Rendell willing to negotiate a gas 'pooling' law

By MARC LEVY

Gov. Ed Rendell is insisting on certain environmental protections and landowner compensation requirements before he signing any bill that forces Pennsylvania landowners to sell their below-ground natural gas rights to a drilling company.

Rendell's top aides said this week that discussions on a measure being sought by the booming natural gas industry are in the early stages, although the pace of talks is expected to pick up in the coming weeks before the Legislature returns to Harrisburg in September.

The so-called pooling law is a top priority for the gas industry, which is pouring billions of dollars into the Marcellus Shale -- a massive rock formation underlying New York, Pennsylvania, Ohio and West Virginia -- in a modern-day gas rush.

See entire article here:

http://www.businessweek.com/ap/financialnews/D9HHHGCO0.htm

US GAS: Futures End Near Flat

By Edward Welsch

Natural-gas futures settled near unchanged Wednesday ahead of the release of natural-gas storage data expected to show a smaller-than-normal build in gas supplies, and as storm activity in the Gulf of Mexico remained unthreatening to U.S. energy infrastructure.

The National Hurricane Center reported that a low-pressure area in the Gulf of Mexico formed into a tropical storm overnight, but is unlikely to strengthen enough to disrupt energy supplies.

Natural gas for September delivery on the New York Mercantile Exchange settled up 2.7 cents, or 0.6%, at $4.324 a million British thermal units. The front-month contract dipped to a new 10-week low during the day and some longer-dated gas futures ended in negative territory, which traders attributed to concerns over the long-term pace of economic growth that hit other markets Wednesday.

See entire article here:

http://online.wsj.com/article/BT-CO-20100811-712935.html

Calls for 1-year Moratorium On Natural Gas Drilling

By Bob Kalinowsk

JACKSON TWP. - Standing at a reservoir that provides drinking water to 30,000 residents in Luzerne County, state Rep. Phyllis Mundy on Monday called for a one-year moratorium on new natural gas drilling permits in Pennsylvania.

"We are allowing this industry to move ahead too fast," Mundy said from the Huntsville Reservoir in front of approximately 75 concerned citizens. "We need to take a step back and give ourselves the necessary time to do this right. The risks of doing it wrong are simply too great and long-lasting."

The Kingston Democrat plans to introduce the moratorium proposal later this week in Harrisburg, along with two other bills designed to protect drinking water from contamination due to Marcellus Shale gas drilling.

One bill would prohibit gas companies from drilling within 2,500 feet of a primary source of community drinking water, such as the Huntsville and Ceasetown reservoirs in the Back Mountain and Lake Scranton. The current distance is only 100 feet, Mundy said.

The other bill calls for a resolution to urge U.S. Congress to repeal a provision in the federal Safe Drinking Water Act, known as the "Halliburton loophole," that exempts oil and gas drilling industries from restrictions on hydraulic fracturing near drinking water sources.

The Huntsville Reservoir is the drinking water source for 30,000 people in Luzerne County and the nearby Ceasetown reservoir serves 70,000 local residents. Much of the land surrounding the reservoirs has already been leased to gas drilling companies, Mundy said.

"The cost and the effect on human health if either or both of these reservoirs were to become contaminated … is unimaginable," Mundy said.

More than 3,100 gas drilling permits have already been issued by the state Department of Environmental Protection, including four in Luzerne County. Mundy conceded her proposed legislation would not affect permits already granted. She thinks a moratorium will allow state officials to monitor the industry before it expands further and "would allow us to recover ground lost while the industry has gathered momentum."

"The current economic climate makes us very vulnerable to promises of easy money and good jobs. But we must ask ourselves - will this economic boon come at the expense of our infrastructure, our quality of life, our water supply, our safety, and our health?" Mundy said.

State Rep. Eddie Day Pashinski, D-Wilkes-Barre, attended the press conference and said he will support Mundy's bills.

A spokesman for House Majority Leader Todd Eachus, D-Butler Township, said Eachus wanted to review the proposed legislation before deciding on whether to support a moratorium.

"Rep. Eachus supports Rep. Mundy's passion and commitment to protecting the public and environment from the dangers of natural gas drilling. He stands with her in making sure they are held accountable," said Eachus spokesman Bill Thomas.

Dr. Tom Jiunta, a member of Gas Drilling Awareness Coalition, said many legislators openly admit they have concerns about the current regulation of the gas industry, but don't do anything to cease the expansion.

"If you say you are concerned as a legislator, you can only mean that if you stop it first," Jiunta said.

West Pittston Mayor Bill Goldsworthy, Mundy's Republican opponent in November's election, said Mundy should have proposed something before it came to such a critical point. At this point, he is in favor of the moratorium, he said.

"She has been there for 20 years. This should have all been done. All the rules and regulations should have been in place before these companies started drilling," Goldsworthy said. "It's almost like a football game where you say go ahead and start the game and we'll give you the rules after the first quarter. It's a shame it got to this point."

State Rep. Karen Boback, R-Harveys Lake, who is also planning to introduce legislation related to gas drilling restrictions, released a prepared statement Monday afternoon.

