Nov. 19--DALLAS TWP. -- The natural-gas producing Marcellus Shale will have a massive effect on nearly every county in Pennsylvania, becoming a vital contributor to the economy that will affect other industries, experts agree.

"Pennsylvania could become the OPEC of natural gas in the nation," said Ray Walker, vice president of Appalachian Shale, the largest natural gas producer in the state. "This is the biggest thing I've ever heard of in this industry, and I've got 35 years in it."

Drilling for oil and gas is nothing new in the state, but the scope of the Marcellus Shale deposit -- possibly one of the nation's largest -- and the technology involved in accessing it are. With natural gas companies aggressively leasing properties, state lawmakers have to think fast about details from how much to regulate the industry to whether gas production should be taxed, possibly as a form of school property tax relief.

A panel of Republican state senators mulled testimony on Tuesday at a well-attended hearing hosted by Misericordia University. Speakers included natural gas professionals, some from the Barnett Shale deposit in Texas, and representatives from state agencies and non-profit research organizations.

The Marcellus Shale play, as the industry refers to it, has the potential for economic impact totaling $7.1 billion and creating 26,559 full- and part-time jobs with higher than average wages, said Kathryn Z. Klaber, executive director of the southwest office of Pennsylvania Economy League.

For a long time, accessing shale gas was considered too difficult, but new technology for horizontal drilling changed that, according to John Hanger, acting secretary of the state Department of Environmental Protection.

Development of Marcellus Shale is still in the early stages, but there has been a steady increase in interest, Hanger said. In 1999, there were 2,017 oil and gas permits issued, he said. This year a record 6,860 were issued so far, 566 permits exclusively for the Marcellus Shale, Hanger said.

Natural gas companies use a process called hydraulic fracturing to break up the shale. It requires millions of gallons of water, which is treated with chemicals and picks up more in the process. This "frac fluid" must be put in impermeable tanks and taken for treatment, Hanger said.

"Disposal of the water I think is the single biggest challenge," he said. "Water source issues are also serious, but disposal is the biggest problem."

Pennsylvania's geology is not as good as Texas' for injecting wastewater underground, Hanger said. And there is a limit on how much frac fluid can be treated, he said.