Cabot lays out $1 billion
BY ROBERT L. BAKER
Cabot Oil and Gas has spent more than $1 billion in Susquehanna County since 2006 and expects to add 54 wells in 2011, with 149 wells drilled to date.
External relations director George Stark told a packed Wyoming County Chamber of Commerce luncheon Wednesday that his company would be around “for a long while” and the 400 jobs it has had a hand in creating to date will only grow as new wells come on line.
He said that the fact that eight of the top 10 producing Marcellus shale gas wells in Pennsylvania are Cabot’s far exceeded his company’s hopes.
“The production has been off the charts and we’re happy about that,” Stark said.
But he acknowledged that some have criticized Cabot for modest lease payouts four or five years ago in the $25 per acre range and questions about water contamination.
“Look, it’s easy to do Monday morning quarterbacking,” Stark said. “The reality is we didn’t know four years ago what we know today. The industry is evolving.”
He criticized a New York Times article of two weeks ago “which had its facts wrong” in addressing waste treatment in the Marcellus shale and noted three days ago that Pennsylvania Department of Environmental Protection released information through an Associated Press story that he feels vindicates the industry.
“We strive to do all we can with our regulators, and know the importance of a healthy environment,” Stark said, while noting Cabot’s relations with DEP has not always been smooth.
However, he did not talk about water contamination implied in a consent order his company signed in recent years with DEP and the people who live along Carter Road in Dimock Twp.
“Please don’t change the rules mid way,” he said. “We now have a much better understaning of them (DEP), and they understand what it is we’re doing.”
As for jobs, he acknowledged that the first ones were filled by people out of the area who had a knowledge base to draw on.
“That’s changing now, but you just couldn’t find people locally to run a compressor station or tend wells,” he said.
Stark is hopeful though that will change with partnerships with places like Lackawanna College and the Susquehanna County Career and Technology Center in Dimock.
He acknowledged that water used in fracking Cabot’s wells is now almost completely a closed loop system with 20 percent of water initially used coming back up and recycled with 80 percent fresh water.
Tunkhannock businessman George Gay Jr. asked if Cabot had interest in the Utica Shale, a reserve that is estimated to be 3,000-7,000 feet below the Marcellus.
“The short answer is yes,” Stark said, “but that’s not why we are here right now. We’ve got more pressing matters.”
Asked about the lack of severance tax in Pennsylvania, Stark said Cabot pays taxes and fees in other ways and he questioned if a severance tax were created would the money raised ever find its way back to the region gas was extracted from?
“We paid out $10 million last year in road repairs in Springville, Dimock, Auburn and Jessup townships in Susquehanna County,” he noted. “If we paid a severance tax, would the state send that money up here to repair the roads? Not likely.”
Stark said that Susquehanna County residents have received $43 million in royalties from Cabot since 2006, and one well – the Chudleigh in Springville Twp. – has produced a billion cubic feet of gas by itself.
“Everybody wants one of those,” he chuckled.
Stark acknowledged he was in Wyoming County because even though his company is committed to drilling only in Susquehaanna County, its employees live in an around Tunkhannock.
“We want to be a good neighbor wherever we are,” he said.
To that end Stark noted that Cabot is already planning a giant company picnic on July 23 on the Harford fairgrounds that he’s guessing will surpass the one that attracted 3,000 people to Montrose last summer.
“It will be a great time once again to say thank you,” he said.