Marcellus Shale Gas

S. HRG. 112–223 MARCELLUS SHALE GAS HEARING BEFORE THE COMMITTEE ON ENERGY AND NATURAL RESOURCES UNITED STATES SENATE ONE HUNDRED TWELFTH CONGRESS FIRST SESSION TO EXAMINE MARCELLUS SHALE GAS DEVELOPMENT AND PRODUCTION IN WEST VIRGINIA EAST CHARLESTON, WV, NOVEMBER 14, 2011 ( Printed for the use of the Committee on Energy and Natural Resources U.S. GOVERNMENT PRINTING OFFICE 72–436 PDF WASHINGTON : 2012 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 COMMITTEE ON ENERGY AND NATURAL RESOURCES JEFF BINGAMAN, New Mexico, Chairman RON WYDEN, Oregon LISA MURKOWSKI, Alaska TIM JOHNSON, South Dakota JOHN BARRASSO, Wyoming MARY L. LANDRIEU, Louisiana JAMES E. RISCH, Idaho MARIA CANTWELL, Washington MIKE LEE, Utah BERNARD SANDERS, Vermont RAND PAUL, Kentucky DEBBIE STABENOW, Michigan DANIEL COATS, Indiana MARK UDALL, Colorado ROB PORTMAN, Ohio JEANNE SHAHEEN, New Hampshire JOHN HOEVEN, North Dakota AL FRANKEN, Minnesota DEAN HELLER, Nevada JOE MANCHIN, III, West Virginia BOB CORKER, Tennessee CHRISTOPHER A. COONS, Delaware ROBERT M. SIMON, Staff Director SAM E. FOWLER, Chief Counsel MCKIE CAMPBELL, Republican Staff Director KAREN K. BILLUPS, Republican Chief Counsel (II) C O N T E N T S STATEMENTS Page Capacasa, Jon, Director, Water Protection Division, Region 3, Environmental Protection Agency, ................................................................................................ 14 Capito, Hon. Shelley Moore, U.S. Representative, 2nd District of West Vir- ginia ....................................................................................................................... 5 Coleman, James L., Task Leader, Marcellus Shale Gas Resource Assessment, U.S. Geological Survey, Department of the Interior ......................................... 18 Cugini, Anthony, Director, National Energy Technology Laboratory, Depart- ment of Energy ..................................................................................................... 7 Dettinger, G. Kurt, General Counsel, Office of the Governor, Charleston, WV ......................................................................................................................... 30 Facemire, Doug, State Senator, West Virginia Legislature, Gassaway, WV ...... 49 Garvin, Donald S., Jr., Legislative Coordinator, West Virginia Environmental Council, Buckhannon, WV ................................................................................... 69 Huffman, Randy C., Secretary, West Virginia Department of Environmental Protection, Charleston, WV ................................................................................. 33 Manchin, Hon. Joe, U.S. Senator From West Virginia ......................................... 1 Manchin, Tim, Delegate, West Virginia Legislature, Fairmont, WV .................. 36 Rahall, Hon. Nick, U.S. Representative, 3rd District of West Virginia .............. 4 Rotruck, Scott, Vice President, Corporate Development, Chesapeake Energy Corporation, Oklahoma City, OK ....................................................................... 62 West, Kevin, Managing Director, EQT Corporation, Pittsburgh, PA .................. 66 Witt, Tom S., Director, Bureau of Business and Economic Research, Professor of Economics, College of Business and Economics, West Virginia University, Morgantown, WV ................................................................................................. 58 APPENDIX Additional material submitted for the record ........................................................ 85 (III) MARCELLUS SHALE GAS MONDAY, NOVEMBER 14, 2011 U.S. SENATE, COMMITTEE ON ENERGY AND NATURAL RESOURCES, East Charleston, WV. The committee met, pursuant to notice, at 10 a.m. on the 7th Floor Courtroom of the Robert C. Byrd Federal Courthouse, 300 Virginia Street, East Charleston, West Virginia, Hon. Joe Manchin presiding. OPENING STATEMENT OF HON. JOE MANCHIN, U.S. SENATOR FROM WEST VIRGINIA Senator MANCHIN. I’d like to call the hearing to order. I want to thank, first of all, all of you for being here, everybody. I appreciate it very much. I’d like to introduce to you the staff that we have with us today. I’ll introduce, first of all, my staff and our DC office staff and our West Virginia staff. With me from DC I have Robert Diznoff. Robert is my Energy Council. Robert if you’ll raise your hand in the front here. Robert is a Charleston native. So we’re glad to have him. His law degree is from the University of Miami and he was born and raised in Charleston, West Virginia. I have also here with me, Kelley Goes who is our State Director. We’ve got Sara Payne. There’s Sara, right over there, our Assist- ant Director. Also Travis Mollohan. Travis is our Field Director. With us from Washington from the staff as far as the Energy Committee, I have Allyson Anderson. She’s our Senior Professional Staff. Allyson if you raise your hand there. Allyson has 5 years on the committee. She’s a petroleum geologist. We’re happy to have her. Kelly Krye, where’s Kelly? She just went. OK, Kelly just went