Letter From the Lake — Wayne County, Pennsylvania: “If you could turn rocks into potatoes, we’d all be pretty well off.” That was the comment made not so many years ago by a year-round resident of these parts, as he watched me wielding pick and shovel to carve out a drainage ditch in the rocky ground.
But the mostly barren land has always been part of the attraction to this corner of northeastern Pennsylvania. Lots of year-round residents have taken their turn in the metropolitan areas, but have returned here to eke out a living in a part of the country where the 2000 Census per capita annual income was something like $17,000.
Why do they do it? Often for the same reason summer vacationers like me make the pilgrimage: To get out of the rat race and the traffic jams down below.
But things change, of course, as I was reminded recently on a late autumn visit to Wrighter Lake and its environs. While you still can’t turn rocks into potatoes, you can drill deep into the rock formation that lies under a major chunk of northern Pennsylvania and the Southern Tier of New York and find natural gas — lots of gas.
The discovery of major gas deposits under the formation known as the Marcellus shale formation has triggered a “gas rush” as homeowners have sold off leasing rights to their properties in the thousands of dollars per acre. Landowners who sold leasing rights for $500 an acre a year ago or so are now kicking themselves as prices have climbed to $2,500 an acre, or — in some cases — a reported $5,000 an acre. Many people are forming coalitions of property. In August a group of 500 property owners sold the drilling rights to 10,000 acres of land for $110 million.
It’s all happening first in northeastern Pennsylvania. If you travel a few miles south of Montrose to Dimock Road and head over toward the old white farmhouse at the intersection of Waterford Road you will find an austere sign marking the entrance to “Hubbard #1,” a gas-producing well owned and operated by Cabot Oil & Gas, the big Houston-based energy company.
A November 9 article in the Binghamton Evening Press & Sun Bulletin reported that Cabot is spending more than $100 million for drilling rigs and pipelines to exploit the gas reserves. “Some of these wells are among the best producing wells in the world,” a Cabot spokesman was quoted as saying. “It’s changing the world supply.”
It could also change a lot of other things in northeastern Pennsylvania. The gas is extracted through what are known as “horizontal” wells. Pipes are drilled down a mile or more into the earth, and then a process known as “fracing” is employed to drill horizontally up to 2,000 feet or so in all directions to ferret out the pockets of gas. Fracing (pronounced frack-ing) comes from the term “fracturing fluid” — referring to millions of gallons of chemical-laced liquids that are injected into the wells to break up the shale and free up the gas.
As the Binghamton paper explains: “Byproducts of drilling include chemicals and sand added to water and injected into the well to stimulate gas flow. Some chemicals are biocides to kill bacteria in water taken from rivers. They also typically include friction reducers to ease pressure in surface lines and down the well casing; sand and sometimes anticorrosive agents to protect equipment.”
Exactly what’s in the fracing liquid is not known, because the companies doing the drilling regard it as proprietary information. In addition, no one seems quite sure what the environmental impact will be of the material brought to the surface along with the natural gas — stuff like brine, metals, radon, and “norms” — “naturally occurring radioactive minerals.”
One of the drilling companies already is talking about converting some abandoned wells into repositories of the newly generated waste. If that doesn’t sound like an environmental nightmare, then consider the new pipeline being laid to transport the gas to places like Philadelphia, New York, and central New Jersey. It’s a 182-mile long, 30-inch line, replacing a 12-inch line currently in use.
In addition, there’s no guarantee that the royalties envisioned by some landowners will last forever. Gas wells can be terribly productive in the first few years, and then fall off precipitously. Plummeting energy demand has affected natural gas prices as well as oil. And the drilling companies have been impacted by the credit crunch the same as everyone else. The stock of Cabot Oil has dropped from a high of $72 earlier this year to around $25 now.
Chesapeake Energy, the nation’s largest natural gas company, has seen its stock price fall from $74 this summer to $14 now. The company had to sell some $3.37 billion in leases to a Norwegian firm to stay afloat.
As a blogger at the informative Binghamton Press website (www.pressconnects.com/gaslease) recently wrote: “That is quite a cut in acquisition funds. Good luck to those hoping for that $25,000 per acre lease. Was fun dreaming, wasn’t it?”
If rocks still aren’t turning into potatoes, northeastern Pennsylvanians can look forward to some environmental hot potatoes. And the rat race seems closer than ever.