Richard Adams joined Chief Oil and Gas in September of 2009 as a senior environmental advisor. In this role, Mr. Adams is involved in helping to manage and develop Chief’s environmental policies and compliance programs, mainly in regard to ensuring responsible source water use and safe wastewater disposal, and working with the gas industry as a whole to further its advances in environmental protection and enhancement. Prior to joining Chief, Mr. Adams retired from a 35-year career with Pennsylvania Department of Environmental Protection at the Northcentral Regional Office in Williamsport. There he held the positions of Engineering Chief in DEP’s Water Quality wastewater permitting program, and Environmental Program Manager of the Watershed Program. In the Watershed Program he worked extensively with watershed associations, County Conservation Districts, the agricultural community, and local/county government to provide grants and technical assistance

for a variety of watershed stewardship, conservation, and habitat improvement projects. He also served as a contracted consultant for the Susquehanna River Basin Commission (SRBC), where he was involved in helping the Commission usher in its regulations for water use by the Marcellus industry. He is a registered Professional Engineer. Mr. Adams received a B.S. degree in Chemical Engineering from Bucknell University in

1971, and an M.S. degree in Chemical/Environmental Engineering from Clarkson University in 1972. He has lived in Williamsport since 1974. He is a member of the Susquehanna Chapter of Trout Unlimited and is a board member of the North-Central Pennsylvania Conservancy. Mr. Adams agreed to share some of his thoughts about Marcellus Shale gas drilling with us.



WG: Tell us about your current position.

As most of your readers have heard by now, the development of a Marcellus gas well requires water sources that are safe and reliable and that pose no, or at least insignificant, impact to the aquatic environment, water system users, and aquifers. My job with Chief is to work with the regulatory

agencies, mainly SRBC and DEP, and with landowners and water system owners, to identify such sources, obtain approvals, and to use them and manage them responsibly. Additionally, wastewater from gas well development, which includes drilling wastewater, frac flow-back wastewater, and produced brines must be safely managed at the site and either re-used or disposed of properly, in accordance with all adopted regulations and using safe management practices. My work at Chief is directed at making sure

this wastewater management happens at the highest level of protection of the water quality in Pennsylvania, for all users.



WG: Why did you choose to move from a

job with SBRC and go to work with Chief?

At the end of my careers with DEP and SRBC, I guess I realized that I still wasn’t ready to quit working. I still wanted to do what I could to apply my engineering experience and knowledge of Pennsylvania’s

environmental resources in a way that could have some direct impact on environmental protection and resource management. At the same time, I had come to a personal conclusion, after looking into a number of sources of information, that natural gas was going to be a critical element in any legitimate and

responsible energy policy and environmental future for the country and the planet. I think that the development of the shale reserves that we are finding out about can reduce our dependence on foreign oil, fill a very problematic widening gap between energy sources available and future demand projections,

and transition us from the fossil fuel era to alternative sources of energy in the cleanest and most economical way. Because of this, and all of the beneficial economic development that will occur from the shale gas development, I decided that the development of the Marcellus Shale was a good thing for

our region and our state, and that it was definitely going to happen. When the opportunity at Chief presented itself, it looked like a perfect fit for how I wanted to further my environmental engineering pursuits, while working with a great team on something that is so vitally important to our collective future,

energy-wise and environment-wise.



WG: What did you do at the PA DEP &

SRBC?

Well, I worked in a number of different regulatory permitting programs, and also programs that were designed to enhance the ability of outside groups and agencies to be stewards of their local environment, mostly all related to water. Let me just name a few of the programs and you will see what kind

of variety I have witnessed over 35 years: sewage treatment, industrial treatment, and mine drainage permitting; industrial and municipal storm water permitting and planning; general water quality modeling and monitoring; concentrated animal feeding operation (CAFO) permitting and enforcement;

the Chesapeake Bay nutrient control strategy; agricultural stream bank fencing program; Growing Greener funding program; abandoned mine treatment projects; development and implementation of the special protection program for the state’s high quality and exceptional value streams; and finally the development

of DEP and SRBC policy on water usage. The most satisfying observations in my 35 years—seeing the lower segments of the West Branch of the Susquehanna river rebound from an acid mine-affected waterway to one which now supports bass fishing tournaments and all forms of healthy aquatic

recreation, and which is now arguably the centerpiece of our quality of life here along the river communities. That, and seeing the unbelievable progress made by folks in watershed associations, water resource organizations, and conservation districts, who have taken the enhancement of their local watersheds into their own hands.



