The Herald, Sharon, Pa.

January 22, 2012

Boom? What boom?

No permits yet for local drilling

By Lauren Mylo
Herald Staff Writer

MERCER COUNTY —





Local school districts are anxious to offer up their acreage for gas and oil drilling. Leasing companies are packing meeting rooms with their promises of the next gold rush. Local lawyers have seen an increase in business as residents are pouring in for a review of their land holdings.

The shale boom is coming, but it’s not here yet.

To date, no drilling permits have been issued for Marcellus shale, a rock formation lying thousands of feet below the earth’s service that contains a wealth of natural gas and oil, in Mercer or Trumbull County, according to the Pennsylvania Department of Environmental Protection and the Ohio Department of Natural Resources.

Geologists say Marcellus is too thin to contain any real resources under Mercer County, but the even deeper Utica shale is ripe for the taking. There have been permits issued in Mahoning County for Utica shale drilling but again not in Mercer or Trumbull counties.

“I definitely think we’ll end up seeing quite a bit (of activity), it’s just a matter of when,” said Dan Gracenin, executive director of the Mercer County Regional Planning Commission.

“We know there are people out there looking for leases, things of that nature, but we haven’t heard anything about wells being drilled.”

One local landowner signed up his family’s 164 acres in Pymatuning Township in October but has yet to see any activity.

“I don’t know if anybody knows what’s going to happen,” Glenn “Mickey” McKnight, of Reynolds, said pleasantly, noting that as an octogenarian he’s just happy with the money he was promised – $3,000 an acre and 17 percent royalties on whatever comes out of the earth.

“It didn’t sound like a bad deal,” he said.

He and his brother and sister leased their parents’ property to Hilcrop Energy Company, Texas, and McKnight said the company approached them.

“They’re, as far as I know, buying everything up in Delaware and Pymatuning” townships, he said. “They want territory so they can drill because this is quite an operation. They’re not going down eight feet in the ground, they’re going down some distance.”

Reynolds School District has leased about 40 acres, also with Hilcrop. Brookfield Local School District leaders have been talking seriously of leasing.

Local lawyers said they’ve seen an increase in their workload as people have questions about either existing leases on their land or potential ones.

“It’s fairly regularly we receive phone calls from folks asking us to interpret their leases, read their leases,” Greenville attorney Daniel Wallace said. “It’s a regular thing. It hasn’t overwhelmed my practice but it has become very much a part of it.”

Wallace said most people already have shallow well leases, which can complicate or prohibit people’s signing of shale well leases.

But most of the real drilling activity has been in places like Washington County and running up through northeast Pennsylvania, Wallace said, noting Mercer County is on the fringes.

Utica shale drilling could be “10 years down the line,” Wallace said, “but eventually you may see some activity.”