Rumor has it that the natural gas industry, which has been ramping up activity the past three years, is pulling up stakes and moving en masse for greener pastures.
While that may not be quite the case, local activity in the year ahead may be focused more on building infrastructure than on ramped-up drilling until the price of dry gas rises.
"There is some presumption that there's a mass exodus of gas drillers leaving the area," observed Mark Murawski, Lycoming County transportation planner. "Frankly, that is not really accurate."
Workers install a gas line which extends up a hill side just south of Route 973 west of Balls Mills.
Murawski, who has been studying the local impacts of heavy truck traffic associated with the industry, said area residents will notice only a slight decrease in industry activity this year.
"We've seen a significant ramp-up in activity over the past three years," he said. "I see a leveling off or slight decrease (in activity), but not a mass exodus."
Thomas Murphy, co-director of the Marcellus Center for Outreach and Research, agreed.
"I don't see a mass exodus," Murphy said. "If you see the number of drilling rigs that are operating in Pennsylvania, it has decreased a little but we're not seeing a precipitous drop."
Low natural gas prices, a glut of natural gas on the market, a mild winter and a lingering national recession all have combined to put a squeeze on the bottom lines of gas companies, Murawski said, but that in no way means industry-related activity will cease here.
Natural gas prices have been well under $3 per 1,000 cubic feet. Energy market analysis firm Bentek LLC recently indicated that natural gas producers will "stomp on the brakes with both feet and jam the dry gas freight train in reverse" by decreasing drilling rig activity in northeast Pennsylvania by 14 percent.
"The driver in all of this is certainly the price of natural gas being low," Murphy said.
"As natural gas supplies outpace demand, due in large part to expanded Marcellus Shale development coupled with an atypically warm winter, production in 2012 may slow to some extent," said Travis Windle, spokesman for the Marcellus Shale Coalition.
Williamsport/Lycoming Chamber of Commerce President Vincent J. Matteo said there could be as much as a 30-percent reduction in drilling in the area in the next year.
"That is an estimate. While there is a slowdown, it's nothing to be alarmed about," Matteo said.
"It's not a bad thing to see a leveling off," Murawski said. "I was very concerned at the begin-
ning how quickly the drilling occurred here and the amount of truck traffic bombarding our transportation system."
According to Murphy, some companies have shifted their focus to oil and "wet gas" areas of southwestern Pennsylvania and eastern Ohio.
"It's a shift toward liquids - whether oil or natural gas liquid," Murphy said. "Liquid prices are more comparable to a barrel of oil."
Wet gas, such as propane, butane and ethane, are traditionally priced higher than dry natural gas, Murphy said.
Fort Worth, Texas-based Range Resources announced in February that it plans to devote only about 25 percent of its $1.6 billion capital budget for 2012 in dry gas areas - mostly in the northeastern Pennsylvania region of the Marcellus Shale - while the rest will be spent in "liquids-rich" regions such as southeastern Pennsylvania.
"Range's presence has been more focused in the southwestern wet gas areas (of Pennsylvania) from the start of Marcellus exploration, but we will continue to have activity in the northeast," Range spokesman Mark Windle said.
As companies shift their focus toward drilling in other areas, much work continues to be done in northcentral Pennsylvania, Murphy said.
"In the interim, we're still seeing infrastructure builds - companies building compressor stations, putting pipeline in and extending gathering systems in areas where they anticipate drilling," he said. "We're still seeing companies leasing ground in northcentral Pennsylvania. Companies are coming back to tie up (early) leases that have expired. It's not a general wave of leasing, it's more strategic leasing."
The county Planning Commission recently approved land development plans for two compressor stations and one facility near Jersey Shore that is expected to withdraw up to 3 million gallons of water per day from the West Branch of the Susquehanna River and transport it via pipeline to drilling areas to the north.
Daria Fish, a spokesperson for Chief Oil and Gas, said the company has 125,000 acres under lease in northeast Pennsylvania.
"Chief currently has three drilling rigs running (in that region) and we plan to continue drilling in 2012," Fish said. "With the price of gas so low, our primary goal is to secure our acreage position and our 2012 plan may include reducing the number of rigs we operate."
Natural gas drilling permits and water withdrawal applications continue an upward trend.
"Our water withdrawal applications are still increasing," said Susan Obleski, director of communications for the Susquehanna River Basin Commission, the entity that oversees water resources among Pennsylvania, New York and Maryland.
The state Department of Environmental Protection issued 469 drilling permits in Lycoming County in 2011, compared with 254 in 2010, according to the department's website.
From January to February of 2011, 54 permits were issued, while 98 permits were issued during that same span this year, according to the department.
- Sun-Gazette staff writers Matt Hutchinson and Mike Reuther contributed to this report.