Royal Dutch Shell PLC said Friday it will buy East Resources Inc., a major owner of shale gas holdings in the northeast United States, for $4.7 billion from private investors.

Europe’s largest oil company said it will pay cash for East Resources, which produces oil and gas equivalents of 10,000 barrels of oil per day, mostly in Marcellus Shale, which extends over large parts of the northeast, including the Southern Tier and Pennsylvania. East Resources is based in Warrendale, Pa.

Shell said it was buying the company from Kohlberg Kravis Roberts & Co., as well as Jefferies & Company and privately-held East Resources itself. The deal must be approved by regulators.

Shell CEO Peter Voser said the acquisition fit with plans to “grow and upgrade the quality of Shell’s North America tight gas portfolio.”

East Resources is an active driller in Tioga County, Pa. See a map of East Resources wells and permits.

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Task force to study drilling

Bath, N.Y. — A task force designed to look at how future drilling of the Marcellus Shale natural gas formation could affect Steuben County operations was approved unanimously by county legislators Monday.

The decision was made after a series of legislative meetings during which local residents expressed strong feelings both for and against the controversial drilling.

Unlike traditional drilling, breaking apart the shale to release natural gas will require millions of gallons of chemically treated water forced through pipes under high pressure.

Supporters welcoming the industry say the drilling will bring significant revenues into the county, and argue there is no proof the drilling endangers lives or the environment.

But opponents point to studies performed in Texas and the Southwest indicating the chemicals used in the process are toxic and create long term damage to people and the environment.

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NYSEG launches program for businesses

New York State Electric & Gas on Wednesday said it has launched an energy-efficiency program for small business customers with electricity demand of less than 100 kilowatts.

Eligible businesses will receive free energy-efficient lighting assessments. Seventy percent of the cost of recommended lighting upgrades will be covered by NYSEG.

To effectively perform the assessments and upgrades, NYSEG will stagger the launch of the program through August 2011. The program will begin in the Ithaca area July 12; in Elmira, Oct. 1; and in Binghamton, Dec. 28.

EnerPath will manage the program, hire and train local workers to perform the assessments and select and supervise licensed subcontractors who will perform the lighting upgrades.

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National Grid slow to provide data

ALBANY -- State regulators say they have been having trouble getting information out of National Grid on its request to implement a new electric rate plan.

In fact, according to documents filed in the case earlier this month by the state Department of Public Service, it's been like pulling teeth.

National Grid "has failed to respond, failed to fully respond, or failed to timely respond to innumerable staff interrogatory requests," DPS wrote. "As a result of (National Grid's) neglect, staff, on average, has lost more than one-and-a-half months in allotted time to complete its audit..."

London-based National Grid submitted a request to the state Public Service Commission in late January asking for permission to hike electric rates by $390 million a year. The DPS is the administrative arm of the PSC, a five-person board that oversees utility regulation in the state.

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The parent company of New York State Electric & Gas is selling three natural gas utilities in New England to help pay for a $1.4 billion power grid upgrade in Maine that's aimed at assuring reliability and creating capacity for future wind power projects in the state.

Utility company UIL Holdings said Tuesday that it will buy Southern Connecticut Gas Co., Connecticut Natural Gas Corp. and the Berkshire Gas Co. from Iberdrola USA for $885 million. Under the deal, which is expected to close by early next year, UIL Holdings also will take on about $411 million in debt.

Iberdrola USA said the deal will help fund its Central Maine Power's first major grid upgrade in three decades.

Construction is expected to start in June and end in 2015.

"The investment will serve to continue guaranteeing electricity network reliability for customers in Maine and the New England region, providing it with the necessary capacity to incorporate new renewable energy sources," said Michael McClain, who's overseeing the project for Iberdrola.

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General Electric Co. announced Monday that it plans to harness the power of winds blowing across Lake Erie by developing the world’s first freshwater wind farm several miles offshore from downtown Cleveland.

GE and the nonprofit Lake Erie Energy Development Corp., or LEEDCo, announced a partnership to develop five wind turbines about 6 miles north of Cleveland Browns stadium. The turbines, which would stand about 200 feet tall, would aim to generate about 20 megawatts of power by 2012 and 1,000 megawatts by 2020.

The announcement came weeks after the Obama administration cleared the way for America’s first offshore wind farm in Massachusetts. In late April, U.S. Interior Secretary Ken Salazar approved a $2 billion Cape Wind project off the shores of Cape Cod after more than eight years of lawsuits and government reviews.

America has the world’s largest onshore wind industry but lags behind other countries in offshore electric generation because of high upfront costs, heavy regulation, local opposition and technological challenges.

