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Marcellus o Utica . Appalachian Basins
MANGEilU$"f,'+ffiITIIE #I SHALE GAS PUBLICATIOilPENNSYLVANIA. SOUTHERN NEW YORK . OHIO
Media information online atESSCEIITRAL.COM
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lltPACT FEES¡ From Page 3
iets coming into the airport," said
Coolidge.Another airport Project involves
lengthening the runway to 4,000 feet
to accommodate larger aircraft."We're looking to retrofit an existing
building for emergencY servicespersonnel and to put up anothertowerat the airport with the impact fees,"
said Coolidge."We've also been discussing
security upgrades at human seruices
and at the courthouse."The commissioners would like to
see a compressed natural gas stationin Wellsboro to Promote the use and
purchase of vehicles that wot-dd run
on natural gas."We have the suPPort of the three
gas industry entities for the CNG
station, though we're not prepared toannounce their names at this time,"
said Coolidge."This CNG station is part of creating
the Route 6 conidor connectivitYwith the ability to fuel with naturalgas between Wellsboro, Towanda,
Mansfield and Sayre."Towanda and SaYre alreadY have
CNG stations, the Mansfield station isbeing developed, and we're lookingfor a location for a CNG station inWellsboro.
Dandy Mart is develoPing a CNG
corridor in the northwestern Partof the state, and others are beingdeveloped elsewhere in the state.
"Eventually, allthe CNG corridorsbeing built will be linked together so
that natural gas-powered truck fleets
can tiavel across the state just like
gasoline- and diesel-powered truckfleets do today," said Coolidge.
"We're undertaking services thatneed to be met and Prcjects that need
to be done, and with the CNG station,we're opening thé door to a moreindependent ft¡ture for our county and
the commonwealth, and thanks to thegas industry we're doing it allwithoutcausing a greater tax burden to thepeople of our townshiPs, boroughsand to the countY at large."
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While revenues are down slightly, funded projects are underwayBy R. Bro* Pronko, municipalities put last year's impact meet the demand of the MarcellusMBC Regional Business Analvst fees in their capital reserve fund so Shale induqtry ánd the age and
5TATE g9LLEGE, pA - This July, they could have more time to plan condition of the current housing stock
counties and municip"liii"" ""Á.,
" their projects and programs. is not a-ttractive to new residents
the commonwealth nJ ,"r*in¡"á t" For the second round of funding, moving into the area with the
;d"br;i; "
uOO¡tio. t" t;;;ilh ";
;. they will have 10 months to allocate Marcellus Shale industry.
country. the money before having to send their "One of the housing projects
on July 1 , the pA public Utilities usage reports to PUC on April 1,2014. we're working on is a72-unit mixed-
Commission releaseO $áó i,iii,OOO i" Lycoming County impact fee income housing development on
the second round of iriJ"J t""r. ói*i' proiects ' the old Brodart property' which
- was sent to the 67 Pennsylvani DUe tO the diminishing feeS On WellS,counties and their municipalities, with36percentorthatportionauocated \ tlp tOtal amOUnt Of the impaOt feeS WaSto counties with wells, 37 percent _ | \to municipatities with wens, and 27 $l ,738,000 leSS than laSt yea[ HOWeVef, ¡n
the future, lower,revenues could be offsetsomewhat a$ñatural gas pr¡ces rise.
percent of the total - $121 ,200,000
percent to all other municipalities.Of the remainder, $28 million was
directed to state agencies and $71.8million to the Marcellus Legacy Fund.
\n2012, drillers paid the state$50,000 per-horizontal well and
$10,000 per-smaller vertical well. Thefee for horizontal wells is based onthdyear the well was spud and theaverage price of naturalgas.
For example, if the price of naturalgas is between $3.00 - $+.SS per1,000 cubic feet (MCF), drillers pay
$S0,000 on that well during its firstyear (back to 2011), $40,000 on thewell's second year, $35,000 in its thirdyear, down to $10,000 in the well's15th year of production, the last year of
"We have been very proactivewith our impact fee dollars," saidKurt Hausammann, Jr., directorof Lycoming County Planning &Community Development.
"We allocated a million dollarstoward building a new terminal at theairport, and we put $117,000 towardrehabilitating Reach Road, the mainthoroughfare in the largest industrialpark in Lycoming County, which isoccupied by gas companies that driveheavy equipment on the road.
is a Brownfield site that housed awarehouse owned by Brodart, acompany that supplies libraries witheverything from furniture to electronicordering systems," said Hausammann.
