City Gas Well No Sure Thing, Drillers Say

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There's no guarantee that a proposed gas well being drilled on city-owned land in the 12th Ward will produce gas --- and thus revenue --- drillers told city officials and residents Thursday night.

Although the past drilling history in the McKeesport and Versailles area suggests there is indeed gas under the parcel, a new well might not be productive, John Hazi, senior land agent for Penneco Pipeline Corp. of Delmont, Westmoreland County, told the Almanac after the meeting.

Penneco has made an offer to drill for gas on the so-called "Palkovitz property" along Eden Park Boulevard near Renziehausen Park, a nearly 27-acre parcel which was taken by the city for delinquent taxes in 2009.

"We had an independent study done by a geologist, and by a staff geologist, and we determined that it was worth drilling," Hazi said. "There probably is gas there, but it really is not a sure bet."

Still, the potential exists and the odds are favorable, said David Smail, land and engineering supervisor for Penneco.

"Each well costs $250,000 to $300,000 to drill, so we wouldn't put that kind of money into this unless we were confident" that a gas deposit is likely, he said.

. . .

The well would not be one of the more controversial, expensive and deeper wells that access gas trapped in the Marcellus shale layer a mile or more below the surface.

Penneco doesn't drill Marcellus shale wells, said Dean Walters, a field superintendent for the company. Instead, the well would be drilled into a layer of so-called Devonian shale that's about 3,000 to 5,000 feet below the surface.

Those shallower wells have been drilled in Pennsylvania since the early 20th century, and many of those decades-old wells are still productive today, Walters said.

In exchange for the right to drill on the property, Penneco would pay the city a 12.5 percent royalty on any gas obtained, and give the city up to 400,000 cubic feet of free natural gas per year. A drilling lease obtained preliminary approval last month from city council, but is going back to council for final authorization at Wednesday's meeting.

. . .

Under terms of the lease, Penneco has the right to drill up to six wells on the property, but would probably only drill three, Hazi said. If the wells are productive, each would pay the city between $500 and $1,200 per month, he said, or between $6,000 and $14,400 per year. (An rough estimate by the Almanac, based on current gas prices, had pegged the city's potential revenues at $2,000 to $7,500 per year.)

If the first well is successful, Penneco will consider exercising its option to drill the additional wells, Hazi said.

. . .

Only a few residents attended the meeting at the Palisades, Downtown, but they voiced concerns about noise from drilling operations and the potential for air or water pollution.

The process of constructing a drill rig, drilling the well, tapping the gas, and then setting up a collection station will take about two months, the Penneco officials said. Assuming the well is productive, employees will only be at the site a few days a week after the site is up and running.

The noisiest part of the process --- drilling the well --- would take about a week, and operations would be restricted to daylight hours, Walters said.

Under the lease, the city has the right to limit drilling operations to minimize noise, said J. Jason Elash, city solicitor.

. . .

After the well is drilled, a mix of water, sand and what Walters called a "mild acid" is used in the drilling operation to fracture the rock and release the gas (a process called "fracking"), but state Department of Environmental Protection regulations require all of the water to be collected and trucked away to an authorized treatment plant.

During the fracking process, the water is collected in a plastic-lined pond, then vacuumed into a tanker truck. Asked about the possibility of a leak or spill, Walters said such accidents are rare, but do happen.

In the event of a spill, the soil around the liner would have to be excavated and taken to a treatment site for disposal, Hazi said. Such accidents are generally minor and happen "maybe once" in every 60 wells drilled by Penneco, Walters said.

. . .

Other questions centered on the possibility of a gas explosion, like the one that destroyed a gas well in Indiana Township in July, killing two workers.

Walters said such accidents are rare, but that he couldn't make any blanket promises. "Gas is very volatile," he said. "There's always a risk. But we all have families that we want to go home to."

. . .

Several people quizzed Elash whether drilling the well would keep the city from incorporating the parcel into Renzie Park, as proposed by Mayor Jim Brewster.

"There is no blanket prohibition --- no ordinance --- against commercial activities in Renzie Park," Elash said. Individual deed covenants on many of the other parcels that make up Renzie prohibit drilling, but no such restriction is included in the deed to the Palkovitz property.

Brewster wants to extend an existing fitness and nature trail through the site. Elash said the well would not keep the trail from being expanded.

