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12

Energy companies rush to find natural gas in New York farm country

When the well hit, natural gas blew from the hole behind...

When the well hit, natural gas blew from the hole behind Kathleen Bergstresser's house like air from a punctured tire. Workers ignited the gas to control it, sparking a house-high plume that lit the night.
"Have you ever heard a bunch of jet bombers going over low?" she asked. "That's what it sounded like." The success of that well and others nearby made it clear by the late 1990s that natural gas was waiting to be discovered in the vineyard-rich Finger Lakes region of west-central New York.

Today, wells are being drilled across a large stretch of the state.

Land agents are knocking on farmers' doors in a race to snap up mineral rights. Major industry players are moving in.

Talisman Energy Inc., Canada's largest independent oil and gas producer, announced a joint venture this year with Seneca Resources Corp. to explore in western New York and northwest Pennsylvania.

"People are talking about New York in Houston, and that's a new thing," says Kathleen Sanford of the state Department of Environmental Conservation's division of mineral resources.

Drillers are sinking their bits into the Trenton-Black River reservoir, a 460-million-year-old seabed where pockets of gas are trapped deep beneath the surface in fractured limestone.

The reservoir is a huge formation that has also been explored in Ontario, West Virginia and Ohio. Recent spikes in energy prices are giving companies more incentive to poke into it, and advances in seismic mapping have made it easier to locate gas-rich fractures.

"It's like a root system on a tree," said Joe Murray, New York operations manager for Fairman Drilling Co., over the steady screech of a rig working north of Elmira, N.Y. "We're trying to get where the stump is."

Drilling down two kilometres or more is an expensive gamble - a well can cost more than $1 million US. Crews work round the clock for weeks amid earsplitting screeches, grime and a pervasive stench of diesel.

But it's all worth it when a well hits big.

Columbia Natural Resources proved it beginning in 1996 with production from multiple wells on two sites near Keuka Lake, southwest of Rochester, including the well that burst to life in the Bergstresser backyard in December 1997.

Other players in the petroleum industry noticed, and by 1999 a rush was on.

Companies dispatched "land men" to Steuben and Chemung counties, a largely rural area of vineyards and farms, to acquire mineral rights from property owners. The frenzy drove up lease prices from about $1 an acre to as much as $25 an acre plus a $100-an-acre signing bonus.

With land largely locked up in Steuben and Chemung, the rush to procure land is spreading east and west, as far as 240 kilometres from the boom's epicentre.

"There's a huge part of New York that hasn't been explored," says David Lind of Pennsylvania General Energy, a gas producer.

"I don't believe any of us believe that what we have is all there is there."

Among landowners who sign up with developers, only a few will hit the jackpot: a producing well.

The Bergstressers are discreet, but say they made more than $1,000 a month from 120 acres during their well's heyday.

Today, the only evidence of the well is a bright orange pipe sticking up in an old hayfield and continuing monthly cheques - now only about one-fifth the size of a year ago, because the well is producing less due to a loss of pressure underground.

DeWitt Van Alstine is among those waiting to start collecting cheques from a gas field near Corning.

"It's not like anyone's going to be millionaires off of this," said Van Alstine. "The only ones that are going to be millionaires are going to be the drillers."

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