The Marcellus Shale is a gold mine of natural gas - pitting gas companies and farmers against locals and environmentalists.

The farmland around the college town of Oneonta, N.Y., is punctuated by barns and cows. But the quiet setting belies a battle that is raging over the Marcellus Shale, a largely untapped deposit of natural gas that runs from West Virginia to New York.

Gas companies, environmentalists, and cash-strapped farmers have been squaring off over the lucrative commodity, whose fate could be decided soon.

Experts say Marcellus is the largest natural gas deposit in North America, even bigger than Texas's lucrative Barnett Shale. A Penn State study of the shale has placed the amount of recoverable gas there at 489 trillion cubic feet -- more than 20 times the amount that the United States uses each year.

Companies including Chesapeake Energy (CHK, Fortune 500) and Hess Corp. (HES, Fortune 500) have been vying with one another to tap the gas deposit, which could be worth nearly $2 trillion in revenue based on today's low prices.

Range Resources (RRC) has spent $1 billion on rights to drill in the region, where it's leasing about 900,000 acres. Chesapeake Energy's 1.5 million acres of leased Marcellus land are a big reason its stock is up 74% this year.

But while gas producers have already started drilling the Marcellus in Pennsylvania, they are still waiting in New York, whose Department of Energy Conservation recently released a regulatory proposal for public comment.

The comment period ends Nov. 30, but the process will likely reach into next year, according to Richard Capozza, a lawyer at Hiscock & Barclay in Syracuse who represents several local gas companies. "The industry thinks they can work through it," he says, "but the environmentalists are up in arms."

Local advocacy groups say it would be better to preempt spills and contamination by banning drilling or mandating large distances between wells and water sources. "The draft does take steps to mitigate impact, but it doesn't adequately protect the area," says Adrian Kuzminski, an activist who lives in nearby Fly Creek.

Drillers have known about the Marcellus Shale for more than a century, but it used to be prohibitively expensive to extricate the gas from the dense, deep rock. Thanks to a new use of a technology called hydraulic fracturing, or "fracking," Big Energy now has a reason to drill into the shale.

By Mina Kimes, writer-reporter (Fortune Magazine)