Shale drilling changes prospects for American Dream

BY LAURA LEGERE
Times-Shamrock Writer

George Laird keeps the stubs from his monthly natural gas royalty checks in a binder he saved from leaner years when he tried to supplement his income by selling melaleuca, a kind of Australian tea tree oil marketed as “The Wonder from Down Under.”
The old slogan seemed newly right for the natural resource boom that sparked the Susquehanna County landowner’s sudden change of fortune.
Once a dairy farmer, then a construction worker who waited tables at night, Mr. Laird, 67, dreaded the day he would have to sell off sections of his 159-acre farm in Auburn Twp. in order to retire. Now that several Marcellus Shale wells are pulling gas from beneath his property, he is making enough money to save for his children’s retirement.
“I think everyone dreams of getting a lottery ticket that would win a million dollars,” he said, flipping through pages of royalty stubs. “This is so much better than a lottery ticket because you’re winning every month.”
Marcellus Shale development in Susquehanna County has helped the lucky and the shrewd achieve aspects of the American Dream that might otherwise have been outside their reach: large landowners are holding on to their property and profiting from it, entrepreneurs are starting businesses or expanding them and leaseholders are retiring comfortably a few years early.
For others, the boom has disrupted a dream of settling in the quiet country, tainted their drinking water with natural gas, or made renting or buying a home unaffordable. Many have experienced a mix of the benefits and grief.
“It’s been good and bad both,” said Chuck Winschuh, a 60-year-old Dimock Twp. resident whose gas lease and royalty payments on 10 acres will help him retire at 62 instead of 65.
He and his wife are sensitive to environmental concerns, drink water delivered to their hillside home “just to be on the safe side” even though their well water quality has not changed, and are chagrined to see “the industrialization of what was once a quiet rural area.”
A natural gas compressor station – the third within about two miles of their home – is planned for right across the road on an old dairy farm that makes up most of their picturesque valley view.
“We’re really dreading this,” he said. “We had planned to live here for the rest of our lives and it looks like maybe a year or two from now we’re going to want to get out of here.”
It is difficult to quantify dream attainment, but some numbers help illustrate the boom’s impact on wealth, housing and quality of life in Susquehanna County.
The county’s producing wells have paid out an estimated $300 million in royalties through the end of 2012, according to the statistical website Marcellusgas.org. Penn State Extension researchers estimated last year that about two-thirds of Susquehanna County gas lease money in 2010 went to mineral rights owners who also live in the county.
On the other hand, the state Department of Environmental Protection has determined that water supplies at 29 homes in Susquehanna County have been affected by natural gas drilling, most of them by methane that has migrated from gas wells to aquifers.
The influx of workers staying in the community to drill wells and build pipelines has benefited landlords who have in some cases doubled their pre-drilling-era rents or bought investment properties to lease them. But the landlords’ gains have been a loss for low- to moderate-income and elderly residents priced out of the rental market.
While the rental crisis has somewhat subsided since drilling peaked in the county in 2011, “the crunch is still very serious,” said Dennis Phelps, executive director of the Northern Tier community action agency Trehab.
The agency has several projects under development to build rental units for families and seniors across the region to help alleviate the problem in the long term, he said.
“That’s going to take several years because it takes a year for each development to be built,” he said. “That doesn’t take care of the immediacy of the problem right now.”
The stress on the market has also made it more difficult for first-time homebuyers to afford available properties and elderly residents to move from large houses to smaller ones. While some neighboring counties saw home values decline with the nationwide housing crisis, the price to purchase a home in Susquehanna County has increased, he said.
“Five or six years ago, a first-time homebuyer could buy a home for $90,000 to $100,000,” he said. “Now your starting range is $150,000 to $160,000.”
“It basically interrupts the entire continuum of housing,” he said.
For some landowners like Mr. Laird, the Marcellus Shale has made it possible to renovate existing homes or build new ones. And it has changed the trajectory of their years.
“If it hadn’t been for gas money I would still be working six days a week,” he said. “All of a sudden we’re seeing money that we’d never seen before.”