2007-10-13 / Front Page

AREA OIL, GAS TARGETED

Drilling permits reach modern day highs

A rush on natural gas reserves in Cameron, Potter and McKean counties is continuing.

The Pa. Dept. of Environmental Protection reported that the number of oil and gas drilling permits issued this year in the three counties has been on par with the 2006 figure, which was a modernday high, DEP said.

In 2006, about 120 permits - 75 for oil and 45 for gas - were issued for Potter County. Sixteen were issued in Cameron, 13 for gas and three for oil.

Interest in Potter County gas reserves is rapidly increasing. Extensive drilling is expected to take place in Abbott Township, near the village of Germania, and in several northern Potter County locations, according to information revealed during Tuesday's Potter County Planning Commission meeting.

PCPC member Rance Baxter cautioned property owners to be wary if they're approached by companies seeking to extract natural gas from under their land.

"These companies know more than most of the landowners do when it comes to how much gas is there and where it is located," Baxter said. "It's almost like dealing with voodoo to try to understand it."

Another member, Mitch DeLong, said indiscriminate drillers could cause damage to private water supplies.

PCPC members will consider regulations controlling drilling activities in the coming months.

Steve Rhoads, executive director of the Pa. Oil and Gas Assn., said companies recognize a greater possibility of return on their investments, due to higher prices, increased demand and improved extraction technology.

"As long as wellhead prices remain at historic levels, you will see a historic number of wells being drilled," Rhoads said. "You have to be able to drill new wells when the production from the old ones continues to decline (and) the income is now available to invest in new wells."

Rhoads said drillers are interested in shallow natural gas caches that were originally explored a quarter-century ago. These pockets of gas were not economical to tap in prior years.

Much of the natural gas that producers would like to access is located underneath state forest land. Dominion Transmission Corp. drilled a well on land leased from the state on Steam Hill Road, near the Cameron/Potter County border. Seneca Resources and Homeland Energy Ventures have also been active.

One risk is gas migration, such as what occurred recently in Kushequa, McKean County, where water wells have been polluted by migrated gas. Drilling activities are monitored by local conservation districts and DEP.

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