"We'ré also doing a Brodartneighborhood improvement project forup to 150 units and putting in 32 unitsof senior housing on Grove Street in
Williamsport"The housing projects are mostly
funded with private money, but we'reusing county-level Act 13 money
dollars to conduct a transportationstudy in the eastern part of the county,which has seen a dramatic increase intruck traffic due to the Marcellus shaledevelopment.
"The idea of the transportationstudy is to help us develop a corridormanagement plan for Routes 405,220and 180," said Hausammann.
"The transportation study just wentout for bid, and the airport projectwas already put out for bid, andthey've chosen the design team forthat.project, so we've started movingfonryard on our projects."
Tioga County impact fee projectSTioga County is using a portion
of the $9 million in impact fees itreceived over the past two yearsto fund airport projects and anemergency responder facil ity.
"The first project is buy additionaljet fuel and to construct the facilitiesat the airport to contain it so we canaccommodate emergency responderpersonnelthat might need to refuelquickly and take off," said TiogaCounty Commissioner Erick Coolidge.
The county also plans to buy AWOS/ASOS instrumentation (AutomatedWeather/Surface Observing System)to help pilots land using only theirinstruments when the weather is bad.
"That will be used for emergency
NAIURAT GAS
Pittsburgh-area hotels cater to oil, gas workersBy Anna Bentlyt,Pittsburgh Post-Gazette
WASHTNGTON, PA (AP) - To
endear a hotel to the oil and gascrowd, give them a place to eat andsleep at all hours of the day, a placeto wash their boots, a warm place tosmoke in'the winter and a cold beeronce in a while.
So goes the formula developedby Tejas Gosai, president of theWashington, Pa.-based businessShale Hotel lnc. The company is
managing two hotels geared toward oiland gas workers, building two othersand preparing to turn the MonroevilleHoliday lnn into an industrydestination for workers summonedhere by the Marcellus Shale, thenatural gas deposit underlying muchof Pennsylvania.
Gosai represents a group of fourdoctors, among them his father; whobought the 187-room Monroevillehotel in June. His goal is to replicatethere what he has helped to do inBentleyville - attract at least half ofthe guests from oil and gas fields.
The Gosais have been in the hotelbusiness for a dozen years. KamGosai, a practicing physician inWashington County, co-owns theHoliday lnn Express and the BestWestern Garden lnn in Bentleyville.
These hotels weren't built for oil andgas workers. They've slowly shiftedin lhat direction over the past severalyears.
Consider the food, which, seemingly,never stops.
Breakfast begins at 3 a.m. andguests rushing out the door to a jobare given bags so they can toss in a
breakfast burrito and be on their way.The early meal is served until 10:30a.m.
At 1 p.m., soup and popcorn startin the lobby. Two hours later, anotherbreakfast shift begins for those justwaking up.
ln the evenings, there are happyhours and winé, beer and cheesereceptions. On occasion, there'sbarbecue from Hog Father, an industryfavorite.
Outside the hotels, Tejas Gosai hasplopped a few heating lamps andwinterized chairs to accommodate thesmokers.
When he heard that a nearby hotelwas asking rig workers to leave theirmud-coated boots in the lobby,Gosai rebranded the Bentleyville BestWestern as the "The Best WesternGarden lnn where you can wear your
boots."But he has also installed boot-
washing stations outside, whereworkers returning from the field canhose off their gear.
Behind the scenes, the hotels'operations have changed as well.
While at most hotels thehousekeeping staff works a morningshift, at Gosai's operations they workall hours with their shifts staggeredto accommodate the workers'unorthodox sleep schedules.
Then there's the issue of bedbugs. lt hasn't been a problem,Gosai prefaced. But when serving a .
population that moves from one hotelto the next, he figures it's only a matterof time.
Anticipating that, he requiredeveryone on the housekeeping staff totake a course in bed bug inspection.
Gas drilling rcyalty owners oppose new Pa. billBy Kevin Begos,Associated Press
P¡TTSBURGH, PA (AP) - Oil and gas royalgowners and an environmentalgroup in Pennsylvaniasaid that legislation'awaiting Gov. Tom Corbett'ssignature seriously weakens negotiating rights forsome landowners.
The NationalAssociation of Royalty Owners saidlast-minute changes made during the weekendto a Senate bill could allow drilling companies touse decades-old mineral leases to force currentlandowners to accept Marcellus Shale drilling undertheir property. Trevor Walczak, vice president of theassociation's Pennsylvania chapter, said Corbett
be similar to so-called forced pooling. That's whena drilling company can force some landowners toaccept drilling if many surrounding ones have agreedto leases.
