WAYNE COUNTY, Pa. - In this bucolic northeastern corner of Pennsylvania, old-timers and newcomers alike feel deep attachment to the land. That is true more than ever because of intense interest in what sits 6,000 feet below the rugged hills: a vast store of natural gas and an undreamed-of chance at wealth.

"This is the biggest energy play in Pennsylvania since Col. Drake struck oil in 1859," said petroleum geologist G. Warfield "Skip" Hobbs IV, who has analyzed natural gas in this part of Pennsylvania for investors.

In a time of relentlessly rising energy prices, industry is after one of the hottest prospects in the United States - gas trapped in the pores of a 365 million-year-old layer of rock called Marcellus shale that stretches from New York through West Virginia. It is especially promising in northeastern Pennsylvania.

And especially troubling to local environmentalists.

Drilling will lead to "contaminated drinking water, carcinogens in the farmland and food chain, torn-up roads, risk of explosions, toxic air pollution, plummeting real estate values, and screeching noise pollution," the group Damascus Citizens for Sustainability warns on its Web site.

Last summer, gas drillers paid $50 an acre to lease the county's forests, hay fields and pastures. That price has skyrocketed to more than $2,000 an acre, with the possibility of millions of dollars more in royalties paid to the landowner if drilling is a big success.

The potential bonanza has come like a shot out of the blue in Wayne County, where the biggest town, Honesdale, has 5,000 people. It's a place in transition, with Branko's Patisserie du Jour sitting across from a Case International Harvester parts dealer on Main Street.

When an agent for Chesapeake Energy Corp., the nation's second-largest independent natural-gas producer, knocked on Harold Welch's door here last summer, the dairy farmer on a dirt road was not interested.

"I didn't want this place destroyed," said Welch, who installed 142 birdhouses to attract swallows and bluebirds to the 212-acre farm. Early-morning birdsong resounds on hills where his grandfather spent a lifetime digging out and hauling away rocks.

Welch, with three children who hunt and swim on the farm, came around after talking with neighbors and joining a group that wrote a six-year lease with stronger protections for land and water.

Signing with Chesapeake for $750 an acre in late November, he missed the dramatically higher prices this year. Still, his $159,000 check was enough to put up a sorely needed silo, buy milking equipment, and tithe $16,000 to religious organizations.

The natural-gas industry has long known of the resource beneath Welch's farm. But now the rise in energy prices - the costs of crude oil and natural gas have doubled over the last year - has made it potentially profitable to drill for the hard-to-extract gas.

Full Story: http://www.philly.com/philly/hp/news_update/20080706_
Betting_on_a_bonanza.html

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