About a mile outside of Gerry, a tiny drilling operation manned by a half dozen workers has reached a depth of nearly 1,000 feet in search of natural gas.
From afar, the rig vaguely resembles a launch pad service tower roughly 50 feet tall surrounded by an assortment of vehicles and support equipment. In a few days, the crew will have drilled to a depth of 3,800 feet into the Medina sandstone that yields billions of cubic feet of natural gas from thousands of wells in Chautauqua County every year.
But the sandstone's production potential pales in comparison to the Marcellus formation, a massive sheet of black shale that runs across the Southern Tier and extends to Ohio, Pennsylvania and West Virginia. An estimated $1 trillion worth of natural gas remains stored within the 400-million-year-old rock formation, according to a recent study conducted by the Penn State Workforce Education and Development Initiative - but the reserves remain vastly untapped.
As of Tuesday, a new natural gas drilling operation outside Gerry had reached a depth of more than 800 feet. Its final destination — a depth of 3,800 feet, where the well will be able to access natural gas from the rich Medina sandstone that lays beneath the surface.
P-J photo by Patrick Fanelli
Legislation passed Tuesday by the state Legislature will make it much easier for the private sector to tap the Marcellus reserves in New York state, and that in turn will spur hundreds of millions of dollars in economic activity across Upstate New York, according to state Assemblyman William Parment, D-North Harmony.
''This has the opportunity to really revitalize a chunk of the Southern Tier,'' Parment said. ''You're going to have all kinds of people benefit from this.''
Since Chautauqua County ranks third in New York state in terms of natural gas production, Parment has become something of a pointman in the Assembly when it comes to issues involving the valuable commodity - and he helped the state Department of Environmental Conservation draft the legislation that was adopted Monday.
The new regulations that will go into effect unless Gov. David Paterson vetoes the bill will make it easier for companies to drill horizontally through underground rock formations - and when it comes to the Marcellus Shale, the primary target of the legislation, horizontal drilling is essential to maximize output.
''Now you have a lot of major companies coming to New York state willing to lease. That never happened before, because the DEC could take their mineral rights away from them,'' Parment said. ''I'm convinced the gas companies will invest at least a billion dollars this year.''
Parment helped draft extensive changes to the state's natural gas regulations a few years ago to better protect property owners who have valuable natural gas reserves underneath their feet. But the regulations only applied to vertical wells, since there wasn't much of a demand for the more difficult horizontal drilling operations.
''It worked fairly well when there wasn't a lot of money involved and people weren't disputing the wells,'' Parment said.
Under the new regulations, the DEC will ease up the cumbersome approval process for horizontal drilling operations, and the protections for property owners will be extended to horizontal wells. In addition, each square mile will be limited to only one vertical well branching out to six horizontal ones deep underground to minimize the surface impact of drilling operations.
''Basically, it protects property owners and the environment, and it gives the industry a playing field where they know what the rules are,'' Parment said. ''So I think it is a good piece of legislation.''
State Sen. Cathy Young, R-Olean and Agriculture Committee chairwoman, expressed a great deal of enthusiasm over the measure, predicting a ''wave of economic revitalization'' as a result of increased natural gas production across the Southern Tier.
''From Chautauqua to Delaware County, more natural gas will be recovered, potentially triggering a billion dollar investment in the Upstate economy,'' said Sen. Young, who helped guide the bill through the state Senate.
THE ENERGY DEBATE
Some local leaders and environmentalists objected to the measure since it would result in additional drilling in New York, which is estimated to sit atop as much as 20 percent of the natural gas contained in the Marcellus Shale.
The entire formation contains anywhere between 168 trillion and 516 trillion cubic feet of natural gas, according to the Penn State study, which was conducted in conjunction with Gary Lash, a SUNY Fredonia geosciences professor.
Julie Coppola Cox, a spokeswoman with National Fuel, said the Marcellus Shale would provide the utility with a ''nice new supply'' for its customers.
''This helps facilitate our ability to drill the kinds of wells we need to drill to access that Marcellus formation,'' she said.
She also reflected on the national debate occurring over whether to lift the ban on off-shore drilling as both the price of gasoline and natural gas continues to rise, saying it is essential for the U.S. to ensure a steady supply of fuel to keep skyrocketing energy prices at least somewhat under control.
There remains significant opposition to off-shore drilling because of the potential environmental consequences - and the debate isn't limited to the oceans, since vast natural gas reserves underneath the Great Lakes remain off-limits to drilling companies, at least on the American side of the border.