A Protest in U.S. Oil Country Spells Trouble for Fracking Abroad – “Gardendale, Texas, sits on the Permian Basin, the largest oil province in the United States. That makes it an unlikely site of anti-fracking protests and an even more unlikely bellwether for shale gas drilling activity in Europe and Asia. And yet it is. About 15 residents in the town, population 1,574, are waging an anti-drilling crusade against Berry Petroleum. They have tried to turn Gardendale into an official municipality, which would give them more control over gas exploration and production near their homes. They launched a website to chronicle Berry's alleged misdeeds, and a YouTube channel with short "Berry Tales" videos. They have, if nothing else, painted a drilling trailer which they playfully call the “Gardenhell scar" and dumped it near a group of oil storage tanks (see above). Many Gardendale residents I spoke to say they aren’t against drilling, just against Berry's manner of drilling, which involves fracking — the technique in which water, sand and chemicals are blasted deep underground to break up hydrocarbon-rich rock formations. Their reasons for kicking up dust over Berry’s development plan resemble the complaints of landowners in Pennsylvania and other areas where shale drilling has taken hold: There are too many wells in a small area; the rigs are too close to backyards; the stream of trucks flows all hours of the day and night. Annalee Gulley, a spokeswoman for Berry Petroleum who works for KGBTexas Communications, declined to comment. Berry created this website to describe its plans and has held community meetings to answer questions and address concerns, participants say. The residents’ main objection however is largely unspoken: Unlike TV’s oil-soaked Beverly Hillbillies, or the many landowners who became fracking millionaires, the Texans don’t really get paid for their inconvenience and worry. In the U.S., most landowners own the mineral rights to their properties. They are willing to allow drilling because it can make them rich. Oil companies have put wells in the middle of residential neighborhoods and beside schools and churches in the Fort Worth area because landowners enjoyed a financial benefit. That’s not the case in western Texas, where land has changed hands so many times over decades that it’s rare for a landowner to own his mineral rights. This predicament, an aberration in the U.S., is the norm in the U.K., Poland, Canada, China, France and pretty much everywhere else. That’s what makes Gardendale an unusual indicator of how shale gas initiatives might proceed abroad. Gardendale’s situation “is quite common around the world,” said Kevin Shaw, a lawyer specializing in energy and natural resources at Mayer Brown in Houston. “In the end, you’re still going to get those wells drilled, but it’s going to be harder. It’s going to take longer and it’s going to be more expensive.” Companies from Exxon Mobil Corp. to Royal Dutch Shell Plc. have inked mega-deals in the past year to take the U.S. gas revolution on a road show, including Shell's $10 billion Ukraine exploration agreement signed in January… “In the past, people always thought developing a ‘social license to operate’ was important, but didn’t make a direct link to success or failure that impacted their profitability,” Munro said. “Now oil and gas companies have come to realize that their ability to turn a profit depends as much on reputation management as good engineering or strong geoscience skills.” Translation: Companies such as Berry must address and quell complaints like those that Gardendale’s protesters have about drilling. Community relations — “stakeholder management” in the anodyne jargon of corporate sustainability — has become a critical part of operations for many extractive industries. Berry’s website explains the company’s local philanthropy to community initiatives and education. The company appears yet to deploy sustainability measures as systematically as much larger firms. Berry ranks below the industry average in its disclosure of environmental, social and corporate governance performance, according to public data assembled by Bloomberg LP. Energy executives warn against counting on a fracking-fueled oil and gas boom outside the U.S. for the same reasons Berry faces in Gardendale. U.S. fracking “is advanced for a number of reasons,” including the “royalty component,” Michael Yeager, CEO of the oil-producing arm of Australian conglomerate BHP Billiton, said in a March interview. “It’s going to stay that way in our opinion for a long period of time.”” (Bloomberg)

Steelmakers reap benefits from US shale gas revolution – “Amid the industrial ruins of the Mahoning river valley in eastern Ohio, a decrepit stretch that was once one of the great steelmaking centres of the world, the huge new Vallourec Star pipe mill looks like a spaceship from some more advanced civilisation. Its fresh paint gleaming in the sunshine, the plant is a symbol of a brighter future for the region, and for the US Steel industry. The North American shale boom, triggered by technological advances that have made it possible to extract gas and oil from previously unproductive rocks, has created a surge in demand for steel tubes to use for drills, well casing, pipelines and other equipment. Vallourec, a French company that specialises in tubes for the oil and gas industry, has spent $1.05bn on the plant. It is the largest investment in the region’s industry since the 1920s. “Shale gas is a revolution,” says Philippe Crouzet, Vallourec’s chairman, at the plant’s inauguration last week. “It changes the global map of gas completely.” Mr Crouzet says Vallourec must have a plant in the US to serve the hundreds of small shale producers pushing back the technological frontier and making new demands on suppliers. The market for high-quality tubes that can meet those demands is growing at 8 per cent a year. Other companies, such as Benteler of Austria, have spotted the opportunity. In total some $7bn worth of new investments in steel pipe mills have been announced, according to Michelle Applebaum of Steel Market Intelligence. If built, they will raise the US tube industry’s capacity by about 60 per cent. The plants are the most visible sign of what Tom Gibson, president of the American Iron and Steel Institute, an industry body, describes as the “transformational” impact of shale. John Ferriola, chief executive of Nucor, the largest listed US steelmaker by market capitalisation, recently talked about the “exciting” prospects opened up by the shale boom. “It’s going to create a need for more steel that goes into the pipes to bring the gas to the user,” he says. “But in addition to that, it will allow manufacturing to re-source back into the US . . . [and] that provides a greater demand for our product.” There is no doubt that excitement in the industry is running high. The question is whether optimism is running ahead of reality. Signs that the US Steel industry faces challenging times are not hard to find. The former RG Steel mill, a few miles from the new Vallourec plant, was shut last year. It has had several owners, including Severstal of Russia, in the past few years, and is now owned by Hilco Trading, a privately held financial services group, which has put it up for sale again. Meanwhile Timken, a bearings manufacturer also based in Ohio, has come under pressure from Relational Investors, the activist fund manager, and Calstrs, the California teachers’ pension plan, to spin off its steel operations, on the grounds that the business is highly cyclical and affecting the stock market’s valuation of the group. Timken has agreed to set up a panel of non-family directors, advised by Goldman Sachs, to investigate such a split…  One answer is that “oil country tubular goods”, as pipes are known in the industry’s jargon, are a relatively small proportion of the total steel market, about 5 per cent. That probably understates their contribution to the growth in demand. Peter Marcus of World Steel Dynamics, a consultancy, suggests that the oil and gas industry might be responsible for about a third of expected 20 per cent growth in the US Steel market by 2020. Even so, other uses such as construction and the car industry are still very important. Moreover, imports have been taking a rising share of the US market. The US imposed anti-dumping duties on imports of steel tubes from China in 2010, but imports from other Asian countries such as South Korea have continued to grow. The investments in new tube production capacity in the US are mostly not being made by US companies. Apart from France’s Vallourec, investments have been announced by Luxembourg-based Tenaris, Evraz and TMK of Russia, Borusan Mannesmann of Turkey and Tianjin Pipe of China. Charles Bradford, a steel analyst, says some of the new plants are likely to displace existing capacity, some owned by American companies such as US Steel. “That’s not necessarily the best market to be in.” With huge global overcapacity, sluggish demand in many sectors, and prices that have been falling steadily since 2011, the steel industry is facing headwinds that even the “shale gale” cannot overcome.”” (Financial Times)

