Gas Leases

When domestic gas prices spiked during an energy crisis in the early 1980s, prospectors came into the western part of the Quad- state region to acquire drilling rights. With oil at $130 a barrel and natural gas prices headed above $11 per thousand cubic feet, they may return.

Exploration and production companies are looking for huge reserves of natural gas in Marcellus black shale in the northern Appalachian region. New drilling technologies for extracting gas from shale, coupled with historically high oil and natural gas prices, have triggered a land rush for drilling rights.

Marcellus shale, named after the town in New York where it was first gassed, is found mostly in western New York and Pennsylvania and much of West Virginia. The shale area also stretches into Garrett and Allegany counties of Maryland, Morgan County and western Berkeley County and western Frederick and Shenandoah counties.

Farmers in Lycoming County Pa., are reportedly being offered from $1,500 to $2,500 an acre for drilling rights, and if gas is found, they collect royalties.

Even if no large discoveries are found in the western part of the Quad-state region, drilling activity in the Appalachian Mountains could have an economic impact on its neighbors to the east. It would tend to raise standards of living, tighten labor supplies, and possibly result in lower energy costs.

Just as growth pushing out from the Baltimore-Washington area has affected the Quad-state region, an increase in energy-related activity to the west might indirectly impact the region.

Marcellus shale recently gained popular attention when USA Today reported that geoscience professors at Penn State and SUNY-Fredonia had estimated original gas in place within the shale at 168 to 516 trillion cubic feet (Tcf), and recoverable reserves of as much as 50 Tcf. The United States currently produces roughly 30 trillion cubic feet of gas a year.

It is one of the three largest potential onshore resources of natural gas in the United States, according to the U.S. Geological Survey, with reserves of up to 75 Tcf.

[Read the rest at redOrbit]