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North Carolina the next natural gas hot spot

April 05, 2010
TOPICS: Natural gas
The emergence of horizontal drilling has tapped new natural gas fields across the country as companies bore their way into shale basins. The newest find? North Carolina.

From the Raleigh News & Observer:

Natural gas deposits, trapped in prehistoric geological formations, lie buried less than a mile deep throughout parts of Lee, Chatham, Durham, Wake and Orange counties.

Geologists estimate the formations cover nearly 1,400 square miles and could contain enough natural gas to supply the state's energy needs for about 40 years at current levels of usage. North Carolina relies heavily on natural gas to run electric power plants, to fuel industrial operations and to heat homes and offices.

"We think it's commercially significant," said James Simons, the state geologist. "These deposits could extend farther than we think. It could be a lot more."

The more natural gas is confirmed, the more frenzied the scramble to cash in. Still, no one expects the rush in North Carolina that gripped Louisiana in 2008 after the discovery of the Haynesville Shale, a 9,000-square-mile natural gas deposit. Hundreds of wells tapped into the gas-rich "pay zone," making millionaires overnight out of landowners and spawning a host of environmental concerns.

For the time being, state laws that prohibit certain types of drilling as well as uncertainty about the size of the deposits have limited industry interest in North Carolina. But the natural gas potential in this state is piquing interest, and a federal assessment of the state's gas potential, due out next year, could focus greater attention on the state.

Energy companies have been collecting state geological data in recent months and checking county land records to identify local property owners.

"The people who are interested are trying to keep itquiet," said Ronald Perkins, a Duke University geology professor who also works as a consultant for the energy industry. "If it does take off, companies will start coming in and competing for land."

Right now, Perkins said, the state is in "the wildcat phase" of exploration.

WhitMar Exploration Co. in Denver and Magnum Land Services of Michigan have requested core samples from the state geological archives, and have checked county land records.

If the companies decide to drill in North Carolina, landowners could reap a windfall in land-lease bonuses and royalty payments - ranging from less than $100 a month to thousands of dollars, depending on property size - for natural gas extracted below their farms and homes.

"Obviously it's a win for the property owner, and he's buying new cars and adding wings to his house," said Whitney Marvin, president of WhitMar. "If it's the kind of play that we'd be interested in exploring, it would be at least a couple [of] thousand dollars a month to the property owner."

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