the golden gas play, page-3

MARCELLUS SHALE ON FIRE heres another article



More than a mile beneath parts of Pennsylvania lies a mostly untapped reservoir of natural gas.

Geologists and energy companies have known for decades about the gas in the Marcellus Shale, but only recently have figured out a way to extract it from the thick black rock about 6,000 feet underground.

Now gas drillers are leasing local land - more than 25,000 acres in Luzerne County alone - in an attempt to find and remove the gas, the value of which increases as energy prices soar.

In January 2008 leases were being signed for values near $100 per acre. By May that value had increased to over $2000 per acre.

With lease values changing so rapidly, landowners are unsure at what price to accept a lease offer.

Kenneth L. Balliet, a forestry and business management educator with the Penn State Cooperative Extension, recently took a trip to Fort Worth to see the economic impacts of those deposits. He said leases are being signed for $18,000 per acre in areas where production has proven strong.

There were 195 Marcellus Shale wells drilled in Pennsylvania in 2008 and another 768 in 2009, according to the state Department of Environmental Protection. Another 364 have been drilled this year as of May 5. There were only about 20 wells in Pennsylvania when Balliet was first interviewed, and he expects local production to eventually rival Texas Barnett Shale. He said a gas company confided it planned to spend $1 billion in 2008 in leasing agreements in Pennsylvania.

That kind of investment could mean a big boost to the area's economy as a whole. But many people are concerned that the state doesn't have adequate safeguards in place to properly regulate the natural gas industry.
Finding a good balance between economic prosperity and environmental safety appears to be the state's greatest challenge in the Marcellus Shale play.