WG: How do you feel about your former

employers’ abilities to regulate the gas

industry, knowing the practical realities

of the jobs they have to do and those of

your company?

I give both the DEP and the SRBC a very high grade. Both have very robust regulatory frameworks in place that are well thought out, publicly vetted, and very protective. Both have very smart and dedicated people in the programs that administer the regulations. At one point, there was public concern about

the numbers of staff available to carry out these programs, but both agencies have made strides to increase the numbers. Our Chief sites are inspected quite regularly. When we need to talk to someone in either agency we get through quickly, and I can tell you that our policy at Chief is to communicate before

we act, so that we get the expertise and environmental knowledge of the local agency person on the issue first. Overall, I think that the gas companies and the regulatory agencies are working together quite well to protect our land and water and air.



WG: As someone whose career has been

spent protecting us and our environment,

what can you say to those concerned

about health, quality of life, and

environmental protection regarding

rapidly expanding Marcellus gas extraction?

Specifically, what are Chief and

others in the industry doing to protect us

and our region? Do Chief’s efforts differ

from those of other companies up here?

I tell them that you have to look at the big picture. Almost anything we do in life has some impact on the environment. Look at the cars we drive and all of the direct and indirect environmental impact that is caused by them and the fuel they require and the infrastructure behind all that. But the key is—does the

benefit derived offset the impact? To me, the argument for natural gas is a no-brainer. Let’s look at the benefits: decreased dependence on foreign oil, can produce electricity at 2/3 the cost of other fuels, burns cleaner, has a much lower carbon footprint (and yes, I believe that global climate change is a real problem), has a much lower transport cost, will create tremendous economic benefits. On the environmental

impact side, I am not saying that there aren’t any. There are some temporary surface land disturbances when we build well pads and pipelines, and there is some very minimal impact when we withdraw water, and there are certainly some waste products like wastewaters and drill cuttings. But I am telling you that

these are manageable—we can drain much larger areas of natural gas from smaller well pad acreages now with the horizontal drilling technology, and we can manage our water withdrawals so that we take water when the streams are high and use smaller streams, in that manner, that are closer to the well pads

so that we don’t have to create so much truck traffic, and there are a number of safe and reliable methods emerging for the treatment and recycle/re-use of the wastewater that minimize what may need to be discharged into our streams. The Marcellus Shale Coalition, whose membership consists of 95% of all the

companies drilling in the Marcellus, including Chief, are working hand in hand with the regulatory agencies to find these optimized solutions. We’re looking at shared water sources, shared gathering pipelines, and shared recycled wastewater to help minimize traffic and activity. We all have a lot of people working on these kinds of things.



WG: Any personal concerns about our

quality of life here as gas extraction by so

many different entities gathers momentum?

My wife and I live here and raised our kids here because we love the quality of life here and we love all the fantastic recreational opportunities that this region provides. It is going to stay that way as far as I am concerned. I’m in a position now where I can tell you that any potential impacts from the gas development,

most of which are temporary, can and will be managed so that we are not going to sustain any significant losses. I guess I would say that I am more concerned about the alternative—not developing the natural

gas resource. We simply cannot develop alternative sources of energy fast enough for our growing demand. And energy conservation, which I both practice and believe in as playing a critical role in our planet’s energy solutions, will also not be enough. We need to develop all our available sources. Natural

gas is one that will benefit us in many ways and one that can have minimal impacts on our land and water if managed properly.



WG: How big a factor in well production

are chemical fracking formulas?

All of the chemicals used in fracking formulas have important purposes: preventing scaling on the production casing, allowing the necessary water pressures to crack the shale, preventing oxidation, preventing the growth of bacteria in the fractures, etc. They are essential to the fracking process. Safe

handling, storage, and containment procedures and practices are extensively followed with these chemicals, and we have not seen any environmental impacts with their use because of this close management. Even

so, the industry is constantly looking at different formulations that use chemicals that degrade faster and are safer. Some changes have already been made.



