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Marcellus Shale dispute bubbling up in northeast Pennsylvania

DAMASCUS, Pa. - Tim Coulter's farm in this rocky corner of northeastern Pennsylvania is in financial trouble. He's sold off the livestock. There's no market for the timber. And with only 121 acres left, Coulter can't carve off any more of the land that his family has owned for five generations.

DAMASCUS, Pa. - Tim Coulter's farm in this rocky corner of northeastern Pennsylvania is in financial trouble. He's sold off the livestock. There's no market for the timber. And with only 121 acres left, Coulter can't carve off any more of the land that his family has owned for five generations.

In September, a week before the Wayne County sheriff was scheduled to foreclose on Coulter's farm to collect $7,000 in taxes, salvation arrived in the form of a check from a natural-gas company that leased Coulter's land for Marcellus Shale exploration.

"Everybody's counting on the gas to come through," said Coulter, 48. "Without it, we would have gone under."

His reprieve may be only fleeting. Though shale-gas development has raced eastward across Pennsylvania in the last two years, it has stopped dead in its tracks in Wayne County before any production wells can be drilled.

What is unfolding here is a mammoth clash between neighbors with starkly contrasting visions about the land. It is a virtual range war, waged at public meetings and on the Internet, expressed mostly in insults but occasionally through small acts of vandalism.

Last month, the Delaware River Basin Commission, a multistate agency based in Trenton, declared a moratorium on drilling any gas wells in the upper Delaware watershed - even nonproducing exploratory wells - until it can approve new drilling regulations.

The reason: These rural highlands drain into the protected waters of the upper Delaware River.

Though the DRBC maintains that it is not opposed to the "appropriate development" of natural gas, many landowners here who have signed gas leases regard the commission's move as a stealth ban, an intrusion by unelected out-of-state officials to deprive them of their property.

"The DRBC is trying to take something away from me," said Bob Rutledge, whose 500-acre farm has been in his family since the 1800s. "This is America. We still own mineral rights."

But local residents who believe that gas drilling poses an imminent health threat applauded the DRBC's action.

"We have property rights, too," said James Barth, who owns 20 acres in Berlin Township, surrounded by neighbors who have leased their land for gas drilling.

At its root, the battle here is kind of a red state/blue state conflict - a cultural chasm dividing newcomers, old-timers, and those with opposing economic interests.

Wayne County is in New York City's ever-expanding orbit - the population has increased 28 percent in two decades, to 51,337 - and many new homeowners were attracted to the sublime upper reaches of the Delaware, designated a national scenic and recreational river.

"We have our little islands of serenity," said Barbara Arrindell, a stained-glass artist and executive director of the anti-drilling group Damascus Citizens for Sustainability.

Since it was founded two years ago, Damascus Citizens has developed some clout. Its urbanized, media-savvy leadership has enlisted allies in New York City and Philadelphia, portraying natural gas as Armageddon for public drinking-water supplies.

Thanks partly to the lobbying effort of Damascus Citizens, the national advocacy group American Rivers last month named the upper Delaware the nation's "most endangered" river.

The organization's voice was further amplified last month by the HBO premiere of Gasland, a documentary by New York filmmaker Josh Fox, who vacationed as a youth at his family's cabin in Damascus Township. Fox dedicated the movie to Damascus Citizens.

John Hanger, secretary of the Pennsylvania Department of Environmental Protection, called Gasland "fundamentally dishonest." But the soft-spoken Arrindell, who is credited in the film as a consultant, said it was an accurate reflection of her views, as well as those of her passionate colleagues.

Pat Carullo, a Staten Island, N.Y., native who moved to Wayne County after the attacks of Sept. 11, 2001, goes crimson with rage at the mention of hydraulic fracturing, the extraction technique that involves huge injections of water, chemicals, and sand deep into a well. He compares it to the Gulf of Mexico oil spill.

"Look at the gulf!" shouted Carullo, a Damascus Citizens cofounder who speaks in high-volume sound bites. "We're fighting for our lives here! Look at my hands. They're shaking! It's no game here!"

