The questions emerge: Is it safe? If so, what would fracking mean to the small town? There is no consensus on either question.
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.
Proponents laud fracking as a means of reducing U.S. dependence on foreign oil.
Opponents say fracking can wreak havoc on the environment, contaminating the water supply.
Caledonia has signed a lease with Fairhope, Ala.-based Fletcher Petroleum giving it access to less than 1/10 acres of the town's land. For $100 the company will have three years access to a plot of land about the size of a four-bedroom house.
Board attorney Jeff Smith said the lease does not necessarily mean the company will drill. Smith said Fletcher has been leasing land all over Mississippi at the same $100 rate.
Ed Hollingsworth, a geologist with Fletcher Petroleum who has been in the industry since 1981, said he has yet to see drinking water contaminated by fracking.
"I've been involved with probably 100 or so wells in the water basin, probably 90-99 percent of them have been fracked, and I'm not aware of one complaint from any surface owner that we damaged city, town or individual water wells.
"I think that's a pretty good record," he said.
Hollingsworth said his company has a working well in Maple Branch, two miles west of Caledonia. Maple Branch was originally drilled in the late 1970s. It was the first horizontal well in the state of Mississippi.
Thanks to state regulation, he doesn't feel water contamination is a valid concern.
"If there was I think we would have seen it after about 40 years of it. All the fresh water is protected and has been protected ever since we first drilled. These fracks are in sandstone that is several thousand feet deep. You have 4,000 feet of hard rock between you and the reservoirs which are very shallow in that area," Hollingsworth said.
Benny Coleman, head of the water department for the town of Caledonia, said there are five water wells in Caledonia, ranging from 300 feet to 818 feet deep.
Coleman said there's at least 4,000 feet between where the fracking is taking place and the town's aquifers. He doesn't see contamination as likely.
Ray Lewis, an environmental administrator with the Mississippi Oil and Gas Board said fracking is nothing new.
"Fracking has been around since time immemorial. It's part of the well process. "As technology developed, we have direction drilling and horizontal drilling," Lewis said.
Lewis said Mississippi has not had instances like flammable gas because diesel and hazardous chemicals are not allowed in fracking operations.
"In Mississippi, salt water is the majority of these fluids. Non-hazardous and organic chemicals are added to assist in the fracking process."
Lewis said that the state Oil and Gas Board is in the process of changing their regulations to require companies to list each chemical used in the fracking process.
"We know we don't use diesel in this state but we really have no paper trail. Right now, providing the chemicals is optional," he said. "It's better for everybody if we have it at our fingertips."
Lewis said besides the chemical mixture, the density of the rock plays a huge part in the amount of pressure needed to fracture the shale and release oil or natural gas.
"The northern states have a tighter formation than the South because we're closer to the water," he said. "We're more sandstone and sand."
Lewis said fracking is going on in Amite, Wilkinson and Adams counties.
Hollingsworth said there are several horizontal wells throughout the state. He said while horizontal wells are different from the vertical wells they differ only in the amount of oil and gas collected.
He said the fracking process was used during the completion of the well to make it produce a little better than it would on its own.
Bill Vest, a former resident of Caledonia and a safety consultant in the oil and gas industry, is not opposed to fracking but he is vocal about safety concerns. He said an improperly drilled well could be deadly.
"If it hits, the jobs are great, the money is good and it gives some people a foot in the door to a career. But at what cost? I don't want places that I love to hunt and fish screwed up because somebody didn't do their job.
"You need good people, you need good health, safety and environmental professionals out there on the job. If you don't have a solid health, safety and environmental culture, bad things will happen," Vest said.
The possibility of a safety breach prompted Caledonia Mayor George Gerhart to oppose the fracking lease. He refused to sign the lease agreement permitting fracking on the town-owned parcel.
"Caledonia is probably the most wanted area in Lowndes County for people to move here because of the school system and a wonderful place to raise a family.
"As far as I am concerned, if there was one mistake in this fracking process, this community would be ruined for years to come," Gerhart said.
Alderwoman Brenda Willis does not share Gerhart's concerns. Her family is benefiting from several wells on lands it owns. She feels the process is completely safe.
"It's not like there are going to be 900 trucks on the streets of Caledonia," she said.
Vest said if natural gas is found in Caledonia, people from around the world will be flocking to the small town.
"Everybody and their brother are going to be coming to Lowndes County looking for work, a place to stay and food to eat. They're going to be in your bars and on your streets.
"When you've got 18-wheelers with loads in excess of 100,000 pounds going 24 hours a day, seven days a week, 365 days a year, truck after truck after truck, you're going to end up with some pretty screwed up roads. Traffic is going to be horrendous," he said.