Replies to This Discussion

Permalink Reply by Lynn Wigglesworth on October 13, 2010 at 3:25am

With the price of natural gas so low, it makes sense to me to store it until the price comes back up. Drilling more wells seems stupid to me when there is already a glut of gas on the market. The gas companies used to say that natural gas had to be at $4 or more for them to make money. It's now $3.80-something, so WHY are they still drilling????

Permalink Reply by Ann Ticopa on October 13, 2010 at 5:24am

Several reasons. To hold leases. To "prove" their holdings, to benefit their stock price and'/or interest by potential investors. Because they have contracts with the outfits who actually do the drilling. In some places (e.g. Eagle-Ford) there is a shortage of drillers and gascos that have them want to keep them. And, the more efficient outfits can at least break even at < $4.

Permalink Reply by William Ladd on October 13, 2010 at 4:24am

Dominion is not thinking of their storage areas so much as they are are thinking of keeping CONTROL of the land they leased 30 or 40 years ago.

Think of it like this: you have Seneca lake with clean potable water just outside of your back door. This is your "GLUT" supply of water. You have a pipe to pump that water to your house and storage area. Does it make sense to maintain a large area for storage when you already have all the water you can ever use and several pumps to bring it to your house?

Maybe at one time Dominion or the previous lease holder needed that storage area. Today they only need more pipelines and pumping facilities, not storage!

Bill L.
aka Bummy

Permalink Reply by Lynn Wigglesworth on October 13, 2010 at 4:32am

If you bought all that water in Seneca lake at $1/gallon and the selling price today is $.50/gallon, would it make more sense to sell it or just hold it in the Lake? "Storage gas" is gas that someone paid to pump out of the ground, then pump into a 'holding' area, waiting for the right time to sell. This is NOT the right time.

Permalink Reply by William Ladd on October 13, 2010 at 5:48am

The lake is the storage area for everyone LynnPump it when you need it! Is it a good idea or a legal practice to.... well lets say pump in a hundred gallons in a storage area and then pump out 150 gallons?

Permalink Reply by Lynn Wigglesworth on October 13, 2010 at 6:14am

Bill; Then you can't compare a commonly-owned lake to a privately-leased storage area. When Dominion pays to lease a storage area, it's theirs to use as they choose.

Permalink Reply by William Ladd on October 14, 2010 at 2:06am

Lynn, Can you tell me exactly where the boundaries are fot Dominion's storage?

It would be nice to know that their storage is sealed up and that only the gas that has been pumped in is the gas the will be pumped out!

If my property is leased for storage and my neighbor's property is not leased for storage, then will the stored gas stop at the line between my property and my neighbors property?

Lets say that your property and my property has a fence between them. You have a field of corn on your side of the fence. I have a herd of cows on my side of that fence. A tree on your side of the fence falls on that fence and tears it down. Who is to blame if the cows discover they can have a party in your corn?

Bill L.
aka Bummy

Permalink Reply by Lynn Wigglesworth on October 14, 2010 at 2:27am

I don't know anything about the boundaries of the Dominion storage field. It's the wording in the lease that is important. I assume that the storage layer is a completely different layer than the Marcellus; storage is usually more shallow and in the porous layers. I also assume they have a 'buffer area' to keep the gas from migrating too far. There's no chance of Dominion stealing your Marcellus gas when they pump out their stored gas, but there IS a risk that drilling in the storage area could release their stored gas. Drilling on your neighbor's land also can't steal your gas. The Marcellus is what is called a 'tight' formation. The gas doesn't flow from one area to another...that's why they have to frac it. The fracing only goes a few hundred feet from the bore hole, so they can't "suck the gas out from under you" as some landmen apparently claim.

The laws in PA cover lots of things, including cows...PA is a "fence in" state. If the cows get into the neighbors corn, it's the cow owner's responsibility. I know all about that, having had to round up my cows many times in the years before I got my new fence. It doesn't really matter why they are out...still the owner's responsibility.

Permalink Reply by Ann Ticopa on October 13, 2010 at 6:13am

Seneca Lake is a "storage area", analogous to Dominion's gas storage. Its primary inflows are Keuka Lake, Catherine Creek, and underground sources ... which are subject to seasonal and other variation. If you want power companies and other industrial users to switch to gas, storage is an integral part of convincing them that there will be a stable supply, without big seasonal swings in price.

Permalink Reply by William Ladd on October 14, 2010 at 3:05am

What do you do for a living Lynn?

Permalink Reply by Lynn Wigglesworth on October 14, 2010 at 3:30am

I raise beef cattle. For several years I ran a farm stand where I sold beef, lamb, eggs, vegetables, and some crafts. I had a lot of 'complications' in my life this year and didn't do the farm stand; I just sold my beef by halves and quarters this year. Farming doesn't earn me much money (child support from my ex helps a lot), but it keeps me out of trouble. At least we eat well.

Permalink Reply by William Ladd on October 14, 2010 at 4:08am

Raising cattle and the other farm activies you speak is at least an honest lifestyle. The problem comes because of high prices a farmer has to pay for machinery, repair parts, supplies an so on. A farmer has to be a mechanic, electrician, plumber, carpenter, veternarian, engineer and wear several other hats too. Not many folks can handle all of these jobs.

But there are rewards too. Good food and plenty of it! Helpful neighbors when needed, Waking up to mother natures's music, Quietness in the evening when the sun goes down, opportunities to see first hand deer, bear, rabbits and the other wilderness neighbors and even make friends with them. Lots of folks will Poo Poo these things as unimportant. But to my way of thinking, sanity is less apt to be lost! Nerves are not being jangled constantly. your friends are not just just fair weather friends.

Bill L.
aka Bummy

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