who is Michael Krancer?

[franklin]

trout17 wrote:
I watched PCN cable the other night and saw Mr. Krancer being interviewed by members of the House. He refuted the idea that Mr. Walker, the new CDEC director had as much authority as the media said and that Corbetts remarks were misstated Walker is the new appointee that, according to Corbett, has the authority to over ride any other cabinet Director and allow permits for gas and coal despite objections if it meant jobs would be created. Mr. Krancer said that isn't what would happen. He also said that the NY Times article lacked truth and the facts weren't correct. Some of the facts in the article were from the PA DEP. Representative Pyle from Indiana and Armstrong Countys asked Mr. Krancer if he had enough staff and money in this new budget to meet his needs. Krancer said he did. Pyle said that was gratifying to hear as "every other agency in the last three days has said, NO, we don't have enough resources to do our job." I frankly find Mr. Krancer's statement terrifying. We didn't have enough inspectors last year despite an increase in numbers, now we have a 20% drop in funding while the permitting process has been simplified. I am afraid we are in for a long, bad stretch with these guys at the switch.

Pyle also remarked that TheArmy Corps of Engineers has been a road block to drilling because they are monitoring water usage in the Allegheny River. When have you ever heard the Corps a friend of environment?

Jim Kearney

Jim, what is the basis for your comment on the number of inspectors required to inspect drilling sites? I'm interested in obtaining any analysis recommending the inspection efforts needed to inspect the gas drilling industry.

 

[reds]

848 wells permitted in Bradford County for 2010.
581 wells permitted in Tioga county for 2010.

One well inspector for each county and the Tioga County inspector is responsible for Potter County, as well. Does that seem like a sufficient number of inspectors for the number of wells?

 

[franklin]

reds wrote:
848 wells permitted in Bradford County for 2010.
581 wells permitted in Tioga county for 2010.

One well inspector for each county and the Tioga County inspector is responsible for Potter County, as well. Does that seem like a sufficient number of inspectors for the number of wells?

Probably not but I would like to know if the inspectors are supplemented by other federal or state departments or staff within the DEP. Also how much work is involved inspecting an individual site. How often are they visited, how long, etc. Having built up department budgets in my own business I would like to make an inspection operating budget estimate that I could apply to my thoughts on gas taxes.

As far as Krancer's testimony, he is just coming on board. How much input has he had into the budget process? Did he fully engage in the job as soon as appointed or did he transition in over few weeks? I'd be more interested in his answers to critical questions after he is on the job six months.

 

[Gone4Day]

reds wrote:
848 wells permitted in Bradford County for 2010.
581 wells permitted in Tioga county for 2010.

One well inspector for each county and the Tioga County inspector is responsible for Potter County, as well. Does that seem like a sufficient number of inspectors for the number of wells?

The number of permits issued can be a bit misleading when we're talking about horizontal wells. Even though there is no rig on a property, they still need a drilling permit to drill under it. So a single MS well pad may need a dozen or more permits, depending on how subdivided the surrounding land is.

There are about 95 active MS rigs in PA right now. That's been fairly constant since Nov. 2010, plus or minus 5% for moves and maintenance. DEP has about 320 inspectors, so technically, they could have an inspector on site 24/7 at each pad without paying overtime if they wanted. They'd just be sitting around most of the time though.

 

[reds]

Gone4day, where did you come up with 320 well inspectors number? It sounds high. Also there were over 6000 wells permitted state wide last year, around half of which were Marcellus, the other 3000+ are inspected, as well.
http://www.dep.state.pa.us/dep/deputate/minres/oilgas/2010%20Year%20End%20Report%20as%20of%2012-31-2010.pdf

http://247wallst.com/2011/02/03/many-pa-gas-wells-go-unreported-for-months/

The article posted here claims about 65 inspectors for the DEP, I found conflicting reports on the actual number, but I was under the impression it was actually just short of 200. I don't know if that includes water quality specialists, who inspect the E&S provisions on gas work and make sure that there is proper containment should there be a failure on site.