The new legislation would only apply to people
btllsfibutrageous. It's j ust i ncred i bly"'""' '."'- out of touch with reality.i¡ir,i+-1l
- Georue Jugouic,enuir0nmGntal attornsy, Penn Future
But horizontal drilling and shale gas fracking didn'texist in Pennsylvania until about five years ago. lnthe past wells went straight down on a leaseholder'sproperty, not across multiple property lines.
Walczak said his group was surprised by thefinal legislation since it has had good relations withlegislative leaders. He said the bill is "bad businessand bad politics" that gives too much power to energycompanies.
"lt's outrageous," said George Jugovic, an
environmental attorney with Penn Future. "lt's justincredibly out of touch with reality."
Jugovic said the legislation seeks to bindlandowners to decades-old leases "whenever it
GRflWTH
The Marcellus Legacy Fund gnows'strongerafter second round of impact fees
By R. Brock Pronko,MBC Regional Business Analyst
STATE COLLEGE, PA-Act 13
earmarks over $20 million in impact feeseach year for eight state agencies to helpoffset the statewide impact of drilling.Last year, the total amount the stateagencies received was $25.5 million, thisyear, it was $28 million.
The eight agencies include: StateConservation Commission andthe County Conservation Districts;Pennsylvania Fish & Boat Commission;Public Utility Commission; PA Dept. ofEnvironmental Protection; PA EmergencyManagement Agency; Office of State Fire
Commission; PA Dept. of Transportation;
and Natural Gas Energy Development.ln addition to the agencies, funds in
excess of the municipality restrictionin Act 13 are re-allocated to theHousing Affordability & RehabilitationEnhancement fund (PHARE) whichreceived $2.5 million last year.
The restriction for municipalities is thegreater of $500,000 or 50 percent oftheir total budget for the prior fiscal year,
adjusted to reflect any upward changesin the Consumer Price lndex.
PHARE was designed to assist withthe creation, rehabilitation and supportof affordable housing throughout thecommonwealth and also as an economicstimulus, bringing money, jobs andconsumers into an area.
Afier state agency earmarks, 60percent of the remaining impact funds goto counties and municipalities as part ofthe Unconventional Gas Well Fund, and
areas, community conservation andbeautification projects, communityand heritage parks and water resourcemanagement."
For example, Lycoming County is using
a portion of its Legacy Funds to builda walking trail around the 9-hole WhiteDeer Golf Oourse in Montgomery Pa.
The Marcellus Legacy Fund alsodistributes funding to the. state's Highwayand Bridge lmprovement Account,Commonwealth Financing Agencyfor environmental clean-up projects,Environmental Stewardship Fund,
The amount of Legacy Fundsdistributed each year is
determined by the numberof active wells and well
production.
Pennsylvania lnfrastructure I nvestmentAuthority and the H2O PA program.
Lycoming County is also using itslegacy dollars to conduct a transportationstudy in the eastern part of the county,which has seen a dramatic increase in
truck traffic due to the Marcellus shaledevelopment
"The idea of the transportationstudy is to help us develop a corridormanagement plan for Routes 405,220and 180," said Kurt Hausammann, Jr.,
director of Lycoming County Planning &Community Development.
The amount of Legacy Fundsdistributed each year is determined
appropriating no state funds for theconservation districts in this year's statebudget.
However, on May 29, the HouseRepublican budget included $2,856,000for the county conservation districtsthrough the state Department ofEnvironmental Protection and $1,01 9,000through the Department of Agriculture.
Pennsylvania conservation districts,which were established in 1945, andinclude 66 of the 67 Pa. counties(excluding Philadelphia) implementa variety of programs and provide
assistance for a range of conservationissues unique to each county, such as
abandoned mine drainage, erosion andsedimentation pollution control, floodplainmanagement, forest management,storm water management, and wildlifemanagement.
Each conservation district, whichmakes up the entire county, is led bya board of directors made up of localpeople. These volunteers study countynatural resource issues and makedecisions that enhance and protect thelocalcommunity.
Over the past two years, the CountyConservation Districts and the StateConservation Commission received $7.5million from the impact fees, $2.5 millionlast year, and $5 million this year.
"ln the first year, $2.5 mill¡on in impactfunds were allocated to the conservationdistricts," said Jay Howes, a deputysecretary in the PA Dept. of Agriculture.
