NORTHWESTERN PENNSYLVANIA High natural gas prices fuel surge in drilling

ERIE, Pa. (AP) -- High natural gas prices are driving a record-breaking demand for well-drilling permits in northwestern Pennsylvania.
Gas prices, and the demand for permits, have been increasing steadily for about the past five years.
In March 2003, the Department of Environmental Protection issued 233 drilling permits for the 12-county northwestern Pennsylvania area -- a monthly record that stood until 240 permits were issued in March. In the first four months of this year, 580 permits have been issued. Last year 609 permits were issued in the first four months. By comparison, 225 permits were issued in the first four months of 1999.
"I don't think we can be any busier. There's not the equipment out there to drill any faster," said Paul Kucsma, DEP's northwest regional manager of oil and gas monitoring.
Industry officials are stopping short of calling the situation a boom, however, saying that higher steel prices have driven up the cost of drilling -- keeping profits from climbing as high as some drillers might like.
"The increased demand for natural gas is reflected in the increased price we've seen over the past couple of years, and that's reflected in the drilling activity," said Steve Rhoads, executive director of the Pennsylvania Oil and Gas Association.
The relatively high price for gas at the wellhead -- $5.50 per cubit foot on average in Pennsylvania -- is giving companies reason to drill.