By DAVID BERTOLA
dbertola@bizjournals.com | 716-541-1621

On a sunny morning in June, Carol Kauffman was in her kitchen making a maple walnut angel pie - her mother's recipe - when a touch of egg yolk mistakenly got mixed in with the egg whites.

"And when you do that, the whites won't beat," she said. "It's a disaster."

Kauffman was in a much brighter mood a week later, July 1, when she learned the state Department of Environmental Conservation provided revised recommendations to Gov. Andrew Cuomo to essentially lift the ban on the controversial hydraulic fracturing procedure for extracting natural gas.

Her house sits on 140 acres in Houghton, a hamlet in the town of Caneadea in Allegany County. She said she would like to be able to watch natural gas being drilled there. She previously lived in Seattle but returned to the area to care for her ailing mother, who died last year.  

In previous decades, oil and gas wells were drilled nearby, and shimmering pools of oil can be found on her property, which has been in the family since the 1800s. To keep it in the family, she was hopeful for a big lease with a gas company.

"Otherwise we'd have to sell," said Kauffman, who lives alone - unless you count her three cats and about a dozen ducks that waddle around the yard.

A couple years ago, oil and gas companies were paying top dollar throughout Pennsylvania but not in New York, where the DEC was studying whether drilling the shale, also known as hydrofracking, can be done in a way that's environmentally safe.

The DEC's announcement gives Kauffman hope, as the natural gas rich-Marcellus Shale formation lies beneath her property. While she is cautiously optimistic that drilling eventually will be permitted, she said she's also anxious to get things going.

"I am delighted that we have an opportunity, I am so pleased," said Kauffman, adding with a laugh, "Drill, baby, drill!"

Emily DeSantis, DEC spokesman, said after more research is completed by the end of July, the 700-page supplemental generic environmental impact statement (which includes the agency's recommendations) will be updated. Then, by the end of August, a 60-day period for public comment will begin.

"We will review the comments we receive and make any changes at that time, before we issue the final supplemental generic environmental impact statement," DeSantis said.

No permits will be issued to drill the shale until the public comment period has ended and the impact statement is final. This could mean hydrofracking New York's Marcellus may not occur until 2012.

Of the DEC report, Dennis Holbrook, executive vice president of Blasdell-based Norse Energy Corp., which drills for natural gas and transports it, said: "It's an encouraging sign. Geology doesn't stop at the (Pennsylvania) border, and there is significant potential in New York for shale development."

If New York's Marcellus is to be drilled, Holbrook said one of the first things Norse will focus on is choosing spots to drill the nearly 180,000 acres it leased.

"The second will be to expand our acreage position," he said.

According to Holbrook, in recent years companies offered landowners hundreds of dollars an acre in Broome County and Binghamton. And because of the moratorium on drilling, he said, "it didn't come with the opportunity to develop the shale."

The uncertainty caused oil and gas companies to put land leasing programs on hold. Among them was Somerset Production Co. LLC of Williamsville.

"We know people who paid up to $6,000 an acre in the eastern part of New York and in Pennsylvania," said Somerset land manager George Kubisty.

He wonders what will happen if the comment period causes the DEC to tighten regulations or increase permitting fees so high that drilling becomes cost prohibitive.

Kauffman, meanwhile, said her current lease is for $1,300 a year and is with Petroleum Development Corp., a Somerset partner. It expires in 2013.

As far as offering big-dollar leases like the one Kauffman seeks, Kubisty said it's not like a couple years ago when companies threw money around to secure drilling rights. Since then, more is known about where to find the gas.

"The better areas have been defined, and they are not in some New York counties," Kubisty said. "Companies aren't going to pay high prices. I may be wrong on that, but you may have had a better chance of getting a big payday when there was some uncertainty, some mystery."

Either way, Kauffman said, she is prepared to lose the property or continue living there. But if she gets an offer, she'll be at the end of her driveway, waving trucks in with flags and sweetening the deal with homemade desserts.

"I'll have coffee warming in the back for the drilling crews and cookies," she said, "and rhubarb pie for anyone else who wants to come."