"I think the thought of city council is to use the funds from this drilling process to pay for that expansion," he said. "The extension of that trail and other things (from Renzie) goes hand and hand with what these gentlemen are doing."

. . .

The proposal has been presented to the Allegheny Regional Asset District, which provides an annual subsidy for Renzie's operation, and the RAD board had no objections, Elash said.

In fact, several other non-profits that receive RAD money are also looking into leasing gas rights, said Dennis Pittman, city administrator, who also attended the meeting with Penneco.

A road will need to be built into the site to move equipment during the drilling process. While the exact location hasn't yet been determined, Penneco wants to avoid using "narrow residential streets," Walters said.

. . .

The company has also agreed to work with the city, Elash said, to put its access road in a location that will facilitate the expansion of Renzie Park, if and when the parcel is annexed to the park.

Under state DEP regulations, the site would be planted with vegetation to match its original appearance, and also would be secured with a locked chain-link fence. The finished well equipment would stand about eight feet high.

City council meets at 7 p.m. Wednesday at the public safety building (the old municipal building) at the corner of Lysle Boulevard and Market Street, Downtown.

Feedback on “City Gas Well No Sure Thing, Drillers Say”

This sounds like…progress. This is exactly what the city should be doing. #1 Finding a use for city owned property that is not doing anyone any good, and #2 Finding new revenue streams. As well as the trails Mr Brewster suggested (which I agree with), a new, wider access to the newer ballfields from would be nice. Maybe add another pavilion, even a partialy enclosed one, as they are always booked. We have a huge regional asset in Renzie Park and we need to put money into it. I have also suggested adding some bench seating to the bandshell if the money is available.

They have been drilling these wells for years with no “town meetings”, no opposition. Now, thanks to the media, every well is a huge ordeal. This minor inconvience for a short time will have huge impact for the citizens of the area.

I support the drilling on any city property throughout the area.
Adam Spate - October 29, 2010

Adam has some good ideas, as does the Mayor. Expanding the trail, benches at the bandshell… good stuff.

However, I oppose this drillng. Renzie Park is a gem that should NOT be put at risk for environmental damage. PLUS the Palkowitz site sits too near to homes in Grandview.

If we want to increase revenues for the city we need to:

1) Reduce Crime (thus improving the city’s image and livability factor)
2) Improve Infrastructure to support faster highway access. (this is a Mon Valley Problem and I don’t believe the Mon Fayette boondoggle is the solution.)
3) Fix our antiquated tax code for individuals and businesses.
4) Support the expansion of existing businesses.
5) Attract new residents.
6) Restore rather than demo exisiting structures by encouraging private investment.
7) Rezone our downtown and hospital districts and move all in town social service programs to the hospital area.
8) Take better advantrage of ALL of our riverfront property.
9) Bring in new businesses.
10) Fix the gouge residents and businesses are feeling as the result of ridiculous sewage rates.

Allowing for the drilling is a short term fix (20 years) at best and could result in damages greater than the cash inflow, much like the expansion of Section 8 housing in the city.

I think I left, “Elect a good Mayor” off my list. That goes without saying. Also, we need to encourage new people like Adam to seek city and school district office. You can either change your people, or you can CHANGE YOUR PEOPLE. In my humble opinion, for the most part, what has been tried has not worked and certain people have had more than their chance to make things better.

I look around McKeesport and see nothing but possibility and hope. Rather than make a spiel about “No Negativity” we need truly positive, upbeat, bright, and committed people to lead our city to a positive transformation.

Yes, this may be a political spiel, but hopefully I have introduced some ideas that whoever is elected can carry through with.

Be Safe and Blessed,

You Know Who
3)
Mayoral Candidate - October 30, 2010

Very good ideas “Mayoral Candidate”, but how are you going to finance all your big fancy plans? Dont you think that just about every politician in this city has wanted many of these same things. Thats the whole reason we are here.
To your suggestions:
1) Reduce Crime. I believe our police force is doing the best job possible with thier resources. Funding for more hours and officers is needed.
2) Improve Infrastructure to support faster highway access. What does that mean? We are not far from Route 30, Route 51 and Route 48. We have a premier location.
3) Fix our antiquated tax code for individuals and businesses. How about just going after those who dont pay?
4) Support the expansion of existing businesses. Maybe we give them property for FREE. Hmmm, we have enough of it lying around.
5) Attract new residents. This is a no brainer, but it should read “Attract a better class of residents”
6) Restore rather than demo exisiting structures by encouraging private investment. Totally Disagree. These structures were designed to last 50 years and are outdated. Knock um all down.
7) Rezone our downtown and hospital districts and move all in town social service programs to the hospital area. That will just piss off people and they will relocate elsewhere. We need the Social Services, it is the only thing bringing people into town during the day.
8) Take better advantrage of ALL of our riverfront property. This one I agree with. The way McKees point is designed and maintained sucks.
9) Bring in new businesses. ???
10) Fix the gouge residents and businesses are feeling as the result of ridiculous sewage rates. There is nothing wrong with the sewage rates, the collection of old ones, yes, but the rates are fine. I have had the opportunity to learn why they are higher, and totally agree. We cannot continue to have a combined sewer system.