Province urged to quell shale gas protests – “The New Brunswick government is being urged to try and address the growing anti-shale gas protests in Kent County. There have been at least 21 people arrested at various demonstrations in the last two weeks in eastern New Brunswick. Bernard Richard, a former education minister and provincial ombudsman, has dealt with public opposition to government policies. He said when an issue boils over, it is important that political leaders get personally involved in the situation. Richard said a personal approach worked for such leaders, such as former U.S. president Bill Clinton, to address public controversies. “Can the premier, this premier, do that as effectively? I don’t know how many million-dollar questions, you know, but it is an important question and I think we are at that point actually." I think there is something of a crisis in the air right now," Camp said. “They said they consulted, they had conversations with people but a lot of people said they didn’t like fracking and even the report that the government commissioned by Louis Lapierre said we should go ahead with it but there’s significant public opposition out there, which must be dealt with and it wasn't dealt with.” The Kent County protests are in response to seismic testing being conducted by SWN Resources Canada. The company is trying to determine if there is a viable shale gas industry in the area. The company is not hydraulic fracturing… Demonstrators remained camped out on Monday near a field along Route 126. Yellow boxes and cables continue to line Route 126, but SWN's seismic testing trucks are not in the area. Many of the protesters have been asking for a meeting between the provincial government, SWN Resources Canada and First Nation representatives… Protesters say the company has halted seismic testing until a meeting can be held on Wednesday. The provincial government wouldn't comment on the proposed meeting and SWN did not respond to repeated calls to confirm Wednesday's meeting. Elsipogtog First Nation members attending the meeting say they have promised the provincial government and SWN they will not talk to the media until the meeting is over. Meanwhile, some demonstrators say they feel left in the dark about the meeting. “What I am afraid of is that economic interests will be placed above the protection of our waters and our lands,” said Willie Nolan.”” (CBC)

Europe Shale Gas Market Prospects- Ten European Countries Open Up Their Shale Markets for Investments in Exploration – “The new Europe shale gas report from OGANALYSIS noted that most oil and gas companies, investors and equipment & service providers are aiming to tap the boom in Europe shale gas. The report analyzes the current status, potential and feasibility of shale development, ongoing activities, government stance and companies operating in each of the 13 shale markets. The report also provides complete analysis on reserve potential, key basins and shale plays information with details of physical characteristics, reservoir properties and resource characteristics. Feasibility of shale development coupled with details of concessions awarded, drilling success rates and operations, strategies of over 34 companies is provided. Basin wise operations are provided for all companies operating in each shale market including Royal Dutch Shell Plc, BNK Petroleum, Chevron Corporation, Exxon Mobil, ENI SpA, Total SA, 3Legs Resources, Cuadrilla Resources, Realm Energy and San Leon Energy among others are actively perusing shale gas exploitation opportunities in Europe. Driven by the success of the US shale and amidst energy security plans, ten key markets have opened up their shale plays for investment. While Poland has already awarded 111 concessions, the UK has uplifted the ban on hydraulic fracturing. Germany, Denmark, Sweden, Spain and Ukraine have awarded concessions and Turkey expects its first shale gas production in 2013. On the other hand, Netherlands is still conducting studies on environmental impact, Lithuania is yet to announce the bid winner and Belgium is also yet to announce its stance on shale gas. Further, France and Norway are unlikely to explore their shale reserves in the near to medium term future.The report identifies the top ten trends in Europe shale market and compares the shale plays with the US shale play characteristics. Key drivers and challenges faced by countries along with feasibility of first commercial production are also discussed in detail. Further, the Europe shale gas report from OGANALYSIS discusses physical characteristics of major basins in each country along with their reservoir properties and resource characteristics. Further, shale formations and key plays in each basin are discussed in detail. Basin wise company information along with the current status of activities in permits awarded is analyzed. In addition, company wise shale activities are provided for leading ten companies. Recent shale gas developments along with their impact on companies/ markets/ alternative fuels are also provided. Current status of shale operations in 30 markets worldwide including 13 European markets- Comparison of potential investment areas in Europe based on shale reserves, exploration progress and companies- Comparison of the US and Europe shale play characteristics- Top ten trends in Europe shale markets- Exploration status of shale plays in 13 European markets including Poland, the UK, Sweden, Turkey, Ukraine, Denmark, Germany, Netherlands, Lithuania, Belgium, Spain, Romania, Bulgaria, France and Norway- Government support, risked and technically recoverable shale gas reserves along with investment drivers are identified for each of the markets- Current E&P activities including Concessions awarded, confirmed availability of commercial gas volumes in shale plays and feasibility of first production from each of the basins in all markets are detailed- Identifies key basins in each country and details potential shale plays, physical characteristics, reservoir properties and resource characteristics for each basin- All leading companies with exploration permits in each of the European shale market along with their shale plays, acreage and drilling status are detailed- All recent developments along with their impact on country and regional shale market are analyzed”” (MarketWatch)

MSP says ‘shale gas revolution’ offers a route out of fuel poverty – “Murdo Fraser, convener of the Scottish Parliament’s economy, energy and tourism committee, insists it is time for Scotland to embrace the “shale gas revolution”. Abundant gas deposits are thought to lie under Fife but the prospect of extraction through fracking has proved hugely divisive… Opponents warn the process, which can cause earth tremors, could change the face of their communities forever but Mr Fraser — a vociferous opponent of wind turbines — believes the potential is enormous. He believes gas deposits underground between Falkirk and Kirkcaldy and Glenrothes and Anstruther could offer a cheap fuel source. “Shale gas has revolutionised energy markets in the US and has substantially reduced costs for both consumers and industry and I believe it has the potential to do the same for Scotland,” Mr Fraser said. “Nearly 40% of Scottish residents are struggling in fuel poverty. I want to see a proactive Scottish Government approach on shale gas that will give hard-up Scots a route out of fuel poverty.” Mr Fraser added: “Recently I have visited several factories in my region and they are crying out for shale gas in order to level the energy price playing field. Unless the Scottish Government can devise a balanced, fair and affordable energy policy, high energy prices will cost manufacturing jobs.” However, Dr Richard Dixon, director of Friends of the Earth Scotland, believes that Mr Fraser is misguided in his support for onshore and offshore shale gas, which he fears could cause pollution. “We already know of about five times more fossil fuels than we need to guarantee disastrous climate change — the last thing we need is more dirty gas,” said Dr Dixon. “Combined with local health impacts and soil and water contamination risks, unconventional gas is a bad idea all round. “Scotland should ban all shale gas, fracking and other unconventional gas developments before they even get going. “We are blessed with huge renewable energy resources so we should be exploiting these clean energy sources instead of even considering unconventional gas. “Murdo Fraser should reconsider his position against wind power and for dirty fossil fuels.”” (The Courier)