"That money was split in half, with
$1.25 million distributed by the Public
gas drilling has had the most impacts.This year, the conservation districts
will receive a total of $5 million, half ofwhich will go to block grants for all 66
conservation districts, as before. Howthe other half will be allocated this yearwill be discussed at the commission'smeeting next week.
ln next fiscal year, the impact funds forthe'conservaiion districts will increaséfrom $5 million to $7.5 million, whichis double the normal funding for thedistricts.
"The increase in funding raises thequestion going forward if splitting thefunds fifty{ifiy between all 66 districtsand the counties impacted directly fromgas drilling will continue to be the bestway to allocate the funds,'r said Howes.
"When the well is being fracked ihereare lots of impacts, from erosion andsedimentation on a drill site to wear andtear on the gravel covered access roads
to the sites,"However, thosé impacts lessen over
time, which raises the question of what'sthe most equitable way to allocatethe money in proportion to the actualimpacts.
"Do you do it on basis of the totalnumber of wells in that county, thenumber of wells drilled in the currentyear, or wells drilled in the past threeyears?
"That's what the commission has todecide."
The Pennsylvania Dept. ofEnvironmental Protection receives $6million per year in impact fees regardless
FHTIIEüI
Gas line upgrade pnoposed for NY-to-Boston routeBy Stephen Singer,AP Business Writer
HARTFORD, CT (AP) - ln anothersign that natural gas is outpacingcostlier heating oil, a Texas energycompany is proposing to install newpipelines, replace others and buildtransmission stations in the heavilypopulated, 200-mile New York-to-Boston corridor.
The preliminary plan proposedby Algonquin Gas Transmissions, aunit of Spectra Energy in Houston,would build and replace about 44miles of pipeline in Connecticut,Massachusetts, New York and Rhodelsland, install a new pipeline to spanthe Hudson River in New York andbuild compressor stations to boost gasflow.
But reluctance by power generatingcompanies to commit to the project
York, Pennsylvania and Tennessee -are in the early stages of filing beforefederal regulators.
Until recently, much of the naturalgas in the U.S. has come from GulfCoast states, such as Texas andLouisiana. New sources of naturalgas, such as the Marcellus Shale in
New York, Ohio, Pennsylvania andWest Virginia, now present additionalopportunities to tap natural gas, saidCathy Landry spokeswoman for thelnterstate Natural Gas Association ofAmerica.
"We'll be needing to revamp linesslightly to access new areas," she said.
Burying pipeline in New England willbe particularly difficult because it's aheavily populated region and utilitieswill have to negotiate rights of way andland deals with numerous propertyowners, Landry said. Environmentalconcerns such as wetlands also could
The pipeline has got people more riled upthan fracking because fracking doesn'thappen right away, but they can put the
gas in the pipeline now.
Seth Gladstone, a spokesman forFood and Water Watch, a consumeradvocacy group. "The bottom line iswe're dealing with a dirty fossil fuelthat's contributed to climate change."
Craig Stevens, a resident of SilverLake Township, Pa., and an opponentof increased use of natural gas, saidhe and other landowners with rightsof way for gas line construction arefighting projects on issues such aspayments and easements.
Photo provided
"The pipeline has got people moreriled up than fracking because frackingdoesn't happen right away, but theycan put the gas in the pipeline now,"he said.
Algonquin is undeterred, insisting inits federal request for approval that it'ssimply responding to demánd.
The rush by local gas companies tobring in new customers "confirms theneed for new pipeline infrastructure tosupport this growth," Algonquin said.
has emerged as an early problem, andenvironmentalists who say natural gasis only slightly less dirty than otherfossil fuels are protesting expandedgas pipelines.
The project, which would expand thecurrent Algonquin system and affecthundreds of properties, would add450,000 cubic feet of gas per day tothe 2 billion cubic feet now piped in
force gas companies to reconfiguretheir plans, she said.
Another problem facing Spectrais attracting electric generatingcompanies to commit to the pipeline.John P. Reddy, Spectra's chief financialotficer, said at an industry meeting inMay that the Algonquin project willsupply markets served by naturalgascompanies, but power generating
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PENNSYLVANIA COLLEGEoF TECHNOLOGY (CRED|T)
SHALETEC (NoNCRED|T)
one College Ave.,
Williamsport, PA 17701
Davie Jane Gilmour, President(s70) 326-3761 / FAX (570) 326-5551
www.pct.edu / www.shaltec.org
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Reynoldsville, PA 15851
Mlke Knobloch, Coordinator(814) 653-8265 Ext 1 78
FAX (814) 653-8425www,jefftech.us(adult education tab, Marcellus Shale)
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NATURAL GAS PRODUCTION & SERVICESASSOCIATEOFAPPLIEDSCIENCE.MANSFIELD UNIVERSITYGl Alumni Hall, 31 South Academy St., Mansfield PA 16933
Lindsey Sikorski, Director, The Marcellus lnstitute at Mansfield
University(570) 662-4808 / FAX (570) 662-4093http://geoggeol. mansf ield.edu/whalcan-i-study/natural-gas-product¡on-services.cf m
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DESCRIPTION
I i, t[h.r000h $f i0rl-term; stfl ekqb,le]ics.itlfbaiiiiti iipr0groms sludents galn hands-qn lraining,,& spoclalized skllls fDr fobs.in the enCrgy &tmhnology sectors, slsckasg corlifitAtÉs .