down. She’s our Science Policy Fellow. She’s an oceanographer with a Ph.D., from Boston University. Abigail Campbell, Abigail, there. Abigail is a Staff Assistant. She’s finishing her master’s degree in International Relations from the War College. So I want to thank everybody for being here. Also with me I have as on the panel is Congressman Nick Rahall and Congresswoman Shelley Capito and Congressman David McKinley will join us shortly. I’d like to welcome the members again of my colleagues from Congress. I’m glad that all of them are able to be with us today. (1) 2 I would also like to thank all of the distinguished witnesses who have come to speak on the important issue of Marcellus Shale gas development in West Virginia. Of course, thanking all of you who have a stake in this issue from the business folks, our local commu- nity officials and constituents who have made time to be here today. Today’s hearing is an extension of the good work the U.S. Senate Energy Committee has been doing on the shale gas development. The purpose of the hearing is to examine Marcellus shale gas development and production in West Virginia. My friend, Chairman Jeff Bingaman, has held 2 natural gas hearings this year. So this is the third hearing of the full committee on an issue that is uniquely important to our State and region. I’d like to thank Chairman Bingaman and Ranking Member Lisa Murkowski for allowing me to bring the work of the U.S. Senate Energy Committee to West Virginia. I cannot think of a more ap- propriate topic for my first field hearing. We all know that Marcellus shale gas could truly be a game changer for our great State. We are literally sitting on top of tremendous potential with the Marcellus shale. We need to work together to chart a path forward in a safe and responsible way that allows us to produce energy right here in America and create well paying jobs for hard working Americans. Of course we also need to do all that we can to make sure that West Virginians are getting the jobs here in West Virginia because the people of our State should benefit from the natural resources we have. West Virginians are the hardest workers in the world. I’ve always said that we’re not looking for a handout. We’re looking for a work permit. We’ve gathered experts here today to discuss how development in the Marcellus shale can help us rebuild America. I know there are a whole host of issues of great concern to folks around the State like how we can use all of our abundant natural resources like coal, timber and natural gas in a balanced way that does not endanger the health of our land and water and whether industry is treating residents fairly. To address the concerns I truly believe that we need a regulatory system in place that is really driven by the States with the Federal Government acting as our partner to effec- tively extract the natural gas and attract the billion dollar ethane cracker, plants for natural gas production and the jobs that they would bring to West Virginia. I know our State legislators and working very diligently on this as we speak. That is why we need to explore today what we are doing in West Virginia. We are ready to assume the primary regulatory roles as we go forward. We need to know are we prepared with the regulatory expertise and the resources to develop the Marcellus shale safely and respon- sibly. Do we have enough inspectors? Is our infrastructure able to bear the burden of new development? How can the Federal Govern- ment and the EPA act as our partner, not our adversary, in all of this? Let me remind all of you that oil and natural gas exploration are not new to West Virginia. In fact, West Virginia is home to the very beginnings of petroleum exploration in the United States. Oil 3 and gas production in West Virginia actually began as an out- growth of the salt industry in the 1800s. At that time oil and gas had no real significance in our State. But salt makers would frequently hit oil and gas in their drilling. So much oil was diverted to the Kanawha River by salt manufac- turers that it was known as Old Greasy to the boatmen. It didn’t take long for some industrious West Virginians, namely the Rathbone Brothers, to find the value in these salt byproducts. These brothers began an exploration in what became known as the burning springs oil field in the Great Kanawha Valley region. It was named this way because you could get a pretty good flame by throwing a lighted candle in the gas that escaped the site. From these early beginnings in around 1859 the oil industry grew to peak production of 16 million barrels in 1900. Natural gas took off from there and West Virginia led the country in natural gas production until 1917. Natural gas output then went on the de- cline and picked back up in about 1970. There have been booms and busts throughout the last 100 years in West Virginia. It’s estimated that there are more than 150,000 existing oil and gas wells in our State whether they are still pro- ducing or not.

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