number of violation ID’s issued. As I have mentioned elsewhere there are numerous issues with the violation dataset, and my perception is that there was a period of time in which there was a lack of uniformity in how the data were entered, which is reflected in data trail left behind. So while using all records from the data download may inflate the number of of violations, to use only the unique violation ID’s will yield a number that is too small.

A Mosaic of Recent Activity

Summer is a time to vacation, barbecue, and enjoy the great outdoors. In case you have been partaking in summer fun and missed recent drilling news, information, and events, check out the summaries below compiled by the folks at FracTracker with input from many sources including Edward Kokkelenberg:

PA DEP Data Changes
Until June 2012, data from the Pennsylvania Department of Environmental Protection (PA DEP) Office of Oil and Gas Management had a Marcellus Shale indicator associated with various reports, including the permits issued report. These have all been replaced with an Unconventional indicator. Read more about the distinction from the PA DEP here (PDF). The following two visualizations show you trends with the unconventional wells drilled and permitted in PA using the new category:

Drilled Unconventional Wells in PA by Type

Drilled Unconventional Wells in PA by Type

Chart of Unconventional Permits in PA by Year

Unconventional Permits in PA by Year

In the News
The Math Behind the 100-Year, Natural Gas Supply Debate
When President Barack Obama said that the U.S. has a supply of natural gas that can last nearly 100 years, he was using a quick-and-dirty computation that is nonetheless rooted in recent geological research. How should natural gas supply data be interpreted for public consumption? Read more»

Natural Gas Production in 2010 by State

Shell Methane Migration Incident Under Investigation
Shell, a company who plans to build an ethylene cracker facility in western PA, is being investigated by the PA DEP for methane migration concerns in northeastern PA (Tioga County). The original incident was reported on June 21, 2012. Several families within a one mile radius of the site have already been evacuated temporarily. Read more»

Unconventional Wells in Union Township, Tioga County, PA

Health Research
Health Network to Analyze Health Effects from Natural Gas Activities
Geisinger Health System, a nonprofit chain of hospitals in eastern PA, plans to use its database of patient records to determine whether natural gas drilling in the state’s Marcellus shale is harming residents. Read more»

Geisinger Health System

Worker Hazard Alert Issued
Based on NIOSH field studies, OSHA and NIOSH released a Hazard Alert on June 21, 2012 for gas drillers who are working on sites utilizing hydraulic fracturing due to the potential for them to be exposed to airborne silica during fracturing sand transport and mixing. Read more»

Mixing of sand on site

Marcellus Papers
This unique and easy-to-read assortment of papers has been put together by the Paleontological Research Institute. Browse through introductory topics such as Why the Geology Matters or more intricate discussions of the water input required to hydraulically fracture a Marcellus Shale well – the quantity, additives, and risks. Read more»

PRI’s Marcellus Papers

Alert service available through Sunlight Foundation
With this online resource, you can: set up alerts and subscribe to receive updates from Congress, state legislatures; search through every bill and regulation in the federal government; follow and search bills in all 50 states, powered by the Open States project — And more»


Popular Media
Injection Wells: The Poison Beneath Us – By ProPublica

ProPublica article about deep well injection

The Sky is Pink video – By Josh Fox

Jobs Impact of Cracker Facility Likely Exaggerated

This past January, when Ohio was still in the midst of the bidding war for the proposed cracker facility, Toledoans saw the following blurb in their paper, the Toledo Blade:

Gov. John Kasich is pursuing the multibillion-dollar ethane-cracker facility that Shell Chemicals LP plans to build in Ohio, West Virginia, or Pennsylvania to capitalize on the increasing harvest of natural gas from Marcellus shale. The American Chemistry Council estimates that the plant would generate 17,000 jobs in chemistry and other industries as well as $1 billion in wages and $169 million in tax revenue.

That’s some financial impact, right?  And now we are hearing the same figure coming out of Harrisburg via the Post-Gazette:

Estimates from the American Chemical Council have projected that a $3.2 billion ethane-processing facility, similar to the one that Shell is considering for Beaver County, would create more than 17,000 new jobs at the plant itself and among spinoff businesses along the supply chain.

Too bad it is isn’t very realistic.

Although the planned Monaca plant is one of several new cracker facilities planned in North America, currently, there are just a handful on the continent. In January, I posted about one of them, a Shell facility in Norco, Louisiana.  On their website, the multinational giant proudly proclaims the following, in bold type:

Shell Chemicals’ Norco facility is located in St. Charles Parish. The facility has over 600 full-time employees, more than 160 contractors, and generates an annual payroll of $50 million. The company pays more than $16 million in state and local taxes and $6M is property taxes that help fund public education as well as police and fire departments.

As I mentioned five months ago, those are significant contributions, to be sure. But it is a far cry from the projections of the American Chemistry Counsel (ACC) state above.  Shell also operates another cracker in Deer Park, Texas, which claims:

Shell Deer Park is a 1,500-acre complex located in Deer Park, Texas, approximately 20 miles east of downtown Houston along the Houston Ship Channel. Founded in 1929, Shell Deer Park is now home to 1,700 employees who operate a fully integrated refinery and petrochemical facility 24 hours a day.

That’s a lot of jobs, but as an integrated facility, it already accounts for some of the “spinoff businesses along the supply chain”.

Nova Chemicals operates another cracker in Sarnia, Onterio, which according to their website employs about 900 people who earn an estimated $86 million in wages and benefits each year.