India’s Shale Gas Boom: Dream or Reality? – “As India prepares for the release of its long anticipated shale gas policy, pressure continues to mount on New Delhi. An increase in coal imports over the past 12 months has demonstrated the stress on current energy supply and the negative impacts it has on India’s public health and environment. In March, Veerappa Moily, India’s Minister for Petroleum and Natural Gas, said that the government’s shale gas policy would be released in early April, yet such a policy, which Moily stated in an interview with Reuters in March would be a “game changer” for India, is still to materialize. Many analysts continue to point to the importance of improving the country’s energy security. Indeed, shale gas production could offer a reprieve for energy-starved India as well as a much needed boost to its economy. Shale gas is often described as a game changer in energy politics, prompting Daniel Yergin and Robert Ineson to define it as “the biggest energy innovation of the decade.” India is a fast developing country and energy is pivotal to maintain its steady economic growth, stability, and development. As the third-largest energy consumer in the world, according to a 2011 Enerdata report, and a natural gas net importer since 2004, it is easy to see why the South Asian nation is placing high hopes on its own “shale gas revolution.” But is it a realistic prospect that India could relive the American experience of a shale gas boom? Energy demand in India has been consistently increasing and is expected to rise by 7-8% annually in the coming decade. Indeed, many in India are still waiting for their first electricity connection. Hence, energy security is at the forefront of the Indian government’s agenda, and unconventional resources like shale oil and shale gas have the potential to improve its situation. The U.S. experience with shale gas not only resulted in more advanced knowledge of the extraction process, but has also allowed a decrease in production costs and drilling time, making it both more feasible and competitive. Moreover, for a country like India, where coal still dominates the energy mix – coal imports increased to a record 135 million tons in the last fiscal year – shale gas can represent a promising alternative, both in terms of costs and environmental impact thanks to its potentially lower emissions…Current research has identified six main basins that could be successfully exploited once the Indian government reveals its national shale oil and gas policy: Cambay (Gujarat), Assam-Arakan (North-East), Gondwana (Central India), Krishna Godawari onshore (East coast), Cauvery onshore, and Indo-Gangetic basins. Although the release of a comprehensive national shale oil and gas policy has been postponed, in 2010 the government signed a Memorandum of Understanding (MoU) with the U.S. in order to cooperate in developing Indian shale gas resources. Exploration and assessment of the potential of shale gas are part of the objectives of the MoU and, under the agreement, in 2012 the U.S. Geological Survey assessed the resources in a number of basins (the Cambay, Cauvery, and Krishna-Godavari basins), estimating the total of recoverable resources to be 6.1 tcf. This figure contrasts with the estimates suggested by the U.S. Energy Information Administration in 2011 of 63 tcf.”” (The Diplomat)

ANALYST: Now That The Cheap Money Is Coming To An End, We Can See The Bubble To End All Bubbles – “There's a Warren Buffett quote that's something akin to: When the tide goes out, you can see who's been swimming naked. That's the theme of a note this morning from SocGen analyst Kit Juckes, who says that as rates are rising, and tapering talk picks up, it's beginning to be clear where the unsustainable bubbles have been built up. No surprise: He says the bubbles were found in emergingg markets, which have been crumbling lately. Each of the three significant financial bubbles of the last 30 years has been fuelled by the Fed keeping policy rates below the nominal growth rate of the economy for far too long. The chart below highlights two conflicting issues. It highlights two conflicting issues, one supporting my core view, the other challenging it. The first is that current policy is creating market and economic distortions just as past periods did. The reaction to taper talk in EM, commodities and volatility shows where bubbles have been inflated. This is the most powerful argument in favour of the Fed taking the first baby-steps on the path away from super-easy policy. The second issue is that nominal GDP growth is slowing - 3.4% y/y in Q1 2013 after a post-crisis peak at 4.5% a year ago. SG economic forecasts look for a re-acceleration from here. The Fed may not need evidence of a return to ‘old normal' growth or signs of a re-acceleration in CPI or wage inflation to justify tapering. But nominal growth does need to turn a bit higher.It's possible that Juckes is being dramatic with the "bubble to end bubbles" line, but the volatility being seen in emerging markets right now (from Indonesia to Brazil) lends a datapoint in favor of the idea that that's where this period's big bubble was blown.”” (Business Insider)

Illinois Gas Drilling Rules: Governor Pat Quinn Signs New Fracking Regulations Into Law – “CHICAGO (AP) — Illinois Gov. Pat Quinn on Monday signed into law the nation's strictest regulations for high-volume oil and gas drilling. "This new law will unlock the potential for thousands of jobs in Southern Illinois and ensure that our environment is protected," Quinn said in a news release announcing his widely expected signature on the bill that he pushed for and that the Legislature passed overwhelmingly a few weeks ago. The new law establishes rules that oil and gas companies must follow during hydraulic fracturing, or fracking, which uses high-pressure mixtures of water, sand or gravel and chemicals to crack underground rock formations and release oil and natural gas. Companies will be required to disclose chemicals and to test water before and after drilling as well as hold the companies liable for contamination. Opponents of the legislation — who unsuccessfully pushed a 2-year moratorium to allow more time to study the environmental and health impact of fracking — said they are considering a legal challenge to the law. "We have already put together a legal team with attorneys from all over the country to look at various aspects of the bill," said Annette McMichael, a property owner in Johnson County who belongs to a coalition that opposes fracking. "We are looking at what legal avenue to pursue." One of the sponsors of the bill, Sen. Michael Frerichs, D-Champaign, said the fact that fracking is already happening in Illinois makes the law that much more important as the state moves to "protect the environment while allowing for job creation." Environmental groups that helped craft the legislation said they were hopeful the safeguards will address their continued concerns about the method's "environmental impact." "The environmental community looks forward to working with the governor and agencies to make sure that this bill is strongly enforced," Jan Walling, executive director of the Illinois Environmental Council, said in statement released by Quinn's office. According to Quinn's office, the law would make Illinois the first state in the nation to require hydraulic fracturing operators to submit chemical disclosures to the state both before and after fracking, as well as require the companies to conduct water testing before the fracking process and then again a number of times after it's completed. While state records indicate that hydraulic fracturing has begun on a limited basis in parts of Illinois, it will it will be a while before it begins in earnest because the state's Department of Natural Resources must hire dozens of new engineers, inspectors, attorneys and other experts.”” (Associated Press)