WG: How many Chief employees are Lycoming

County residents? How many are

working here but still call Texas home?

How many local people have you hired?

Chief has 20 employees at our Williamsport Field Office; seven were local to PA before going to work for Chief, eight have relocated to the Lycoming County area with their families from other other states— Texas, Louisiana, and Colorado—and five travel back and forth.



WG: Anything else you would like to say?

I think I’ve said about all that is on my mind. One thing I would add is that, in actuality, Chief and all the companies do appreciate the level of involvement that the public has taken in learning about our industry and all of the issues involved. It shows us that they are engaged and want to be a part of it. I’ve seen a lot of environmental issues over 35 years and how they end up being managed. It is usually an evolving process,

always requiring good input from the public, and almost all have been a success in the end. My take on this one is that it will be a success as well.



WG: When figures are bandied about

as to the gas potential in the formation,

how would those huge numbers translate

in terms of number of wells, drilling

pads, gathering system lines, compressor

stations, transmission lines, amounts

of water used in extraction, amounts of

flowback and produced water needed to

be treated and ultimately put back into

our waterways?

It would be impossible to estimate the numbers at this early stage, but with the enormity of the Marcellus, there could potentially be tens of thousands of wells drilled in the next several decades over the 95,000 square mile area of the Marcellus. With the potential for longer laterals and increased number of wells on a pad site, the impacts of gathering lines and compressor stations will be minimized and more localized.

Also, with the advances of water recycling, the amount of water that needs to be withdrawn is reduced and the amount of water that needs to be treated and disposed of is reduced.



WG: In a public meeting, a representative

of your company responded to

the question, “How many wells in the

Marcellus in our area will one compressor

station serve?” with the answer

”33”. Is this accurate? Based on what

size compressor station? What will this

mean in terms of land usage? Looking

at existing gas pipelines and a topo map

of our county, where would you figure so

many stations will be placed?

Our midstream representative was responding to a specific question about the Barto compressor station in east Lycoming Co. and the answer was for the current capacity not what it could be capable of in the

future. First, capacity is not about the number of wells, but about the total amount of gas produced at the wells. Chief currently has two compressor stations in Lycoming – one in the eastern part and one in the western part of the county. Both facilities were designed to grow within the existing space to

be able to accommodate our gas produced as well as that of other operators in the immediate area for several years into the future.



WG: Any concerns about ground level

ozone levels at and downwind of drill

sites? Any health studies being done on

Chief workers or subs with continual

exposure to drill and fracking site air?

Chief has been drilling and fracking shale wells for more than 12 years now with no cause of concern from our workers or subcontractors on site. We have not heard of any health studies that have been requested,

performed or expected to be performed at Chief or by anyone else in the industry.



WG: Is it true that when land is leased,

some drillers may only be drilling for

any recoverable natural gas, say in

another formation closer to the surface,

in order to prove up the resource and tie

up the land? Is Chief drilling only for

Marcellus Shale gas?

I can’t speak on what other companies may or may not do, but Chief is drilling for gas from the Marcellus Shale formation and not from any formations closer to the surface. The Guardian asked a number of questions Rich Adams said were outside of his specific job with Chief. Chief VP of Industry & Public Affairs, Kristi Gittins handled those questions. Included below is what we could fit in this issue. We’ll

publish Kristi’s bio and more questions and responses from Rich and Kristi in the next issue. If you have questions for either, send them in to The Guardian and we will pass them along.



WG: Once a well is proven and capped,

what factors determine how long until it

comes on line and a landowner begins receiving

royalties? Tell us about some of the

factors: price of gas, rights acquisition costs,

proximity to an interstate transmission line,

gathering system right of ways, capitalization

of the lease holding entity, etc.?

Chief designed our initial drilling program in close proximity to the interstate pipelines in all areas and that is true for Lycoming County as well. Most of the leases have clauses that allow us to build gathering lines

from the wells, but there can be issues when the most direct route to the interstate line goes through an unleased property or through a wetland area. Its costs approximately a million dollars a mile to build pipeline so going around areas can be problematic and time consuming. In addition, there are numerous

regulatory and environmental holdups that can take time to resolve. Bottom line - our goal is to get gas to market to be sold.



