Touring the Natural Gas Fields; Opening Minds
The Hometown Energy Group, an energized group of natural gas supporters from Otsego County, New York, arranged a tour of some Cabot Oil & Gas sites in Susquehanna County, Pennsylvania recently and minds were opened as the visitors saw what natural gas development is really all about.
A group of elected and appointed officials, representatives from highway departments, landowners and others, interested in seeing natural gas development site in progress, traveled to Montrose, Pennsylvania on December 6th. We met with Cabot Oil and Gas personnel, both on and off site, with Tony Ventello of the Central Bradford Progress Authority, and one of Cabot’s hydraulic fracturing supervisors, Larry Fulmer, for presentations and Q&A.
We met Bill desRosiers at the Inn at Montrose. The Inn which is owned by Dan and Gretchen Backer was recently renovated (completed in 2009), fueled by the economic turnabout natural gas development has brought to Susquehanna County.
The Inn at Montrose
Bill desRosiers of Cabot served as both host and tour guide. He described a thriving gas field in the Montrose area, one producing 700,000,000 cubic feet per day with 15 of the 20 most productive wells in the Marcellus. Cabot projects a 30 year build-out with at least another 30 years of production after that. There may be more. The steep decline in production after the first year isn’t evident in the Montrose area wells. First year production rates have continued for as long as 3 years, indicating the strong possibility of a longer production cycle. This field is so productive that Cabot has no interest in expanding to New York State.
Tony Ventello of the “Progress Authority,” an industrial development association (“IDA” in New York parlance) centered in Towanda, gave us an overview of his experiences with the onset of this new industry in his county. In his capacity as County Planner, at the time, he and a group of potential stakeholders visited with their counterparts in Decatur, Texas, before development was fully implemented back home. Information gathered from Texas and later from Calgary, Canada, assisted county officials in subsequent decisions.
The change in the economy of Bradford County has been impressive. Aside from jobs and general welfare, freehold mineral rights have generated individual wealth for some. Spinoff benefits have included increased support for education and public charities. A new hospital is being constructed supplemented by Cabot, local support and the gas industry, new hotels, expansion of current businesses, and creation of businesses that never before existed. The railroad has suddenly come back to life and supplementary gas field services have occupied formerly dormant buildings.
Tony spoke about the cyclical nature of the industry. When prices are high, gas flows. Low prices, less gas. Price swings should moderate with increased gas use in heating, electrical generation, chemicals, and transportation. However, given the nature of the business, the Progress Alliance is investigating communities like Hobbs, New Mexico that are further along the production phase to see how they are managing their sudden wealth to ensure less cyclical disruptions. Tony also mentioned the disruptions caused by a rising real estate market. Great for the homeowner, less so for the renter. Bradford County’s experience and research will be a great resource when gas development comes to other regions.
New hospital being built in Montrose with industry help
(Photo credit/ Susquehanna Independent Weekender)
Bill desRosiers talked about the local Health Care System that had broken ground to a new facility. Cabot Oil and Gas Corp started off the hospital’s fundraising effort with a $1 million donation. The company then issued a challenge promising to match contributions up to the $1 million. This would give the health care system a total of $3 million dollars.
Our last speaker, Larry Fullmer, brought over three decades of experience to the podium. He described the transition of the art and science of hydraulic fracturing. He started in the days when he stood in the back of a pick-up truck, read charts off a mechanical transcriber, and calculated downhole mixtures in his head. Now he sits in a fully appointed trailer with banks of computers. No on-the-fly, rule-of-thumb calculations these days; the data sets the parameters. However, there is still room for experience and he packed that experience into his presentation. The group was fascinated and could have stayed for another hour. but we had to move on to a new well site. Larry is available for presentations.
The final hour was spent on-site at a new Cabot rig that can reposition itself. We broke into groups, one led by Bill desRosiers and the other by the “company man,” the man in charge of the operation. Hard hats and safety glasses were distributed. The group was spilt in half; each group had the opportunity to walk about an active drilling sit with various operations being fully explained. Pipes, drill bits, compressors, berms, the “doghouse” with its attendant computers were the backdrop for question on safety features and regulations.
A $50, 000 drill bit
Bill desRosiers explains how directional drilling works
Group 2 at the “doghouse”
Watching and monitoring drilling in the “doghouse.”
Computer readouts are monitored in Pittsburgh and in Houston
The following are comments from one attendee.
I observed none of the “horrors” we hear about. I found the employees to be just good people who are dedicated, hardworking, caring Local Americans, like anyone else. They answered any question asked. One young lady was from Afton.
The presence of N/G drilling has transformed the area in a positive manner. There were thriving businesses and I never observed one “for sale” sign of any home. In fact, many new homes were being built behind the old ones. The noise was not that loud. You could not hear the rig in the bus as they were drilling. The rig normally stays on the site a maximum of 15 weeks and drills up to 6 wells. Seldom are sites re-drilled.
We were allowed all over the sight and in the control room and were free to talk to any employee. Not the actions of people with something to hide. The farmer was there on his Harley with side car when we arrived just hanging out.
More “Trips to PA” are scheduled next year, potentially starting in April. Possible venues include Williams, Southwest, Exxon, and maybe some Shell sites further west. The Progress Authority holds an industry exposition in early summer, a good place to pick up information. The face-to-face contact with the industry and those who do business with it is an excellent way to gain information. We intend to invite realtors, bankers, and insurance representatives to speak to their counterparts to share experiences.