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Methane migration related to natural gas drilling has caused death, injuries and property damage in Pennsylvania, leading to plans for stronger regulations and enforcement efforts.

Officials from the Pennsylvania Department of Environmental Protection called drilling industry officials to a meeting in Harrisburg earlier this month to urge care in preventing underground gas leaks that can cause catastrophes.

The warning, along with a plan being developed for stronger regulations, comes in the wake of more than 50 incidents documented by the DEP showing methane migration from drilling implicated in deaths, destruction and evacuations of homes.

A recent high-profile case involves the Carter Road area of Dimock, where methane migration linked to drilling caused one residential water well to explode and ruined the aquifer used by a dozen households, according to DEP records. Dimock represents one of more than 50 gas migration cases the DEP is tracking related to new drilling and abandoned wells. All involved dangerous and sometime fatal accumulations of gas in enclosed spaces.

(Click to read the entire article)

Shale drilling plans create friction

In Pennsylvania, miners are pumping millions of gallons of chemical-laced water into horizontal wells to fracture underground shale formations and release valuable natural gas. Plans to do so in New York are mobilizing citizens by the thousands.

It could be a gold rush," said Kenneth Knowles, chairman of the Steuben County Land Owners Coalition. He looks across the Pennsylvania border and sees new cars and full restaurants. Estimates suggest that horizontal drilling and high-volume hydraulic fracturing has pumped more than $2 billion into the Pennsylvania economy, and Knowles wants the same benefits in his county, where the unemployment rate was 10.3 percent as of March. "It will be the one greatest benefit that this county has ever seen, no question about it."

Charles Tauck, principal owner of Sheldrake Point Winery in Ovid, Seneca County, looks south and sees 200-foot drilling rigs, five-acre well pads, hazardous waste holding ponds and accidents contaminating drinking water. He is part of a group of Finger Lakes winery owners and environmentalists who are pushing the state Department of Environmental Conservation to beef up proposed "hydrofracking" rules for fear of environmental destruction, water pollution, chemical spills and loss of quality of life. "It could lay waste to some areas of the Southern Tier," he said.

Their sharply contrasting opinions are found among more than 14,000 public comments sent to the state DEC regarding the 800-page draft Supplemental Generic Environmental Impact Statement for horizontal drilling and high-volume hydraulic fracturing to develop the Marcellus shale. Geologists estimate that up to 516 trillion cubic feet of natural gas lies trapped in this massive underground formation that stretches from West Virginia and eastern Ohio into Pennsylvania and parts of New York, including the Southern Tier and the Finger Lakes.

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Power for Jobs

State Senator Tom Libous and Assemblywoman Donna Lupardo are concerned over a proposed change in the Power for Jobs program that could slightly increase NYSEG bills over the next few years.

The program provides lower cost electricity to qualifying businesses to make doing business in New York State more competitive. A few of the companies who are helped are Endicott Interconnect, Unison in Norwich and National Pipe and Plastic in Vestal. NYSEG, Rochester and Gas and National Grid residential and some farming customers currently get a hydro-power credit on their bills.

The new proposed legislation would basically reduce the hydro-power tax credit over five years. Libous and Lupardo say the Power for Jobs program is vital to the success of companies in our area, but also say a compromise needs to be reached so people NYSEG bills don't increase by $2 to $4. Tom Libous says, "If you look at the bill that is drafted, they're asking those of us in the NYSEG and Rochester gas region to pick up the majority of cost for a statewide program. They're going to take away the hydro-credit. While they do have some means in restoring money back to the ratepayers. I still think in our region we would be the upstate region that would support the brunt of the statewide program."

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Construction of a branch line to move Marcellus Shale gas from Susquehanna and Broome counties to a major distribution network is expected to begin in late summer and be completed by year's end, according to developers.

The project, proposed by Laser Midstream of Houston, would connect gas fields in northern Pennsylvania to the Millennium Pipeline, which bisects Broome and Tioga counties and leads to major markets in the Northeast.

It also would service gas fields in southwestern Broome County, if and when they are developed.

The construction phase would last about 100 days and require between 120 and 150 workers, said Laser Midstream president Chip Berthelot. The project would employ between eight and 12 permanent workers.

(Click to read the entire article)

Rochester Gas and Electric customers could soon see an increase in their power bill, if the governor's new Power for Jobs program passes the state assembly.
That's according to Democratic Assemblyman Joe Morelle, who opposes the legislation.

The program has already cleared the state senate. It offers companies cheap power, in exchange for creating jobs. But Morelle says those savings for businesses will come at the expense of customers, who will be forced to subsidize the program through increased rates for hydroelectric power. He argues the program will negatively affect customers with RG&E, New York State Electric and Gas, and National Grid.

