SPECIAL REPORT: THE GREAT SHALE GAS RUSH
Exploring the promise and challenge of a new energy supply.
UPDATED, October 26, 2010: Pennsylvania Governor Ed Rendell has placed a moratorium on further leasing of state forest land for gas drilling.
Whether they come for whitewater rafting through the Youghiogheny River Gorge, or to enjoy the vistas at the edge of the Laurel Highlands, Pennsylvania’s highest mountains, visitors flock each season to Ohiopyle State Park.
But a new guest interested in work, not recreation, is seeking entry to the 20,500-acre woodland, 70 miles southeast of Pittsburgh.
Global Geophysical Services, a Texas-based seismic survey company, wants to begin testing in the park for potential natural gas drilling sweet spots, state officials say. The reason: all of Ohiopyle—its trails and campgrounds, and even the mighty Yough (pronounced “yawk”)—sits atop the Marcellus shale.
And even though this is ostensibly a protected area, the Commonwealth of Pennsylvania did not purchase the subsurface mineral rights for the vast majority of land in its 117 parks when the recreation areas were established decades ago. State officials fear there is little they will be able to do to stop gas development in the Pennsylvania park system, including at popular Ohiopyle, the park where the pressure for gas exploration has been most intense.
(Special Report: "The Great Shale Gas Rush")
Public Land and Private Rights
Perhaps it was inevitable that public lands and private interests would clash over Marcellus shale development in a state whose name literally means, “Penn’s Woods.” To this day, Pennsylvania remains 60 percent forested, bisected by the Allegheny Mountain range. Three great watersheds define its geography: The Delaware River to the east, the Susquehanna in the center and the three rivers that meet in Pittsburgh to the west. Those responsible for the many state and federal protected enclaves—there are 35 National Park Service units in or near the Marcellus from Tennessee to New York—are just beginning to understand how the new natural gas industry could alter this landscape.
The first impact has been on Pennsylvania’s state forests, which, much like the lands managed by the U.S. Forest Service, have always been designated for a mix of protection and production. The job of the state Department of Conservation and Natural Resources (DCNR) is to balance competing interests: To maintain wild areas while at the same time supporting extractive industries such as timber, mining, oil, and gas. Pennsylvania has one of the largest expanses of state forest in the eastern United States—2.1 million acres. About 1.5 million of those acres sit on the Marcellus shale.
Nearly half the Pennsylvania state forestland in the shale formation, 700,000 acres, is now leased for drilling. There are a number of older oil and shallow gas wells in the forests. But 96 percent of the $434 million to flow to the state in energy business bonuses, rental, and royalties since 2007 have been from Marcellus producers, who did not begin leasing new acreage until 2008.
The new shale drilling could have a more significant impact on public lands than conventional oil and gas wells of the past, concluded an assessment (pdf) by the U.S. National Park Service (NPS) first published in 2008 and updated last year. While conventional oil or gas finds are in limited pockets, the shale gas is locked in rock continuously throughout the formation. One of the positives, the NPS noted, is that the horizontal drilling technique used in the shale gas industry could allow producers to choose well sites away from sensitive areas and reach the gas from a distance. Still, the NPS report said, “It is conceivable that over the course of many years wells could be drilled on every available spacing unit.”
Also, the shale gas rigs are larger and require more space than the traditional oil and gas equipment. Even though the sites are reclaimed after drilling, leaving only a small unit of pipes and valves at the wellhead commonly called a “Christmas tree,” four to six acres of surface disturbance is likely at each site. That’s more than twice the 1.5 to 3 acres needed for a conventional drill site. And drilling in a forest means cutting down trees.
There are 15 Marcellus shale wells already producing on Pennsylvania state forest land. (See interactive: "Mapping a Gas Boom") All are within a huge expanse in the north-central part of the state that Democratic Governor Edward Rendell has sought to package and promote for the past seven years as the “Pennsylvania Wilds.” The area, with eight state forests and 29 state parks, boasts the largest elk herd in the northeastern United States, more than 2,000 wild trout streams, and some of the darkest night skies in the East. It could also become home to 1,000 Marcellus gas well pads, with six to ten wells per pad, based on the state forest land that is currently leased, with 400 permit applications already in process, the DCNR says. The agency reached a stark conclusion after a recent geographical information system analysis: “No additional leasing involving surface disturbance can occur without significantly altering the ecological integrity and wild character of our state forest system.”
Rendell, whose second and final term in office ends in January, has said he would like to call a halt. The governor came out in favor of a moratorium on further state forest gas leasing in March, after gas producer Anadarko accidentally spilled 8,000 to 12,000 gallons (30,280 to 45,400 liters) of mud in Sproul State Forest. Weeks later, the worst shale gas accident to date in Pennsylvania occurred on private land surrounded by the Moshannon State Forest, a blowout at an EOG Resources well in June that spewed gas and drilling wastewater for 16 hours before it could be brought under control. To have any lasting impact, a moratorium would have to be passed by the Pennsylvania Legislature, which is now debating whether to impose a severance tax and take other steps to regulate the industry.
But the DCNR’s GIS analysis made clear that a moratorium on state forest property would not halt the shale gas industry’s impact on those forests. Pennsylvania does not own the mineral rights to about 15 percent—about 350,000 acres (141,600 hectares)—of its state forestland, much of it in the Marcellus area. And there are plenty of wells being drilled on neighboring private property that once buffered the forests. “Gas development on private lands is already surrounding the state forest in some areas, causing an uncompensated, lasting change on the forest’s wild character,” said the report.
National Parks Weigh Impact
That private development impact also was a primary concern raised in the National Park Service’s assessments.
