Natural Gas Prices Spark Drilling Frenzy in Penn.

If all goes well, the Marcellus could help moderate the steep climb in natural gas prices and reduce possible future dependence on natural gas from the Middle East, which is beginning to arrive at coastal terminals in liquefied form.

A natural gas drilling site on a farm in Hickory, outside Pittsburgh, that seeks to extract gas from 600 feet below the surface.

Natural gas in the Marcellus and other shale formations is sometimes found as deep as 9,000 feet below the ground, a geological and engineering challenge not to be underestimated. The shales are sedimentary rock deposits formed from the mud of shallow seas several hundred million years ago. Gas can be found trapped within shale deposits, although it is too early to know exactly how much gas will be retrievable.

The gas from all the shales combined “is a game changer,” said Robert W. Esser, an oil and gas expert at Cambridge Energy Research Associates. He estimated that shale produced four billion cubic feet of gas a day on average last year, or about 7 percent of national production, and that shale gas production would increase to nine billion cubic feet a day by 2012, or about 15 percent of expected national production.

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The New York State Energy Research and Development Authority estimates that developing New York’s portion of the Marcellus could roughly double the amount of natural gas now produced in New York. Currently that is about 55 billion cubic feet a year, providing for 5 percent of the state’s needs.

The Marcellus has suddenly become attractive in large part because natural gas prices have spiked in the last several years and the geologically similar Barnett Shale has been an industry sensation.

By using horizontal drilling techniques, oil and gas companies have been able to draw natural gas from underneath the city of Fort Worth, even from below schools, churches and airports. The companies have perfected hydraulic fracturing techniques, pumping water and sand into well bores to fracture shale and release gas from its pores.

Production in the Barnett has exploded from a trickle five years ago to over three billion cubic feet a day, and energy experts say that number could more than double by 2015. Shale gas development in other parts of Texas, Louisiana and Arkansas has also shown promise.

But no formation compares in size to the Marcellus. It is deeply entrenched in wooded and mountainous countryside and expensive to reach. But the reserve is also within short pipeline distance from some of the nation’s most energy-hungry cities.

Still, not everyone here is happy about all the leasing and drilling. At meetings with the companies, landowners have asked questions about potential hazards to water and woodlands.

Keith Eckel, 61, a grain farmer with 700 acres in northeastern Pennsylvania, said he had not decided whether to let the companies drill on his property. “Farmers have taken care of this land all their lives and don’t want to see it destroyed,” he said.

But many farmers and retirees in rural Pennsylvania appear excited that their lives are about to change.

“Now I can retire,” said Robert Deiseroth, a 63-year-old farmer and auctioneer from the town of Hickory, who recently received a $16,000 royalty check from Range Resources that he hopes will be repeated month after month. “This was a godsend for me. If it weren’t for this I would have to sell off some of my land to get some money for retirement.”

Mr. Deiseroth has put new windows in his house, bought a new fishing boat and plans to build a new garage. His 89-year-old father and 90-year-old mother, who live nearby, just got a $20,000 monthly check. His father has replaced the golf cart he drove around his farm with a Kubota utility vehicle, while his mother has bought a flat-screen television.

“When Range came in a lot of people didn’t like it,” Mr. Deiseroth said, “But things changed when they started getting their checks.”

Copyright © 2009 The New York Times

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