As the price of gas climbed, drillers looking for fresh land started eyeing the verdant, rolling pastures of Wayne County in the northeastern part of the state.
Companies such as Hess, Chesapeake Energy (CHK), and Cabot Oil & Gas (COG) dispatched “land men” to go door to door to persuade homeowners to sign mineral leases. Farmers were getting $250 to more than $3,000 an acre to allow drilling on their property, says Meagher. Land that sold for $2,000 to $3,000 an acre in 2004 was going for as much as $10,000 an acre by 2009. Meagher says he often got calls from prospective investors in Manhattan, Boston, and beyond. To encourage more, he put property ads in the New York Post, New York Times, and the Wall Street Journal.
“I wanted to get my clients here the highest possible bid,” he says.
By the summer of 2009, a joint venture of Hess and Newfield Exploration (NFX) had secured leases for 80,000 acres with the Northern Wayne Property Owners Alliance, a group of 1,500 landowners formed to negotiate with the gas companies.
’People Here Struggle’
“It’s the biggest thing ever happened around here, in my lifetime at least,” says Alliance member Bob Rutledge, a dairy and beef farmer whose family has been in Wayne for 170 years. “People here struggle. The economy here sucks when it’s good. The farms are dying.”
Spokesmen for Hess, Chesapeake, Cabot, and Newfield declined to comment.
Honesdale, the county seat, last saw a boom like this in the 1820s, when it was the starting point for the new Delaware & Hudson Canal. In March 2009, Leonard Schwartz, recently retired as chief executive officer of chemical company Aceto, reopened Honesdale’s 182-year-old Hotel Wayne. He gutted and redecorated its rooms and upgraded its restaurant and bar to accommodate out-of-town speculators and energy company officials with expense accounts.
“The gas companies were giving out money,” says Schwartz. “People were buying tractors, eating out. You felt it.”
As fracking fever spread, opposition to gas exploitation was building. In the spring of 2008, a gas company offered Josh Fox’s family almost $100,000 to drill on its Wayne County property, inspiring Fox, a filmmaker, to make the anti-fracking documentary “Gasland.”
The Oscar-nominated film, which shows water from a faucet catching fire, was shown on HBOand helped foment broader opposition to fracking. Fox and an alliance of conservation groups called on the Delaware River Basin Commission to ban the practice in Wayne County. They argued that the drilling technology, which involves injecting high-pressure jets of water and chemicals into underground rock formations, would pollute the river’s 14,000-square-mile basin, a source of drinking water for 15 million people.
In May 2009 the commission, which includes the governors of Pennsylvania, New Jersey, Delaware, and New York as well as a representative from the U.S. Army Corps of Engineers, declared that gas companies wanting to drill in Wayne County would need a permit from the DRBC as well as from the state of Pennsylvania.
Land men started pulling out of Wayne, according to local townspeople. A year later the commission announced that it would not issue permits and would study the impact of fracking.
The decision caught farmers and investors off guard.
“I had never even heard of this out-of-state commission,” says Jim Stracka, a contractor from Scranton, Pennsylvania, who joined with two New Jersey businessmen to form a company called Gasaholics to invest in Wayne County.
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