Gas industry keeps eyes on Pa.

GENARO C. ARMAS Associated Press Writer

STATE COLLEGE — When it comes to natural gas drilling, all eyes are on Pennsylvania.

From controversy over methane-tainted water in the small northeastern Pennsylvania town of Dimock, to the legislative tussle over an extraction tax, to a close watch on regulatory moves in Harrisburg, how the state proceeds on many fronts related to the Marcellus Shale formation has the potential to affect the industry’s future elsewhere.

“The eyes of the world are back on Pennsylvania as part of a transformation, I believe, in energy policy,” Scott Perry, director of the state’s Bureau of Oil and Gas Management, said this week at Penn State University’s Marcellus Summit conference.

The state’s link to the oil and gas business goes back 150 years ago to a boom that began in northwestern Pennsylvania in small-town Titusville.

“We did it once before,” Perry said, “and it looks like we’re going to do it again.”

The gas riches of the vast Marcellus Shale — which underlies Pennsylvania, New York, West Virginia and part of Ohio — have attracted a rush of drillers and related operations to the region in the last two years. Tens of thousands of acres of Pennsylvania land have been leased and thousands of wells have been drilled.

Some geologists estimate the Marcellus contains 500 trillion cubic feet of natural gas, of which 50 trillion cubic feet might be recoverable by hydraulic fracturing, or “fracking” — enough to supply the entire East Coast for 50 years. Those vast gas riches are attractive because they’re so close to major markets in the Northeast.

“The Marcellus is so big, so new and happening so fast,” said conference presenter Bobby Huffman, project director for Houston-based Spectra Energy Transmission, a major natural gas infrastructure company. “I would say the rest of the industry is watching it because the potential for the ultimate amount of gas production is so big in Pennsylvania.”

Advancements in the technology have significantly increased the yield and economic viability of tapping the shale gas.

But environmentalists are concerned on several fronts, especially because the process uses millions of gallons of water mixed with sand and chemicals, some of them toxic, and blasts deep underground to crack the shale and free the gas within. Surface spills of chemicals and contamination of water aquifers and private wells by migrating methane gas are among concerns.

Julian Boggs of the Columbus-based Environment Ohio, said in a phone interview that his group has been keeping tabs on Marcellus issues in western Pennsylvania, though drilling concerns aren’t quite at the forefront as a statewide issue there. Marcellus projects have only recently crept into parts of eastern Ohio.

In Ohio, the Utica Shale — a formation deeper underground than the Marcellus — may hold more promise than the Marcellus, based on preliminary interest from gas companies, said Rick Simmers, statewide enforcement coordinator for the Ohio Division of Mineral Resources Management.

“We’re watching and gearing up for a fight, especially with leasing of state lands,” Boggs said. “The biggest problem with hydraulic fracturing ... is that it hasn’t been around long enough for the environmental impact to be understood.”