PA Gov. Wolf Issued 73 Fracking Permits in Two Weeks, On Pace for 7,300 in First Term

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In his first two weeks, Pennsylvania Governor Tom Wolf’s Department of Environmental Protection issued 73 fracking permits.

PA DEP Permits Issued Report

PA DEP Permits Issued Report

According to the Permits Issued Report on PA DEP’s website, in the first 10 business days from January 21 to February 3, the rate of permitting is about one shale gas well permit per hour.

Using TimeAndDate.com’s business day calculator, there are 1,004 business days in Wolf’s first term. An average of 7.3 permits per day, means that the Wolf administration is on pace to issue 7,329 fracking permits by January 20, 2019.

According to the Spud Data Report on PA DEP’s website, in that same period, drilling began at 44 shale gas wells. Drilling takes place seven days a week, so 44 wells over 14 days puts the Wolf administration on pace to oversee the drilling of 4,576 shale gas wells.

Former Governor Tom Corbett issued 12,259 permits and oversaw the drilling of 5,819 wells from 1/21/2011 to 1/20/2015, according to the same PA DEP reports.

The rate of permit applications, permitting, and subsequent drilling is dependent on a number of factors including methane prices, gas liquid prices, permit expiration, lease expiration, and the prospective for new demand gas power plants and exporting gas overseas.

The outlook is bleak. A significant increase in demand for shale gas would raise the price, inducing more shale gas operators to apply for permits and drill wells.

There are three big factors that could drastically increase the rate at which companies apply for permits and develop wells.

A combined cycle gas-fired power plant.

A combined cycle gas-fired power plant.

First, there are 32 proposed gas-fired power plants in Pennsylvania and the Wolf administration’s implementation of the EPA’s “Clean” Power Plan will largely determine the demand for methane gas regionally. The EPA rule recommends coal to gas conversion in electric generation as a priority and must be implemented by each state’s governor according to the Clean Air Act.

 

 

 

A Liquefied Natural Gas terminal.

A Liquefied Natural Gas terminal.

Second, the controversial Cove Point Liquefied Natural Gas export terminal in Lusby, MD is scheduled to come online in 2017. There are two major transmission pipeline projects serving it including the Columbia Gas Pipeline currently being upgraded and the proposed Atlantic Sunrise Pipeline. Methane produced in eastern Pennsylvania is already contracted to serve overseas customers via Cove Point.

 

 

 

An ethane cracker.

An ethane cracker.

Third, the demand will increase for gas liquids found in western Pennsylvania’s shale such as butane, ethane, and propane if the proposed Shell ethane cracker in Beaver County is built. Ethane crackers produce ethylene for plastics and the construction of Shell’s plant is listed as a priority in Tom Wolf’s “Fresh Start” plan.