Twitter's streaming api permits filtering tweets by geolocation. According to the api documentation, only tweets that are created using the Geotagging API can be filtered. The code below uses tweepy to filter tweets for the San Francisco area.

#!/usr/bin/env python
import tweepy
import ConfigParser
import os, sys

class Listener(tweepy.StreamListener):
    def on_status(self, status):
        print "screen_name='%s' tweet='%s'"%(status.author.screen_name, status.text)

def login(config):
    """Tweepy oauth dance
    The config file should contain:

    [auth]
    CONSUMER_KEY = ...
    CONSUMER_SECRET = ...
    ACCESS_TOKEN = ...
    ACCESS_TOKEN_SECRET = ...
    """     
    CONSUMER_KEY = config.get('auth','CONSUMER_KEY')
    CONSUMER_SECRET = config.get('auth','CONSUMER_SECRET')
    ACCESS_TOKEN = config.get('auth','ACCESS_TOKEN')
    ACCESS_TOKEN_SECRET = config.get('auth','ACCESS_TOKEN_SECRET')
    
    auth = tweepy.OAuthHandler(CONSUMER_KEY, CONSUMER_SECRET)
    auth.set_access_token(ACCESS_TOKEN, ACCESS_TOKEN_SECRET)
    return auth


fn=sys.argv[1]
config = ConfigParser.RawConfigParser()
config.read(fn)
try:
    auth = login(config)
    streaming_api = tweepy.streaming.Stream(auth, Listener(), timeout=60)
    # San Francisco area.
    streaming_api.filter(follow=None, locations=[-122.75,36.8,-121.75,37.8]) 
except KeyboardInterrupt:
    print "got keyboardinterrupt"

Find the complete codebase on github at: https://github.com/telvis07/twitter_mining