Pa. to lease 32,000 acres for gas drilling

AP News
Posted: Nov 10, 2009 10:31 AM

Pennsylvania will open nearly 32,000 acres of additional state forest land to leasing by gas drilling companies, the state Department of Conservation and Natural Resources said.

The six tracts are located in the Elk, Moshannon, Sproul, Susquehannock and Tioga state forests in Cameron, Clearfield, Clinton, Potter and Tioga counties.

In selecting tracts for potential leasing, officials consider not only recommendations from drilling companies but environmental and aesthetic issues that may rule out certain areas, officials said.

"Our approach to making state lands available for natural gas drilling has always been to limit the impact on the surface and on other uses of the land," the department's acting Secretary John Quigley said Monday in a press release. "We've been exceptionally mindful of our obligations as we developed this plan to balance our environmental responsibilities and the budget."

Drilling for natural gas has intensified in regions of Pennsylvania that lie over the potentially lucrative Marcellus Shale formation. Currently, 660,000 acres of the 2.1 million acres of state forest land are under lease for gas production, the department said.

Prospective bidders in the upcoming lease sale of underground oil and gas rights have until Dec. 12 to provide proof that they are registered to do business in Pennsylvania. Pre-qualified bidders may submit sealed bids until Jan. 12, when the bid will be publicly opened.

The list of bidders and award decisions is to be posted on the department's Web site within 24 hours.

The 2009-10 state budget requires the department to raise $60 million from a lease sale on state forest land. This lease sale requires a minimum bid of $2,000 an acre and royalties of 18 percent on the volume of gas that is extracted.

Companies will be encouraged to use existing roads, and surface development is barred on some portions of the tracts to protect wild or natural areas, ecosystems, water bodies and recreational uses, Quigley said.

The department will allow 123 well pads on the six tracts, said department spokeswoman Christina Novak.

Leases run for 10 years, but can be extended based on the production of the wells on a tract.