In Fayette County, Pennsylvania, Bill Jackson owns a dairy farm that his family founded in 1940. It's not unusual for him to log 18-hour days tending to cattle and corn among the verdant rolling hills, rivers and forests typical of this rural area. A part of his farm is also leased for natural gas drilling.
"Natural gas is a resource that provides energy for the country. It's every bit as much a part of the farm as the hayfield or the cornfield that we see above the surface," he said.
Western Pennsylvania residents like Jackson share a strong work ethic. But with the decline of the steel and coal industries over the past four decades, the region has suffered economically and has seen a population decline.
In early 2011, Chevron acquired independent natural gas producer Atlas Energy, Inc., and began producing gas in southwestern Pennsylvania. Nearly all of the 366 employees who joined Chevron as a result of the acquisition continue to work with us today. With more than 700,000 acres (283,300 ha) under lease in the Marcellus Shale, Chevron is one of the state's largest leaseholders.
Adding to Economic Growth
Marcellus natural gas can provide cleaner-burning, affordable energy, which supports energy security, regional jobs and economic growth for the United States and places like Fayette County. Chevron is helping ensure that the people of southwestern Pennsylvania benefit from this resource without compromising their communities or the environment.
A 2011 study by global information company IHS estimated that by 2015, approximately 270,000 new jobs will be created in the Marcellus region, which could also support 1.6 million jobs by 2035.
Chevron drilled 60 wells in 2011 and will continue to expand operations in ways that benefit local economies while limiting negative impacts. According to Jackson, "The Marcellus industry has provided a much-needed boost to the economy. The hotels and restaurants are full. It has provided jobs for well operators, truck drivers, drillers and excavators—a wide array of jobs."
Chevron's Trip Oliver grew up in Pittsburgh, Pennsylvania, and understands the importance of this opportunity. "The development of Marcellus natural gas has the potential to have the biggest impact on our region's economy in my lifetime," said Oliver, a government and public affairs manager for Chevron operations in the region. According to the Pennsylvania Department of Labor & Industry, from late 2009 to early 2011, 72,000 people were hired in the core and ancillary Marcellus industries.
To encourage long-term job growth, we are partnering with Carnegie Science Center of Pittsburgh to launch the new Chevron Center for STEM Education and Career Development, which supports science, technology, engineering and math (STEM) for students from preschool to high school in the region.
"We need talented professionals—engineers, geologists, geophysicists and information technology specialists," said Bruce Niemeyer, head of Chevron operations in the region. "This program will help enable the Pittsburgh area to remain competitive in a 21st-century global economy."
Protecting People and the Environment
Pennsylvania's history of oil and gas development dates back to 1859, when Colonel Edwin Drake developed the world's first commercial oil well at a depth of 69 feet (21 m). The energy industry has long known about huge gas resources trapped in shale rock thousands of feet deep across the United States. But only in the past decade have energy companies combined two established technologies—hydraulic fracturing and horizontal drilling—to successfully unlock this resource in the face of increased energy demand.
"Permission to operate depends on our ability to do business responsibly. Protecting land, water and communities is our highest priority," said Niemeyer. "After the decline of this region's coal mining and steel industries, people here worked hard to clean up the environment. Western Pennsylvanians don't want to give that up."
“Protecting land, water and communities is our highest priority.”
— Bruce Niemeyer, Chevron
To foster dialogue between the company and local communities, we began work in 2011 to create an external advisory council in Fayette County. The council was established in early 2012, and we have plans to create additional councils in other areas. We participate in informational meetings, display our exploration and production equipment at county fairs and other events, and offer media tours of well sites. Residents also can ask questions or express concerns through a community hotline.
After acquiring Atlas, Chevron moved quickly to share best safety and environmental practices with the new employees and contractors, using our Operational Excellence Management System and underscoring our commitment to safe and responsible operations. "We acquired Atlas on a Friday, and by Saturday morning, we sent an internal team of experts to meet with key contractors to discuss safety and environmental stewardship," said Niemeyer. "During our first full week, we hosted Chevron environmental and safety professionals from other operations to share best practices and identify opportunities for improvement." Chevron currently is working with regulators to strengthen regulations and with other energy producers to establish and enhance safety practices.
Native Pennsylvanian Bryan Hajos worked for Atlas for four years and is now a safe-work advisor for Chevron. Hajos trains contractors and former Atlas employees in Chevron's safety culture and procedures. One of our many tools used to drive safety performance is the five-step stop-work authority: Stop the unsafe or at-risk act, notify a supervisor, involve the right people in addressing the issue, resume work when the issue has been resolved and share what is learned.
"We used stop-work authority to halt a project to shore up a leased road, which delayed the project, but made the road safer," said Hajos. "With stop-work authority, contractors and employees don't need to explain lost productivity or time. New procedures, training and values are creating a positive experience where everyone is looking out for each other."
Operating Responsibly
"It only takes 10 seconds to scare people about the perceived risks of energy development, but it takes months or years to correct those misperceptions," said Oliver. "It's critical to communicate with southwestern Pennsylvanians about our proven approach to unlocking natural gas from under their land."
Producing gas from shale involves injecting water and special fluids into rock thousands of feet below the surface and the groundwater aquifers. A mixture of water and sand makes up more than 99 percent of the fluid, and chemical components are less than 1 percent. On FracFocus.org, a voluntary disclosure mechanism, we disclose the chemical additives of the fracturing fluids used in our wells. Our wells are designed, drilled and installed to protect the groundwater during hydraulic fracturing and over the life of the well, which can be 30 to 50 years long.
In Pennsylvania, we use a combination of up to eight layers of steel casing and cement, which forms a continuous barrier between the well and any groundwater. Groundwater aquifers are typically no deeper than 350 feet (107 m), while hydraulic fracturing operations take place at approximately 7,500 feet (2,286 m) to 8,500 feet (2,591 m) below the surface. We conduct a series of tests over the life of the well to verify long-term integrity.
Our operations adhere to the company's position statement on fresh water to safely and responsibly manage fracturing fluids, wastewater and produced water. We test all private wells used for drinking water within 3,000 feet (914 m) of the proposed drilling location and provide test results to the owner of each well and to the Pennsylvania Department of Environmental Protection. To improve the industry's transparency on water quality monitoring, the Marcellus Shale Coalition is developing a public database in which companies will post results.
Bill Jackson has the understanding that we hope others will gain as we inform them about our safety measures. "Agriculture is our livelihood, and we wouldn't do anything to endanger that livelihood, whether it's the cows or the crops," he said. "Our cows are fed off a spring, which was one of our early concerns. We've had it tested regularly, and nothing has changed."
Chevron is also working to reduce truck traffic. A typical well needs approximately 1,200 truckloads of water for drilling and completions activities, which will increase truck trips over Pennsylvania's rural roads. We are recycling water to reduce the number of trucks and emissions, and truck drivers are undergoing safety training. We also work with local officials to determine the best routes.
"When we are finished at a well site, we leave the roads we used for access in the same condition as or better than when we arrived," Oliver said.
Many residents like Bryan Hajos hope Chevron can help reverse a decades-long trend in Pennsylvania. "In the past 20 years, you'd go to college here and go somewhere else to find a job. Now people like my friends and me, who grew up here, have a chance to go to school here, stay in the community and work for a world-class organization. Chevron is breathing new life into the community."
Updated: May 2012