I see no solutions mentioned in your post. Drilling is a solution. 2 months of headache for 20 years of profit. Sounds like a no brainer. This money can be used to fund many of the ideas that you have. Plus there are many other ways to raise funds. Non-traditional means. Unfortunately everyone in politics in our area has been for too long and it is time to hand over the reigns.

I am a huge proponent of the Task Force program in McKeesport. I believe this is one of the most viable solutions today to deter, report and stop crime. I have seen it in action, I have seen it work. I have seen a change in residents that are associated with it. It also enhances the overall community outlook. Neighbors talking to neighbors. Friends helping friends. The City of McKeesport helping out with all the small things that people complain about. Those small things may seem irrelevent, but they matter to the people who live here. If we can give everyone that lives in this city a bit more pride in this city, the other issues will take care of themselves. I point to New Orleans, home of one of the worst natural disasters of all time. Go there, talk to lifetime residents who have come back, becuase they LOVE thier city. They are rebuilding it. And we can rebuild McKeesport. No it will never be “the way it was” and neither will America, but we can make it “a nice place to live”

And you are right, Maybe I do need to run for City Council…
Adam Spate - October 30, 2010

Adam,

We live in a free country and you are entitled to your opinions. Anyone can be a critic and nobody ever built a statue of one.

I tend to take a contrarian approach. Nearly everything that has been tried by Mckeesport’s leaders has failed. Not everything,. Just most things. If we don’t change how we do things, we are just going to keep getting the same old horrible results.

I agree COMPLETELY about the Task Forces.

Yes. You should run. Can you imagine the debates you and I would have in Council Chambers? LOL.

Keep up the great work in Grandview! Your efforts are appreciated.

Paul
Mayoral Candidate - November 04, 2010

Adam,

By Highway access I meant Parkway and Turnpike. No trucker can get to either from our mill0site in under 25-30 minutes. Neither can they get to Pittsburgh quickly. How about a two lane expressway (free to use of course) along the river? We can put a trail in with donations, why can’t we do a road which is MUCH more needed?

Do you really believe our sewage rates are fair? OUR plant is bringing in business from more and more surrounding communities and Frac water that erodes OUR equipment faster, and WE pay more? Sorry. That isn’t just. WE are a captive audience so we are getting a raw deal to bail out Brewster’s wasteful spending.

Drilling may be a 2 month solution and a 200 year environmental nightmare. Ever fish a sulfur stream where strip mining occurred? Of course not. There are no fish there. These drilling companies could care less about our environment and the mess they leave behind. I do have to study the issue more but I have learned to be very distrustful of what our local government tells me is ok. These are the same folks who in years past told us it was a good idea to sell off our Water Authority cheap with no guarantees for staying and keeping jobs in Mckeesport; and our ENTIRE millsite (Riverfront Property) for enough money to make one year’s payroll shortfall. Bad decisions at the local level effect us more and worse than anything that happens in DC.

I know that you are new to the Mckeesport political scene and have great ideas and positive ambitions for yourself and the city. That is great!

I also know that you are a bright and well read individual. May I recommend that you thoroughly study the local issues and history better? I’ve studied Mckeesport and her political failures since 1999 and I still don’t know half of what has transpired here. What i do know is more than most and that I won’t repeat the mistakes of the past.

Welcome to Mckeesport Politics. Believe nothing that you hear and only half of what you see. People’s actions speak much louder than their words. That being said, I should shut up now and get on with the business of transforming Mckeesport.

