Unitization, Spacing, and Pooling Requirements for Natural Gas Drilling Pennsylvania
Feb 03, 2014
In the fall, 2012, ten students from the MSPPM program at Heinz College enrolled in a required Systems project class, the object of which is to structure an unstructured problem. The group undertook a study to explore methods to improve the efficiency of natural gas extraction from the Marcellus Shale and the minimization of surface disturbance in the state of Pennsylvania. The main methodology involved creating a GIS representation of drilling units in Cumberland Township, Greene County, and using it to analyze the effects of development related to pooling and unitization, well spacing, and unit size.
Among the most significant findings of the team’s work were that:
Theoretical scenarios using different regulatory restrictions show that the lack of regulation of unit size and shape, pooling and drainage in Pennsylvania’s Marcellus Shale is producing unnecessary surface disruptions in the categories of access roads, deforestation, and pad density. Therefore, requirements affecting pooling, unitization and spacing in the Marcellus should be enacted and enforced along with drilling permit applications.
The scenarios demonstrate that increased planning and the use of horizontal rather than vertical wells creates less surface disturbance and is more efficient in terms of production, resulting in less stranded gas.
Units should adhere to the intended drainage area of wells drilled in the unit. Surface features are not the most efficient way to divide up natural gas development.
A Pugh clause of some sort should be required in the future for every lease agreement between a mineral interest owner and an operator. This should prevent dilution of interests in unitization and incentivize the development of adjacent units.
Consideration should be given to creating a “Mineral Interest Reservation System” as an alternative to a “forced pooling” approach.
Unitization agreements that are filed in County courthouses should also be available on a statewide Internet based system to more readily inform the public and other stakeholders of the approved units, and should be available to the general public.
The oversight governance for unconventional gas drilling should be reorganized and centralized. It should consist of experts and representatives of major interests.
Future study areas include the verification of drilling unit configurations, the analysis of truck routes with the object of reducing route mileage, the determination of the effects of regulation on company expenses, and the review of case law in regard to unconventional drilling to determine how different statutes have functioned in different states. (Note: above text summarized from the student report).
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