As for how inspections are done there is more to it than simply sitting there while the horizontal drill rig is on site. Many companies drill top holes using traditional rigs to save money, this needs to be inspected, then that is moved and the horizontal rig is moved in and additional inspections are done. That rig is then moved and the frac job is done involving more inspections and finally there is post completion inspections. Additionally, if there are violations there are follow up meetings with the companies so that these can be argued, believe it or not gas companies rarely just accept NOV's. Not to mention for accountability reasons there is time consuming paperwork

 

[bikerfish]

yep, I'd imagine the inspection process is similar to inspections in my trade, inspection after every step or so.
with the growing number of wells, I think we are going to need a proportional increase in inspectors. gotta keep these companies on the straight and narrow. it's our future that is at stake.

 

[Gone4Day]

reds,

I was being a bit facetious about DEP putting all their field inspectors on MS drilling. They obviously have much more to do then just watch MS rigs. There were 1,185 MS wells completed in 2010, all the paperwork is in now, so that's the official number. Permits issued does not equal wells drilled. All drilling in PA is MS drilling, including the dozen or so directional/vertical rigs that are barely hanging on.

There was an article, posted on this site I believe, from last year that DEP was adding 40 new inspectors, which would bring the total to 321. Having done SH&E inspections myself and been subject to them, there is far more then just drilling that needs monitored. There are OSHA, EPA, DEP, DNRC, PENNDOT and even fire marshal regulations that must be adhered to. It probably takes 6 months of training before a new inspector can be certified. My point is DEP is doing a pretty good job right now, Before we start adding 100s more, lets be sure there is adequate justification for them. We don't want to hire and train a whole bunch of new inspectors and then have to lay them off in a year or two because we overshot our manpower needs. That's bad business practice, even for government agencies.

The drilling rate in PA is basically flat right now. Will it increase in the foreseeable future? I can't answer that but if you can, you could make a bundle on Wall Street.

This just in:
http://www.nytimes.com/2011/03/22/business/global/22gas.html?src=busln

As Niels Bohr said, predictions are very difficult, especially about the future.

 

[reds]

Gone, check your PM.

 

[franklin]

Gone4Day wrote:
reds,

I was being a bit facetious about DEP putting all their field inspectors on MS drilling. They obviously have much more to do then just watch MS rigs. There were 1,185 MS wells completed in 2010, all the paperwork is in now, so that's the official number. Permits issued does not equal wells drilled. All drilling in PA is MS drilling, including the dozen or so directional/vertical rigs that are barely hanging on.

There was an article, posted on this site I believe, from last year that DEP was adding 40 new inspectors, which would bring the total to 321. Having done SH&E inspections myself and been subject to them, there is far more then just drilling that needs monitored. There are OSHA, EPA, DEP, DNRC, PENNDOT and even fire marshal regulations that must be adhered to. It probably takes 6 months of training before a new inspector can be certified. My point is DEP is doing a pretty good job right now, Before we start adding 100s more, lets be sure there is adequate justification for them. We don't want to hire and train a whole bunch of new inspectors and then have to lay them off in a year or two because we overshot our manpower needs. That's bad business practice, even for government agencies.

The drilling rate in PA is basically flat right now. Will it increase in the foreseeable future? I can't answer that but if you can, you could make a bundle on Wall Street.

This just in:
http://www.nytimes.com/2011/03/22/business/global/22gas.html?src=busln

As Niels Bohr said, predictions are very difficult, especially about the future.

What type of an educational background is required of inspectors?

 

[pcray1231]

All drilling in PA is MS drilling

This is very incorrect.

 

[Gone4Day]

franklin wrote:
What type of an educational background is required of inspectors?

These days you can get a degree in SH&E, but an environmental science degree would also be good. A Bachelor of science with some applicable experience or an associate degree and significant applicable experience would also be suitable.

 

[Gone4Day]

pcray1231 wrote:

All drilling in PA is MS drilling

This is very incorrect.