IT'S WORKING: The Shale Boom Has Given America Tons Of Political Leverage In The Middle East – “Many have been skeptical of the true extent of the shale revolution's impact on the U.S. economy, beyond localized effects like lowering mid-continent crude prices and reducing costs for industrial petroleum product manufacturing. But in a new note, Standard and Poor RatingsDirect's Peter Rigby says it's actually given the U.S. a tremendous amount of political leverage. Specifically, it can impose sanctions on Iran without the ricochet effect of spiking crude oil prices. The Boston Company has made a similar argument — that U.S. crude production may not be causing prices to go down, but has dampened market volatility. In a follow-up email to Business Insider, Rigby elaborated on his point: ...as Iranian supply came off the global market, new US supply was coming on line to contribute to meeting global demand. So even though US supply, for all practical purposes, does not go onto the global market, it contributes to global supplies. The price is still global, which the US pays, adjusted, of course, for transportation and crude quality differentials. So, all else being equal, had the embargo gone into effect without that new 1 million barrels per day from the US, there would have been upwards price pressure on crude. One million barrels is not an insignificant amount, as evidenced by the changing crude oil shipping patterns that are emerging. Rigby cautioned that the Saudis still hold all the cards. But it looks like the U.S. is finally getting some leverage.”” (Business Insider)

Gas drilling stays in limbo in Northeast Pennsylvania – “DAMASCUS, Pa. -- Standing on a hilltop above his Wayne County cattle farm, Bob Rutledge surveys rolling hills and a sea of green grass. His gaze falls to the earth beneath his worn brown boots, where he believes more than a mile below the surface lies an opportunity -- natural gas. But Mr. Rutledge, whose ragged blue jeans betray his love for hard work, will never know if that opportunity can be realized unless an obscure regulatory agency lifts its ban on drilling in the Delaware River basin. "We don't know because we will never know," said Mr. Rutledge, 48, of Damascus, whose ancestors began settling here a few years before the Civil War. "To have it right at our fingertips and have it actually happening just 30 miles away is disappointing." While gas drilling thrives throughout the state, a large swath of northeast Pennsylvania still remains off-limits. This is in stark contrast to what is happening in a neighboring watershed, the Susquehanna River basin. There, the Susquehanna River Basin Commission has exercised less control over the industry, leaving most of the regulation, besides water withdrawals, to the state. In May 2010, the Delaware River Basin Commission, based in West Trenton, N.J., declared a moratorium on natural gas extraction within the basin, a nearly 14,000-square-mile watershed that straddles four states and is home to the Delaware Water Gap National Recreation Area. Since then, environmentalists and landowners in favor of gas drilling have tried to persuade, through their attorneys and massive letter-writing campaigns, the commission to either completely close the door on the industry or open the watershed to wide-scale development. Yet three years later, nothing has changed. Environmentalists are pleased, but worried the commission may lift the moratorium. Landowners, who want their land developed, are becoming more frustrated and fear gas companies will pull out…"It just aggravates me, because we went through a lot of effort and spent a lot of time," said Mr. Rutledge, whose 500-acre farm is under lease. Mr. Rutledge believes gas development would have a huge economic impact. Most of northern Wayne County is jobless wilderness and farmland. He listed community members who have committed suicide because of financial troubles. If given the economic boom, a "farmer can work with something else than 50-year-old equipment," he said. "We got our beautiful scenery, but we're living in poverty. A lot of our members are getting fed up waiting ... because of a bunch of politicians working in other states." Politics is a real aspect to the battle over environmental and mineral rights concerns in the watershed, where much of the fight consists of behind-the-scenes negotiations and bickering. Then, there is the difficulty of trying to get five governments with vastly different constituencies to work together on a complicated and divisive issue. The governors of Pennsylvania, Delaware, New Jersey and New York and a federal representative from the Army Corps of Engineers make up the five-member river basin commission board, which has the power to give the go-ahead or bar drilling with a single vote. "It's not a simple process to develop a regulatory framework for something as complicated as natural gas drilling and have five governments work out the particulars," commission spokesman Clarke Rupert said...No Marcellus Shale well has been hydraulically fractured in the Delaware River watershed. But in the Susquehanna River watershed, scores of wells are producing gas…"To literally cut off a section of Pennsylvania, we feel like we are in no-man's land," said Mr. Coccodrilli, a member of the NWPOA who has other leased land by Hess and Newfield in northern Wayne County.”” (Scranton Times-Tribune)

Shale gas opponents take fight to ombudsman – “The Office of the Ombudsman is being inundated by complaints from citizens concerned about shale gas exploration in the province. For months, the independent office has been seeing a flood of letters of complaints against the provincial government’s handling of the shale gas file. Chris Rendell, a Hampton resident, sent a three-page letter to the ombudsman, saying the provincial government is refusing to address the concerns of citizens about the shale gas industry. "Regardless of how much opposition, regardless of the fact that new information appears weekly and daily that refutes the claims and arguments of the ministers of the government, yet nothing seems to alter them from this course," Rendell said. Rendell said he wants the ombudsman to review the way the provincial government has gone about studying the impacts of shale gas. "Citizens of New Brunswick have not been given an opportunity to be heard. We feel the entire process was unfair and deserves some examination," he said. "Allowing the exploration companies full latitude to come and do what they like and paying little attention to the voters and the citizens of this province. And we're asking the ombudsman to look at some of the specific issues regarding their behaviour in that regard." The acting ombudsman said the letters have been coming in for months and the office is trying to wade through all of them. A new ombudsman, Charles Murray, was appointed on Friday. Murray is a civil servant and former political assistant to one-time Saint John Tory MP Elsie Wayne and to former Progressive Conservative cabinet minister Brad Green. The New Brunswick government hired Louis Lapierre, a professor emeritus in biology at the University of Moncton, to lead a series of public meetings about its oil and gas regulations… The company has been met by a series of protests, including about 100 demonstrators on Saturday… SWN Resources Canada has started seismic testing in Kent County in the last two weeks to see if there is viable gas industry in the area. The company has been met by a series of protests, including about 100 demonstrators on Saturday. The RCMP arrested 12 anti-shale gas protesters on Route 126 near Harcourt on Friday morning. Michel DesNeiges, a lawyer with the New Brunswick Environmental Law Society, said environmentalists and police are clashing and part of the problem is the provincial government has been far too quiet. "I believe government hasn't been straightforward with New Brunswick citizens all of the time," DesNeiges said. "And that creates suspicion on the part of citizens and I can understand that suspicion. So the government has to step in, change its approach and be present in what's going on."” (CBC)