"The hydroelectric savings currently realized by those rate payers will be greatly reduced, hereby costing energy consumers here more. For Rochester Gas and Electric rate payers alone, it translates to a cost increase of nearly $25 million a year - between $80 and $100 annually for households and consumers."

Power for Jobs is a $150 million program. Morelle says state coffers should be used to subsidize it, instead of turning to upstate residents, to bear the brunt of what he says is a program that largely benefits downstate.

Power for Jobs is renewed annually by lawmakers, and currently supports 240,000 jobs across the state. But this year legislators failed to renew the program. It's continuing under a temporary two-week extender, but the governor has urged them to make the program permanent.

CHAUMONT — Acciona Wind Energy USA, the developer of the proposed 53-turbine St. Lawrence Wind Farm in Cape Vincent, has purchased 102 acres of farmland along Old Town Springs Road and Cheever Road from H. George VanAlstyne, Chaumont, for $180,000, according to property transactions recorded May 10 at the Jefferson County clerk's office.

Acciona wants to run a 9-mile, 115-kilovolt transmission line that would connect the wind farm's substation on Swamp Road, Cape Vincent, to a National Grid substation on County Route 179 in Lyme.

The Environmental Quality Board today approved first-of-its-kind regulations that will protect waterways from the effects of natural gas drilling wastewater, better enabling the state's Marcellus Shale reserves to be developed without sacrificing the health and quality of Pennsylvania's vital water resources.

Environmental Protection Secretary John Hanger said the new regulations are an appropriate and necessary measure to ensure that drilling wastewater containing high concentrations of Total Dissolved Solids, or TDS, do not pollute drinking water supplies, damage industrial equipment, or endanger delicate aquatic life.

"Drilling wastewater contains TDS levels that are thousands of times more harmful to aquatic life than discharges from other industries. Without imposing limits on this pollution, treatment costs for this wastewater are passed along to downstream industries and municipal ratepayers," said Hanger. "All other industries in Pennsylvania are responsible for the waste they generate and the drilling industry should be no exception."

Next, the EQB-approved TDS rules will move onto the Environmental Resources and Energy committees in the state House and Senate, as well as to the Independent Regulatory Review Commission for a 30-day review period.

(Click to read the entire article)

OWEGO The Cornell Cooperative Extension of Tioga County and the Tioga Employment Center will present an informational session on employment opportunities in the gas drilling industry May 26 in the Hubbard Auditorium at 56 Main St, Owego. There will be two sessions, one from 2 to 3:30 p.m. and the other from 6 to 7:30 p.m.

Information covered includes companies hiring, the type of jobs available and how to apply and contact employers. To register, call the Cornell Cooperative Extension of Tioga County at (607) 687-4020. Space is limited.

The New York State Public Service Commission (Commission) today announced it will hold public statement hearings, and otherwise invite public comments, on an application by Niagara Mohawk Power Corporation d/b/a National Grid for a certificate of environmental compatibility and public need pursuant to Article VII for the construction of a new 115kV electric transmission line from Spier Falls, Saratoga County to Rotterdam, Schenectady County.

Interested members of the public may provide their comments regarding this matter at public statement hearings to be held as follows:

Tuesday, May 18, 2010,Saratoga Springs City Hall, 474 Broadway, Third Floor,
Saratoga Springs, New York, 4:00 p.m. to 5:00 p.m. and 6:00 p.m. to 7:00 p.m.

The public will have an opportunity to present its comments at the hearings before an Administrative Law Judge. A verbatim transcript of the hearing will be made for inclusion in the record of this proceeding.

(Click to read the entire report)

NY has enough power for summer: PSC

In a release, the Public Service Commission also said prices this summer would likely remain stable based on NYMEX futures.

Power prices for July and August on the NYMEX were in the $40s per megawatt hour in western New York, the $60s in the Hudson Valley, and the $70s in New York City, all of which are about the same as this time last year.

The PSC did not provide an actual demand forecast but did note it approved of a couple of enhancements to Consolidated Edison Inc's demand response programs that pay consumers to reduce usage during times of high demand.

In April, the New York ISO, the state power grid operator, issued a Power Trends report that said the state would have about 43,000 megawatts of supply available in 2010, including imports, to meet a forecast peak demand of about 33,000 MW.

(Click to read the entire report)

A special panel has begun to gather information so Chemung County can move forward if the state approves a new natural gas drilling technique.

With nearly two dozen members, the Chemung County Executive's Advisory Commission on Natural Energy Solutions first met April 29, and three or four of the panel's eight subcommittees have already begun meeting, County Executive Tom Santulli said Wednesday.

