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Falling Gas Prices: Falling Royalties

HARFORD TOWNSHIP — The combination of low natural gas prices and a lack of pipelines to move gas out of the region is a headache for drillers. This year m...

HARFORD TOWNSHIP -- The combination of low natural gas prices and a lack of pipelines to move gas out of the region is a headache for drillers.

This year may be the year when these problems trickle down to landowners, gas workers, and businesses that depend on them.

Wells on the Empet family dairy farm in Harford were once listed among the top natural gas producers in Pennsylvania, but Rick Empet says gas production is down.

"I'm still working seven days a week," Empet said.

Empet is working because he believes 2015 could be an upside down year. Money the family makes from natural gas is falling and dairy farming revenues are growing.

"Farming's done OK for me. We've grown the business and we're pretty successful at it," Empet said.

Energy company reports suggest the natural gas boom around the country is ending.

Chesapeake Energy made $733 million dollars in the first quarter of 2014. In this year's first quarter, it lost more than $5 billion. A Chesapeake financial officer writes, "(In) the northeast part of the Marcellus…we are currently curtailing production."

Meanwhile, in Susquehanna and Lycoming Counties, Cabot Oil and Gas recently had plans, "to drill over 120 wells in 2015.  We have lowered that number to 70 wells."

Fewer wells could mean fewer jobs at the rigs.

At the Lenox Restaurant in Susquehanna County, owner Marlene Peck says until recently, workers who built well pads made up half her customers.

"It's a lot slower for breakfast and lunch, that's really when they come in," Peck said. "It bothers me."

Nearby landowners receiving monthly royalty checks are also concerned.

One energy company executive doubts many wells will be capped. Instead he predicts drillers will take less gas out of the ground and that translates into less money for landowners.

Rick Empet says his family saved most of the money from gas companies in recent years. He's worried about neighbors who weren't so frugal.

"There's going to be some people who are really going to struggle. This bonus money that they've received the last couple of years, they've gone on trips, they've bought things they maybe wouldn't have otherwise," Empet said.

The president of the Marcellus Shale Coalition which represents energy companies says the industry can grow with new and expanded pipelines to areas that need natural gas, but industry experts say getting these pipelines in our area is at least five years away.

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