Carullo, a graphic designer, said the drilling issue was a fight to the finish for the gas industry and the public.

"This is where it's happening, and the industry knows it," he said. "This is where Philadelphia and New York meets ExxonMobil and Halliburton. Good luck! Somebody's got to win here."

Stoic dairy farmers like Amos Rutledge, 70, are flummoxed by folks like Carullo, who, they say, don't comprehend the farmers' need to make a living from the land, producing livestock, crops, timber, stone, maple syrup, and now natural gas.

"Some of these folks seem to enjoy fighting," said Rutledge, a distant cousin of Bob Rutledge's.

"I just walk away from them," he said of the "antis," as the farmers refer to the environmentalists.

Marian Schweighofer, who operates a 720-acre farm and nursery in Damascus Township with her husband, Edward, said the farmers were a bulwark against expanding suburbanization along the Delaware.

Each time a farmer goes under, she said, open land is replaced by houses on five-acre lots producing runoff to the Delaware from septic systems, chemically treated lawns, and asphalt.

"We're just dumb, greedy farmers," she said. "That's what we keep hearing."

Schweighofer, 54, organized the Northern Wayne Property Owners Alliance after gas-company agents began signing unsuspecting Wayne County farmers to leases. She did some research.

"If this is coming - a tremendous amount of land was already leased - and it's not going to be stopped, how do we as a community gain control of it, direct its course?" she asked.

The alliance, which now has 1,400 members who control more than 100,000 acres, hired the Philadelphia law firm Ballard Spahr L.L.P. to help negotiate lease terms with a gas operator the alliance recruited. The landowners chose a joint venture of Hess Corp. of New York and Newfield Exploration Co. of Houston.

Schweighofer said the landowners were willing to sacrifice some of the standard up-front payment to retain influence over where and how the drilling would occur, and to require the operators to use best-practice environmental controls.

The lease signed last year provides $3,000 an acre, but less than half of that is paid during first 30 months. Less-restrictive leases typically pay more, and all of the money is delivered up front.

"Our members are incredibly close to the land," she said. "Their stewardship is what makes this area as clean and pristine as it is. This is our land. We need to make a living from it. We don't want pollution. That's why our leases restrict the activity.

"But nobody gives us credit for that," Schweighofer said. "They just say we're greedy."

Arrindell is unimpressed with the alliance's efforts, and its membership.

"I call them Marianettes because Marian is like the puppet master," she said.

According to the alliance, Newfield and Hess have leased more than 144,000 acres in Wayne County - including leases initially acquired by another operator that pulled out of the region because of the political resistance. Thus far, they have sunk more than $100 million into the venture.

Newfield obtained permits to drill five exploratory wells before the DRBC declared its moratorium June 14. The exploratory wells will allow it to remove shale samples and run other geologic tests. No wells can be hydraulically fractured.

Gary Packer, Newfield's chief operating officer, said he would like the DRBC to make up its mind soon.

"From our standpoint, we need to understand what the playing field is," Packer said. "We need to have clearly defined rules."

The farmers who have signed leases are also eager to get the moratorium lifted; they'll lose more than half the signing bonus if Newfield and Hess walk away now. They plan to attend the DRBC's July 14 meeting to ask for a new hearing.

Karl Canfield, interviewed as he was milking his 70 Holsteins last week, said his gas-lease bonus offset the $70,000 his farm lost last year because of the depressed dairy market. His wife, Susan, earns extra money cleaning the vacation homes of wealthy New Yorkers.

"Gas companies drilled something like 35,000 wells in this country last year," said Canfield. "There were a couple of major accidents. If you believe the 'antis,' the whole country should be a treeless desert."

The DRBC is likely to proceed slowly.

Last week, the commission received a letter from the northeast regional directors of the National Park Service and the U.S. Fish and Wildlife Service that warned that gas drilling "has the potential to significantly degrade the natural habitats and water quality in the Delaware River Basin." The letter encouraged the DRBC to conduct its review carefully.