How Long Will Shale Oil Last? – “Many experts have hailed shale oil and gas as a game-changer for the U.S. economy. The application of new drilling techniques has led to an unprecedented surge in domestic oil production, prompting many to conclude that U.S. energy independence may be just around the corner. But shale oil, like most other natural resources, is a finite resource. Some skeptics have even pointed out that shale wells exhibit much steeper decline rates than conventional wells, which, they suggest, implies that the boom could fizzle out much sooner than mainstream commentators believe. So just how long could shale oil last? A decade of global shale oil. According to a new study by the U.S. Department of Energy, the world has enough shale resources to satisfy more than a decade of global oil consumption. The report, which marked the first time the department has assessed the size of global shale resources, pegged technically recoverable shale oil resources at 345 billion barrels, or about 10% of global crude oil supplies. The study surveyed shale reserves in more than 40 countries and determined that Russia had the world's largest shale oil reserves, at around 75 billion barrels. The U.S. was second with about 58 billion barrels. Rounding out third, fourth, and fifth places were China, at 38 billion, Argentina, at 27 billion, and Libya, at 26 billion. However, the report considered only resources that were deemed technically recoverable -- meaning those that can be extracted using current exploration and production technology -- without taking into account cost and profitability. It further left out prospective shale areas, such as those underneath major oilfields in the Middle East and the Caspian Sea region, and cautioned that its estimates are "highly uncertain.".. Can North American shale success be copied? However, it's unclear whether U.S. and Canadian success in shale drilling can be replicated in other countries with large shale resources. In addition to having pioneered new drilling technologies, U.S. and Canadian energy producers enjoy several key advantages that their international counterparts do not yet possess. Chief among them is the presence of a sophisticated and extensive infrastructure network, consisting mainly of pipelines and storage terminals. In addition, U.S. and Canadian energy producers have preferential access to crucial ingredients in the fracking process, such as specialized drilling rigs and plenty of water, as well as clearly established and enforceable property rights. One company that was a true pioneer and driving force behind the U.S. shale revolution is Chesapeake Energy. While debt-related challenges continue to cast a dark cloud of uncertainty over Chesapeake's future, few would question the superb quality of its remaining oil and gas assets. For many investors, the important question is whether Chesapeake's current share price reflects the true value of its assets. To answer that question and to learn more about Chesapeake and its enormous potential, you're invited to check out The Motley Fool's brand-new premium report on the company. Simply click here now to access your copy, and as an added bonus, you'll receive a full year of key updates and expert guidance as news continues to develop.”” (DailyFinance)

Sundance Energy Will Look to Acquire More U.S. Shale Assets – “Sundance Energy Australia Ltd. (SEA), an explorer that entered the Eagle Ford shale formation of Texas this year with the purchase of Texon Petroleum Ltd., said it will look to make further U.S. oil and gas acquisitions. Sundance is capable of making another deal the size of the Texon transaction, valued at about A$100 million ($96 million), and will consider adding acreage through drilling leases or purchases, Managing Director Eric McCrady said in an interview in Sydney. The Denver-based company isn’t negotiating any acquisitions at present, he said. Sundance, which also bought acres in Colorado in 2012, plans to invest about $225 million drilling wells in the U.S. this year and expects spending to increase next year. The company is focusing on oil and gas basins in Texas, Colorado, Oklahoma and North Dakota. “Something the size of Texon is a manageable acquisition for us, and it could even be slightly larger,” McCrady said June 14. “The main focus right now is drilling up the assets we have today.”.. The company was the third-best performer on Australia’s S&P/ASX 300 Energy Index in the last 12 months, with only Caltex Australia Ltd. (CTX) and Linc Energy Ltd. (LNC) posting bigger gains. The company expects to drill as many as 40 wells next year, compared with as many as 30 wells this year, McCrady said. Sundance, which is traded in Sydney and has a market value of about about A$394 million, acquired about 7,300 net acres in the Eagle Ford through the Texon deal. “We need to be acquiring assets that are below the radar of larger competitors who drive up valuations,” McCrady said. Sundance Energy raised A$48.1 million selling shares and plans to use the proceeds partly to accelerate development in the Eagle Ford, it said May 31. The company had about $145 million of cash at the end of March, it said this month.”” (Bloomberg)