So how silly is the claim of 17,000 jobs and $1 billion in wages? Consider that with all of its existing crackers and other facilities,

Shell chemicals companies staff total 8,500 worldwide. The majority of these support our manufacturing operations.  This does not include joint venture employees.”

Even with the JV employees not being counted, we are talking about major petrochemical plants in nine locations around the world, plus three technology centers.  So just who are these experts at the ACC who keep getting quoted for the 17,000 job figure? According to website:

The American Chemistry Council’s (ACC’s) mission is to deliver business value through exceptional advocacy using best-in-class member performance, political engagement, communications and scientific research.

Well played, ACC.  You have put on a best-in-class performance with your exceptional advocacy.  But for the rest of us, it is time to start considering more realistic jobs numbers when talking about the proposed ethylene producing facility.

Long Term Trends in PA’s Marcellus: Violations per Well

Ever since the DEP responded to FracTracker’s request for oil and gas violation data in October 2010, I have been providing periodic updates of the data in a variety of meaningful ways, such as raw violations totals and violations per amount of gas produced. But for most purposes, the best analysis has always been in terms of violations per well.

Since that time, the data have improved considerably. Not only have significant issues been addressed with both datasets, but the violations and drilled wells are now both relatively easy to access online directly from the DEP. That does not mean, however, that the available datasets are perfect or straightforward. For example, the DEP seems to count violations by the number of violation ID numbers issued, but upon closer inspection, that’s not the full story, and as a result, I prefer to use the total number of entries on the compliance report instead. The situation for permits and wells used to be almost exactly the opposite, as those reports often list multiple actions for the same well.

I have not checked the permits report lately but as I began this analysis, I was surprised to discover that the drilled wells list has been cleaned up considerably, as each unique eight digit well API number appears on the list exactly once. Now I may be the only one excited about this, but it is a notable milestone in the evolution of the data in my humble opinion,  because it removes an element of interpretation which can have a significant impact on the result of the analysis.  And as an added bonus, it makes the analysis much easier, too.

So let’s take a look at violations per well (VpW) from January 1, 2005 through June 12, 2012:

Violations per well by year in Pennsylvania’s Marcellus Shale.

Keep in mind that if we were talking about raw totals of violations and wells, it would of course be significant that we are less than half way through the year. As a ratio, however, that’s not the case, and there is no reason to expect the VpW for 2012 to change substantially up or down based on seasonality. Looking at the the trend, however, there is plenty of reason to expect the final score to be lower, as the rate of violations per well has been declining sharply in recent years. In fact, the current 2012 rate of 0.51 violations per year is less than half of the 1.14 violations per Marcellus well that we saw in 2009. Certainly, that’s an encouraging trend, if it can be attributed to changes in practices in the field, and not just changes how violations are administered, coinciding with changes in the executive branch of the state government.

One of those changes made by the new administration was an effort to route the violations process through Harrisburg. It was a move that raised considerable suspicion among some people, as it had the appearance of moving the oversight process a good bit closer to elected and appointed officials. But on the other hand, it was clear that the three DEP offices which handled oil and gas violations were not on the same page:

2010 Violations per Well by DEP issuing region.

Violations issued from the North Central Regional Office (NCRO) were roughly three times that coming from either the North West Regional Office (NWRO) or the South West Regional Office (SWRO). As the role of the regional office is supposedly diminished in determining what is and is not a violation, we will take a look at the 2012 data on a county by county basis:

Marcellus Shale violations per well (VpW) by county from 1-1-12 through 6-12-12. Counties outlined in yellow contained at least one drilled well during the period.

Compared to the map above, it seems like the strong association with VpW score and regional office affiliation is starting to break down. For those who are are curious, you can see all of the data for each county dating back to 2005 by clicking on the blue “i” tool, then any map outline.

But because the VpW scores can be so exaggerated for counties with just a handful of Marcellus Shale wells, let’s take a look at the five counties with the most wells, all of which were in the North Central Regional Office jurisdiction except for Washington, which was in the South West Regional Office:

Violations per Well for the 5 counties in PA with the most Marcellus Shale wells, as of 6-12-2012.

Last year was the first time since 2007 that Washington County did not have the lowest VpW score out of the five counties with the most wells. In this subset, trends are down across the board since 2009, and now the counties that are major players in the Marcellus are all much closer together.

When it was learned that the plan at the DEP was to have Secretary Krancer approve each Marcellus violation, the prediction that the number of violations relative to the activity of the industry would decrease was widespread. Even though the specific plan was scuttled, the expected result came to pass anyway. And yet, the validated hypothesis does not amount to proof of political meddling; the possibility that the data reflect improved practices in the field would also net the same result.

Global bans, moratoria, and movements regarding hydraulic fracturing for natural gas

Global Reactions to Hydraulic Fracturing

In addition to her mapping of bans in New York State, FracTracker’s Karen Edelstein is also keeping up with the movements against high volume hydraulic fracturing worldwide. See below for her most recent map:

Global bans, moratoria, and movements regarding hydraulic fracturing for natural gas

By the Pittsburgh Post-Gazette

Marcellus Impact Graphic by Pittsburgh Post-Gazette

A captivating view of gas drilling’s impact from an economic standpoint. Click on the image for more information by the Pittsburgh Post-Gazette about how 7 counties in Southwest PA may use the funds they receive from PA’s impact fee.