Seneca Resources Corporation ("Seneca"), the wholly-owned exploration
and production subsidiary of National Fuel Gas Company (NYSE: NFG)
("National Fuel" or the "Company") today announced plans to complete the
conversion of two of its Pennsylvania drilling rigs to cleaner-burning
natural gas, displacing the diesel fuel currently used to power
equipment at the well site. These will be the first dedicated 100
percent liquefied natural gas (LNG)-fueled drilling rigs operating in
the Marcellus Shale within Pennsylvania.
The first rig was converted earlier this month in Lycoming County. The
conversion of a second rig should be completed in early November. Seneca
will also deploy a third rig that will run on both diesel and natural
gas during this fiscal year.
"We continually look for opportunities to improve our operations, reduce
our costs and minimize our environmental impact. The use of alternative
fuels, such as LNG and eventually field gas (natural gas produced from
local wells near the drill pad), is just one step in a broader strategic
plan to expand the use of natural gas in our drilling program," said
Matthew D. Cabell, President of Seneca. "This change will help reduce
our environmental footprint and it is also economically beneficial."
Industry studies on the use of natural gas have shown a significant
reduction in carbon dioxide (CO2), volatile organic compounds (VOCs) and
nitrogen oxide (NOX) emissions when compared to diesel. Certain
emissions reductions could be as high as 95 percent. Additionally, the
operation of a drilling rig fueled by natural gas is quieter than one
utilizing diesel fuel and is virtually odorless.
At a much lower cost than diesel, natural gas-powered drilling rigs
offer an economic benefit to the company. At today's prices, the savings
could be as much as 65 percent. Longer-term, Seneca expects to see
additional savings as rigs are connected to natural gas produced from
nearby wells, eliminating the need to transport LNG to the rig site.
"National Fuel has been a diligent steward of the environment for more
than 100 years and Seneca places this as a top operational priority,"
said David F. Smith, Chairman and Chief Executive Officer of National
Fuel. "Over the past few years, Seneca has used coal mine drainage water
in its drilling program, instituted a 'zero surface discharge' policy
for produced water and embraced other technology to reduce its
environmental footprint. Utilizing natural gas powered drilling rigs
furthers Seneca's long-standing operational excellence."
National Fuel is an integrated energy company with $5.8 billion in
assets comprised of the following four operating segments: Exploration
and Production, Pipeline and Storage, Utility, and Energy Marketing.
Additional information about National Fuel is available at www.nationalfuelgas.com
or through its investor information service at 1-800-334-2188.
Seneca Resources Corporation