GAS COMPANIES TURN UP HEAT
Rendell administration will allow new drilling activity

Energy companies got their wish last week with the announcement that they'll be able to seek the mother lode of natural gas reservoirs deep under state forest land in northcentral Pennsylvania.

Seismographic studies and core drilling have pointed to massive reserves, held in the Marcellus Shale formation, some 6,000 to 8,000 feet underground, and the Trenton- Black River, which is more than 10,000 feet deep.

Drilling technology has advanced and gas prices are high enough to drive exploration companies to go after the gas, which will be expensive to access, with no guarantee of return on investment.

Meanwhile, speculators from Texas to Canada are scouring for the more traditional "shallow drilling" opportunities on private land throughout the region, trying to persuade rights holders to sign leases for annual payments plus royalties on any gas that's produced.

In many cases, owners of acreage in Potter and Cameron counties do not own the oil, gas and mineral rights.

The Rendell administration last week confirmed that it's lifting a five-year moratorium on gas wells, auctioning the rights to drill on an additional 75,000 acres of state forest land. There are already approximately 650 wells on more than 200,000 acres of state forest under lease for gas production.

Stephen W. Rhoads, president of the Pennsylvania Oil and Gas Association, welcomed the reversal.

"We just wish it were larger," Rhoads said, "because 75,000 acres is not a whole lot of land."

However, the Sierra Club accused state leaders of giving in to pressure from oil and gas interests after halting drilling in 2003, in response to concerns that construction was destroying wildlife habitat.

In Potter County, speculators are fueling the local economy -- motels, restaurants and gas stations are the main beneficiaries -- as they spread out in search of leases and seek to cash in on gas reserves that were either overlooked by, or out of the reach of, earlier drillers.

A surge in activity is imminent. Several companies have multimillion dollar budgets allocated to drilling in the region. Last year, 67 drilling permits were issued in Potter County and 49 wells were drilled. Early returns from 2008 show an even higher rate of drilling and production.

Earth moving activities involved with the typical oil and gas projects consist of clearing trees, road building, grading (well site establishment), pipeline installation, and tank battery construction. These activities generally involve between one and five acres and require erosion and sediment control practices to protect nearby watercourses.

Another risk is gas migration, such as what occurred recently in Kushequa, McKean County, where water wells have been polluted by migrated gas.

Drilling activities and road-building are monitored by local conservation districts and the Pa. Dept. of Environmental Protection.