Lease prices may be slipping

By FRITZ MAYER

RIVER VALLEY — Leasing prices from at least one gas drilling company have slipped from $2,750 per acre with a 14 percent royalty for a five-year lease just two weeks ago, to $2,250 with a 14 percent royalty for a 10-year lease.

According to a letter written from a land man to a Damascus, PA property owner, the reason for the decrease is twofold. First, the gas company in question, Chesapeake Energy, feels it now has enough leases signed to begin the “exploration phase of their Marcellus drilling program.” And second, the company is concerned that new drilling requirements initiated by the Susquehanna River Basin Commission, and similar requirements that will be adopted by the Delaware River Basin Commission (DRBC), “will severely delay the issuance of drilling permits” because the commissions meet only four times a year. The letter was sent on June 26.

In a related development, Congressman Maurice Hinchey, whose district includes Sullivan and Delaware counties in New York, has weighed in on the role of the DRBC regarding gas wells.

Hinchey wrote to DRBC Executive Director Carol Collier urging her to fully scrutinize pending gas drilling applications. In the June 27 letter, Hinchey wrote, “Natural gas drilling can certainly offer the region some economic benefits and help to meet our energy needs as we transition to more sustainable sources of energy. However, it is imperative that any development of natural gas resources be conducted in a manner that does not threaten ground and surface water resources. I understand that the process of extraction that is likely to be used, hydraulic fracturing, requires the use of a prodigious amount of water and would come under the DRBC’s jurisdiction. It is vital that the DRBC use its full regulatory authority, in concert with the New York State Department of Environmental Conservation, to ensure that gas-drilling operations that are permitted by the two agencies meet the highest standards for environmental protection and use best management practices.