Let's drill for gas - in our yard
With today's high prices, even home-owners are tapping into reserves.
VETERAN, N.Y. — Ed Clauss is sitting on top of a potential bonanza. And to prove it, there's a 112-foot drilling rig grinding away 24 hours a day right in front of his white-paneled house in the rolling green hills of western New York.
A mile away, in the middle of Ross Lant's alfalfa field, sits a brand-new natural-gas well that's more than 10,000 feet deep.
"It's just like finding money," says Mr. Lant, who'd just come in from a 12-hour day of spring planting. "But we're not sitting here waiting for it."
The potential for an energy crisis has unleashed a surge in drilling for natural gas around the country - much of it in people's backyards. The number of wells in operation has more than tripled since 1999. Most of the activity is out west, but it's also booming as far east as New York, Pennsylvania, and West Virginia.
The combination of higher prices and the discovery of deep new reserves has created a frenzy of drilling that's revitalizing the region's energy industry. "It's a fantastic boom," says Robert Jacobi, professor of geology at the University at Buffalo. "I forgot who said it first, but it's true: The Texans are discovering where New York is again."
That boom has already had an impact on the local economy. A few landowners are already receiving royalty checks, some as high as several thousand dollars each month. Thousands of others have signed up to lease their mineral rights for the first time. And the "landmen," the workers who sign up those rights, keep moving east throughout the state.
How it all began
Natural gas is not new to the Appalachian Basin. For years, New York and other nearby states had some drilling going on. In fact, natural gas was first discovered in Fredonia, N.Y., in 1821, when a tinsmith noticed a steady stream of bubbles coming up from a local creek. He poked a hole in a washtub, put a shotgun barrel in it, and put the whole thing over the bubbles. Then he lit it. By 1825, the whole town was ablaze, and New York's first natural-gas boom was under way.
By the turn of the century, much deeper reserves were discovered out West, and the drillers turned their attention there. But small operators in New York, Pennsylvania, Ohio, and West Virginia kept working. In New York, for instance, a shallow sandstone reserve known as the "Medina play" produced between 1.5 and 3 percent of the state's natural gas. This year, thanks to a new find, that's expected to double or even triple.
"It's very exciting, a real shot in the arm to oil and gas exploration in New York, the likes of which we haven't seen for several decades," says Brad Gill, executive director of the Oil and Gas Association of New York.
That boost came from a discovery made a few years ago by a local driller, Columbia Natural Resources. By using technological advances in seismic mapping, geologists were able to get a sense of the terrain several miles deep beneath the earth. They found what they believed was a 460 million-year-old limestone seabed with a large fracture in it that could potentially be filled with gas. It's called the Trenton Black River reservoir.
But Columbia had to drill first to be sure there was gas. At the time, natural-gas prices were hovering around $1.50 per thousand cubic feet, not enough to justify drilling even a shallow well for $100,000. The deeper wells, necessary to hit the Black River reserve, run closer to $1 million. But the company drilled anyway and did strike gas, and lots of it.
But because natural-gas prices were so low, not much more drilling went on. Instead, Columbia and other local drilling companies sent out dozens of landmen to knock on farmers' and landowners' doors, to buy up leases for the mineral rights under their property.
This time, we mean business
The mineral rights for Lant's farm, which has been in the family for six generations, had been leased out to various companies on and off for years. But this time, when a landman from Fairman Drilling came knocking on the door, the negotiations had a different feel to it.
This company really wanted to dig, and they started last November, just before natural-gas prices spiked up sharply to almost $10 per thousand cubic feet. In February, it was flared, and a plume of flaming gas 30 feet high spurted out of the newly dug well.
"It went all the way up the side of that hill there," says Joseph Murray, Fairman Drilling's field manager in the area. He points to the slope next to the wellhead - known as a "Christmas tree," because of the number of wheel-like valves that run up and down the thick 8-foot-high pipe.
The well could eventually produce 3 to 5 million cubic feet a day, and depending on its depth, it could last five years, or 20 years. The Lants get 12 percent of what's produced.
Most people in this economically struggling area are delighted by such prospects, but not everyone is happy with a rig next door.
The Trenton Black River reserve has already been explored as far north as Ontario, through New York and Pennsylvania, and far south as West Virginia. No one knows yet how deep or rich the reserves are, but they're believed to be substantial. So much so that major oil companies are now taking a serious interest.
Talisman, Canada's largest independent oil and gas company, recently signed a joint agreement with Seneca Resources, a Houston-based firm, to explore more than a million acres in the Appalachian Basin in western New York and Pennsylvania.
Other big energy companies, like Enron, are rumored to be doing their own studies.
(c) Copyright 2001. The Christian Science Monitor