BLAIRSVILLE -- The biggest methane producers on Bill McConnell's 380-acre farm north of Black Lick Creek in Indiana County aren't the 30 or so beef cattle roaming around its spring-greening slopes.

	V.W.H. Campbell, Jr., Post-Gazette Bill McConnell -- Getting noise, erosion, water contamination and none of the profits. Click photo for larger image.

Not anymore. Not since 2003 when seven coalbed methane wells were drilled into his pastures and their "horse head" pumpjacks began their metallic, 24-hour-a-day, seven-day-a-week, clanging, thumping and pumping.

It's a tin-eared variation on the green rural scene that is becoming increasingly common in Pennsylvania's coal regions as prices for coalbed methane -- chemically the same as natural gas -- have surged to historic highs, and drilling companies have taken advantage of a 24-year-old court decision that says whoever owns the coal owns the gas that goes with it.

That ruling allowed gas companies to buy mineral rights for coal and to drill hundreds of methane wells on farms, fields and woodlots without paying the property owners anything. It also created headaches for property owners who get all of the noise, erosion, water contamination and none of the profits.

Mr. McConnell is one of those. He could not refuse the drilling company access to the farm he bought in 1988. He gets no compensation from the drilling company for the 15 acres of his property and pasture lands occupied by the wells, their access roads and pipeline right-of-ways. He can't use that land but he still has to pay taxes on it. And, unlike surface property owners who agree to allow natural gas well development on their properties, he gets no royalty payments from the company, which could make hundreds of thousands of dollars over the 25- to 40-year life of the well.

Throw in the reduced value of his property -- no one, he said, wants to buy a farm with a gas well or seven in the front yard that pay no royalties -- and Mr. McConnell thinks the situation is more than unfair.

"I recognize that coalbed methane is a valuable asset, and that if we surface-property owners were treated fairly, it could be a financial advantage to the farmers of Pennsylvania, but right now I feel abused," said Mr. McConnell, who had to speak up to be heard over a well pump just 400 feet from a house on his property. "This has ruined my pasture, ruined my road, and there's nothing I can do.

"Maybe it's the mercenary in me, but if they were paying me, I would tolerate it better. But as it is, it's a fresh affront every time I look at it. It's an open wound."

And he's not alone. According to the state Department of Environmental Protection, there are 388 coalbed methane wells pumping away in Armstrong, Cambria, Fayette, Greene, Indiana, Washington and Westmoreland counties, with hundreds more planned or permitted.

'Like a gold rush'
The coalbed methane boom, which didn't start in earnest in Pennsylvania until 1999, coincides with a nationwide increase in natural gas exploration and development. It was prompted by high demand from home heating and electric power generators that pushed wellhead prices as high as $13 per 1,000 cubic feet last year, and that now stand at about $7.60 per 1,000 cubic feet, still historically high. As recently as the mid-1990s, wellhead prices for natural gas were around $2 per 1,000 cubic feet.

As a result, the number of natural gas wells nationwide rose by 34 percent between 1999 and 2004 to 405,048. And the number in Pennsylvania almost doubled, from 23,822 to 44,227, with more than 7,000 of those new wells drilled in just the last two years.

"In Fayette, Washington and Greene counties, coalbed methane wells are popping up in greater numbers, and there's a lot of gas wells in general going in as people are looking for ways to make a buck," said Heather Fowler, watershed director for the Fayette County Conservation District, who has attended two public forums since February, both of which attracted more than 100 people. "Property owners are looking for help. They're concerned about erosion on their farms, sediment in their wells and about roads and wells dicing up their farmland."

Coalbed methane is found within coal seams and extracted through a well drilled into the coal seam, which pumps out water and, eventually, methane gas. A well site typically occupies about a half acre, an area that does not include the access roads and pipelines from the wells to a collection and pumping facility.

If a surface-property owner also owns the coal seams under his property, a drilling company would have to negotiate a lease and pay a royalty -- usually an eighth of the production revenues -- to tap the gas in those seams, just as it would if it wanted to drill into other sedimentary rock underlying the property for natural gas.

But in the late 1800s and early 1900s the rights to mine those coal seams were purchased, or "severed," from surface-property owners by mining companies throughout much of the state's coalfields. It's estimated that 70 percent of surface-property owners in the state do not own the coal under their properties. Recently, gas well drilling companies, including several from Texas and Ohio, have been buying up coal rights at county sheriff sales for coal seams that aren't mined because they're too thin, but that still contain enough methane to make gas drilling profitable. Some coalbed wells drill into five or six coal seams to extract methane.