Fracking fuels water fights in nation's dry spots – “SAN FRANCISCO (AP) -- The latest domestic energy boom is sweeping through some of the nation's driest pockets, drawing millions of gallons of water to unlock oil and gas reserves from beneath the Earth's surface… But now, as energy companies vie to exploit vast reserves west of the Mississippi, fracking's new frontier is expanding to the same lands where crops have shriveled and waterways have dried up due to severe drought. In Arkansas, Colorado, New Mexico, Oklahoma, Texas, Utah and Wyoming, the vast majority of the counties where fracking is occurring are also suffering from drought, according to an Associated Press analysis of industry-compiled fracking data and the U.S. Department of Agriculture's official drought designations. While fracking typically consumes less water than farming or residential uses, the exploration method is increasing competition for the precious resource, driving up the price of water and burdening already depleted aquifers and rivers in certain drought-stricken stretches. Some farmers and city leaders worry that the fracking boom is consuming too much of a scarce resource, while others see the push for production as an opportunity to make money by selling water while furthering the nation's goal of energy independence. Along Colorado's Front Range, fourth-generation farmer Kent Peppler said he is fallowing some of his corn fields this year because he can't afford to irrigate the land for the full growing season, in part because deep-pocketed energy companies have driven up the price of water. "There is a new player for water, which is oil and gas," said Peppler, of Mead, Colo., who also serves as president of the Rocky Mountain Farmers Union. "And certainly they are in a position to pay a whole lot more than we are." In a normal year, Peppler said he would pay anywhere from $9 to $100 for an acre-foot of water in auctions held by cities with excess supplies. But these days, energy companies are paying some cities $1,200 to $2,900 per acre-foot. The Denver suburb of Aurora made a $9.5 million, five-year deal last summer to provide the oil company Anadarko 2.4 billion gallons of excess treated sewer water. In South Texas, where drought has forced cotton farmers to scale back, local water officials said drillers are contributing to a drop in the water table in several areas. For example, as much as 15,000 acre-feet of water are drawn each year from the Carrizo-Wilcox Aquifer to frack wells in the southern half of the Eagle Ford Shale, one of the nation's most profitable oil and gas fields. That's equal to about half of the water recharged annually into the southern portion of the aquifer, which spans five counties that are home to about 330,000 people, said Ron Green, a scientist with the nonprofit Southwest Research Institute in San Antonio. The Eagle Ford, extending from the Mexican border into East Texas, began to boom in 2011, just as Texas struggled with the worst one-year drought in its history. While conditions have improved, most of the state is still dealing with some level of drought, and many reservoirs and aquifers have not been fully replenished. "The oil industry is doing the big fracks and pumping a substantial amount of water around here," said Ed Walker, general manager of the Wintergarden Groundwater Conservation District, which manages an aquifer that serves as the main water source for farmers and about 29,000 people in three counties. "When you have a big problem like the drought and you add other smaller problems to it like all the fracking, then it only makes things worse," Walker said… The amount of water needed to hydraulically fracture a well varies greatly, depending on how hard it is to extract oil and gas from each geological formation. In Texas, the average well requires up to 6 million gallons of water, while in California each well requires 80,000 to 300,000 gallons, according to estimates by government and trade associations. Depending on state and local water laws, frackers may draw their water for free from underground aquifers or rivers, or may buy and lease supplies belonging to water districts, cities and farmers. Some of the industry's largest players are also investing in high-tech water recycling systems to frack with gray or brackish water. Halliburton, for instance, recently started marketing a new technology that allows customers to use recycled wastewater, calling it an "investment to further the sustainable development of the oil and gas industry." The American Petroleum Institute, the principal lobbying group for the industry, said its members are working to become less dependent on fresh water, and instead draw on other sources. "Recycling wastewater helps conserve water use and provide cost-saving opportunities," said Reid Porter, a spokesman for the group. In some states, regulators have stepped in to limit the volume or type of water that energy companies can use during drought conditions. In northwest Louisiana, as the production rush began in the Haynesville Shale in 2009, the state water agency ordered oil and gas companies to stop pulling groundwater from the local aquifer that also supplied homes and businesses, and use surface water instead. That order is still in effect and has helped groundwater levels to recover, said Patrick Courreges, a spokesman for the Louisiana Department of Natural Resources. In Colorado's Weld County, home to Peppler's farm and more than 19,000 active oil and gas wells, some officials see selling unneeded portions of their allotments from the Colorado River as a way to shore up city budgets. The county seat of Greeley sold 1,575 acre-feet of water last year to contractors that supply fracking companies, and made about $4.1 million. It sold farmers nearly 100 times more water but netted just $396,000. "The oil and gas industry is a small but significant player," said Jon Monson, director of the city's water department, which has designated 35 fire hydrants where haulers may fill up their tanks to truck to gas wells. "Just knowing that oil and gas is a boom-and-bust industry, we are trying to not get used to it as a source of revenue because we know it won't last." Some environmental groups argue that local and regional planners should let the public weigh in on how much drilling can be supported in drought-stricken areas. Some states require oil and gas companies to disclose the chemicals and the amount of water they use in fracking operations on FracFocus.org, a website formed by industry and intergovernmental groups in 2011, but the statistics are not complete. "We don't want to look up 20 years from now and say, 'Oops, we used up all our water,'" said Jason Bane of the Boulder, Colo.-based Western Resource Advocates.”” (Associated Press)

Indoor fracking installation seeks to provoke debate – “It is one of the biggest, most polarising issues there is, but artists who have created an indoor fracking installation insist they are not trying to sway opinion either way. "We want to create an emotionally engaging experience. People can then go away and come to their own conclusions," said Heiko Hansen, who with his partner, Helen Evans, has recreated the sounds, tremors and flames you would get from a fracking operation…At the gallery space at Liverpool's Fact (Foundation for Art and Creative Technology), there is a scale model of the mobile platform that would be used to drill down and there is a pool of waste water nearby. It is an eerie, almost otherworldly experience and one that will, they hope, provoke debate. "We decided to do fracking because it is a pressing issue," said Hansen. It is particularly relevant in the north-west, where there are large reserves and Centrica has announced £160m investment in fracking fields around Blackpool. "Everybody talks about fracking but the iconographic image of it has not yet been found." Hansen and Evans – who together are known as HeHe – say the installation is realistic. "Some people today have asked if we're drilling or not, I'll leave it up to people's interpretation," says Hansen. "You're always forbidden from going to see these things, there are always fences and barriers, you can't touch you can't come close. It is like nuclear power stations and oil drilling rigs, these are the most sophisticated things ever built but we can't touch them or personally appropriate them so there is a role for the arts to say: 'Let's do it as a performance to bring people closer'." "What struck is a how beautiful it is and how musical it is. It felt more like a fairground ride," said the Fact director, Mike Stubbs. Fact is celebrating 10 years as a pioneering centre for new media art and the fracking installation is part of a project called Turning Fact Inside Out. Elsewhere in the building, the Polish artist Katarzyna Krakowiak has turned the building into a giant listening device, gathering previously hidden sounds which she's put in to an enormous chute. American artist Steve Lambert is showing a piece called Capitalism Works for Me! True/False in the UK for the first time. It is like a huge carnival sign and people will be able to vote either way. Last Thursday, capitalism was losing 15 to 6.”” (Guardian UK)

How Fracking Killed Nuclear Power – “Cheap natural gas has not only made new nuclear plants unfeasible, an Exelon executive said in Chicago Thursday, but has undermined Exelon’s plans to upgrade its existing fleet. Five years ago the U.S. faced a shortage of natural gas, and with the prospect of a cap on carbon emissions, the world’s largest nuclear utility expected nuclear power to flourish. “Nuclear generation was looking phenomenal,” Andy Swaminathan, a senior vice president for portfolio strategy at Consellation—an Exelon company—told about 150 people gathered Thursday at a Chicago Council on Global Affairs forum on shale gas. “Exelon’s stock price was $90. Unfortunately it’s about a third of that today. It’s directly related to the fact that gas has gone from $10 and $12 an MMBtu to approximately $4 to $5 an MMBtu in the visible trading horizon.” When the shale gas boom began around 2009, fueled by the proliferation of lateral drilling and hydraulic fracturing of deep shale deposits, Exelon put plans for new nuclear plants on hold and turned to a less-costly strategy of upgrading existing plants. In the last decade, Swaminathan said, Exelon has been able to create the equivalent of a new nuclear plant by increasing production at its existing 20 plants. But now, Swaminathan said, even upgrades look too costly compared to power generation from cheap natural gas. “We completely abandoned new nuclear generation in the emergent generation perspective. We said you know what, we’ll go to upgrades… At this point even those look very challenging.” Exelon has shelved plans to upgrade its LaSalle plant in Illinois and Limerick plant in Pennsylvania, Swaminathan confirmed. But Swaminathan placed the blame on cheap natural gas, while the company’s official release pointed the finger at subsidized wind power: We removed these previously deferred extended power uprate projects from our program in response to market conditions and artificially depressed power prices resulting from subsidized wind energy,” Exelon spokesman Paul Elsberg said in a statement. “Extended power uprates are large investments with paybacks toward the end of plant life, and in this instance, we decided that the risk involved did not provide the necessary returns.” via Midwest Energy News Exelon has been campaigning against wind subsidies, but Swaminathan did not mention wind in his analysis of nuclear power’s fall. Although some in the nuclear industry insist the nuclear renaissance is making a comeback, Exelon officials have said repeatedly that the prospects for nuclear power expansion are bleak. “Obviously I think natural gas would the preferred source of generation going forward,” Swaminathan said.”” (Forbes)