provide a carew patrWtor imnra*ate ;.
employmont & tha optsdr{tyfit let m tur:: ÁddltiorHdiillhrsoéeded..,,
Offers noncredit workforce trainingShaleTEC, as well as a variety 0f degree
programs leading to career opportunities in
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Assoofater,m sp*iáleodÍectrno¡ggy,negise proúralGgi qbJeotue of every,,progq4m
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Program provudes CDLA preparatoin & a twoweek class on the gas industry
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A var¡ety 0f majors in fields such aswelding, automated manufacturing,
CAD technology, heavy constructionequ¡pment, diesel and on-sirepower generation, among others.
New for fall 2013 are degreesin mechatronics engineeringtechnology & emergencymanagement technology
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FAX (814) 653-8425mjknoblock@jefftech.
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A]{GIII.ARY IIIDUSIRY SERUIGESRANI(ED BY NUfilEER 0F FT EIiIPLoYEES
'BASED ON DATA PROVIDED FROM THE
2013 MARCELLUS RESOURCE GUIDE
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MCNEES WALLACE& NURICK LLC100 Pine St., HaÍisburg, PA 17101
David M. Kleppinger,
Chairman of the Firm(7 171 232-8W0 r F AX (7 11 n7 -5300
www.mwn.c0m
NTTTANY VALLEY OFFSET1015 Benner Pike, State College, PA 16801
Robery Butkins, President(814) 238-3071 / FAX (814) 23803051
www. nittanyvalley.com
INSTITUTE FOR ENTREPRENEURIALEXCELLENCE, UNIVERSITY OFPITTSBURGHAnn Dugan, Executive Director(412) 648.1544 / FAX (412) 6481636www.entrepreneur.pitt.edu
YEAR
EST.
#0FFI EMP,
IOTAL I OF
OFFICES
iIiiiiiliiiiiii
*0F LocatOFFICES & LOCATIONS
2 - State College, PA;
Scranton, PA
1 - State College, PA
3 - Pittsburgh, PA;
Washington, PA;
Waynesburg, PA
SERV|CES
OFFERED
Attorneys in real estate, envhonmental, tansportation, energy
communications & utility, asset planning & federal taxation;
business munselliry law groups, lease documents, wellpefmitlir€, watef resource pefmitting.acquisition, wastewater
lreatment & disposal, movement of welldrilling Euipment,collection & conveyance via gathering lines & pipelines,
attorneys in oil & gas p¡actice group counsel individuals,
hunting clubs & other organizations on estate & businessplann¡ng techniques that can be util¡zed lo address both tax
& generalionai planning issues that can arise with recently
acquired wealth aüributable to bolh the "bonus payments: for theprimary term of gas lease as well as future royalities; counsel
client on the ramificiations of a lease if you're a business enity,
including the income tax consequences upon receipt of the
bonus & lease payments, limiations on th€ use of funds
Commercial printing, publications, brochures, catalogs, news
letters, oil & energy news, folders, inserts
COMPAI{Y CONTACTFOR EUSINESSINOUIRIES
Curtis N. Stambaugh(717],237-5435
FAX (71 7) 237-5300
Bobert Butkinds(814) 238-3071
FAX (814) 23&3051rbutkins@ nittanyvalley.com
(4121648-1544
FAX (412) [email protected]
c0uNTtEsSERVEO
DNR All C,ounties
AllCounites
Penn. Stale Univef., Scranton
Univer., Bucks-Monlgomery-Delaware County Newspapers,
Commonweallh of PA
DNR
lnstitute for Entrepreneurial Excellence at University of
" Pjtsburgh Joseph M. Katz Graduate Sqhool of Business
helps entrepreneudal bus¡ness leaders harness the power ofinnovat¡on, collaboration, and knowledge to increase profit
margins, create jobs, diversily revenue streams, connect to
emerging markets, secure new research & development dollars,
we take pride in knowing that - collectively, the people we sérve
fuel southwestem Pennsyfuania's resurgent economy
All Counties
PIPEIIl{E
Proposed North-South Upstate Pipeline could benefitgas customers in New Yórk and the Northeast
By R, Brock Pronko,MBC Regional Business Analyst
New York State is the fourth largestconsumer oi natural gas of the 50states, using about 1,200'billión cubicfeet per year to fuel its homes andbusinesses, and for electric generation.