"I respect the effort to defend the environment, and I understand the urge to allow our laws and regulations to catch up with the industry," Boback said. "I am proud to say that as legislators we are working tirelessly and we all have the same goal - protecting the lives and health of the people we represent and ensuring we have laws in place to guard our natural resources."

Oil Spill Update

By Saad Asad

It has now been a little over two months since the BP oil rig explosion took place. While early optimistic estimates predicted the cleanup could end in late May, it is now apparent that the spill is of much greater magnitude than originally thought. To get a better perspective of how huge this oil spill is, check out this visualization. The Boston Globe, as always, provides fantastic pictures to show the devastation it is wreaking on the animals of the Gulf.

President Barack Obama visited the Gulf Coast again this Friday to chastise BP for paying billions out in dividends and advertising to improve the public image while those affected by the oil spill were having difficulty receiving their claims. He also declared a moratorium on offshore deep oil drilling until a commission had found a way to safely drill this deep. Residents and politicians have criticized this fearing that the moratorium will further hurt the Gulf economy. Currently, BP is trying to slow the release of oil in to the Gulf. Michael Cooper of the NY Times writes:

Adm. Thad W. Allen of the Coast Guard, who is commanding the federal response to the disaster, said earlier in the day that some oil had been collected in a cap that was placed over the leaking well and that it was beginning to be funneled up to a ship on the surface. But he noted that a great deal of oil was still escaping, by design, through vents in the cap. The vents were intended to let some oil out in order to keep cold Gulf water from rushing in and forming icy hydrates that could block the flow of captured oil to the surface.

Until those vents are closed, it will not be clear whether the cap is seated tightly enough on the cut end of the well’s riser pipe to prevent large amounts of oil from continuing to pour into the Gulf of Mexico, Admiral Allen said. He said that current plans call for closing those vents on Friday.

He said that a rough estimate of the rate at which leaking oil was being captured by the cap was 1,000 barrels a day, a small fraction of the estimated 12,000 to 19,000 barrels of oil a day that is gushing into the Gulf. But he said that as the vents on the cap are progressively closed, more oil should be captured, as long as the seal continues to hold.

Al Jazeera reports the scope of the disaster:

So far more than 200km of Louisiana coast have been contaminated, triggering long-term fears for the region’s already vulnerable coastal wetlands and native wildlife, including lucrative fishing grounds.

Earlier scientists from the University of Miami released a study showing the oil slick’s surface area had expanded to cover 24,435km sq of the Gulf – triple the size of satellite imagery from May 1.

To ultimately stop the oil spill from further gushing in to the Gulf, BP will be drilling two relief wells towards the site of the current well. Then, the relief wells will be pumped with mud and cement to seal up the original well. Unlike previous measures by BP, experts are certain the relief wells will succeed because engineers are comfortable drilling wells like this.

The BBC reports that BP will also pay for the construction of sand barriers off the coast of Louisiana to prevent the oil from harming the state’s vulnerable wetlands.

AG says state should reject ComEd's $500M offer

Says consumers will pay higher rates under the plan

May 5, 2010

BY DAVE McKINNEY Springfield Bureau Chief

SPRINGFIELD — Attorney General Lisa Madigan today came out against Commonwealth Edison’s $500 million offer to the state in exchange for allowing the utility to lock in higher electricity rates and receive a guaranteed profit of 10 percent.

“It is my job to protect utility customers from excessive rates.  I will not support any proposal that forces ratepayers to pay more than they should for electricity,” Madigan said in a statement released by her office.

“This is just another effort to lock in unjustified profits.  I strongly oppose allowing ComEd to use the state’s financial crisis to try to increase their profits by asking ratepayers to pick up the tab,” the attorney general said.

One Wall Street analyst who spoke with the Sun-Times believes ComEd would derive a roughly $4 billion windfall if the state were to accept its offer of upfront cash in exchange for locking in above-market electricity rates during the next four years.

House and Senate Democrats, who are crafting a new budget heavily reliant on borrowing, have not shown a willingness to accept ComEd’s 11th-hour offer as a Friday adjournment deadline creeps closer.

The attorney general’s stance gives key legislative Democrats plenty of cover to simply dismiss the utility’s high-stakes offer as a bad deal for consumers.    

Sen. Donne Trotter (D-Chicago), the Senate Democrats’ top budget negotiator, said there was “not a lot of love” expressed toward the ComEd plan during a morning leadership meeting within his caucus.

And a top aide to House Speaker Michael Madigan (D-Chicago), father of the attorney general, gave no signs of support for ComEd’s plan, which was still being dissected.

“I’ll call it under review for now,” said the speaker’s spokesman, Steve Brown.

Enticing as it seems for a state budget mired in red ink, the Citizens Utility Board is concerned that ComEd’s $500 million offer could lock in higher electricity rates for consumers.

Not all politicans balked at the proposal. Mayor Daley called the utility’s unprecedented offer a “good concept.

“The state needs money. Everybody needs infrastructure money. They have to update all of their electrical lines. And the faster you do this, the better off it is for the environment,’’ the mayor said.

Contributing: Fran Spielman