Bucks County, PA
More than eyebrows were recently raised at the latest state legislators forum held in Bucks County. Voices were shouting loud and opinions were expressed regarding the latest Marcellus ShaleA fine grained sedimentary rock composed mostly of consolidated clay or mud. Shale is the most frequently occurring sedimentary rock.ShaleA fine grained sedimentary rock composed mostly of consolidated clay or mud. Shale is the most frequently occurring sedimentary rock. is one of the most highly productive types of sedimentary rock whose density provides tight stores forhydrocarbon reserves below. Marcellus ShaleA fine grained sedimentary rock composed mostly of consolidated clay or mud. Shale is the most frequently occurring sedimentary rock. is a rock formationA body of earth material with distinctive and characteristic properties. running through about two-thirds of Pennsylvania, and areas of New York and West Virginia. Geologists estimate that there is a large enough natural gas reserve within the shaleA fine grained sedimentary rock composed mostly of consolidated clay or mud. Shale is the most frequently occurring sedimentary rock. to power the United States for one to eight years. drilling law – ACT 13Signed into law by governor Tom Corbett. This law will further protect the environment as well as tighten the regulations on the natural gas industry..
Though many people were upset, Bucks County legislators tried to explain the benefits of this law to the crowd of 200 that were present at the meeting.
ACT 13Signed into law by governor Tom Corbett. This law will further protect the environment as well as tighten the regulations on the natural gas industry. establishes drilling impact fees that would generate $480 million in new state revenue through 2015. It will also force drillers to disclose the chemicals they use and require drilling sites to distance away from public and private water sources.
Legislators present at the meeting included State Senators Bob Mensch and Chuck McIlhinney – and Representatives Marguerite Quinn and Paul Clymer. Also joining them, Brian Ellis – a Butler County representative.
The legislators were accused of lying and covering up vital information regarding the law and impact fees.
“I don’t think we’ve pleased everybody and that’s all right but as long as we can do that in a way that’s respectful without interrupting one another.” Clymer said in closing.
Residents are focused on the fact that frackingRefers to a method used by producers to extract more natural gas from a well by opening up rock formations using hydraulic or explosive force. overrules local zoning – which will leave municipalities with no say about where drilling sites are located.
Some municipalities have sued to challenge this law.
Let us look at the logic here.Yeah, but a gain of 65% off a historical low is still $3.05, still down nleary 50% from last year.True but trends in commodities have tendencies to run for quite some time before they turn. Besides, this has been an abnormally hot summer. Electric demand has risen due to more people running a/c, which means more demand for natural gas in the electric producing sector.Also true but don’t you remember that a very warm winter cut demand for heating? Your heating bill fell mainly because of the change in temperature, not the tiny bit of the price decrease that the utilities passed on. And are you really surprised Texas natural gas production is down? Most of what is making its way to the natgas market is the byproduct stuff that comes from oil drilling. Something like 30% of rigs are producing natural gas. Can’t make money at $1.50 per.That has been my argument with you and Mark. Shale gas can’t make money at less than $7.50 if the Chesapeake statements were to be believed. (That is all in costs, not the costs that do not include depreciation, leasing, etc.) If prices are to remain above $3.00 (the low end of BE point), you’ll probably see some rigs come back on-line, but we’ll likely see this oversupply remain, simply because we have so much inventory to get through first.Why would rigs come on line when the core areas need more than $5.00 gas to have a chance of making profit and the average well is not economic under $7.50? Shale gas has been a disaster for the industry and has wound up destroying capital. Do you really think that investors are eager for another bout of capital destruction?No matter what the narrative that Mark is pushing I can’t see any economic logic in having companies that do not have to in order to keep from going under by writing down their leases spending any money on new gas production. The simple fact is that there is no way for natural gas production to fill the growing demand that is added by closing of coal generation plants without a significant increase in prices. And I suspect that the next time the shale companies act they will demand fixed cost contracts from drillers and a fixed price from purchasers in order to guarantee sufficient profit to try to stave off bankruptcy.