"It's like a gold rush out there in Western Pennsylvania," said Richard Ehmann, attorney and former administrative law judge on the state Environmental Hearing Board. "It all comes down to how fast companies can get their wells up and producing."

Regulation minimal
The DEP recognizes that coalbed methane drilling is growing, and that it has caused concern in rural areas, but it is doing little to regulate it, only requiring well operators to submit an erosion and sedimentation plan to secure a permit. It doesn't negotiate leases, resolve disputes or monitor what coal seams are being tapped. State law requires that the wells be spaced at least 1,200 feet apart and located no closer than 300 feet from a home.

Joseph Umholtz, chief of the Division of Surface Activities at DEP's Bureau of Oil and Gas Management, said the bureau's staff, despite the addition of six new inspectors this year, is "stretched to the limits."

"We work to try to have the wells spaced so they cause the least amount of problems," Mr. Umholtz said. "But we don't inspect every site. We don't have enough personnel. If you have a problem you have to call us."

Mr. McConnell said a big part of the problem is the 1983 Pennsylvania Supreme Court case known as the Hoge decision that gave ownership of the methane gas in coal seams to the owners of the coal, and has been used by gas companies to validate their rights to access private property.

"With ownership, there is a right to necessary and reasonable access and the owners of the coal have interpreted that to include drilling wells, building roads, putting gates on roads, running pipelines, but there's been no litigation since the beginning of the coalbed methane boom to confirm those rights," said Cy Fox, who teaches mineral and property law at University of Pittsburgh's School of Law.

Mr. Fox said the U.S. Supreme Court and several Western states have rejected the holding in the Hoge case and ruled that the sale of coal seams did not include the sale of the methane gas, which until recently was treated as waste and vented and was never intended to be part of the sale.

He said the Dakotas, Illinois and Indiana have passed surface damage acts that require the coalbed methane drilling company to sign an agreement to pay for damage to the land or crops.

In Pennsylvania, several bills have been introduced to address the issue, including one that would give surface-property owners the right of first refusal if coal rights are put up for sheriff's sale. A couple of bills seek to require a "surface use agreement" between the surface landowner and the coal seam owner before any drilling could take place.

"Now guys feel they have the right to just walk right on your property, sink a well, put in a road and pipes, and the surface owner has nothing to say about it," said State Rep. Tom Yewcic, D-Johnstown, who has introduced two of the bills. "But the surface owner should have the right to negotiate the location of the wells and roads and pipelines and be compensated for the use of his property and have his water rights and the value of his land protected."

Steve Rhodes, president of the Pennsylvania Oil and Gas Association, the oil and gas producers trade group, said the group supports Mr. Yewcic's surface use agreement legislation.

"It's a good step. We've heard complaints about disgruntled landowners, and part of the problem is that some of the mineral rights owners haven't been as forthright as they could have, or should have, been," said Mr. Rhodes. "We understand there are mutual obligations to the right of access."

Opposition to legislation
The Independent Oil and Gas Association of Pennsylvania, three of whose 125 company members are involved in coalbed methane work, was less enthusiastic about a legislative remedy. Louis D'Amico, the group's executive director, said it opposed the "right of first refusal" bill, but is working with Mr. Yewcic to fashion legislation that would prevent surface property owners from filing "nuisance suits" to delay gas well drilling.

"It's a financial issue. The key is damages and the ability to sue for damages," he said.

Kathleen McGinty, state DEP secretary, said Pennsylvania's alternative fuels program has made a priority out of capturing and using coal mine methane, but has been careful in counseling surface property owners about their rights.

"Along with the uptick of gas prices, there's been an uptick of concern among surface property owners, but nothing's been decided and no one's been dealt out of this game," Ms. McGinty said. "There's a need for final judicial or legislative action to solve this issue. Certainly it's an area of contention in need of some clarification."

A lot of money is at stake. In 2005, the most recent year for which the state has complete statistics, coalbed wells produced 1.8 billion cubic feet of methane. It's estimated that there are 2.7 trillion cubic feet of recoverable methane in Pennsylvania coalbeds, 2.3 trillion feet of that in bituminous coalbeds under southwestern and central parts of the state.

Coalbed methane wells, which are generally shallower than regular natural gas wells, cost from $87,000 to $150,000 to drill. They produce an average of 50,000 cubic feet of gas a day, worth about $380 a day or $138,700 a year at today's prices, and can operate for up to 40 years.

"Anywhere there are coal seams underground there could be wells," Mr. McConnell said. "It used to be that surface property owners only had to worry about mineable coal, the thick seams, but now any 6-inch-thick coal seam is important, so places people wouldn't even think about or worry about before could be targeted for development.

"It's a fantastic resource. But it's a shame they're not being fair to the rural landowners."