Shale Drillers Squeeze Costs as Era of Exploration Ends: Energy – “After spending $53 billion on a land binge to find hydrocarbons, the petroleum industry is counting on technological innovations -- better imaging data, speedier and longer horizontal drilling, among them -- to ramp up the flow of oil and gas from U.S. shale fields where they’re drilling more than 10,000 wells a year. The techniques are embraced by the biggest producers from shale such as Chesapeake Energy Corp. (CHK) and Newfield Exploration Co. (NFX) to boost shareholder returns by shifting money from exploration, which is winding down, into what’s known in industry parlance as manufacturing. The moves will help producers increase profit at a time shareholders are ousting executives and revamping boards because of poor performance. “Now that all of the established shale plays are known, companies can start focusing on the economics of these plays,” said Eric Gordon, who helps manage $35 billion at Brown Advisory Inc. in Baltimore. “They are under pressure to reduce drilling time and operating costs.”.. Producers that engaged in a land rush yielding vast shale discoveries from Pennsylvania to Wyoming and Texas are now being pressed by shareholders to turn promises into profit, said Brian Gibbons, a debt analyst at CreditSights Inc. in New York. By employing new technology, domestic explorers aspire to catch up with international energy titans such as Exxon Mobil Corp. (XOM) that generate six times as much profit from each barrel of oil. Measures to cut per-unit production costs also are key to coping with oil and gas prices that are one-third and two-thirds lower, respectively, than their 2008 peaks. Soaring output from wells in North Dakota, Oklahoma and Texas has driven a 3.2 percent increase in U.S. crude production this year, adding to the 19 percent rise in 2012 that was the biggest annual jump in at least three decades, according to Energy Department figures. Independent U.S. oil and gas companies -- those that focus on production and don’t refine crude into fuels and chemicals -- ended 2012 with an average cash-flow deficit of $1.5 billion, compared with an average surplus of $386 million for the world’s biggest energy producers. Independent U.S. explorers spent more than $53 billion during the past decade snapping up drilling leases as breakthroughs in horizontal drilling and hydraulic fracturing allowed explorers to access previously impenetrable formations. Of the 17 companies in the Standard & Poor’s 500 Oil & Gas Exploration & Production Index, Chesapeake was the biggest spender on prospective U.S. oil and gas leases with $19.9 billion from 2003 through 2012, according to data compiled by Bloomberg. The company, whose shares lost 36 percent from 2010-2012, on May 20 said it hired former Anadarko Petroleum Corp. (APC) Senior Vice President Robert Douglas Lawler as its new chief executive. Chesapeake, the world’s largest driller of horizontal shale wells, said as early as March 2012 that all of the major untapped petroleum deposits in the continental U.S. had been discovered… Denver-based QEP’s recycle ratio was 0.69 in 2012 and Chesapeake posted a 0.97, data compiled by Bloomberg show. In contrast, Exxon scored a 4.5 and Total SA (FP) had a ratio of 3.3. The ratios include three-year averages for reserves used in calculating costs for the companies. The best performers in the exploration and production index were Denbury Resources Inc. (DNR), which uses carbon dioxide to coax more oil from wells, and Range Resources Corp. (RRC), the second-largest holder of drilling rights in the Marcellus Shale. Both logged recycle ratios that surpassed Chevron Corp. (CVX)’s 2.5 and BP Plc (BP/)’s 2.8. Devon and QEP said several factors lowered their recycle ratio numbers in the past couple of years, including falling gas prices that cut revenue as they shifted more drilling to oil projects, which are costlier than gas.”” (Bloomberg)

Centrica's stake in Cuadrilla says much about UK shale gas industry – “Speculation over the worth of the UK's shale gas industry has veered between the enormous – enough to fuel the entire country for decades to come according to estimates from the British Geological Survey – and the negligible: several big gas players, including BP, Shell and Centrica, have said the amount of shale gas likely to come from the UK was nowhere near enough to trouble investors. That speculation has been turned on its head. Centrica has taken a 25% in Cuadrilla, the only company to have started shale gas fracking in the UK. But the amount the company has paid for its stake tells us more about the likely worth of the UK's shale gas industry than any of the wild pronouncements yet. Centrica will pay £40m for a 25% stake in Cuadrilla's main shale gas field in Bowland, Lancashire, giving the shale gas driller a presumed value of £160m. There is also the small matter of £60m that Centrica will contribute to Cuadrilla's drilling to come. Cuadrilla has already sunk more than £100m into drilling for shale gas in the UK, most of it in Lancashire's Bowland shale, with not a penny yet to show in gas production, and with many setbacks – it has been forced to cease drilling in Lancashire after two small earth tremors at one site and fears for wildlife at another. The company is also looking to drill in Sussex, where its preliminary drillers recently started work in Balcombe, but it faces strong local opposition. The amount Centrica is prepared to pay reveals the appetite – or lack of it – for investors in the UK's putative shale gas fields. Lord Browne of Madingley, former chief executive of BP, and now chairman of Cuadrilla and a director of its venture capital backers, Riverstone Capital Partners, told the Guardian earlier in 2013 that he would ensure the company and its backers invested "whatever it takes" to make shale gas in this country a viable industry. It seems that Riverstone did not have enough enthusiasm, or capital, to do that alone. Valuing Cuadrilla – which is the only company yet to have fracked in the UK, and the owner of the licences to frack most likely to bear early fruit – at only £160m in nominal terms is a severe blow for those who think the UK's energy future is homegrown gas. That low valuation should cause serious worry on the right wing of the Tory party, many of whom have been advocating a "dash for gas" as a cure for the UK's energy woes. But fracking is no easy solution. As the International Energy Agency warned this week, the UK is not like the US, where extensive fracking in the last five years has sent the price of gas plummeting. Population density is much higher here, and the geology is much less propitious. Shale gas fracking involves blasting dense rocks apart under immense pressure, using water and chemicals, and regulations in the UK are much tighter than they are in the US.”” (Guardian)

