American Oil and Gas Reporter - May 2018 - 94

ConventionCoverage: Pennsylvania Independent Oil & Gas Association
scribed. "Everyone in this room has experienced this; companies or license plates
you don't expect are seen in Northeast
Pennsylvania. It's going to be a challenge
for everyone to continue operating the
way they are used to operating, but through
perseverance and hard work, you guys
will come out on the right side of things."
Ender said the Appalachian Basin would
remain a world-class natural gas producer,
although he expressed uncertainty about
whether the region's aggressive growth
pattern would continue. Infrastructure remained the main challenge to Pennsylvania
production increases, he noted.
"We have watched demand build out,
and we do believe drilling activity in Appalachia will reach a peak over the next
year," Ender indicated to PIOGA. "That
is not to say things are going to decline,
but we think we are at a point where the
efficiency of drilling in the areas that are
being drilled-the actual number of rigs,
the wells being drilled each month-will
reach a peak and plateau during the next
five years."
The basin's drilling focus has shifted
from Appalachia's northeast producing
areas to the southwest corner, driven in
large part by operators chasing higher oil
and natural gas liquids prices, Ender said.
Once major infrastructure is in place, he
projected 20 percent growth across the
basin, with Appalachian output hitting
31 Bcf/d in five years.
"The Permian Basin literally is 1,500
miles away, but it is your biggest competitor," Ender said. "The reason is associated gas. Permian producers don't care
about that gas; they want to get the oil out
of the ground. We believe we could see
cases where Permian producers would be
just as happy to pay to get the gas taken
away as they would to get a dollar for it."
Oklahoma's SCOOP and STACK plays,
and the Haynesville formation in northern
Louisiana all have potential for growth,
but less than their Appalachian and Permian
counterparts, Ender assessed. "Appalachia
has the most prolific natural gas resource
in the United States," he concluded. "Going
forward, to see where prices are going,
we have to pay special close attention to
the infrastructure development timeline,
demand development on the Gulf Coast,
as well as exports to Mexico."
Underground Injections
Despite the natural gas industry's rapid
growth into a world-class production
giant, Pennsylvania only has eight oper94 THE AMERICAN OIL & GAS REPORTER

ating disposal wells for produced fluids,
Dave Rectenwald, an environmental scientist with the U.S. Environmental Protection Agency, told PIOGA. He noted
the commonwealth's disposal wells handled 1 million barrels in 2012; that same
year, 2 million barrels of Pennsylvania
fluids were sent to disposal facilities in
West Virginia and Ohio.
Pennsylvania has such a small number
of disposal wells because historically operators discharged produced fluids to waterways, Rectenwald said. The industry
conducted large waterflood operations
using freshwater that encompassed as
many as 4,000 wells in western parts of
the commonwealth since 1985. Revised
federal regulations in the 1990s severely
limited those discharges into steams, and
operators shifted to produced water in
their waterfloods or sending fluids to
municipal treatment plants, he said.

In 2011, Pennsylvania asked all Marcellus shale operators to voluntarily stop
sending water to those treatment facilities,
and five years later EPA fully banned
such unconventional fluid disposal, Rectenwald said. The commonwealth's operators
turned to neighboring states, such as Ohio
and its 220 disposal wells, to handle the
produced fluids.
From 2007 to 2012, Pennsylvania increased natural gas output 1,300 percent
and oil production 280 percent, while fluid
production jumped 870 percent, Rectenwald
calculated. In 2012, the commonwealth's
wells produced 35 million barrels of fluids,
and operators reused most of that volume
in refracturing activities, he noted.
"When you compare Pennsylvania with
Oklahoma, Ohio and West Virginia in 2015,
Pennsylvania is pretty much the only state
where the majority of produced fluids
doesn't go into disposal wells," he said. r

Economic Development Group
Plans For A Better Gas Future
PITTSBURGH-Western Pennsylvania
needs to develop a wide-ranging economic
agenda to properly develop its natural
gas resources, Kevin Acklin, vice president
and chief legal officer for Peoples Natural
Gas Co., told the Pennsylvania Independent Oil & Gas Association.
Kicking off PIOGA's 2018 spring
meeting, held March 21, Acklin described
how the economic development group
Forge the Future was working to tap the
benefits of the third largest reserves of
natural gas on the planet
"Technology has allowed for new
methods of extracting natural gas; energy
is a driver of our local economy," he
said. "The real challenge for us is capturing
that full value for the people of the commonwealth. Forge the Future is about
more than just profits. It is a triple bottom-line approach: it is about investing
in profits, in people and recognizing that
moving toward production of natural gas
actually does help the planet."
Forge the Future is a three-step initiative, Acklin described. A 2017 business
study led to a partnership between the
Pennsylvania Chamber of Business and
Industry and business leaders, which will
move to an action plan to guide stakeholders in taking advantage of the opportunity of the commonwealth's natural

gas resources. He added Forge the Future
embraced three strategies to fully realize
the value of natural gas:
* Maximizing in-state demand for
power and heating, with a goal of building
6,000 megawatts of electricity generation,
converting more than 500,000 homes
from fuel oil to gas, and installing 2,200
megawatts of distributed heat and power
to businesses, hospitals and universities.
* Building downstream commercial
applications in three key clusters: petrochemical; advanced technology based on
materials such as concrete and glass, and
robotics, artificial intelligence and additive
manufacturing; and
* Expediting key pipelines to increase
U.S. gas exports to 3.6 trillion cubic feet
by 2025.
He said Forge the Future wanted to
move beyond maximizing pricing to support the economics of extraction.
"If we just produce and export, then
we are exporting our wealth," he asserted.
"The challenge is, how do we capture
that value to provide the other impacts to
the local economy and regional economy?
If we invest in infrastructure and policies
that pursue the conversion of this economic
opportunity, the government is going to
reap a lot more benefits if jobs are created
and gross domestic product is growing

American Oil and Gas Reporter - May 2018

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