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A Westmoreland County company will ask city council tonight for permission to drill for natural gas near the site of a proposed new elementary school in the 12th Ward.

Under the proposal from Penneco Pipeline Corp. of Delmont, as many as six gas wells would be drilled on a few acres of the so-called "Palkovitz property" near Renziehausen Park.

But the wells would be conventional "surface" wells, not the more controversial and expensive wells that access gas trapped in the Marcellus shale layer nearly a mile below the ground. And they would not interfere with possible construction of a school on the 27-acre parcel along Eden Park Boulevard, city officials said.

The 18-month lease would pay the city $10,000 per year until the wells were drilled, plus a 12.5 percent royalty on any gas obtained. In addition, the city would receive up to 400,000 cubic feet of free natural gas per year.

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Penneco officials will answer questions from council at 6:30 tonight in the Public Safety Building, 201 Lysle Blvd., Downtown. The regular council meeting begins at 7 p.m.

During a discussion at Tuesday's council work session, city officials didn't have possible production figures available for each well, but said the amount of revenue would be small compared to deeper wells that access gas in the Marcellus shale.

(An analysis by the Almanac suggests that each well would net the city between $2,000 and $7,500 per year in royalties, though much higher figures are possible.)

Nevertheless, the lease --- if approved by council --- would be an important step, Mayor Jim Brewster says.

"One of the things that I've been trying to do is open up the new revenue streams that we're going to need over the next decade," Brewster says. "Fortunately, we have an opportunity in that we have access to gas on a property that (the city) already owns."

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Gas wells have been a common sight in Western Pennsylvania since the 1900s, and the Palkowitz parcel is actually part of the so-called "Snake Hollow Gas Belt" that was the site of the famous "McKeesport gas boom" --- a rash of speculation in 1919 that saw thousands of wells drilled.

Indeed, Pennsylvania has more gas wells than any other state except for Texas --- about 55,000, according to the U.S. Department of Energy. City officials said a gas well is already located next to the Palkovitz property, behind the former Babe Charapp Ford dealership on Eden Park Boulevard.

A state database shows seven gas wells in McKeesport's city limits, with three more in neighboring Versailles and 20 in White Oak. More wells dot Port Vue, Glassport, Liberty, Lincoln and other communities.

"I've been out in the woods in Washington County and Greene County, and you can't go too far without finding a gas well --- it's not a new technology," Brewster says.

Most of Pennsylvania's gas wells are relatively shallow wells, not deeper wells into Marcellus shale, and are classified as so-called "stripper" wells that produce less than 60,000 cubic feet (60 Mcf) of gas per day.

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According to the Independent Oil and Gas Association of Pennsylvania, a newly drilled shallow gas well (PDF) produces up to 16,544,000 cubic feet of gas (16,544 Mcf) per year --- about 45,000 cubic feet (45 Mcf) per day. The state Department of Environmental Protection says most wells, however, produce less than 11,000 cubic feet (11 Mcf) per day --- about enough to fuel a single-family home for a month.

With gas currently selling for less than $4 per Mcf on commodities exchanges, if each well produced only 11 Mcf per day, the city would net less than $2,000 per year. At 45 Mcf per day, the city would net about $7,500 per well per year.

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However, there have been some highly publicized accidents recently involving gas wells. In July, two people died after a gas well exploded near Natrona Heights in the northern part of Allegheny County.

Although gas well procedures are inspected and regulated by state authorities, Brewster told council members they shouldn't hesitate to ask tough questions of Penneco.

"There's no haste to approve this until you're thoroughly aware of everything in the country," he said.

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Drilling will not impinge on a new elementary school proposed by McKeesport Area School District. The wells would be drilled at the southwest corner of the site, said Dennis Pittman, city administrator, while the school has been suggested for the northern part of the parcel.

However, plans for the school have been on hold since June, when district officials announced they were considering other alternative locations. The city has received no updated plans from the district since then, Pittman said.

The lease, if approved by council, would also guarantee Penneco an option to drill in Renziehausen Park if the park was ever opened for gas drilling. Although city officials have been investigating for almost a year whether it's possible to drill horizontally to reach Marcellus shale gas underneath the 258-acre park, they have no plans to allow surface well drilling, Pittman said.

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