WG: As hydro fracking has been

around for so long and the gas potential

of the Marcellus has been known for even

longer, what changed to make the resource

exploitable in the last few years? What advances

have occurred and when did shale

gas development become viable?

Mitchell Energy engineers and geologists spent 20 years in North Texas hammering away at the Barnett Shale trying to figure out how to get the gas out economically and were finally successful with a particular

hydraulic fracture stimulation process in the early 1990’s. The company sold to Devon Energy in 2001 and Devon experimented with drilling horizontally in the shale (drilling horizontal wells was not new, just new

to shale at the time). The combination of horizontal drilling coupled with a water frac completion allowed for enough production to make the very high cost wells profitable. After a few successful years, other operators tried repeating the technology in other shale fields which is where we are today. Since the

early days, engineers have continued to refine the technologies used for producing gas from shale to make it even more economical while also minimizing the impacts to the environment and other natural resources.



WG: What is Chief’s position on Senator

Casey and Schumer’s Frac Act bill?

We oppose it – it is not necessary to add additional overlapping regulations.



WG: Does Chief foresee or are you doing

any R & D on less toxin and/or water

resource dependent methods of gas extraction

from shale?

At Chief and as an industry, we do a lot of research and constantly try new methods for developing gas from shale. Our goal is simple -- to extract the most gas possible while minimizing the impact to the environment and other natural resources. It is a constant and evolving learning process and

we do not expect that to ever change.



WG: Is it true that in some other shale

formations, a propane based frac method

rather than water is used? Is it true that it

is not possible in the Marcellus and why?

No, gas fracs are not commonly used in Marcellus-similar shale areas – Barnett, Fayetteville, Haynesville. And to be clear, gas fracs are not a new technology. Chief has no plans now or in the near future to test

a gas frac in the Marcellus.



WG: It is alleged that in the Barnett

Shale, fracked wells give up 50% of their

production in the fi rst year. Is this true and

is it so in the Marcellus? Will re-fracking

be utilized in the Marcellus to keep wells

production up? If so, how often?

A typical production curve has not been established for the Marcellus but yes wells typically produce more in the early years. Re-fracking in not a common event in the Barnett or any other shale field at this time

and I would not expect it to be common in the Marcellus at any point in the near future. Re-fracking has given mixed results when it comes to increased production versus the cost of re-fracking.



WG: We hear about mile square units

being drilled from one well pad. What

is the effectiveness of a frac out into the

shale from a lateral bore? Gas industry

representatives said a year ago in a public

meeting that it was 1000 feet. In a meeting

last spring, the answer was 500 feet.

This past fall, at two different meetings,

the answer was “a couple hundred feet.”

What do these shrinking distances mean

in terms of how many wells can be drilled

in one square mile?

There will never be a uniform answer to this question because the area is diverse and what may work in one area will not work in another. It is too early to tell what type spacing may work in any particular area of

the Marcellus, but one thing is certain, there will not be a cookie-cutter type answer that will apply to the whole Marcellus, so for us, as operators, we need flexibility in unit designations to maximize gas production in any given area. To answer the question specific to Lycoming County – Chief has drilled more wells than any other company and we don’t have the answer yet. We have not tested 500 ft spacing in the area.



WG: It has been said that the distance

a well bore can go laterally may increase

as technology improves. Is this anywhere

on the horizon?

We are drilling longer laterals, but the jury is still out on how long is effective. Longer does not always mean better. Back to our goal - to extract the most gas possible while minimizing the impact to the environment and other natural resources. It is an education and learning process that will

continue.

WG: Does Chief have any plans to use

closed loop systems for onsite recycling of

frac fluids?

Commenting on the environmental issue of collecting wastewater in open-dirt brimmed waste pits where it sits until it is hauled off to treatment facilities: Chief has NEVER collected flowback wastewater in

open pits. We have always contained the wastewater in enclosed tanks and will continue to do so. Chief is currently evaluating the re-use of frac flowback and plans to conduct field pilot tests of on-site treatments

of frac flowback. But at no time do we plan to have the frac flowback in open pits, it will be in enclosed tanks.