Drilling prospects bring land rush to Illinois

2012-05-13T00:00:00Z Drilling prospects bring land rush to IllinoisBy Jim Suhr AP Business Writer nwitimes.com
May 13, 2012 12:00 am  • 

McLEANSBORO, Ill. | It's not a festival or the 19th century architecture that's drawing the late-model cars from Texas, Oklahoma, Louisiana and Pennsylvania to the downtown square in this tiny, southern Illinois community.

It's the musty vault inside the county courthouse, where secretive visitors have converged in a hunt for underground riches.

For months, out-of-staters known in the business as "land men" have descended on this 2,900-resident city, lining up to comb through bulky books of yellowed property records dating to the 1800s. The aim is to find choice parcels in a veritable land rush tied to the prospect of reaching previously inaccessible oil and natural gas deposits in the region.

They're a guarded bunch armed with laptops and legal pads, refusing for competitive reasons to reveal who they're working for. But they confide they're painstakingly pinpointing ownership of rights to a shale formation thousands of feet underground for clients hoping to exploit trendy yet controversial horizontal drilling techniques.

"I've never seen this kind of activity," said Mary Anne Hopfinger, Hamilton County's clerk for the past six years.

The suddenly intense interest in southern Illinois stems from a belief that the region's New Albany Shale, a formation of rock roughly 5,000 feet below the surface, contains oil and other liquid hydrocarbons that are rarer — and far more profitable — than natural gas.

Energy companies have learned in recent years how to tap huge amounts of once-inaccessible oil and gas in the U.S. using a drilling practice called hydraulic fracturing. Commonly known as fracking, the technology uses sand and chemical-laced water to blast open shale and create escape routes for oil and gas trapped inside.

They have found so much natural gas that the nation's storage facilities are projected to reach their limits later this year. Prices have fallen to lows not seen in a decade, so low that drillers are abandoning plans to explore for new natural gas because it is no longer profitable.

But drilling for oil in shale formations — if it can be found — is still extraordinarily profitable because world oil prices remain high.

The U.S. Geological Survey believes that Illinois' shale — hundreds of thousands of years old — may hold 1 trillion to 8 trillion cubic feet of natural gas, just a fraction of 22 trillion cubic feet U.S. consumers go through every year.

By contrast, the "gas rush" is most pronounced in the Marcellus Shale, geographically stretching from Ohio to New York and beneath roughly two-thirds of Pennsylvania. It's believed to hold one of the biggest natural gas resources in the country, 43 trillion to 144 trillion cubic feet by the USGS count.

Environmental groups and other critics of fracking believe the chemicals have polluted drinking water supplies, though the industry says there's no proof.

State lawmakers are responding, updating mining laws to regulate such extraction and safeguard groundwater. Across Illinois and some two dozen other states, nearly 140 fracking-related bills have been introduced, many of which would require public disclosure of fracking fluids, according to the National Conference of State Legislatures. Similar federal rules have been proposed by the Obama administration for public and American Indian lands.

"If states enact legislation that makes disposal (of fracking chemicals) more expensive, companies may redo their calculations, but many companies are jumping in," said Chris Swezey, a Virginia-based USGS research geologist.

The new fracking and horizontal drilling techniques have unlocked huge reserves of oil in North Dakota, Texas, Colorado, Wyoming and Oklahoma. It has helped U.S. oil production grow for three years straight after 23 years of declines.

Proponents of the practice tout the economic benefits, including the creation of thousands of Illinois jobs and millions in tax revenue in a state swimming in red ink.

Any such boost would be welcomed in Illinois coal country. The economic need can be clearly seen about 110 miles southeast of St. Louis in McLeansboro, where empty storefronts stand among buildings dating to a time before cars and when Mark Twain was publishing his most famous works. Unemployment rates in the region top 8 percent.

The scouting of southern Illinois may portend a boon for the region, but it's been a headache at times for county clerks.

In Wayne County, Clerk Glenda Young estimates her Fairfield office has hosted 30 to 35 land scouts a day. Their interest is reflected in the $6,000 to $10,000 worth of copies or related services Young's staff has provided for them each month.

In nearby Saline County, six computerized "search stations" in Clerk Kim Buchanan's office have been in hot demand for two years among agents from energy companies largely based in the South.

The "land men" cling to anonymity, shooing away a reporter as they hunker down in the courthouse vaults. One of them — a hulking Texan who has spent the past month plodding through Hamilton County's land records — called the sleuthing "a lot like a puzzle," tracing back some parcels to when Illinois became a state in 1818.

"It can get a little hard on the eyes, but it's certainly exciting work," said another Texan who spent the past couple of weeks working the same vault. He previously spent two months in Wayne County.

In McLeansboro, the records search has spilled over into tables set up in the hallway outside Hopfinger's office.

But not everyone is thrilled about what the research may bode.

At Mimmo's Pizza across from the courthouse, 19-year-old server Tara Castillo has noticed an uptick in strangers sampling the lunchtime buffet since the land rush began. She studied fracking during a social problems class at a community college, and figures the environmental costs outweigh the jobs it could create.

"I wouldn't let someone frack on my land," she said. "I just don't think a little more oil is worth the risk."

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