MARCELLUS AND THE PIPELINES -- II

            More and more natural gas extracted from the Marcellus Formation has been coming onto the market as more wells are drilled in Pennsylvania.  With increased natural gas extraction comes new gas gathering pipelines, being laid every day, which connect these remote wells to central distribution systems, not only for natural gas but for propane as well. This gas gathering effort demonstrates that the Marcellus gas "play" is here for the long haul - pipelines are substantial investments in real estate, material and man hours. Pipelines are permanent, once a pipeline easement is granted, it is usually granted for good, making it a permanent part of the real estate in a region. Once pipelines are established, they will stay in place: connecting individual well sites to processing plants and ultimately existing and projected interstate pipelines. Considered as a development race, the State of New York may have shrewdly imposed the safety moratorium, since it will have now a growing supply of natural gas and propane closely at hand, which will be less affected by national price shocks and shortages, since independent lines are coming on stream, particularly with Chesapeake Power. Pennsylvania may have all the development, but it will likely have all the regulatory headaches and environmental cost as well. New York can sit back, learn from Pennsylvania's experience, and then decide whether it wants drilling on its lands. Now Pennsylvania has moved forward with new and more stringent pipeline rules, in an effort to control the pace and methods of pipeline development. In other words, natural gas exploration is here to stay in Pennsylvania.