For years, local and state leaders have looked upon the thousands of acres of public-owned land surrounding Pittsburgh International Airport as a potential development bonanza.
Little did they know the real gold mine might lurk beneath the surface.
The Allegheny County Airport Authority hopes to tap into that gold by opening up more than 9,000 acres of land at the Pittsburgh International and Allegheny County airports to exploration for natural gas reserves contained in Marcellus shale formations.
It is an effort that, if successful, could generate millions of dollars in revenue to help lower landing fees, increase flights and attract new carriers at a time when the airport is struggling to keep business.
When Dallas-Fort Worth International Airport opened up 18,000 acres of land for natural gas exploration in a Barnett shale formation two years ago, it ended up with an initial $186 million bonus and a royalty of 25 percent on all gas produced through the drilling lease.
From November to July, those royalties have produced $18.7 million in revenue for the Texas airport, which has used it to renovate rest rooms, upgrade flight information display systems and make other terminal improvements. The airport estimates the first full year of production will generate about $30 million in revenue.
"Being able to find and capture natural gas on DFW is like finding money on the ground," said John Terrell, the airport's vice president of commercial development.
So far, about 60 wells are in operation at Dallas-Fort Worth. Officials there are expecting that number to grow to 320, and with it, revenue.
In bids to be advertised today, the county's airport authority is asking for minimum royalties of $4.5 million over the first 18 months of any lease, as well as ongoing royalties of at least 25 percent of all gas produced.
The authority set no minimum lease bonus payment per acre, but spokeswoman JoAnn Jenny said officials expect it to be "significant based on the amount of acres we have." In play are 8,840 acres at Pittsburgh International and 423 at Allegheny County Airport.
In Washington and Greene counties, companies have been paying up to $3,800 an acre to lease land for drilling. If that is any guide, the land at the airports could fetch as much as $35.2 million.
Ms. Jenny said the authority decided to seek bids for the exploration rights after four to five companies asked about the potential for drilling on airport land.
Whatever money is generated would be used to lower costs to the airlines in hopes of attracting more service and new carriers, she said. A big part of those costs -- about $62 million a year -- is the debt payment associated with the construction of the midfield terminal, which opened in 1992.
Kent F. Moors, director of the energy policy research group in the graduate policy center at Duquesne University, believes the airport has reason to be optimistic.
He said that if preliminary geological studies are accurate, the airport is a "prime location for medium size deposits" of natural gas.
"If this ends up being a main area for natural gas development in Western Pennsylvania, I think the revenue is going to be significant," he said.
The Marcellus shale geologic formation stretches from southern New York state across much of Pennsylvania into West Virginia. Geologists have known about the natural gas deposits in the 100-foot-thick Marcellus shales for 75 years, but because of their depth, it wasn't cost effective to go after them.
That changed in the last year or so as natural gas prices climbed higher and drilling technology improved. Now some companies, in addition to paying up to $3,800 an acre to lease land, are offering royalties up to 20 percent of the gas the wells produce.
They have been approaching private landowners, municipalities and school districts about leasing land.
Dr. Moors said one of the past drawbacks in drilling for natural gas in Marcellus shale formations was that waste water associated with the production posed a potential environmental hazard. But, he added, recent technological advances appear to allow companies to reclaim most of that water.
At Dallas-Fort Worth, airport officials have worked closely with the Federal Aviation Administration to ensure the drilling and the big rigs associated with it do not affect flight operations.
Mr. Terrell said the continued drilling will allow the airport to maintain its facilities without increasing costs to the airlines.
"When you have a $640 million budget and you are trying to keep your belt tight, it is important to have a steady cash flow that can be counted on to maintain the airport's facilities," he said.
Denver International Airport also allows natural gas drilling on its property, generating $4 million to $6 million a year in revenue.
