by John Blackford Bucks County Herald 5/18/06

Residents on May 10^th held a second forum on possible gas and oil drilling in Nockamixon and Tinicum Townships. The Nockamixon supervisors had put up $1,000 for the initial forum, but with $500 left over, they agreed to a second one.

A crowd of over 100 at Palisades High School auditorium heard six experts, including Ted Stegman, a venture partner with Arbor Resources, the company planning to drill the test well seeking gas.

Forum organizers Sallie Jo Reid and attorney Tim Throckmorton, both Nockamixon residents, emphasized the need for information on possible drilling, since a vote on the ordinance is scheduled this Thursday, May 18, at the Nockamixon municipal building. Supervisors will vote on an ordinance addressing gas and oil drilling. They are expected to approve drilling in residential areas but prohibit it in village center and resource protection areas.

Panelists included Bruce Baizel, staff attorney for the Oil and Gas Accountability Project (OGAP), of Durango Colorado; Mark Gallagher, vp of Princeton Hydro and an environmental consultant to Nockamixon Twp.; Philip S. Getty, an environmental hydrologist in Bucks County; Ron Gilius, director of the Pennsylvania DEP; and Jeffrey Krein, a local realtor.

Stegman said he’s been in the oil business for 35 years, since working his way through college as a field hand. He’s put together several oil-related ventures and described himself as the financial side of the joint venture with Arbor Resources, which will manage actual drilling.

Like Arbor, Stegman’s business is located in Traverse City, Michigan, where, Stegman said, the many lakes, rivers, forests, and recreation areas make for a highly regulated environment.

Based on his work in Michigan, Stegman claims to understand the need to avoid leaks or accidents. He uses liners for secondary containment under drilling rigs, blow-out preventors, and steel casing to avoid groundwater contamination. In Michigan, Stegman said he often went as far as erecting a small building around compressors to limit noise.

Current techniques are safer and more secure than earlier ones, according to Stegman, who said there were no reports of leaks from any of the oil rigs destroyed in the Gulf during hurricane Katrina.

Stegman said the possible gas in Nockamixon is likely to be in a layer of shale 3,000 to 6,000 feet down, under a layer of hard cap rock. Extraction from shale is currently “the hot play,” in the petroleum business, he noted.

The plan is to drill one test well this August or September to determine commercial viability of drilling. One well is all that’s needed to decide that, he said, adding that drilling should be completed within several weeks, with the rig running 24 hours a day.

If  the area proves successful for gas extraction,  Stegman said pipelines would be laid underground to storage tanks and eventually connect with existing lines serving the Philadelphia area.

Bruce Baizel said his work with the OGAP showed that the most likely source of disagreements between land owners and drilling companies are things like placement of pipelines , compressors, and drilling rigs.

“They put the rig in the middle of my field,” one farmer told him. “Now I can’t plow.” Sometimes crews leave open gates and let the cattle out.

Baizel said most such issues should be dealt with up front by negotiation, including location of drills and compressor buildings, royalties, and reimbursement for damage or accidents.

Baizel said residents should be aware that wells may last 30 years, and the initial drilling company is seldom the one drilling the whole time. There will be accidents and spills, he said, not necessarily because of bad intent, but because things do happen. Thus it’s important to plan clearly for such events.

Drills can move away from the wellhead in any direction for up to ¾ of a mile, a procedure called offset drilling. So your neighbor’s water well could be above the drill, though the wellhead is on your property, said Baizel. So it’s important to test for groundwater contamination based on drill location. The drilling company has to test wells, but not necessarily where the offset goes. This is another issue to negotiate, said Baizel.

Philip S. Getty worked for Shell Oil and Texaco Oil in Texas and the Gulf before returning to Bucks County for the last 20 years to work on groundwater protection and cleanup. Groundwater protection is key during petroleum drilling, said Getty, adding that the DEP must ensure it’s regulations work. If not, he said, residents have a right to complain.

Getty said oil people won’t always tell you where they plan to drill, adding that leaks can be hard to detect. Even with steel casing, he said, a drill that’s penetrated an aquifer could allow leakage above or below the casing to reach it. Testing is essential, he said.

Getty noted the presence of  radioactive material in Nockamixon, since uranium was once mined here. But that there’s no plan to monitor that, he said. Getty agreed that accidents will happen. “Many things come out during drilling, and they must be controlled,” he said. “It’s important to look over people’s shoulders during the work.”

Ron Gilius said the DEP regulates in terms of spills and environmental issues, but does not get involved in contract disputes. He said any damage or spills must be cleaned up by the driller, and that the well must be completely filled after drilling. The site must be restored by the driller within nine months of completion of drilling.

The operator is responsible for testing within 1,000 feet of each well, within six months, but Gilius said the DEP suggests land owners also get testing done separately.

Gilius said most wells in Pennsylvania are in the western part of the state, but that experts will be brought in as needed to monitor work done by Arbor Resources. He said he’ll be paying special attention, because this operation is a first for the area. Gilius said the number of wells in the state is going up, with as many as 6,000 new ones each year, mostly for gas.

During questions, Stegman emphasized that no estimates of revenue to landowners can be made, despite the fact that an Arbor sales rep apparently suggested returns of $1,000 per month were possible. He said he would not release any of the 300 current lease signers from contracts, but that if someone has specific concerns, he’d work with them on the issue. “We’ll sit down and talk,” he said.

Stegman said royalty payments go first to lease signers, but that eventually any land owner in the “producing area” gets payments. Gas can migrate quite a ways, he added, but typically in this area 80 to 160 acres would be the producing area for one well.

In response to a question on conservation easements, Dr. Jim Diamond spoke up from the audience to say that Bucks County Agricultural Land Preservation does not prohibit drilling on its easements but that other conservancies do.

Despite considerable concern within the community about the prospect of drilling in the area, the tone throughout the meeting was respectful and interested, perhaps reflecting the fact that residents are eager to find out more about gas drilling, currently a rarity in eastern Pennsylvania.