Even though New York has trappedMarcellus shale gas of its own, mostof its natural gas comes from out ofstate because of a moratorium onhydrofracturing.
ln 2008, the NY Dept. ofEnvironmental Conservationconducted an environmental reviewof horizontal drilling and high-volumehydraulic fracturing and recommendedthat the health and environmentalimpacts of these drilling techniques bestudied further.
The NY legislature followed with amoratorium on hydrofracking, whichwas recently extended to May 15,
2015.The upside of the moratorium for
pipeline companies is that they hadto build new pipelines in New York tobring in gas from out of state to meetthe growing demand for natural gasby New York residents who desire acheaper and cleaner alternative to
coal.The Millennium Pipeline Company,
headquartered in Pearl River, NYcompleted its first pipeline in NewYork State on December 22,2008.The Millennium Pipeline extends 220miles through the Southern Tier ofNew York State, from lndependence,Steuben County to Buena Vista,Rockland County, and transports gasto New York City and the surroundingmetropolitan area.
The pipeline interconnects withEmpire State Fipeline.at Corning,NY Algonquin Gas Transmission atRamapo, NY and Orange & RocklandUtilities, New York Staie Electric & GasCorporation, and Central Hudson Gasand Electric Corporation.
At the beginning of May, Millenniumannounced a non-binding "openseason" to gauge the interest ofgas providers on the construction-ofapproximately 60 miles of new pipelinewith at least one compressor stationrunning north from a segment of theMillennium Pipeline near the NY-PAborder.
The "North-South Upstate PipelineConnector" would start at Binghamton,NY in Broome County near the NY-PA
border, and connect to the DominionTransmission system near Cortland,New York and the Tennessee GasPipeline System near Syracuse, NewYork.
ldeally; the pipeline will be able toget around the Northeast U.S. west-east bottleneck by tapping shale gasproduction in PennsyTlvania, Ohioand West Virginia, to open west-eastcapacity to the north.
"Historically, natural gas supplieshave come from the South down in
Louisiana, Gulf of Mexico, Texas andOklahoma up to the Northeast. AndWestern Canada also supplies a lot of
Photo provided
changeover from coal to natural gas inelectricity production, and in furnacesand boilers," said Sullivan.
"Even when the price goes up,naturalgas will still be competitiveagainst oil, and there's the added '
incentive of being a cleaner formof energy, which is something thegovernment is trying to encouragethrough various progfams to convertheating and vehicles to natural gas."
One of the "quiet stories"surrounding natural gas, said Sullivan,is how it's having a positive impact onair quality.
"lf you look at EPA data, thisffiYaffiiEs The "North-South Upstate Pipeline Connector" would start at
TRADIIIflNS
TFadition and temptation as Amish'debate frackingBy Julie Carr Smyrlh,Kevin Begos, Associated Press
BALTIC, OH (AP) - ln parts ofOhio and Pennsylvania where horse-drawn buggies clip-clop at the paceof a bygone era, Amish communitiesare debating a new temptation - thelarge cash royalties that can comewith the boom in oil and gas drilling.
"Amish are no different thananybody else. The power of big moneycan bring spiritual conuption," saidJerry Schlabach, an Amish residentof Berlin, Ohio. "lf we can keep ourvalues and adhere to biblical principle,then it can be a.very positive thing,"he said.
Reuben Troyeri who recently signeda drilling lease for his 14O,acrefarm just east of the market townof New Bedford, Ohio, said he feelscomfortable with the process itself.
"l guess I feel they know whatthey're doing, and they'lltake care ofthemselves," Troyer said.
Along the narow bending roadsof Amish country in Ohio andPennsylvania, many families are sittingatop valuable deposits of oil andnaturalgas locked in the Utica andMarcellus Shale rock formations. Theytend to view the wells as a part of lifeand look forward to the added income
a lease can bring.Local leaders in thio say nearly
every farmer in the region has an oldoil well, so it was no surprise whenenergy companies came knocking todrill bigger, more lucrative shale wells.
About 45 percent of the nation'sAmish population is concentrated in
Ohio and Pennsylvania, with 63,000in each state out of a total of 280,000nationwide.