Be Safe and Blessed,

Paul
Mayoral Candidate - November 04, 2010

I believe you may have underestimated the power of knowledge. I have been a study of McKeesport Politics and History since birth thanks to a family that has grown up in this city for generations. My father and Grandfather have taught me the people places and things of the last 50 years. I not only own, but have actually read and comprehend, virtually EVERY book and printed work regarding the history, troubles, and unfortunate events that have brought this city to where it is.

My Family is from McKeesport, being business men and women all their lives. I myself have attempted on two occasions to work within the City myself, and dealing with its residents on a day to day basis. Unfortunately both of these businesses are no longer in business. Not because they were in McKeesport, or because of politicians, but because they made poor business decisions.

I grew up a member of a small church on Jenny Lind Street, which had played a major role in the Swedish Community for over a century. Many a Sunday Brunch was spent listening to stories from those who lived it. I was married in that same small church, the first wedding in over 50 years to be held there. That church is MY history.

I am the general manager of a mid-sized, family owned company, and routinely must make tough decisions that impact the lives of both myself and those of many other people. I have impressed upon many people my abilities to lead them to a favorable outcome. THIS is why I have chosen to seek a political future. I do not seek it to solve a particular issue, or to settle a beef. I do it because of my genuine love of this city and the things that go on here. I devote very much of my time to city on a weekly, daily, even hourly basis. I maintain a face book page which is frequently updated with news and happenings of the city, as well as safety information for the residents. I PERSONALLY aid the police with neighborhood patrols to curb violence within the city. On my own time, and with my own funds. I coordinate monthly meetings and events in Grandview as Part of the McKeesport Joint Task Force. I openly give my personal information to complete strangers in hopes it will lead to a stronger community.

I by no means suggest that I am without faults. I have had my problems (though noe with law enforcement), as most anyone has. Nobody is perfect, and I dont expect them to be. I persue the knowledge to know better next time.

I know that the sewage rates are a popular complaint. But, anyone who is rational enough to objectively hear the argument as to why they needed to be raised would see there is just cause. Our infrastructure is failing. We all know it, we chose to ignore it. Now it needs fixed. Should we pass this expense along to the next generation, as others have done to us? Or are we smart enough to realize the time is now. Separating Rainwater from sewage water makes sense in the long run for the continued expansion of our city. Would you like to see a new business built in the city? Well then, according to DEP guidelines, a water management study must be done. We cant just tap into the old stuff and hope it holds. Also, if we did not raise the rates to finance the upgrades , we would have received a large fine from the DEP for failing to abide to the Clean Water Act. For further clarification, I invite you to visit Mr Rost at 100 Atlantic Avenue in Our Fair City where he can show you the plans and DEP mandates that he must follow.

As you said, “ OUR plant is bringing in business from more and more surrounding communities and Frac water that erodes OUR equipment faster, and WE pay more? “ That part of your story is correct. If we did not do those things our rates would be MUCH more. Luckily we have the means to make extra income with these two options.

Also, thankfully technology has come a long way since the mines under our feet that leak sulfer. I implore you and any other readers not to believe the media rhetoric concerning drilling and take a look at one, talk to someone with one on thier property. I have, many of my customers have had similar wells dug on thier properties. Funny how they now seem to have that extra income to purchase liesure products, isn’t it? There is much to be gained by learning about an issue, rather than making a decision based on what people on Topix vote.

I also do not support your belief that everything our politicians have tried has failed. Maybe turning Fifth Ave into a mall wasn’t the greatest idea, but most ideas have done well. Our local politicians had nothing to do with the steel industry collapse, the flight of shoppers to malls, or the eroding of our infrastructure. If they did, it would only be happening here, and its not.

What we need in McKeesport politics is not a “YES” man for the people of McKeesport. We need someone who will make informed decisions based on fact. That is why Mayor Brewster is regarded so well outside of the city, yet many people who live here think he didn’t do so well. That is also why, I believe that by having his offices in our city, we will benefit. Again, here is someone who genuinely cares about the City he and his family are so involved in, and wants to stay. Many a politician would have moved away the moment they got elected.

Mayors and Councilpeople are like parents for the city. Sometimes they say no and you stomp your feet and get mad, but it is for your own good.

I thank you for your candor and your debating spirit, and wish you well in your endevours. I do plan to attempt to seek offices within our city in the near future but I am not so obtuse as to call myself “McKeesport’s Next” anything.

Also, Mr Togyer, thank you for the forum in which to post as I know you frequently shy away from political speak in your comments sections. You are a gentleman.

Adam Spate
Adam Spate - November 07, 2010

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