Two large national parks are located near the Marcellus: Shenandoah National Park, 20 miles to the east in Virginia, and Great Smoky Mountains National Park, near the southern edge in Tennessee. But there are 33 other national historic sites, national historic parks, scenic river areas, and other areas that also could be affected. Thirteen of those units are actually atop the shale formation, include sites honoring the nation’s earliest and most recent history: from the Fort Necessity National Battlefield near Uniontown, site of George Washington’s first military campaign, to the national memorial being built in Somerset, to honor the passengers of United Airlines Flight 93 who were killed on that ground on September 11, 2001.
The NPS report notes that the Upper Delaware Scenic and Recreational River in New York and Pennsylvania, is entirely within the shale area and is closely surrounded by private landowners who have received lease offers from gas companies.
Potential worries, the NPS assessment said, include “water contamination related to drilling and disposal of drilling fluids, air quality degradation from internal combustion engines on drill rigs and trucks, excess dust from equipment transportation, impacts to solitude and night skies from noise and lighting, and safety concerns associated with the large number of trucks needed to support drilling operations.” (Related: "A Dream Dashed by the Rush on Gas")
The assessment concluded that NPS should be an active participant in regulatory hearings on shale development. Indeed, NPS has weighed in. Late last year, in a submission (pdf) to the New York Department of Environmental Conservation, which is developing regulations while a drilling moratorium is in place, NPS requested that any proposal for a drilling site within 2,000 feet of a park service unit automatically trigger a state environmental impact analysis.
NPS also raised concerns about the potential water withdrawals from rivers, given that each well in the Marcellus shale requires about 4 million gallons of water. NPS asked New York to work with the Delaware River Basin Commission (DRBC), a federal and multi-state compact agency that is also developing gas regulations, to calculate the potential cumulative impact of water withdrawals if the gas boom continues.
NPS noted that such an assessment has been done by the Susquehanna River Basin Commission (SRBC), a sister compact agency to the west. SRBC, which is in the process of deploying a real-time Internet-based system to monitor withdrawals, has made a preliminary estimate (pdf) that the Marcellus industry could eventually demand 10 billion gallons of water per year from the Susquehanna basin. But SRBC’s analysis notes that even that much water would make shale gas a small drain on water resources compared to others in the energy sector: Power plants, mostly nuclear and coal-fired, draw more than 10 billion gallons from the basin every three days.
Who Owns Mineral Rights?
In addition to the impact from development on private land near the National Parks, the federal government—like Pennsylvania—does not own the mineral rights in the majority national park and historic area land overlying the Marcellus. In fact, private landowners hold the drilling and extraction rights for two-thirds of the 170,300 acres (69,000 hectares) of those 13 NPS units, says Pat O’Dell, petroleum engineer with NPS’s Geologic Resources Division. In the majority of cases, that is because even the surface areas are privately owned. At Upper Delaware Scenic and Recreational River, for example, the federal government only owns 100 acres (40 hectares) of the 80,000 acres (32,375 hectares) in the unit.
The Park Service has struggled for years with this issue. In the late 1970s Congress gave NPS authority to regulate some production, even where it doesn’t own the subsurface rights. NPS can require that producers obtain approval and secure bonds to pay for reclamation before operations begin, as long as the gas company must cross federally owned land or water to get to the well site. But there may not be a need to cross federal land in all cases in the Marcellus, so the regulations may not always apply, the NPS report noted. In a process that was begun before the shale development, but is now exceedingly relevant for the NPS units in the Marcellus, the Park Service is working to revise the regulations to ensure some oversight of production operations within park units, even if drillers don’t cross federal land.
But even without the change, NPS officials are hopeful that direct impact on federal park property can be avoided with the use of horizontal drilling techniques from offsite. (See interactive, "Breaking Fuel From Rock") “There is plenty of opportunity to avoid any footprint at all in any of the National Park areas,” says Pat O’Dell, petroleum engineer with NPS’s Geologic Resources Division.
For Pennsylvania’s state park system, it is going to take a great deal of historical research to determine who owns subsurface mineral rights. In many cases, mineral rights were severed from surface rights long ago, in deals that allowed mining companies in the 1800s to acquire land at a low price. DCNR estimates that it does not own mineral rights for 80 percent of Pennsylvania’s parkland. This is mainly due to a rapid major expansion of Pennsylvania’s park system in the 1960s and 1970s, with the aim of ensuring that there was a park within 25 miles of every state resident. It was during this acquisition spree that the land was purchased for Ohiopyle, Pennsylvania’s largest state park and its most popular.
Last year, the DCNR received the first requests for access to the park for seismic surveys, a process that involves using sound waves to create three-dimensional images of underground terrain. Although the gas industry knows the Marcellus shale lies beneath the park, the surveys would indicate the best places for drilling. To create sound waves, the survey teams use large trucks with vibrator units or set off small explosive charges buried underground in a grid pattern. Sometimes, says DCNR spokeswoman Chris Novak, the companies need to drill exploratory wells.
For now, any survey work is on hold as the DCNR has requested proof that the seismic company is working on behalf of a firm that holds title to the subsurface rights. “Before we allow anyone to do testing, they need to prove to us that they own the mineral rights or have a lease,” she says. “We suspect we don’t own the mineral rights, but ‘suspect’ is not good enough in the legal world.”
Novak says that in cases where Pennsylvania does not own the mineral rights, it will attempt to work out deals with companies to reduce the impact in areas that have high recreational use or are sensitive habitats. For now, such voluntary agreements may be the best hope for protecting rafting, hiking, and camping spots, as well as the dwellings of the black bear, bobcat, and river otter in Ohiopyle. If a gas producer owns the mineral rights, says Novak, “we don’t have much ability to deny access.”
(Related: "Natural Gas Stirs Hope and Fear in Pennsylvania")
Read the entire special report, with photos, interactive map and illustration of the process, at THE GREAT SHALE GAS RUSH.