PENNSYLVANIA Officials seek to curb gas drilling

Pennsylvania has been leasing forest land for gas exploration since 1945.
HARRISBURG (AP) -- In a draft of a plan now up for public debate, the Bureau of Forestry wants to stop the decades-old practice of leasing state forest land for shallow gas exploration, saying roads and pipelines built to service the wells are degrading wildlife habitat.
Current leases and wells would not be affected, and the proposal would still allow new wells to be drilled a mile or more apart, leaving gas formations deeper than 7,000 or so feet viable for exploration.
But with wholesale natural-gas prices up about 75 percent in the past year and demand increasing, the gas-exploration industry is complaining that the timing of the bureau's proposal is extremely poor.
State forestry officials said they think well sites and service roads being cut into the forest are interrupting the habitat of wildlife such as warblers and salamanders, and unbalancing the forest's animal populations.
Current wells
Currently, there are about 550 operating shallow gas wells on state forest land that were licensed by the state, and hundreds more that were drilled before the state bought the land, or that have been plugged, said Ted Borawski, a bureau geologist.
Those wells generally are spaced a quarter-mile apart and are connected by roads and pipelines.
"If you look at an aerial view, it looks like a checkerboard," said Jim Grace, the state's chief forester.
The ban, if adopted, would become part of the bureau's forest management plan, which would be in force for five years before it is updated again. Rethinking the ban would be possible at that time, Grace said, particularly if geologists detect a huge shallow gas formation that could be lucrative to the state.
Payments to state
The state gets royalties from the leases and gas flows -- about $2.7 million from oil and gas wells in 2002 -- which it uses to buy new forest land, or improve its facilities and programs on the 2.1 million acres of public forests.
Since about 1945, the state has leased public forest land to gas exploration companies, the vast majority of which drill no more than 5,000 feet into the ground. A smaller number of wells on state forest land are drilled deeper than that.
The Bureau of Forestry is conducting public meetings around the state before it adopts a final management plan, possibly by the end of the year, and Grace said he is still listening to oil and gas industry arguments against a ban.
Industry officials say that not only are wholesale natural-gas prices high right now, but long-term demand for gas is increasing quickly as more gas-fired power plants are being built.
"If we want prices to stabilize, we need to find more supply to put in the marketplace, and it doesn't make any sense in that light to curtail the development of shallow gas leases on public lands," said Stephen W. Rhoads, president of the Pennsylvania Oil and Gas Association.
Rhoads labeled the bureau's reasons for proposing the ban as "relatively trivial and somewhat specious," and said that any concerns could be addressed in a lease agreement with exploration companies.
Although Grace said interest in drilling in state forests has been down, higher natural-gas prices tend to drive more exploration, and state and industry officials say they think drilling activity in Pennsylvania is on the upswing.
Overall, state forests have produced about 380 billion cubic feet of gas since 1945, enough to power 60,000 homes every year, Rhoads said. The state has reaped $134 million from lease payments and royalties on gas production from the drilling, Borawski said.