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Background

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 looking to lease local land in an attempt to find and remove the gas, whose value 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.

Though there are only about 20 wells in Pennsylvania so far, Balliet expects local production to eventually rival Texas’ Barnett Shale. He said a gas company confided it plans to spend $1 billion this year in leasing agreements in Pennsylvania.

That kind of investment could mean a big boost to the area's economy as a whole.

Primary Author

Rory Sweeney
rsweeney@timesleader.com

Natural Gas Leases - Marcellus Shale

Latest Headlines

December 23, 2008

Gas-drilling’s wastewater a concern

HARRISBURG — State environmental protection officials are studying the wastewater from Pennsylvania’s fast-growing natural gas exploration activity to determine whether it is hazardous to human health.

December 18, 2008

Firms still committed to gas drilling

Though natural-gas prices have dropped sharply since their record-breaking highs early this summer, the industry remains primed to drill into the gas-laden Marcellus Shale.

December 17, 2008

Pa. to raise drilling fees to add staff

Responding to companies lobbying to accelerate the permitting process for tapping the potentially lucrative Marcellus Shale, state regulators moved forward on Tuesday with a fee increase to pay for additional staff.

December 6, 2008

Basin commission to step up permit requirements for drillers

The Susquehanna River Basin Commission denied much of Chesapeake Energy’s request to massively expand its water-consumption permit, including its proposed incursion into Luzerne County, during its meeting on Thursday in Bel Air, Md.

November 28, 2008

Energy pacts pump cash into rural Noxen

If anything, Noxen Township caught the periphery of the coal boom in Northeastern Pennsylvania, supporting itself by providing lumber, hide tanning, farm products and as a railroad hub.

November 28, 2008

Marcellus Shale drilling offers hope

HOUSTON, Pa. — Illuminated drilling rigs glow for miles from atop flattened hills when night falls in this rolling farm and coal country in southwestern Pennsylvania.

November 24, 2008

DEP: Firms face lake water snags

HARVEYS LAKE – The borough is girding itself against potential plans to use lake water for natural-gas drilling, but the state Department of Environmental Protection thinks attempting to gain access to the water might be more trouble than it’s worth.

November 20, 2008

Professor: Don’t deter drilling

PLAINS TWP. – To hear John Baen describe it, Pennsylvania is like an awkward, naive suitor, dithering over the details so much that it’s stumbling on the walk to the front door and turning off its hot date: natural gas drillers.

November 20, 2008

Council: Don’t use lake water for drilling

HARVEYS LAKE – Council members on Tuesday night voiced concerns over a gas company’s interest in using lake water for the drilling of the Marcellus Shale.

November 19, 2008

State seen to hinder gas drilling

DALLAS TWP. – Representatives from every aspect of the state’s burgeoning natural-gas drilling industry met on Tuesday and, though differing on specifics, emphasized that Pennsylvanians stand upon a multibillion-dollar windfall, but only if the state streamlines its permitting process.

November 19, 2008

Drillers: Pa. hampering business

DALLAS — Executives of drilling companies exploring a huge untapped reserve of natural gas say the economic windfall expected from the Marcellus Shale may not come to pass if Pennsylvania doesn’t get its regulatory house in order.

November 18, 2008

Drilling questions to be answered

While landowners are imagining the gobs of cash they stand to make from natural-gas drilling in the Marcellus Shale rock layer underlying much of the region, Don Young hopes there’s room to imagine a few other images, such as gas pipelines crisscrossing once-pristine farmland, benzene contaminating groundwater supplies and an industrywide press to tap every inch of lucrative ground.

November 10, 2008

Drilling issues to be addressed

HUGHESVILLE – As night falls over Beaver Lake Road, work lights gradually accentuate a towering structure visible between the rolling hills. In the middle of a roughly square-acre site, the drilling rig is about halfway through a four-week stay at this rural Lycoming County site.

November 4, 2008

Marcellus Shale gets upgraded sevenfold

A geologist says the Marcellus Shale region of the Appalachians could yield seven times as much natural gas as he earlier estimated, meaning it could meet the entire nation’s natural gas needs for at least 14 years.

October 31, 2008

Interest in natural gas fades for now

The natural-gas windfall seems to have dried up – at least for now.

October 26, 2008

Fewer leases being signed as natural-gas prices drop

The natural-gas windfall seems to have dried up – at least for now.

October 25, 2008

Pa. considers adding natural gas to the tax rolls

HARRISBURG, Pa. (AP) _ The land agents, geologists and drilling crews rushing after the Marcellus Shale are raising something besides the natural gas they're seeking: Talk of a natural gas tax.

October 22, 2008

Gas drilling raises water concerns

WILLIAMSPORT – The Susquehanna River watershed has enough water to supply drilling for natural gas in the Marcellus Shale, members of the Susquehanna River Basin Commission assured at a public hearing on Tuesday.

October 16, 2008

Landowners want to void drill leases

HARRISBURG — Scores of people who own land above a potentially lucrative natural gas reservoir are seeking to void the drilling leases they signed and accused a land agent of guaranteeing a lower royalty than the amount allowed by state law.