By William Ecenbarger
Natural gas is almost odorless, but it has nevertheless filled the air of northern and southwestern
If you're a landowner, a driller or a politician, it's an aroma that taps you on the shoulder, calls out your name and grabs you by the lapels.
The gas-rich Marcellus Shale formation is driving energy firms to
Texas- and Oklahoma-based drilling companies are setting up headquarters in
Land that was going for $25 an acre just two years ago is now fetching $6,000. And then there are royalties-a share of the well's income--on top of that. The speculators began by offering the minimum of 12.5 per cent royalty required by state law, but now 20 per cent is common and 25 per cent is showing up in newer leases.
A multi-billion business
Many environmentalists are skeptical of the claims, which they see as exaggerated and self-serving.
None of the state revenue projections takes into account a severance tax.
Some 2,000 Marcellus Shale gas well drilling permits were issued in 2009, nearly quadruple the total from the previous year. Actual drilling began on about half the sites.
Some of the exploration firms are relatively small, new, privately held and founded by wealthy individuals. Others are Fortune 500 companies, like Chesapeake Energy, which is the largest leaseholder in the Marcellus Shale, with 1.5 million acres in its portfolio. The company expects to have 28 rigs in operation by the end of next year and plans to drill 165 wells.
The development of the Marcellus, which many experts consider a revolution in
A gas bonanza
They said that by using some of the same horizontal drilling and hydraulic fracturing methods that had previously been applied in the Barnett Shale of Texas, perhaps 10 per cent of that gas - about 50 trillion cubic feet -- might be recoverable.
The two academics--Terry Englander, a geoscience professor at Pennsylvania State University, and Gary Lash, a geology professor at the State University of New York at Fredonia-said that the volume would be enough to supply the entire United States with natural gas for about two years and have a wellhead value of about $1 trillion.
Both men are respected academics. Engelder first began exploring the Marcellus some 25 years ago under a National Science Foundation grant.
If the Marcellus Shale holds up to these optimistic expectations, Pennsylvania could have a significant increase in population and an enormous boost in income that might be sustained for decades - and even into the next generation. But the combination of billions of dollars of revenue, the possibility of significant environmental issues, and the likelihood of rapid changes in communities and people's lives creates an explosive mixture.
Many local officials are concerned. One of them is MaryAnn Warren, a commissioner in rural
Sportsmen are beginning to sound alarm about the drilling activity along the 12 counties that comprise
"Today, if you were to visit this part of our commonwealth, you would be greeted by a different environment," says Robert Pennell, secretary of the Pennsylvania Council of Trout Unlimited. "You would find a proliferation of new roads being cut into the forests, with semis and tanker trucks hauling tons of heavy equipment and water to remote destinations. Not since the heyday of heavy timbering has there been such an assault on our northern forests."