Maybe I should rephrase that as all PA gas drilling is in shale right now.

In 2010 there were still shallow gas wells being drilled, a couple oil wells and even one geothermal well. But they've fallen off a cliff since. I'll try to find the reference, but of the 8 remaining vertical rigs and 5 directional, all are now contracted for shale drilling, either Utica or Marcellus. Increased costs for everything from rig contracts to fracking services combined with low gas prices have made shallow drilling much less attractive.

 

[pcray1231]

I honestly don't know about the most recent numbers. But I think you vastly underestimate the number of rigs in PA.

For shallow gas, there are roughly 100,000 working wells in PA and over 400,000 total wells (many are past the production stage and plugged). They've generally had been completing 4000 or so new wells per year for some time, but during the recent gas boom, that has increased to closer to 8000 completed wells per year. With the fall in prices, and the attractiveness of Marcellus which can be a more cost effective use for the rigs, I have no doubt that number is falling substantially, as you say.

But I really have trouble believing its zero, especially since a new pad was just cleared near my dad's place. I also have trouble believing that there are only 8 vertical rigs and 5 directional rigs left in the state, as well more than that are underway right now.

These sound more like county numbers.

 

[Gone4Day]

Come on Pat, I thought you of all people would understand what an active rig is. That means its drilling, right now, as I type. Check out http://gis.bakerhughesdirect.com/Reports/ Put in the state and county if you like and click view report. We both know from the time they start installing a pad until the time its reclaimed could be 2-3 years. Probably less then 20% of the time is there actually a rig on that pad, actively drilling. So back of the envelope calculation suggest there are 500 or so pads in the state in the process of being constructed, drilled, fracked or reclaimed.

I'm concerned about the rate of drilling, What is the rate of water usage? What is the rate of waste production?  If you use the number of producing wells or the number of active drill pads you will grossly overstate the actual numbers and scare the crap out of people. That's what the media and unfortunately a lot of environmental groups do. If we are going to get a handle on this, we need to know accurately what the water usage really is and how much waste is actually produced. Exaggerating things 5 or 10 fold does not help.

I'm honestly glad to see conventional vertical wells become obsolete. They are higher risk and do more environmental damage then horizontal drilling ever will. I wish it would all go away but we know that's not going to happen. So rather then cry the sky is falling, let's confront the issue with actual data and facts. Only then can we manage it in a responsible manner to mitigate the detrimental effects.

As of last week there were 1720 active rigs in the US, 875 gas, 839 oil and 6 geothermal. They are 986 horizontal, 231 directional and 503 vertical rigs. A new report comes out every Friday.

 

[pcray1231]

Gone4Day,

I do understand what an active rig is. I'm saying your website is either bunk, or not measuring what we think it is. It says that last year there were 6 vertical rigs in the state. Now, I don't know how many NEW shallow wells went in last year, but I know in the relatively recent past we were nearing 8000 NEW shallow wells PER YEAR. As a drilling rig will be on a single pad for at least a week, assuming no downtime, that'd say there were at the very least 150 vertical rigs at that time. Again, I don't know last year's numbers, but it was an active year, it certainly didn't decrease to 6.

I can also say I personally know the location of 6 shallow gas wells that are slated to be drilled this coming spring. We used to hunt there, and they cleared the pads last fall. Talked with them on a scouting trip, and the workers said they'd be drilled this spring, so needless to say that area is off limits for hunting for a little while. I'd be very surprised if they don't show up. Sure, one rig will probably handle em all, but thats 1, which is more than the zero you claimed would be drilling shallow wells.

You're back of the envelope calculation that said 500 wells being cleared, drilled, fracked, etc. Thats way, way low. That whole process may take a year for a shallow well, 3 or more for a Marcellus pad (well, a single Marcellus pad can have up to 12 wells). So to reach numbers in the thousands of wells per year, there's gotta be more than 500.

