Landowners get windfalls from natural gas drilling

Pastor Elvis Bowman of the Greater Mount Tabor Christian Center, an aging, homespun church in a low-income neighborhood here, has a new title: energy mogul.

By letting Chesapeake Energy drill wells and pump natural gas from beneath its 50 acres, the church has pocketed tens of thousands of dollars and stands to clear tens of thousands more in royalties each month after drilling begins. The money will help pay for a new $8 million church and performance center, a $12 million mixed-use development nearby and a slate of community programs to help the less fortunate.

"It's been an unexpected treasure," says Bowman, a preacher with a gravelly voice and infectious cackle. "I know without a doubt it was divine."

In this sprawling city and surrounding area, companies are siphoning natural gas from under homes, churches, schools and golf courses in an urban drilling frenzy that's showering property owners with unexpected windfalls. The initiative takes another leap in a few months when drilling begins in Fort Worth's revitalized downtown.

The region, the nation's most active drilling basin, is the epicenter of a natural gas boom rippling across the USA. Companies are boring wells in the unlikeliest of places, transforming large swaths of Texas, Oklahoma, Arkansas, the Rockies, and, most recently, rural Pennsylvania. They're building a vast network of pipelines to transport the gas to population centers, tanks to store the surplus and terminals to house liquefied natural gas (LNG) from overseas.

Much of the infrastructure is springing up in the Gulf of Mexico, which hasn't seen such a building flurry in decades, says Russell Braziel, managing director of Bentek Energy. In Texas, "They're drilling like banshees and finding gas like banshees," he says. "This is fabulous for the consumer."

The drilling boosted U.S. natural gas production 3% last year, helping reduce residential natural gas prices for heating and other uses 5.4%, the Energy Information Administration says.

Natural gas heats about half of U.S. homes and fuels 20% of U.S. power plants. It's also a feedstock for products such as plastics, fertilizer, antifreeze and fabrics.

With oil prices soaring and coal losing favor amid concerns about global warming, natural gas has emerged as the fuel of choice in the USA.

Natural gas prices have risen sharply in recent years. But the drilling boom, at least for now, is tempering consumers' costs as oil prices march toward $130 a barrel. The benchmark spot price of natural gas is about $11 for 1,000 cubic feet. That's far less expensive than oil, even allowing that it takes about 6,000 cubic feet of gas to match a barrel of oil's energy output, measured in British thermal units (Btu).

Driving the U.S. appetite for gas is the power industry. Coal fires 50% of power plants, but it's the largest emitter of global-warming gases.

Most utilities are turning to natural gas generators that emit half as much carbon dioxide, are relatively inexpensive to build and can be finished quickly. Natural gas use by the power industry grew 10% last year.

The surging demand, along with 2005 hurricanes that shut down production facilities in the Gulf, helped push up prices in recent years. Since 2002, natural gas prices have more than tripled.

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