Planning Commission updated on gas drilling

By DAVID THOMPSON - dthompson@sungazette.com
The Lycoming County Planning Commission Thursday took a step toward coming to grips with how natural gas drilling may affect the county and what they may need to do to ensure the impact is as positive as possible.

Thomas Murphy, an educator with the Penn State Cooperative Extension at Lycoming County, updated the commission on gas drilling activities in the area and what those activities could mean to local residents, businesses and public officials.

According to Murphy, the interest in the area is fueled by the Marcellus Shale formations, which has striking similarities to the Barnett Shale formation in Texas.

The Barnett Shale has provided some of the highest natural gas yields in the nation’s history, Murphy said.

The Marcellus Shale covers a much wider swath of land, from the southern tier of New York through central Pennsylvania and into Maryland, Virginia and West Virginia, and is estimated to hold between 150 trillion and 500 trillion cubic feet of natural gas, he said.

In addition to having a high gas yield over a large land area, the shale formation is much closer to markets on the East Coast than the Barnett Shale, he said.

Consequently, natural gas companies who have worked in the Barnett Shale are flocking to Pennsylvania, including Lycoming County, and are leasing thousands of acres of land at premium prices.

In 2008 alone, those companies plan to spend more than $1 billion in the Appalachian basin on leases and drilling, Murphy said. About 60 percent of that money will be spent in Pennsylvania, he said.

Landowners are reaping the benefits of the interest in the area, Murphy said. It took two years for per-acre lease rates to increase from $15 to $300, but only two weeks for it to increase from $300 to $1,500.

“There is lots of cash coming here and lots of people with money in their pockets,” Murphy said.

Once gas is actually produced, a landowner with a well on his property could make $800,000 to $900,000 in royalties during the first year of production, he said. That is a conservative estimate, he said.

The economic impact of gas drilling activities has radiated out far beyond the landowner. One Williamsport hotel that normally is slow during the winter was booked almost to capacity by work crews, Murphy said.

Gas companies need fuel, stone and other site preparation material, rental equipment, meals, services and lodging for their workers.

They need local contractors to do site preparation work, surveyors and other professional services. They need office space to do their administrative work, he said.

While gas drilling can provide a financial windfall for landowners and businesses, local officials need to be vigilant to make sure there are as few adverse impacts from it as possible, he said.

“We were not proactive with cell towers and wind towers. How do we get out in front of this?” commission chairman Charles Springman asked Murphy.

“By doing what you are doing now,” Murphy replied.

According to Murphy, a team of local officials is traveling to Texas to see first hand how gas drilling has impacted communities there.

According to county environmental planner Kevin McJunkin, the difference between wind energy and gas drilling is that wind energy has been unregulated, while gas drilling is highly regulated.

The impact of drilling activities on local roads is not covered by regulations and should be something planners consider, McJunkin said.

McJunkin said planners should study state Department of Environmental Protection regulations involving gas drilling to get a better idea of what is not regulated.