 

[Gone4Day]

Its not really "my" site Pat, its Baker Hughes, the industry standard. Their numbers are used by everybody from the media to service companies and regulators. If they are in error, let's prove it. With an army of anglers about to hit the streams, surely we can find some active rigs not listed. If they are as far off the mark as you suggest, it should be easy. I'd love to prove them wrong but I'll need more then 'I know of 6 shallow wells that are slated to be drilled'. Get me some GPS coordinates and the operator of active rigs not listed and I'll concede your point. Otherwise your just blowing smoke.

If you would have read a little more closely, I said pads not wells. As you mentioned, now they are putting 6-12 wells on each pad. Hence, fewer pads. And of course, last years data shows, a horizontal rig does not sit on the same spot for 3 years, 9-12 months maybe, 18 at most, and then its off to the next pad.

Its not like the old days when they drilled a reservoir, slapping in a well every 500 yards or less, now they are drilling the seal, getting 1000's of feet of 'pay' instead of a few hundred per well. Back in 2008 there were only a few horizontal rigs in the state and over 4600 wells were completed. Recessions don't help and only about 2500 were completed in 2009. By 2010 nearly all the vertical & directional rigs had been replaced with newer, horizontal rigs. Less then 300 wells were completed by conventional rigs while nearly 1200 wells were completed by horizontal rigs.

Since all the remaining conventional rigs seem to be in the most active devonian shale regions, my guess is they are either drilling pilot holes for horizontal rigs or trying to lock in leases before they expire. But in one way you are correct. They completed 1200 horizontal wells last year, but with 5-10X as much 'pay' per well, its the equivalent of drilling 8000 conventional ones.

PA gained 2 horizontal rigs this week, lost one vertical but gained a new thermal. What the heck is a thermal well and what's it doing in Westmoreland county?

http://thoughtcatalog.com/2011/how-to-have-a-rational-discussion/

 

[pcray1231]

You are correct on Marcellus wells, more wells per pad, spaced more widely with more pay per well, etc.

But they're still slapping shallow wells every 500 yards or less. And those are still 1 well per pad, vertical wells. It's not that Marcellus replaced the shallow wells, it's in addition to. See pictures on the first page of this thread, specially the one by my dad's place, which shows 4 new well pads, all less than 3 years old, and from 500-1000 feet apart.

I don't have time today. But tomorrow I'll pm you approximate lat/long for the 6 shallow pads which are to be drilled this spring.

 

[Gone4Day]

Just active rigs please. I've got a shallow gas pad only a few hundred yards from my property line at camp. They were suppose to start drilling last fall, but so far no rig has shown up. The fact that there are 6 new pads just supports my point, the pads are ready but they're just not drilling them.

Which brings up another issue, just how long can they leave a pad in a state of limbo?

 

[reds]

http://www.dep.state.pa.us/dep/deputate/minres/oilgas/2010%20Wells%20Drilled%20by%20County.htm

this link is the most up to date from DEP on wells drilled in 2010. About the same amount of Marcellus wells as Non Marcellus. I know there are some Utica wells being drilled, but very few, I would assume some Oriskanny, are the rest in the Upper Devonian? Also, what type of rigs are drilling the non Marcellus wells that are not Utica?

 

[pcray1231]

Gone4Day,

I don't know of any active rigs at the moment. I doubt this is true of Marcellus, but on shallow gas they often don't drill during winter. I know of a few that were drilled last fall, and a few more to be drilled this spring, supposedly.

Reds, thanks. Those numbers look more realistic. The shallow gas is considerably lower than it was 3-4 years ago, but its certainly believable with Marcellus taking over and many of the rigs being moved over to help with that effort.

So, roughly 1400 shallow wells last year, I highly doubt that was done by 6 rigs as Gone4day's link suggested! That'd be 233 wells per year, per rig! The number of directional and horizontal rigs in his link are also far too low. As its an investor site, I wonder if the numbers aren't the number of rigs a certain investment is associated with, rather than attempting to list the total numbers...