U.S. shale is a boon to manufacturers but not their workers – “(Reuters) - This city has been down for so long, it's hard to believe what's risen up here in the heart of America's "Rust Belt." On an industrial site littered with scrap metal, a French-Japanese joint venture called Vallourec Star has just opened a $1.1 billion state-of-the-art steel pipe mill. The plant, the largest capital investment by a manufacturer in northeast Ohio since the 1960s and Youngstown's first new steel mill since the 1920s, is a big example of the money that has flowed into the state's industrial sector in recent years thanks to the surge in U.S. natural gas and oil drilling. The uptick in energy exploration has prompted companies like The Timken Co. and U.S. Steel Corp. to pump hundreds of millions of dollars into their plants in the state to boost production. Wayne Struble, the policy director for John Kasich, Ohio's Republican governor, said the flood of energy-related dollars could be a major "game changer" for the state. But state employment data, academic research and a week-long tour of half a dozen factories in Ohio suggests the shale gas revolution has been a disappointment when it comes to job creation. "The industries benefiting are more capital intensive than labor intensive," said Tom Waltermire, the chief executive of Team NEO, the economic development agency for northeast Ohio. "Even a manufacturing renaissance won't require the same headcount per unit of output as we had 20 or 30 years ago. If it did require that, the renaissance would never happen." In March, a study by Cleveland State University concluded that while gas exploration had unleashed a surge in economic activity in Ohio, job growth - even in counties directly affected by the drilling - was stagnant. The employment growth that many assumed would follow the energy investment was "not yet evident," the study's authors said… Data from the state's Bureau of Labor Market Information tells the story. After bottoming out in 2010, Ohio's manufacturing sector has added nearly 42,000 jobs in recent years. But the state still has nearly 110,000 fewer manufacturing jobs today than it did in 2007, when the last recession began. Meanwhile pay across the sector is going down, not up, according to the U.S. Bureau of Labor Statistics Quarterly Census of Employment and Wages. Manufacturing workers in Ohio, for instance, have seen their wages fall 1.3 percent in the last year alone… U.S. manufacturers aren't the only ones scrambling to supply the shale drillers. John Wilkinson is the 36-year-old manager of U.S. Steel's operations in Lorain, just west of Cleveland. U.S. Steel recently spent $100 million on the 100-year-old plant to build a new line to meet demand from the energy industry. "The steel industry is back," Wilkinson tells Reuters. "We're starting to see it and it's a fantastic feeling." But Wilkinson can also tick off the names of the foreign companies that are building new plants to sell to drillers, including Tenaris SA, controlled by Argentina's Techint group and based in Luxembourg, as well as China's Tianjin Pipe Group Corp. "In our tubular market, there's a billion tons of capacity coming onto the market in the next few years," he says. "That's what we're going to be up against."” (Reuters)

Single fracking bill remains before California Legislature – “The drive to regulate the contentious extraction process called hydraulic fracturing, or "fracking," has narrowed in focus: lawmakers have winnowed the file of fracking-related bills to a single piece of legislation. Senate Bill 4 by Sen. Fran Pavley, D-Agoura Hills, became the sole survivor after a bill byAssemblyman Bob Wieckowski, D-Fremont, requiring greater disclosure about the chemicals and water deployed during fracking failed to advance in committee Wednesday. Other fracking bills have been relegated to the inactive file on the author's request, perished during floor votes or sent to wither on the suspense file. Some of those bills, particularly those that would have imposed a moratorium on fracking in California, drew vigorous opposition from the energy industry. Senators greenlighted Pavley's bill on a 28-11 floor vote, with every no vote coming from Republican lawmakers. The bill would set up a permitting system, require energy companies to share more information with the state and with property owners and have the California Natural Resources Agency commission a study on the environmental repercussions of fracking. It is pending in the Assembly, with Pavley's office expecting a committee referral soon.”” (Sacramento Bee)

Marcellus Shale drillers to pay $202.47M in per-well impact fees for 2012 – “The state will pay out slightly less in Marcellus Shale impact funds to counties and municipalities this year, tied to a mandated drop in per-well drilling fees. The state Public Utility Commission announced natural gas drillers would pay $202.5 million in fees for 2012, down less than a percentage point from the $204.2 million they paid the previous year. About half of the money -- $102.7 million -- will go to counties and localities impacted by drilling, $71.8 million will go to long-term projects and $28 million to state agencies working on drilling matters. Washington County will receive the second-most funding of any county statewide, at $4.7 million. Two of its municipalities, Chartiers ($578,165) and Amwell (576,941), are among the five highest-grossing localities statewide. Another, Mount Pleasant, fell out of the top-tier for 2012 but will still get $471,000 and is the seventh highest-grossing municipality in the state over the past two years. Mount Pleasant manager Mary Ann Stevenson said the township is still appropriating last year's impact fees, with the bulk of it going into the design and engineering of sewage infrastructure for property owners, instead of septic tanks. "That's the big ticket. The rest is sitting in capital reserve," she said. The PUC is supposed to send government bodies their checks by the end of the month. Bradford County in the state's northeast will collect the most at $7.3 million. Lycoming and Tioga counties follow Washington with $4.4 million each. Lawrence in Clearfield County will clear the most local impact money with $797,000 followed by Cumberland in Greene County at $787,000 and the city of Williamsport in Lycoming at $593,000. Allegheny County will get $1.1 million, Butler $1.2 million, Fayette $1.3 million, Greene $2.9 million and Westmoreland $1.6 million. Even Philadelphia County, which has no wells, will get $1.3 million for long-term projects. "To see how this new revenue stream, now totaling more than $406 million is being distributed to every corner of the commonwealth is a vivid illustration and reminder of how safe, tightly regulated natural gas development is benefiting local communities, statewide programs and funding of government agencies," said Kathryn Klaber, CEO of the gas industry's Marcellus Shale Coalition. "Our member companies are working ... to ensure we get this historic opportunity right for all 12 million-plus Pennsylvanians." Under legislation Gov. Tom Corbett signed in February 2012, the per-well drilling fees companies pay is tied to the price of natural gas. Since prices dropped in 2012, those drilling new horizontal wells paid $45,000 per well last year compared to $50,000 the year before. Second-year wells paid $35,000. The average price of gas dropped from $4.10 per thousand cubic feet in 2011 to $2.78 in 2012. The trends will likely continue into the impact fees distributed next year. While there were 78 active drilling rigs statewide in July 2012, there were 54 statewide as of this month. Chesapeake Appalachia made the most gas producer payments to the state at $27.4 million followed by Range Resources at nearly $24 million and Talisman Energy at $20 million.”” (Post-Gazette)