Appalachian Basin

*UPDATE* The Benefits of Marcellus Shale Development in Deer Lakes Park

UPDATE (5/7/2014; 2:52pm ET): After months of due diligence and deliberation, the Allegheny County Council voted 9-5 to approve the Deer Lakes Park lease late last night.  The lease, which has been called the most comprehensive non-surface lease agreement in the state of Pennsylvania, will allow Range Resources to develop shale beneath the 1,180 acre park in West Deer and Frazer.  Well pads will be located outside the park on private property.

The vote occurred after hearing testimony from many community members on both sides of the debate.  The most notable testimony came from private landowners Ken Gulick and his wife Kris.  The well pad to be used will be located on the Gulicks’ property. Ken told the audience:

“This was a big decision to do this, it’s something we thought about and talked to a lot of people. We have come to the conclusion that we feel it’s very safe.  Our place is already surrounded on three sides by Marcellus well pads. We have eight shallow wells right now, all producing, four on this farm and four on our home farm.  Again, our oldest shallow well is 70 years old and it has been hydraulically fractured. We have well water and our cattle pasture right up to the wells.  It’s been completely habitable and we’ve gotten everything we’ve wanted out of the place.  This has made our lives just a little bit easier and I don’t think we have to apologize to anyone about that.”

Next up to speak was Ken’s wife, Kris:

“We have raised replacement heifers, which are pregnant cows to feed our cousin’s dairy farm. He has not seen any issues with the calves, there are no double headed calves, there are no stillborn, there’s none of that.  These cows are pasturing right up on the wells every day.”

Watch the video of Ken’s and Kris’s remarks from last night:

Despite the fear mongering and misinformation in the Allegheny court house last night, it was not enough to take away from the Gulicks’ testimony — who have actually lived with shale development on their property — and the due diligence of the city council.  The approved lease will yield $4.7 million to the county, $3 million to a parks improvement fund and 18 percent in royalties that have been estimated at more than $50 million.

Original post, April 29, 2014

In order to offer some clarity, last week Range Resources gave a presentation followed by a question and answer session to Allegheny County Council members regarding plans for Deer Lakes Park and its overall Marcellus operations.

Questions on the project ran late into the night, and despite this being presumably a controversial topic – one council member even called the decision “gut wrenching” – only a few council members were left by the end of the night.

To start the presentation, Range Resources’ regional vice president, John Applegath, gave an overview of the Marcellus Shale, stating, “This area above the Marcellus is providing one-fifth of the natural gas to the United States.”  He also presented the council members with 154 studies on shale development to assist the council members in their due diligence. As Applegath explained:

“This includes the most recent studies. It has both the good, the bad and the middle. These are comprised of industry studies, governmental studies, academic studies and environmental group studies. The vast majority however state that producing shale gas is a safe operation when done under the right rules and regulations.  And I’m here to contend that Pennsylvania is one of the leading states for those rules and regulations.” (3:49)

Other highlights from Applegath’s presentation:

  • “In Pennsylvania there are over 250,000 Marcellus Shale related jobs” (6:15)
  • “The average salary for these industry jobs are $40,000 more than the average of any other industry, so these are well paying jobs.” (6:30)
  • Range Resources has 500 employees and we directly support another 5,000. (6:40)
  • Looking at the benefit to the Commonwealth… Pennsylvania has collected $640 million in impact fees over the last three years. (7:30)
  • Industry has spent more than a billion dollars on new roads and infrastructure. Range itself has spent over 120 million dollars. (7:45)

The next portion of Applegath’s presentation discussed the development currently taking place around the park.  Looking at the map below, you can see the already developed and completed horizontal wells surrounding the park (in blue).  These wells brought out no opposition and were completed without incident.  According to Applegath, “Activity is ongoing in this vicinity.”

Deer Lakes Map

Water Operations for Deer Lakes Park

Pete Miller, Water Resources Manager for Range Resources, spoke after Mr. Applegath, providing insight on how water used during completions would be transported to the well site:

“For these wells in particular we plan on using municipal water sources, which we already have permits for… this water will be piped in and stored in large temporary fresh water storage tanks. These fresh water storage tanks will be located primarily on three existing pads in the area that are already built and used to service wells in the past. We’re also exploring other temporary surface leases to pump water to these storage tanks… From these storage tanks we lay a temporary surface line to the well site. The distance for these pipelines are expected to be 1.5 miles, and will be done through surface lease agreements with landowners.” (50:00)

Using a surface pipeline to transport water to the well site will cut down on truck traffic, decrease emissions as well as decrease wear and tear on the roads.  This is an excellent example of how this company (and the industry in general) continues to work with local municipalities and townships to develop these resources while constantly finding ways to minimize impacts.

Commitment to Environmental Protection.

Steve Johnson, Manager of Environmental Health and Safety operations for Range Resources, spoke next about their safety and commitment to environmental protection:

“Our work sites are designed to be safe for the people who work on them and by extension they’re safe for your communities as well.” (59:00)

Johnson also detailed the litany of environmental protections used on site, including: overall site construction, multiple pad liners, sediment controls, safe storage of chemicals and on-site fuel, closed loop drilling and vapor control units to minimize air emissions. Range also uses a FLIR (Forward Looking Infrared) camera at every production site before it goes into production to look for any leaks in equipment. Once in production, Range Resources will utilize a FLIR camera to scan the production site on an annual basis to ensure methane is not leaking into the air.

It is clear that Range Resources is taking every precaution to develop the shale beneath Deer Lakes Park in a safe and responsible manner. If the council members agree to sign a lease, it will come with a $4.7 million signing bonus to pay for public services, as well as $3 million for park improvements. There will also be royalties paid at a rate of 18 percent once the wells begin producing.

Looking at the numbers and safeguards in place, this decision doesn’t seem that “gut-wrenching” anymore.


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