Frequently Asked Questions about Oil & Gas Development at PIT
The Commonwealth of Pennsylvania oversees shale gas development responsibly under its effective oversight and comprehensive set of laws and regulations and is the recognized global leader when it comes to responsible and objective regulation of this opportunity.
Through ACT 13, which went into effect in 2012, Pennsylvania has enhanced environmental protection standards, which we meet and exceed.
Where will the access roads to the well pads be located and which public roads will be the most heavily traveled?
CONSOL Energy has no plans to construct new public roads on airport property and will be able to rely on existing roads without any disruption to daily airport traffic. The drilling plan does call for construction of several access roads located adjacent to airport property.
Will airport access and parking be affected?
Where is CONSOL Energy getting the water it needs to support its drilling activity?
CONSOL Energy will utilize several water sources to support the PIT drilling project. The company is currently in discussions with local municipalities to serve as sources of fresh water in support of our drilling operations at Pittsburgh International Airport. This will result in significant additional income for the townships and is consistent with our commitment to partner with and reinvest in the communities where we operate.
CONSOL Energy is currently reusing 100 percent of the fracturing fluids and water produced with the natural gas and will do so during the airport project. This reduces our freshwater consumption as well as our need for water trucking, transfer and disposal. We also use water pipelines to lessen the need for tanker trucks often used for water transport.
How will the ACAA use the money CONSOL paid or the lease at the airport? When can we expect to see improvements at the airport?
The initial payment of $50M, which was paid by CONSOL Energy to Allegheny County upon the signing of the lease in March 2013, will be used by the ACAA to lower bond rates that will enable the airport to reduce gate fees in an effort to attract more flights to Pittsburgh International Airport. We are already seeing a positive impact. On July 1, 2013, as a direct result of CONSOL Energy’s initial payment under the ACAA lease agreement, the average cost per enplaned passenger was reduced by 3.8 percent, landing fees were reduced by 12.2 percent, terminal fees were trimmed by 0.3 percent, and ramp fees were slashed by 5.2 percent. Reducing operating costs for airlines serving Pittsburgh International Airport, will position PIT to become more competitive and marketable to major airlines and can contribute to improving air service in Pittsburgh.
These funds will also be used to fund capital projects that area residents will see right away, including road paving at the airport and a major renovation of the central rotunda in the airside terminal, which is underway.
How much money will be generated by oil & gas development at PIT?
CONSOL Energy cannot accurately estimate how much gas and related royalty revenue will be generated by the PIT lease until we begin the completions and production phases of development, which we anticipate will be in 2015. Generally, the total deal could be worth $1 billion.
What we do know is that Act 13 has generated more than $202 million through an impact fee assessed on unconventional wells drilled in 2012. The state also collected more than $204 million last fall, bringing the total to more than $406 million in less than eight months, with the majority of the money going to local communities.
Nearly 240,000 Pennsylvanians are employed directly and indirectly within the oil and gas industry. The $204.2 million in impact fee revenue is also in addition to the over $1.8 billion in corporate, sales and personal income taxes generated by the industry since 2006, including $303 million last year.
CONSOL Energy paid over $15 million dollars in impact fees for its combined 2011 and 2012 drilling activity. That number will grow as development continues and we are confident that the PIT project will be a significant contributor.
Additionally, the abundance of low-cost natural gas has driven electric and natural gas prices down nearly 40 percent since 2008, saving Pennsylvania businesses and consumers over $2 billion annually. After importing 75 percent of its natural gas just five years ago, Pennsylvania has become a net exporter of gas for the first time in more than 100 year.
How many jobs will the airport drilling project create? How can I apply?
CONSOL Energy is adding to its workforce to support the significant projected growth of its Marcellus drilling program, which includes the airport project. The company anticipates hiring 50-75 people in its Gas Division over the next six quarters, with openings primarily for drilling and completions engineers.
The multiplier for each of those hires is 4-6 contractor or support jobs for each full time job, so the total number and variety of job openings increases dramatically.
Qualified candidates interested in applying for CONSOL Energy positions should visit the careers page of the company’s Web site at www.consolenergy.com/careers or CONSOL Energy’s Careers Facebook page.
Where will CONSOL dispose of its wastewater?
CONSOL Energy is committed to safely and responsibly managing hydraulic fracturing fluids, wastewater and produced water.
After the hydraulic fracturing process is complete and the well begins to produce natural gas, a portion of the water used during the fracturing process also flows back to the surface impoundment. In our Marcellus operations, this water is stored temporarily in lined pits until it is reused in future fracturing jobs.
