Leading Marcellus Geologist Advocates Forced Pooling of Gas

- Leading Marcellus Geologist Advocates Forced Pooling of Gas

Monday, June 20, 2011
The Patriot-News, Harrisburg, Pa.
by Donald Gilliland

Opponents of forced pooling -- and that would include Gov. Tom Corbett -- should watch the movie "There Will Be Blood," according to the state's leading Marcellus Shale geologist.

Terry Engelder explained that the concept -- whereby drillers are allowed to remove natural gas from beneath properties of owners who refuse to lease their mineral rights -- originated with Upton Sinclair's expose of the oil industry, "Oil!", which forms the basis of the 2007 Academy Award-winning film.

Speaking to the governor's Marcellus Shale Advisory Commission on Friday, Engelder acknowledged up front that the concept bumps squarely up against traditional property rights.

But the benefits, he said, have been determined time and again to outweigh the risk of infringing on those rights.

Pooling is a common feature in the laws of nearly all the oil and gas states, including Pennsylvania.

Yes, Pennsylvania has a forced pooling statute -- 50 years old -- which makes it illegal to waste gas, said Engelder. But the law only applies to gas below the Onondaga Limestone. The Marcellus -- and most of the other gas-rich shale formations in the state -- are all above it.

At the moment, Engelder said, the state has the worst of all worlds.

While drillers cannot lay pipe under a property that has not leased its mineral rights, they can drill immediately adjacent to it and legally fracture the shale under that property and drain gas from it -- without compensating the owner.

That's the rule of capture.

What's more, hold-out owners can prevent drilling into areas where gas has been leased, thereby denying those lease holders the royalties that could be generated from their property.

Engelder showed an example from Lycoming County where he estimated 5 billion cubic feet of gas and $20 million in revenue had been stranded by one hold-out landowner.

"This is not what the oil and gas conservation law of 1961 intended as an outcome," he said.

Engelder said pooling "maximizes the economic benefit, minimizes wasteful stranded gas, minimizes the environmental footprint and provides just and fair compensation" to all.

Lt. Gov. Jim Cawley did not comment, but he did announce that the Commission members have submitted more than 200 policy recommendations, which are now being reviewed by the working groups in preparation for the Commission's final report to the governor next month.

Copyright (c) 2011, The Patriot-News, Harrisburg, Pa.

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ProSep Strengthens Services with Leading International Team

- ProSep Strengthens Services with Leading International Team

Thursday, June 02, 2011
ProSep Inc.

ProSep announced the assembly of its leading international process engineering and business development teams, and the nomination of Gary Blizzard, M.B.A., as Executive Vice President of Process Engineering and Product Development.

During the last 6 months, ProSep hired a large number of internationally recognized process engineers, scientists, and business development managers. With a broader offering, access to additional customer relationships, agents, and business partners, ProSep is now one of the industry's top technology-focused provider.

"The addition of these leading experts to the ProSep team marks an important milestone in our growth plan. Collectively, these additional professional engineers played a key role in the success of our industry's most renowned process equipment supplier," said Jacques L. Drouin. "By doubling the size of our engineering capacity and business development team, we are reaching critical mass and this should allow us to significantly increase projected revenues and reach profitability."

"To lead our new process engineering team and ensure we unlock significant value residing in our proprietary technologies, we nominated Gary Blizzard, who brings an impeccable track record in international business development and a strong background in the field of innovative process engineering," said Jacques L. Drouin, President and CEO.

Gary Blizzard brings over 25 years of diverse experience within multiple segments of the energy industry in the areas of international business development, marketing, engineering, and project management. Prior to joining ProSep, Gary was Business Development Director at Alcoa Oil & Gas and previously Vice President Marketing & Business Development at NATCO Group where he provided leadership for growing the specialized gas treating technology business. He holds a Bachelor of Science in Chemical Engineering from Texas A&M University and a Master of Business Administration from The University of Texas at Austin.

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Industry Leaders Warn of Skill Shortage in O&G

Industry Leaders Warn of Skill Shortage in O&G

Friday, April 01, 2011

GL Noble Denton

A group of European oil and gas industry leaders have agreed that 2011 will see a positive upturn in investment into the sector, but warn that they still face significant challenges if they are to take advantage of the strong growth opportunities ahead of them.

The comments were made at an exclusive round table event organized by GL Noble Denton, the leading independent technical adviser to the oil and gas industry, to discuss key findings from a recent report on the future of the sector from the Economist Intelligence Unit. The event, which was held in London, was attended by more than 25 of Europe's oil and gas industry leaders.

The report, which was sponsored by GL Noble Denton, comprises the views of nearly 200 board-level executives and policymakers on a range crucial industry affairs, from new investment opportunities to future regulatory challenges and the rise of a new breed of 'internationalized' national oil companies over the next decade.
Each of the participants at the round table discussion - including representatives from well-known oil companies, energy distribution
corporations, technical suppliers and industry associations - offered strong opinion on where the industry is heading and the challenges that await.
Key findings from the discussion were:

• More needs to be done to develop the next generation of oil and gas professionals. Faced with a period of investment and expansion, the sector will come against challenges as a result of its failure to attract, recruit and retain highly talented people. The industry needs to work more closely together to address the skills problem, rather than trying to pursue each others' technical staff. With activity set to rise in the sector, companies need to focus on introducing and developing technical resource now, ensuring that the right talent is in place for the future.
• Increased regulation post Macondo should be "non prescriptive." While the majority of attendees agreed that government regulatory intervention in North America may leave the small players struggling to survive, none thought that the industry should be left to self-regulate; indeed the majority felt that the US should follow the non-prescriptive approach taken by European and other governments following the Piper Alpha disaster in 1988.
• In these instances, governments restructured their approach to offshore oil industry regulation completely by separating the regulator from the commercial operators, asking them to identify and reduce risks to "as low as reasonably practicable" and justify their actions to the an independent regulatory regime.
• Natural gas prices set to rise. Respondents to the Economist Intelligence Unit's research on the outlook for the sector agreed that the emergence of unconventional natural gas sources has caused gas to gain widespread credibility as a low-carbon "transition fuel", especially for electricity generation. Participants in the round-table discussions generally agreed that the industry will experience an increase of at least 10% in gas prices over the coming years, fuelled by the increasing demand for energy in Asia. While some attendees felt that unconventional natural gas' position as an industry "game changer" in the Economist Intelligence Unit report may be overstated, others agreed strongly with the study that gas will play a key role in the transition to greater dependence on renewable energy sources.
• Cautious optimism for the future. In the Economist Intelligence Unit's 2011 report on the outlook for the industry, executives expect to see an upturn in investment into the sector, despite fears of tougher regulation and a more costly operating environment. While this feeling of cautious optimism was matched at the round-table discussions in London this month, it was also clear that the industry still has hurdles to overcome if it is to take big steps forward.

"It is clear from the these round-table discussions that the oil and gas industry is focused on its future challenges and understands the need to find more innovative solutions to operating more efficiently and sustainably," said John Wishart, President of GL Noble Denton, who hosted the event.

"But in the face of uncertainty about the impact of post-Macondo regulation, anticipation over the true role of natural gas in future
energy economics and ambiguity over resourcing future projects, the oil and gas industry finds itself holding its breath over how these tough challenges will come to pass."