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White Oak, Penneco address shallow drilling concerns

| Wednesday, April 20, 2011

White Oak and Penneco officials set to put minds at ease at an open public information meeting to allow residents to voice their concerns and ask questions regarding the borough`s prospects for conventional, or shallow, gas drilling.

Borough manager Jack Petro Jr. opened last night`s meeting by clarifying that it was not to discuss concerns about Marcellus shale drilling, a prospect that had been looked into by the borough, but has since been tabled in favor of shallow drilling.

Penneco, a family-owned company headquartered in Delmont, has two shallow gas wells in operation in White Oak, both on privately owned residential land off Upper Heckman Road. The borough is looking into the possibility of signing leases for two wells on public property.

Conventional drilling taps into indigenous oil and gas that rests closer to the surface. In Penneco`s proposed drilling in White Oak, the vertical wells would go no deeper than about 4,000 feet, as opposed to Marcellus wells, which go much deeper and spread out horizontally for several thousand feet.

Council has been in talks with Penneco to drill wells near the athletic association and Heritage Hill Park and Pool complex.

John Hazi, a senior land agent from Penneco who is responsible for lease and property acquisition, pipeline right of ways and damage settlements, explained the benefits to the borough.

'There`s a royalty percentage that is being offered, it`s typically 12.5 percent of whatever gas is marketable, which will be allotted to the borough. Penneco retains 87.5 percent, but the drilling endeavor is solely at Penneco`s risk. We take on all of the expenses related to the drilling.'

Penneco land and engineering supervisor David Smail added that a free gas allotment would be given to the borough.

Petro said the gas allotment would be of great benefit at the athletic association site as it could be used to heat the facilities there.

'The municipality does contribute to the athletic association to pay for oil and electricity.,' he said. 'Council is considering piping some of that to the organization and then the contribution to the organization wouldn`t have to be as great because they`re basically getting free gas to heat the facility. It would take a lot of pressure off of them and the municipality.'

White Oak resident Carolyn Leitzell expressed her concerns. 'We`ve heard so much about the problems with this Marcellus shale and people are up in arms about it because of the noise involved and the air pollution that people have complained about. Is this the same?'

Dean Walters, field superintendent for Penneco, said the White Oak wells could be finished in five days if workers were able to drill around the clock. 'If at all possible, we do drill 24 hours a day because it gives us the quickest turnaround,' he noted. 'There is some noise, no doubt about it. It usually stays within what they consider an industrial level, which is about 95 decibels.'

Residents also expressed concern over increased industrial traffic.

'One of these things I do before I let one piece of machinery come in is if it`s a borough road, then I will make an application to the borough to bond that road, which lasts from when I first come in until I have everything completed,' Walters said. 'Then I ask to be released from the bond. The borough will inspect the road along with us and it will be our responsibility to repair that road.'

Also in question were the issues of enforcement of the contract terms, which would limit drilling to the proposed 4,000 feet, and accountability of the company for explosions, fires or gas leaks.

'Penneco is a very honest company. We stand behind what we do. We are very knowledgeable about where we`re at and we only go where we`re allowed to. We don`t want to have to pay the fines or solicitor`s fees should something happen,' Walters said.

'Keep in mind that we keep specific logs and records and that is public knowledge for the borough at any time to inspect during business hours,' Hazi added. 'They can come in and look at these records as well as the state does and monitor what we`re doing.

'We have a current lease with the city of McKeesport and there`s an indemnification clause in the lease which protects the borough from any of these occurrences.'

Walters said the company would prefer local fire departments to take on a role of perimeter containment after contacting Penneco`s emergency response team, which has a response time of about one hour.

'We prefer that you come in and maintain control, but not go into the fire,' he said. 'We will be bringing in people who are trained to deal with well control. Our basic training will be to show you a wellhead and valves so you know what value to shut to more or less shut the well down.'

Dave Glumac, one of the property owners with a well currently on his land, offered positive feedback about his experience.

'People need to realize that they`ve been drilling gas wells in Pennsylvania for over 100 years in this state, so the potential for fire and hazards have been with us since before we were born,' he said. 'The acceleration of the drilling has just made us more aware of it.'

Resident Rich Bryce expressed concern over the issue of fracking and how it differs in shallow drilled wells.

Walters said the difference is the volume.

'We`re using a fraction of the volume they`re using to treat a Marcellus well,' he explained. 'We`re looking maybe 100,000 gallons of water for a frack job, and they`re looking at up to 10 million gallons of water for a frack job. Our fracks will last for maybe four hours total from start to finish and theirs can last for a week, depending on what they`re doing.'

There has only been one problem of significance with the two wells currently operating in White Oak.

Linda Wetzler, whose property is adjacent to Glumac`s, said, 'The second day they were drilling our water well blew up and they have provided us with water every week. They have been very honest and up front with us.

'It is noisy and we have lost some privacy and it doesn`t look like it did before, but they`re not done yet. The DEP was there in presence many times. They have been very good to work with. I think that we need to be educated on this. There are a few restrictions that should be in the contract, but I think these things have to be considered. I truly can`t say enough about these gentlemen and how they`ve taken care of everything.'

Council hopes to finalize a lease with Penneco by mid- to late-summer.

Residents are urged to contact the borough manager`s office with questions.

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