Historian Donald B. Kraybillsaidthat some Amish accept drilling partlybecause they "have a strong sense ofGod's creation," and that includes oiland natural gas.
"lf they can find ways to capitalizeon the resources under the ground,they don't see a problem with that," hesaid.'
To the Amish, Schlabach said, "theworld was created for the benefitof man. And nature, as we see it, ismade to be used as long as it's kept inproper perspective."
For Susan Mast, an Amish wifeand mother, the issue hit close tohome last summel when an energycompany purchased land adjacent totheir quiet, well-manicured Ohio farmnear the village of"Baltic and beganfracking.
"lt's not as noisy as we thought it
would be," said Mast, who has seven
children. The well, on iand ownedby her parents is in production nowbut she said the drilling phase didn'tbother the youngsters.
"They enjoyed watching what wasgoing on," she said.
But there are some practicalconcerns about allthe industrialactivity that comes with the recent
shale drilling."l'm not excited about it, with allthe
traffic, with allthe horses," said MelvinYoder, who owns a S8-acre farm in
centralOhio.Kraybill noted that rules vary widely '
among Amish communities, butthat there is "considerable concern"among church leaders that drilling
See TRADlTlOllS, Page 12
Photo provided
IAXES
Drilling costs get speedier write-offBy The Associated Press,(Pittsburgh Post Gazette)
PITTSBL,RGH, PA;- Trjcked insidea massive tax billthat won the supportof Pennsylvania legislators Monday isa nod to oil and gas investors who'vebeen battling with the state Departmentof Revenue for half a dozen years.
lndividual investors and companyowners who report their oil and gasproceeds as personal income havebeen trying to get Pennsylvania toallow the same tax deduction on driilingcosts as they get from the federalgovernment. That is; a 100 percentdeduction of intangible drilling costs in
the same year the money is spent."Oiland gas is risky," said Charles
Potter, a voting shareholder andattorney at the law firm Buchananlngersoll & Rooney who is litigating atleast 10 cases against the PennsylvaniaDepañment of Revenue. "Ever since thefederaltax code was invented in '1913,
they always put [in] incentives becausethey want to encourage people toexplore for oil"and gas."
lntangible drilling costs covereverything that goes into putting a wellinto production, except the cost of theequipment. They include, for example,land surveying expenses, fracking,labor, fueland drilling mud.
The federal government offers theoption of immediate deduction orcapitalization over five yéars, whilePennsylvania allows such expensesto be amortized only over the tife of awell. That's the way it's always been in
the state, said Departrnent of Revenuespokeswoman Elizabeth Brassell.
But some in the oiland gas industrynoticed a change about thL time thai
say this issue is one for the smallguys -- the individual investors, orsmall pass-through companies. Thosesmaller operators are not the drivingforce behind the development of theMarcellus Shale, whose wells run, onaverage, $5 million a pop.
But it's the Marcellus Shale Coalition .
that pushed this effort in the Legislature.Jeff Wlahofsky, a CPA at accounting
past few years, some of its seasonedexecutives took the money they madeon those consolidaiion deals andstarted new oil and gas firms withprivate equity money.
Still unclear is how much the newlyperrnitted deduction would impact statetax revenue.
Both the House and Senateappropriation committees concludedthe state would lose $1.1 million nextyear. The Senate committee furtherprojected another $3.3 million duringthe 2013-2014 fiscal yeár, and $4.2million the year after that.
"Where those numbers come fro.m,
I have no idea. They don't make anysense to me," Mr. Wlahofsky said,suspecting the impacl might be higher.
The Department of Revenue declined'to provide a fiscal analysis, Ms. Brassellsaid.
The bill has been approved by boththe House and Senate.
It won't be a.full victory for theindustry -- not an immediate write-offlike the federal government offers. "lthink it's a start," Mr. Wlahofsky said."At least we have some guidanceof how to handle these cosis goingforward."
"lt's better thah nothing," Mr. Pottersaid.
Intangible drilling costs cover ev-erything that goes ¡ntoputting a well into production, except
equipment. They include, for example,expenses, fracking, labor, fuel and drilling mud.
the cost of theland survey¡ng
development of the Marcellus Shaleresources got going in Pennsylvania.They say investors and independentproducers continued to claim thededuction as before, but the statestarted inspecting their tax returnsandnot allowing it.
"Until three or four years ago,they paid almost no attention to it,"Potter said. "We didn't have anybodyassessed until 2006."
Both Potter and the Marcellus ShaleCoalition, an industry group thatrepresents operators in the region,
firm Schneider Downs & Co lnc., led thecoalition's effort to bring Pennsylvaniain line with the federal government.