The environment, water quality, public safety, impact on roads and economic opportunities are among the commission's areas of focus.

"I'm very supportive of natural gas exploration. We want to do it right. We want to make sure we're prepared," Santulli said. "What the public expects is for it to be done in a safe way, and that's what this group is all about, working with all the different agencies that are in place. That's our goal. That's our objective. That's what we're going to do. We want to be prepared when the day comes when we can move forward."

(Click to read the entire article)

The U.S. Department of Energy will give the New York Independent System Operator, which operates the state's power grid, $37.8 million to deploy smart grid technologies to enhance the reliability and efficiency of the power grid.

To implement the project, expected to take about three years to complete and cost about $75.7 million, the NYISO said in a release Monday it signed agreements with all eight of New York's transmission owners.

The transmission owners include CHG Holding Inc's (CHG.N) Central Hudson Gas & Electric, Consolidated Edison Inc's (ED.N) Consolidated Edison of New York and Orange and Rockland, Long Island Power Authority, National Grid (NG.L), Iberdrola SA's (IBE.MC) New York State Electric & Gas and Rochester Gas and Electric, and New York Power Authority.

The project involves the creation of a statewide Phasor Measurement Network and installation of capacitor banks.

The NYISO said the 39 Phasor Measurement units will enhance the grid's ability to detect vulnerabilities and avoid potential blackouts by transmitting system data 60 times a second. Current monitoring systems sample conditions every two to six seconds.

The capacitors meanwhile will provide voltage support on certain transmission lines in areas where there is not enough generation to do the job. (Reporting by Scott DiSavino; Editing by John Picinich)

NYSEG to work on 'smart grid'

REGION New York State Electric & Gas Corp. and other transmission owners in the state have agreed to work with the New York Independent System Operator on a "smart grid" project, the NYISO said.

The project involves the creation of a statewide Phasor Measurement Network and the installation of capacitor banks in various locations throughout New York. These investments will enhance the reliability and efficiency of the bulk electricity grid and provide the foundation for further development of smart grid infrastructure in the state, the NYISO said.

The work will be completed over a three-year period starting July 1.

NYSEG President Mark Lynch said adding the smart grid technologies will "enable us to better monitor real-time operational data and better control system voltage," which help enhance system reliability.

NYISO will receive $37.8 million from the U.S. Department of Energy to deploy the smart grid technologies on New York's power grid. The federal funds will support a $75.7 million total investment in the smart grid project.

Don’t take the power

William Parment calls it theft, and he’s right. The Southern Tier assemblyman sees the effort to reframe the state’s Power for Jobs program as a bid to steal one of Western New York’s primary resources — one from which it already benefits too little.

The proposals — there are four of them — would take away 455 megawatts of low-cost hydropower that now reduces upstate utility bills by an average of $2 to $4 per month and, instead, expand the Power for Jobs program. The problem is that those megawatts could be spread statewide, so that a program meant to benefit upstate would be diminished. Upstate cannot afford that loss.

The issue comes up because the Power for Jobs program expires this week. It provides low-cost power to 440 businesses and nonprofit organizations across the state. Something has to be done to continue that program, but that something doesn’t have to include thievery.

As unacceptable as some of these plans are, they do share a virtue: They recognize that New Yorkers will get much more bang for their buck if, instead of parceling the benefits out in $2 increments across upstate, the power was used to attract employers that will provide jobs and pay taxes. Thus, the solution is to add the megawatts to the Power for Jobs program, but restrict its usage to upstate.

(Click to read the entire article)

A Colorado company is paying 130 Town of Maine residents about $3 million for a jump on Marcellus Shale development in Broome County.

While regulatory and environmental uncertainty has stalled Marcellus Shale prospecting in New York, Inflection Energy has issued checks to finalize a deal to lease 3,000 acres for natural gas drilling.

The area falls generally between Pollard Hill and Twist Run Road roads north to south; and Farm to Market and Edson roads east to west.

The deal, announced in February, calls for $6,000 per acre over eight years. About 130 residents with more than 3,000 acres have begun receiving checks for the first year's payment of $1,000 per acre, said Robert Wedlake, a lawyer with Hinman, Howard & Kattell representing the group, called the South Maine Millennium Coalition.

(Click to read the entire article)

Steuben may take Marcellus debris

Bath, N.Y. — Steuben County is considering a way to increase future revenues for its landfill operations by accepting cuttings from Marcellus Shale drilling in Pennsylvania.

