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Tuesday, June 14, 2011

Fracking crackdown, natural-gas prices depress N.Y. leases, but activity spawns a new publication

Exxon Mobil's recent $1.7 billion acquisition of Phillips Resources and TWP's Marcellus Shale gas leases may mean Marcellus prices are dropping, report Christopher Swann and Reynolds Holding of Reuters.

Exxon is paying about $5,000 an acre; in 2010 leases were selling for as much as $17,000 an acre. Falling natural-gas prices and state regulators' crack down on hydraulic fracturing are leading many energy firms to find other locations, Swann and Holding report. "Marathon Oil paid $20,000 an acre for oil-rich land in Texas earlier this month." Marcellus land does have at least one advantage over many other locations. Its proximity to New York City, where the gas sells for a premium, has Shell "mulling a new petrochemical plant in the region," Swann and Holding report.

However, the closeness to Gotham, which draws its water from a Catskills area underlain by the Marcellus, also makes activity in the area more environmentally sensitive. An online publication, The Watershed Post, has sprung up to cover the rural area, and fracking in particular. Here is a story about it from Brett Norman of Columbia Journalism Review.

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