CONSOL Energy is currently reusing 100 percent of the fracturing fluids and water produced with the natural gas. This reduces our freshwater consumption as well as our need for water trucking, transfer and disposal. We also use water pipelines to lessen the need for tanker trucks often used for water transport. Some wastewater will be transported off site and disposed of in UIC wells.
Well sites are designed to protect the land surface, and we take great pride to restore the land to its original contours after drilling.
Will there be UIC wells built on airport property?
How long will it take to drill each pad?
Depends on lateral count on each pad, but typically 4 weeks per well (2 weeks per vertical & 2 weeks per horizontal)
How long will the entire drilling project take?
4 to 4.4 years.
What is the schedule for the drilling pads?
The tentative schedule calls for Pad 2 to be drilled first, followed by pads 1, 4, 6, 3, and 5 in that sequence. We anticipate that drilling will begin on pad 2 in July 2014 with two vertical rigs. Upon the start of horizontal rig operations, the vertical rig count will be reduced to one and both units will run for the duration of the project through 2018.
How many personnel will work on each pad?
This is determined by the phase of the operation, but typically 15 to 20 people are on-site during the drilling and completion phases.
What is the status of Pad #2 near Imperial Point? Was that location changed to make sure there would be no noise impacts?
CONSOL Energy has engaged a consultant to conduct a sound study, which entailed recording sound levels at a range of lengths from several of its current Marcellus locations during various stages of development. This process has been completed and early results indicate that drilling activities from the current pad locations will meet the township ordinance and will not result in a significant impact.
What about noise impacts from Pad #6?
Again, based on the early results of the sound study we just completed and the fact that Route 376 lies between Pad #6 and the nearest housing development, we do not believe there will be any significant impact to residents of that development.
Will there be any traffic issues associated with Pad #3?
We do not anticipate that Pad #3’s location in the vicinity of Hookstown Grade Road will create any traffic issues. However, if that potential arises, we will conduct a traffic study at that location and if the results recommend mitigation, those plans will be implemented.
How will the PIT drilling activity impact property values?
There are no patterns or trends to suggest that natural gas development is impacting, or reducing, property values in and around where these activities occur. Broadly speaking, shale development is providing a huge boost to landowners and communities.
A recent study done by Penn State University provides in depth analysis of changes in market value at the county level and show no real pattern associated with Marcellus shale drilling activity. There is no clear pattern to average changes in market value or assessed value, relative to the level of drilling activity.
What are plans for processing the natural gas?
CONSOL Energy is still in the process of confirming a midstream partner to build and manage a gas processing facility. We anticipate that we will have this finalized during Q3 of this year as it will be incorporated in the final Environmental Assessment.
What about the Upper Devonian wells?
There is future potential to drill Upper Devonian wells and CONSOL Energy is hopeful that this horizon can be built into its operational objectives for the airport project. However, the company will not have clarity on its potential until it begins drilling and can conduct analysis of core testing, which is estimated to occur in Q3 2014. Any development of the Upper Devonian formation would occur on the existing pad locations and utilize the same infrastructure to maintain operational efficiency, minimize environmental impacts, and maximize production potential.
What is your approach to road repair and maintenance?
Consistent with our core values of safety, compliance and continuous improvement, CONSOL Energy enters into Excess Maintenance agreements with every municipality where we operate. Upon approval/agreement between municipalities and CONSOL, these contracts are signed and bind us to the terms of the agreement, which typically require that we, as the operator, repair roads during and upon completion of our operations if they are damaged and become unsafe to residents and motorists. We are proactive and do not wait for unsafe or damaged conditions to occur.
When dealing with the townships (in CPA) we do one of two things: if we use the road as is, we bond it, but more likely than not we draft a one page document requesting permission at our cost to upgrade the road ahead of our operations so we can avoid any downtime.
Why did CONSOL make the decision to not build more roads as part of the project?
CONSOL Energy will be able to rely on existing roads without any disruption to daily airport traffic to operate on the airport property. These existing private airport roads will be upgraded at CONSOL Energy’s sole expense. The drilling plan does call for construction of several access roads located adjacent to airport property.
Which entity is monitoring air emissions at the well site?
The Allegheny County Health Department. CONSOL will periodically provide to them reports on air emissions and computer models upon request. Air emissions will be quite low at the wellhead after construction due to the fact that are few pieces of equipment there – only the wellhead and tank for water, all of the gas and natural gas liquids will be pumped offsite.
Oil & Gas Development Main
Safety & Compliance
PIT Proposed Drill Plan