County Public Works Commissioner Vince Spagnoletti told the county Legislature’s Public Works Committee his department is conducting a two-month review to determine whether to allow the debris to be dumped at the landfill, and how much the landfill could absorb.

The decision will likely spur a lively local debate, given the mounting controversy about the effect drilling will have on county residents.

The drilling involves a procedure called hydrofracturing, or hydrofracking, which includes installing both vertical and horizontal pipes. After drilling, water and chemicals are forced into the holes to extract natural gas.

(Click to read the entire article)

Drilling for natural gas in the Marcellus Shale in Pennsylvania's easternmost counties has been put on hold for months, if not longer.

On Wednesday, the Delaware River Basin Commission voted unanimously to draft new regulations to govern natural gas projects and not to issue any permits until the new rules are in effect.

The decision means that even as activity escalates throughout the state - nearly 900 Marcellus permits have been issued this year - no production drilling can be done in the Delaware watershed.

Adopting new rules could take six months to a year, commission Executive Director Carol R. Collier said Thursday.

It will stall indefinitely the lone application before the commission - for a well site in Wayne County at the northeastern tip of the state.

(Click to read
the entire article)

NYSEG Plans To Expand

Bath, N.Y. - NYSEG plans to expand its electric capacity in Steuben County.

New electric lines and towers will run along a nine mile stretch starting from Campbell to Erwin, Painted Post and up to Corning's industrial area. The $50 million dollar upgrade of electric capacity will benefit new and existing businesses and create job opportunities.

"It's a good thing," said Steuben County Administrator Mark Alger. "There is no issue that they should be concerned with. It's a good thing for the whole county because it increases the capacity and in the long run, it should lead to more jobs."

The Steuben County Industrial Development Agency approved a package of tax incentives for the project called a Pilot Project. With Pilot Projects, NYSEG will pay annual payments instead of property taxes for the next twenty years. It has not been announced yet where NYSEG will place its new towers.

A bill to temporarily stop the leasing of state forest land for natural gas drilling has state House approval and is headed to the Senate.

The House of Representatives approved the bill 157-33 on Tuesday. It would immediately enact a three-year moratorium.

Proponents of the bill want a thorough environmental assessment of the impact of drilling on the land before more can be leased.

A spokesman for the Senate's Republican majority says there's no plan to act on the bill and that the state already has strong regulatory authority over environmental impact.

The Rendell administration has leased more than 100,000 acres to drilling companies hungry to explore the Marcellus Shale natural gas formation.

(Click to read the entire article)

A chunk of cheap electricity that now helps hold down the monthly power bills of Western New Yorkers and other upstate residents could be snatched away and used as the cornerstone of a plan to expand a program that provides inexpensive electricity to businesses statewide.

Supporters say the proposed shift would make better use of a valuable resource that currently saves upstate residents just a few dollars a month, when it could be turned into a powerful tool to create jobs.

But critics say the proposal is another power grab by downstate interests that will prevent businesses from Buffalo Niagara to Albany from reaping all of the benefits from one of upstate's most valuable economic resources.

"To me, it's really just a theft of a regional asset," said Assemblyman William L. Parment, D-North Harmony.

(Click to read the entire article)

Put a 45-ton drilling rig on a road rated for 10 tons and bad things tend to happen.

In northern Pennsylvania, traffic from heavy equipment en route to Marcellus Shale wells has extensively damaged roads, including state Routes 1001 and 1007 in Bradford County that were shut down for repairs after they became unsafe.

In Broome County, engineers, lawyers and policy makers are considering plans to deal with similar truck traffic anticipated with Marcellus Shale development. The county is holding a special meeting at 2 p.m. Tuesday to discuss a proposal to require county permits for vehicles that exceed certain weights.

The meeting is scheduled in the Legislative Conference Room on the 6th floor of the County Office Building, 60 Hawley Street, Binghamton.

(Click to read the entire article)

CPA essay is now published by the Science and Public Policy Institute. PDF file is available.

New York State Electric & Gas Corp. is slashing the size of the rate increase it is seeking from its electric customers by more than 40 percent, the utility said Thursday.

NYSEG, which last September requested a rate hike that would have boosted a typical residential customer’s electric bill by a total of almost 19 percent, or $12.39 per month, said it is reducing that proposed increase to $6.70 per month.

Exactly how big of a rate increase customers will end up paying will be decided by the State Public Service Commission late this summer. NYSEG provides service to about 175,000 customers in suburban and rural portions of Western New York.

The commission’s staff is recommending that NYSEG’s electric rates be reduced by $18.4 million, although other factors that affect bills would still result in a typical residential customer’s electric bill rising by 3.3 percent, or $2.18 per month.

(Click to read the entire article)

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