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Dan Hust | Democrat

WILLIAMSPORT, PA. ATTORNEY Lester Greevy walks through the enormous crowd gathered inside the Damascus Area Elementary School in Damascus, Pa. last week. Hundreds attended to hear Greevy’s thoughts on how to deal with natural gas companies seeking to acquire mining rights in the area.

Gas 'Boom' Eyed Locally

By Dan Hust
DAMASCUS, PA — January 8, 2008 — With leases already being negotiated in the extreme western edge of Sullivan County, residents along the Delaware River valley are bracing for a boom – or a bust.
According to some observers, the area could soon become the latest wellspring of natural gas in a country hungry for cheap domestic energy.
Yet others see the oncoming swarm of landmen (mineral rights negotiators) as simply repeating a disappointing history.
After all, thirty years ago Exxon and others swept through the region, buying up rights in anticipation of fountains of oil and gas trapped thousands of feet beneath the Sullivan County soil.
That never panned out, and whatever leases were in existence were left to expire.
But with Wayne County, Pa. abuzz with deals and word of deals, river neighbors are beginning to take notice.
Some Sullivan County residents even showed up at a recent informational meeting at the Damascus Area Elementary School in Damascus, Pa.
Williamsport, Pa. attorney Lester Greevy spent the better part of an hour advising more than 400 attendees on the promises and pitfalls of natural gas exploration and mining leases.
But he spent another full hour answering questions.
Dozens, if not hundreds, of those packing the small school’s gym already had unsigned leases in hand, having been visited by landmen over the past few weeks.
“I’m hearing reports it’s up and down the river valley,” remarked Long Eddy resident Noel van Swol, who was in the audience.
A provided map showed some lease agreements had already been worked out in Damascus and Tyler Hill, barely two miles from the Delaware River border with New York State. In northern Wayne County, a lease had already been signed for more than 12,000 acres through an effort by a group of individual landowners.
But most noteworthy of all was Greevy’s understanding that some of the area’s leases were going for $750 an acre – an enormous leap from the $100-$200/acre heretofore acknowledged.
“You’re not that far away from some productive wells in New York,” he said, referring to natural gas mining operations in the Finger Lakes and Southern Tier. “. . . And the Millennium Pipeline is not that far away.
“. . . That may be why you’re seeing the big prices that you are here.”
Indeed, there was talk that $1,000/acre leases were being negotiated, all because new technology has enabled gas and oil companies to seek out fuel sources in formerly inaccessible locations.
Large quantities of natural gas already flow through the Columbia Gas Transmission pipeline bisecting western and southern Sullivan County, and the Millennium Pipeline – which is replacing it – is expected to dramatically increase that capacity when it opens at the end of this year.
Much of the old and new pipeline sits within a mile of the Sullivan-Wayne border, but while the Northern Wayne Property Owners Alliance has already formed to negotiate leases and disseminate information, Sullivan County remains quiet.
In fact, when contacted last week, state officials said they weren’t aware of any such activity on the New York side of the Delaware.
Though no one would talk about it on the record, close to half a dozen residents in the townships of Fremont and Delaware are known to be negotiating with companies like Chesapeake Energy, which is the third largest producer of natural gas in the country.
Oftentimes, such leases provide a significant amount of money upfront for the right to explore and drill for natural gas, with royalties continuing if and when the well produces.
While Greevy warned that landowners must be very careful when signing these agreements (he was there, in part, to offer his own legal services), he acknowledged that they could prove to be a windfall for farmers and residents seeking to mitigate the burden of taxes and a slow economy.
On an environmental level, it was noted that, save for initial excavations, most of a natural gas system’s operation is underground, and disturbed land is required to be returned to pristine condition in both Pa. and NY.
For those worrying about another powerline battle, Greevy said these companies do not have eminent domain rights, but he did expect them to lay pipe to the Millennium Pipeline for distribution to one of the world’s largest markets: New York City.
“I think from what they’re telling,” said Greevy of his contacts in the industry, “they’re planning on being here awhile.”

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