Tuesday, April 04, 2006

Drilling for gas planned in Bucks

A Michigan firm is leasing mineral rights to properties in Nockamixon, but not everyone wants to sign. (See a map of the area.)

By Marc Schogol
Inquirer Staff Writer

April 4, 2006

Texas has its oil patch. Saudi Arabia has Ghawar, the largest oil field in the world. And Bucks County has... Nockamixon?

Drilling rigs will soon be on their way to that Upper Bucks County town, even if they are the last thing that people living amid those rolling suburban hills thought they'd ever see.

A Michigan company is leasing mineral rights to properties in and around the township and plans to begin drilling the first of up to a dozen wells in the next few months. Its target is a natural-gas reservoir 8,000 feet underground.

If any oil should happen to turn up, the company will be happy to pump that out, too.

Relying on exploratory drilling near Route 611 that was conducted 20 years ago, Arbor Resources L.L.C. says it expects to find significant gas deposits beneath the dairy and horse farms and large building lots in the bucolic Upper Bucks County countryside.

Arbor, which operates about 75 gas and oil wells in the Midwest and far West, said it wouldn't know for sure how much gas was underground until the first well was sunk.

But given the location, and given the rising price of natural gas and the need to find domestic energy sources, Arbor Resources field representative Dave Schriml said, "This will be a Wall Street Journal hit when it happens."

To date, about 250 owners of about 4,000 acres of property in and around the community of 3,500 have signed Arbor Resource leases, which offer $20 an acre upfront plus future royalty payments.

But not everyone in Nockamixon is excited.

Other residents have refused to sign, citing concerns about drilling safety and its effect on the environment and property values.

The expected site of the first well is near a former chemical company plant that is undergoing an environmental cleanup. Would this, some wonder, pose a contamination hazard?

"It's an environmentally sensitive area," said Sallie Jo Reid, owner of a 20-acre horse farm. Many people rely on well water, she said.

"I am baffled. This just seems to be something that came into the community and nobody looked at closely enough."

The unusual, large local rock formations - known locally as "Nockamixon Nuggets" - are geological signs that the area is a likely site for natural gas, Schriml said.

Schriml believes that the local fears - which he said he had never previously encountered - have arisen because most residents have never lived with oil-and-gas wells.

Modern technology makes drilling quick, safe and only minimally invasive, he said. Once drilling is completed, working wells are merely pipes rising a few feet above the ground, metered to measure how much gas is extracted.

If gas is found, underground pipes would be laid to link up with existing pipelines used by suppliers and utility companies. The location of the pipes and post-installation landscaping would make them invisible and unobtrusive, Schriml said.

Reid's neighbor, Jim Diamond, has seen it all before and signed on the dotted line.

Diamond, owner of a 40-acre hay farm and chair of the department of agriculture and environmental science at Delaware Valley College, grew up in Fayette County in Western Pennsylvania.

That's where most of the state's 43,906 working natural-gas wells are located, as well as most of its 16,061 oil wells, according to state environmental regulators.

Diamond said his family and neighbors made good money from gas-well drilling on or near their farms.

"Dad used to get about $300 to $400 a month" throughout the 1990s, Diamond said. "Sometimes it was more."

Schriml has told people that royalties could be $1,000 to $2,000 a month. Diamond said a neighbor in Fayette County, where farms do run bigger than in Nockamixon, got more than that. His widow "is in a nursing home and she's still collecting royalties from that well," he said.

Drilling companies must get permits from the state Department of Environmental Protection. Schriml said Arbor Resources is applying for one.

Tom Rathbun, a spokesman for the department's mineral-resources program, said the permit process strictly regulates drilling and "includes any environmental issues."

Some Nockamixon residents' concerns were heightened by a Feb. 14 Fayette County incident in which six workers were injured when a gas well being drilled ignited.

Rathbun said the preliminary investigation indicated that the fire was a freak accident. "It's not something that regularly occurs by any means," he said.

Pennsylvania has come a long way since 1859, when Edwin Drake struck oil and established the nation's first commercial well in Titusville, in far northwestern Pennsylvania.

Gas has replaced oil as the state's primary energy resource. In 2004, the most recent year for which figures are available, Pennsylvania wells produced more than 163 billion cubic feet of natural gas.

That's enough to heat about 2.5 million homes, including the 76,000 Bucks County homes that are tied into Peco Energy Co.'s natural-gas pipelines.

Arbor Resources is returning to a site where a company looking for oil drilled in 1985. No oil was found, and the low price of natural gas 20 years ago discouraged exploration. But now, Schriml said, the price of natural gas, which has more than doubled for consumers since 1985, makes it very worthwhile.

With no regulations on the books, Nockamixon Township's Board of Supervisors recently gave preliminary approval to an ordinance stipulating where drilling may be done.

Township Supervisor Nancy C. Janyszeski voted against the ordinance, having already said no to Arbor Resources.

She has organized a public forum to be held at 7:30 p.m. tomorrow at local Palisades High School. Experts on various aspects of oil and gas drilling and exploration will speak and answer questions.

Janyszeski intends to be at the forum. But it's unlikely she'll change her mind.

It's just the wrong place, she said. "Here we are in Nockamixon in Upper Bucks County! I just can't believe this is happening."