He wrote a white paper on the subjectfor legislators and was asked to draftthe language for the bill, asking for a100 percent deduction in the first year.
Lawmakers modified it to a 33 percentimmediate deduction with the restamortized over 10 years.
The accelerated deduction could bea win for a rising class of Marcellusbackers -- private equity investors. Asthe industry has consolidated over the
FRACKIl{G
Standing ¡n the way of New York's gas industtyMany dedicated to the cause of anti-fracking
among the more visible of thegrassroots fracking foes, theirmotivations and personal styles aredifferent.
"l don't have a political agenda. I
lust want to preserve the quality of lifefor myself and my neighbors," Rappsaid as she had lunch with Scrogginsat the Vestal Diner.
Thin and birdlike with curly redhair, Rapp is a leader in the so-called"homq.rule" movement, which has ledmore than.100 communities to enactbans or moratoriums against fracking.The gas industry has challenged thelegality of such bans but has lost twocases that it plans to appealto thestate's highest court.
Rapp devotes her free time toorganizing letter-writing campaigns tothe governor, gathering signatures onpetitions, and trying - unsuccessfully- to get her town board to enacta fracking ban or pass road-uselaws aimed at the convoys of waterand graveltrucks heading forPennsylvania's drilling sites.
She campaigned last fallfor anti-fracking candidates. But in her countyand others in the border region wheredrilling is most likely to staft if Cuomogives it the green light, all weredefeated.
"l have two petitions, the roadpetition and the ban petition," Rappsaid. "l knock on doors, I go tofarmers markets and the railtrails. I
clon't think of mvself as an activist
local politicians, community groups,and anti*frackihg celebrities such asYoko Ono, Sean Lennon and SusanSarandon. Several days a week, shedrives people around to show themdrilling sites, pipelines, compressorstations, and truCk-worn roads.She introduces them to residentsof Dimock and Franklin Forks whobelieve their wellwater was ruined bydrilling operations - even though stateand federal investigators couldn'tconfirm allthe complaints. Sherecords the tours on video.'She also records town board
meetings, often raising,the ire ofpeople who'd rather not be in thevideos she posts online by thehundreds.
"Basically what I show is,'Doyou want this near your home?"'Scroggins said, standing oh a roadbeside a wellsite with a rumblingcompressor station, tanks, pipes,and other equipment. There are 700gas wells in Susquehanna County;38 percent of the county is underlease, and gas companies indicate apotential of 3,000 drilling locations.
Gas industry bloggers have mockedScroggins, but she clearly relishesher notoriety. On a recent tour, sheflagged down the SUV of a gascompany's new security guards andintroduced herself.
"l'm the tour guide. I'm sure you'veheard about me," Scroggins said.When the ouards said thev hadn't.
By AssociatedPressBROOMRE COUNry NY (AP) -
Big energy companies have beentrying for five years to tap the richesof the Marcellus Shale in southernNew York, promising thousands ofnew jobs, economic salvation fora depressed region, and a cheap,abundant, clean-burning source offuel close to power-hungry cities. Butfor all its political clout and financialprowess, the industry hasn't beenable to get its foot in the door.
One reason: Folks like Sue Rappand Vera Scroggins are standing inthe way.
Rapp, a family counselor in theBroome County town of Vestal, inthe prime shale gas region near thePennsylvania border, is intense andunrelenting in pressing her petitions.Scroggins, a retiree and grandmotherwho lives across the border in hillynofthwestern Pennsylvania, whereintensive gas development has beengoing on for five years, is gleefullyconfrontational. She happily postsvideos of her skirmishes.
The anti-fracking movement hasinspired a legion of people like Rappand Scroggins- idiosyncratic truebelievers, many of them middle-agedwomen, who have made it the centralmission dt tfre¡r lives to stop gasdrilling usirig high-volume hydraulicfracturing in the Márcellus regionthat underlies'southern New York,Pcnnqrrlrrania Ohin end Weqf Virainia
Photo provided
acknowledge thpt Rapp, Scrogginsand others like them have beeneffective.
"There's no denying that theiractions have had an impact," saidJim Smith, spokesman for thelndependent Oil and Gas Associationof New York. "lf they weren't doingwhat they're doing, we would havebeen through with this a long timeago. They're wrong on the facts butthey're very loud and very vocal,and that gets noticed for politicalreasons."
Their cause is amplified by anextensive coalition - including deep-pocketed environmental groups, NewYork City lawyers, organic farmerS,
