Tube City Almanac

November 05, 2009

Brewster: City Will 'Aggressively' Market Gas Drilling Rights

Category: News || By

The city will "aggressively" explore opportunities to sell drilling rights beneath public properties in 2010, Mayor James Brewster said Wednesday night.

The only other alternatives to balancing the city's budget, he told council, are cutting services or raising taxes, and "raising taxes is not something I have ever recommended, nor will I."

Instead, Brewster said, "we are going to aggressively and enthusiastically pursue Marcellus shale gas drilling with any city property that makes sense." Projected revenues from natural gas drilling will be included in the 2010 budget, the mayor said. By law, city council must see a draft of that spending plan by Nov. 15.

. . .

"There are huge opportunities here to generate ongoing, perpetual revenue, which we desperately need," Brewster said. "I'm excited about it, because we may have an opportunity to clean up the cash flow problems that we habitually have at the end of each year."

Last year, McKeesport laid off 10 employees and drew $1 million out of its "fund balance," or surplus, to balance the 2009 budget.

Canonsburg-based Dale Property Services has already approached city officials about acquiring the right to drill for natural gas in the so-called Marcellus shale that underlies much of Western Pennsylvania.

Officials have declined comment on what properties might be targeted, but the largest city-owned tract of land is 258-acre* Renziehausen Park --- although drilling could be legally difficult or impossible due to agreements with the donors, including Emilie Renziehausen, who gave McKeesport the money to create the park in the 1930s.

. . .

McKeesport and old Versailles Township --- now White Oak --- were dotted with natural gas wells in 1919. But those shallow surface wells were slow to produce, and the "McKeesport gas boom" went bust after a few months.

New drilling techniques allow gas producers to approach gas pockets horizontally, boring more than a mile underground to reach trapped gas pockets in the so-called "Marcellus shale" 7,000 feet below the surface. Those gas pockets must be "fractured" using high-pressure water.

"The drilling is not intrusive, and it goes anywhere from 5,000 to 8,000 feet deep," Brewster said. "It is absolutely transparent to the public."

Geologists have estimated that several trillion cubic feet of natural gas could be extracted from the Marcellus formation that stretches from western New York through West Virginia.

. . .

Speculators have offered as much as $3,000 per acre for the right to drill for natural gas, plus a 15 percent royalty on any gas sold.

According to a 2009 report by the U.S. Geological Survey, Marcellus shale wells covering an area of 80 acres on the surface produce natural gas at a rate of 4 million cubic feet per day. The USGS estimates that each well will produce 2.5 billion cubic feet of gas per 80 acres of surface area, at a cost to the driller of about $1 per thousand cubic feet of gas.**

Natural gas has been selling for roughly $4 to $5 per thousand cubic feet** since June, according to the U.S. Energy Information Administration.

. . .

Environmentalists have raised questions about whether municipal water-treatment plants --- including McKeesport's --- are properly equipped to treat the contaminated water produced by Marcellus shale gas wells. (See "Gas Drilling Triggers Pollution Onslaught in Mon Valley," Tube City Almanac, Oct. 22.)

According to the USGS, up to 3 million gallons of water are required to fracture each section of Marcellus shale that's penetrated. This water is treated with chemical additives to increase the gas well's production.

The contamination --- including both those chemicals and minerals dislodged from the rock --- must be removed from the water before it's returned to the river.

The state Department of Environmental Protection is allowing municipal sewage treatment plants to process well water. Council President Rege McLaughlin, who chairs the sewage authority's board of directors, said Wednesday the city's plant is daily treating about 80,000 gallons of water from gas well drillers, for which the authority receives a fee.

But municipal sewage treatment plants are not required to remove the salts and minerals, called "total dissolved solids," or TDS, from the water, which are then dumped into the river. These pollutants, though generally not harmful to human health, can clog intake pipes and damage industrial facilities and water-treatment facilities.

. . .

That problem will be apparently mitigated by new state regulations on sewage treatment plants. John Hanger, state secretary of environmental protection, has promised that all facilities will be required to remove TDS by 2011.

"We should not back away, as we did with the cell tower revenue," said Brewster, referring to a plan to build a cell-phone tower in the Seventh Ward, which many residents objected to, citing health concerns and the unsightly nature of the facility. The proposal, tabled in September 2008, cost the city $150,000 in revenue.

"We cannot get scared away on these sorts of things --- we need to get creative," the mayor said.

* --- edited after publication to fix size of Renziehausen Park --- the original figure was out of date.

** Correction, Appended Nov. 10: A reader points out that the units were incorrect on this story. It costs about $1 per thousand cubic feet (abbreviated MCF) to drill in Marcellus shale. Natural gas sells for roughly $4 to $5 per million Btu. One million Btu is roughly, but not exactly, equivalent to one thousand cubic feet of natural gas. (See conversion table at Thank you to our reader for pointing out this error.

Your Comments are Welcome!

Not objecting to the concept at this point, but what other city-owned tracts would be large enough for well-drilling? I tend to agree that we shouldn’t do this in Renzie Park, and not just becuase of the possible legal hurdles. Any vacant school sites that might qualify? Public Works depot?
ebtnut - November 06, 2009

To comment on any story at Tube City Almanac, email, send a tweet to, visit our Facebook page, or write to Tube City Almanac, P.O. Box 94, McKeesport, PA 15134.