Caledonia has long been rich in natural gas production, but the town could see a resurgence in oil exploration with the advent of a controversial extraction process called hydraulic fracturing, more commonly known as "fracking." Photo by: Matt Garner/Dispatch Staff
December 8, 2012 7:10:00 PM
The Town of Caledonia has long enjoyed the financial benefits of sitting atop a natural gas field, and now, the hunt is on for black gold -- oil, that is.
Until two months ago, natural gas was the only game in town, but fueled by new technology and crude oil prices averaging a healthy $85 to $110 per barrel, exploration is on the rise.
Caledonia has been a hotbed for natural gas and oil activity since the early 1970s, but around two decades ago, the underground fields began to run dry, causing a shift from production to storage. A few years ago, the Caledonia Gas Storage Field expanded its capacity from 11.7 billion cubic feet to 16.9 billion cubic feet, reaping a tidy $20,000 per year for the town of just over 1,000 residents.
In the winter months, as demand increases in the northern states, natural gas is shuttled along the Tennessee and Southern pipelines, drawing from storage fields along the way, like that in Caledonia.
But oil hasn't been a part of the picture until now. There have been a few holes jabbed in the ground, but they have been dry. Many believe hydraulic fracturing, more commonly known as "fracking," will change that.
Earlier this week, Aberdeen landman Foster Kennedy, of Southwest Energy Inc., appeared before the Caledonia Board of Aldermen, requesting a three-year lease to mineral rights on a 50-by-65 foot parcel of town-owned land behind the Shop and Save grocery store on Cal-Kolola Road.
The aldermen unanimously approved the request, with alderman Quinn Parham making the motion and alderman Brenda Willis seconding it. The town will receive $100 for the lease.
Kennedy, who is working on behalf of Fairhope, Ala.-based Fletcher Petroleum Corp, said if their efforts are successful, they hope to stick around Caledonia for a while.
Parham, who lives near the new exploration site, leased his property to a different company a few months ago, and he said work has already started on the well.
If they strike oil on his property, it could be financially lucrative, but even if they don't, he figures there is no harm in trying. Either way, he says, he would still get up and go to work every day, because he loves his job as a service lineman for the Monroe County Electric Power Association.
Lowndes County District 1 Supervisor Harry Sanders said Friday that fracking will add new life to old wells in the area, turning dry holes into potential gushers.
But the process is not without its critics.
Hydraulic fracturing involves drilling horizontally instead of straight down, using high-pressure jets of water, sand and chemicals to split the shale and release previously unreachable reserves of natural gas and oil. Some people, like Parham and Sanders, say the technology has the potential to bring more money and jobs to the area.
But environmentalists in communities across the nation have protested fracking, expressing concerns over the safety of pumping fracking fluid into the ground.
A 2010 documentary, "Gasland," explored the effects of fracking on communities in the west, highlighting health concerns by residents. In the film, filmmaker and activist Josh Fox points to nearly 600 chemicals used in the fracking process, with anywhere from 80 to 300 tons of chemicals used per fracture, saying the fracking fluid threatens drinking water and air quality, and poses other environmental, safety and health hazards.
But proponents of the process counter that it is safe. The Independent Petroleum Association of America made their own film, "Truthland," saying water and sand constitutes 99 percent of the fracking fluid and the remaining fluid contains ingredients common industrial and household materials.
Sanders said Caledonia residents shouldn't be concerned, because the wells are around 7,000 feet below ground, extending far beyond local aquifers, which are only around 2,500 feet.
Instead, he believes the chances are good that fracking will reinvigorate Caledonia's stake in the gas and oil business, bringing jobs for residents and royalties for land owners.
Parham trusts geologists and believes the process is safe. And if the town ends up striking it rich, it will certainly keep the streets paved, he said.
Carmen K. Sisson is the former news editor at The Dispatch.
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