2009-02-26 / Local & State

Pa. May Reveal Drillers' Secrets In Gas Shale Rush

By Marc Levy ASSOCIATED PRESS WRITER

HARRISBURG, Pa. (AP) - Three decades ago, environmentalists and public officials rang the alarm when the price of fossil fuels shot up and drilling companies descended on western Pennsylvania's oil and gas fields in search of paydirt.

The state Legislature responded with the 1984 Oil and Gas Act, which forced the companies to comply with strict new environmental standards - but also handed them a cushion that allowed them to keep secret most information about their below-ground discoveries for five years.

Now, with a fresh wave of exploration companies flocking to Pennsylvania in pursuit of natural gas in the sprawling Marcellus shale rock formation, state legislators are considering peeling back that cloak of secrecy.

One proposal backed by several key senators would require disclosure of well-specific production data every six months in an effort to stimulate interest in drilling and bring Pennsylvania into line with major gas states.

"The thought is why is Pennsylvania so far out of line with what the industry is used to doing in other states?'' said Sen. Gene Yaw, R-Lycoming, the bill's sponsor whose rural, north-central Pennsylvania district is bustling with exploratory activity.

Opponents say the bill would take away their control over information they spent heavily to develop - data that gives them a competitive advantage in the expensive race to tap the thick, black shale that is most abundant in Pennsylvania, New York, West Virginia and Ohio.

"It's like a trade secret,'' said Douglas E. Kuntz, president and CEO of Pennsylvania General Energy Corp. in Warren.

Even with the national recession depressing natural gas prices and exploration activity, analysts say the Marcellus Shale eventually could become the nation's biggest gas field.

And right now, Pennsylvania is seeing the biggest surge of interest in the rock formation.

The exploration companies are a mixture of newcomers to the Marcellus Shale and established players, which include some national companies as well as smaller in-state ones that consider Pennsylvania their bread and butter.

The looming tussle over the 25-year-old law is the latest on a growing list of regulatory dustups as Pennsylvania scrambles to catch up to a drilling rush that is rapidly changing its landscape.

The legislation written by Yaw would require that the updated information provided by drilling companies be made available on a state Web site.

Yaw's proposal would make Pennsylvania's law more like those in Louisiana, Texas, Oklahoma and Wyoming, where state agencies post well-specific production information online, usually within weeks of getting it.

The just-introduced bill has not moved out of committee, and spokesmen for Gov. Ed Rendell and the House's Democratic majority declined to take positions on the issue.

Don Likwartz, who supervised the Wyoming Oil and Gas Conservation Commission before he retired last month, said the quality of the information available from his agency enables companies around the world to download it and create their own maps.

"I can't tell you how many companies told me or someone in the office that they came to Wyoming because of the accessibility of the data,'' he said.

That argument dovetails with how some of the bill's early supporters see it. But Stephen W. Rhoads, president of the Pennsylvania Oil and Gas Association, scoffed at the goal of attracting more exploration companies.

"How many more can you get?'' Rhoads asked. "All the major players are here now.''

In some cases, Wyoming allows confidentiality of well data for up to six months - but there must be a good reason, such as testing of new production technology, Likwartz said.

Pennsylvania does not currently post well-by-well production data online - even after the five-year confidentiality period expires.

All but one of the four exploration companies that responded to questions about the legislation opposed any change in the law.

"Lifting the nondisclosure rule would harm the very companies who have spent the risk capital that unlocked the potential of the Marcellus Shale,'' said Richard D. Weber, president and chief operating officer of Pittsburgh-based Atlas Energy Resources LLC.

But a spokesman for Range Resources Corp. of Fort Worth, Texas, which is generally recognized as having drilled the first Marcellus Shale well in this exploration wave, said it supports anything that boosts public understanding of the industry and enhances efforts to develop the field's full potential.

"So if this helps that,'' Range spokesman Matt Pitzarella said, "then we think that's a good thing.''

Return to top