Marcellus Shale

Drilling to the Marcellus with Air

"Indiana County-based Falcon Drilling is [...] using mid-sized rigs and air drilling, as a less-expensive approach." Quoted from TribLive.com More at TribLive.com.

Natural Gas Development and Landscape in Pennsylvania

"Landscape change in Pennsylvania's Bedford, Blair, Cambria, Centre, Clearfield, Clinton, Columbia, Huntingdon, and Luzerne counties resulting from construction of well pads, new roads and pipelines for natural gas and coalbed methane development is being documented to help determine the potential consequences for ecosystems and wildlife, according to a new U.S. Geological Survey report." Quoted from the USGS announcement. More at USGS.

Produce Where You Have Infrastructure Support

"Magnum Hunter is focusing on the Marcellus and Utica shale plays more than North Dakota because its Eureka Hunter subsidiary has pipeline there to easily move its product." Quote from the Biz Journal article. More at Houston Business Journal.

LNG: Another Way to Lose Your Shirt? Again?

One of the current debates in Washington [1] is about exporting natural gas from the United States. A few years ago companies were mothballing brand new LNG import facilities because massive shale plays started flooding the United States market with low cost natural gas. Now companies are lobbying the United States government for permission to export United States natural gas as LNG. The potential problem with that plan is that a lot of natural gas projects in other parts of the world have an enormous transportation advantage over natural gas shipped from the United States. Many of these new natural gas projects are in areas where there is very little local market and that gas will be sold as LNG. The information below is a sampling of how much natural gas might be going into LNG, FLNG and subsea pipelines in other parts of the world. The volume is surprising even though this list is far from complete. The high LNG prices in Asia might drop as all of this new gas enters the market. AUSTRALIA: Companies in Australia are busy developing LNG projects along the entire northern coast of that continent [2]. There is very little local market for some of these fields and they have a huge transportation advantage to Asia over LNG shipped out of the United States. An article on the Energy Information Administration website [3] reports that Australia expects to have nine new LNG projects that will use traditional natural gas and five that will use coal bed methane. EASTERN RUSSIA: There is a lot of natural gas under the seafloor off the eastern coast of Russia. There Exxon is partnering with Rosneft [4] to build LNG facilities that will export natural gas to the Asia-Pacific market. Gazprom, the state-controlled natural gas company of Russia, has developing or working LNG projects in the Sea of Japan near Vladivostok [5] and at Sakhalin Island [6]. CANADA: Lots of companies are looking at the Pacific coast of British Columbia for the export of Canadian natural gas. Early this month there were proposals for 14 LNG export plants [7] in the province. Chevron [8] and BP [9] are interested in exporting LNG from British Columbia. Shell is already in partnership agreements [10] with Asian customers. AFRICA: On the east coast of Africa, Anadarko and Eni have invested billions of dollars to explore one of the largest untapped natural gas resources in the world [11] off the coast of Mozambique [12], where there is only a small local demand. They plan to have a natural gas pipeline that connects the offshore fields to LNG plants on the continent. Statoil and Exxon are working off Tanzania's coast [13] on large gas discoveries where there is very little local demand. These will be developed for LNG. Similar natural gas resources could exist off the coasts of other nations on the east coast of the continent. USGS recently published an assessment of oil and gas in four East African geologic provinces [14]. Onshore the China National Offshore Oil Corporation is working to develop oil and natural gas resources in some of the the east African rift basins [15]. Western Africa has a lot of potential to export LNG. Based upon 2012 statistics, Nigeria was the fourth largest exporter of LNG [16] in the world. They are only capturing a fraction of the gas. Large amounts of gas are still being flared [17] off the coasts of Nigeria and other west African countries. Algeria [18] is a leading LNG exporting country and a major source to the Mediterranean. Although the country has its instabilities it has a lot of natural gas capacity that could go straight to LNG. Egypt [19] has been a leading LNG exporting country to Europe and has new sources of gas that should maintain or increase export levels. Data from the Energy Information Administration FLNG: Shell is developing a fleet of FLNG (floating LNG) vessels [20] that will have the largest hulls in the world. These are initially intended to capture and convert natural gas from fields that are off the coasts of Australia and Indonesia. A large market also exists for smaller floating LNG facilities [21]. These might be used in areas where natural gas would otherwise be flared. INDONESIA: Indonesia currently accounts for 7% of global LNG exports. In addition, the country produces a lot of natural gas offshore that is converted into LNG and transported to one of its own islands for consumption. A lot of natural gas is currently being flared in Indonesia but the percentage is dropping rapidly through the use of small LNG facilities. Shell plans to use some of its FLNG vessels in Indonesia. Companies from China, the United States and other countries are planning LNG export facilities in Indonesia. The government is requiring them to dedicated a portion of their production to local consumption. In addition to traditional natural gas, Indonesia has significant coal bed methane and shale resources on land. Coal bed methane is currently being produced and the government expects to increase production to 183Bcf/y by 2020. Details in an Energy Information Administration article [22]. PAPUA NEW GUINEA Exxon, partnered with companies from Australia and Japan, recently spent $17 billion on a new LNG export facility [23] in Papua New Guinea that is expected to produce up to 6.9 million tons of LNG at peak capacity. Exploration for more gas in PNG continues. CHINA: China has a diversity of natural gas resources. They have conventional gas in onshore and offshore basins, a shale gas resource that rivals the United States, and a growing coal bed methane production. They are acquiring expertise to develop their shale gas through Sinopec partnerships in several shale gas plays in the United States. One deal with Devon Energy [24] includes the drilling of 125 wells with hydraulic fracturing that will be drilled outside of the United States. If these wells can be successfully developed in China and replicated the need for LNG in China could fall [25]. The decreased need and new pricing models [26] for LNG could see much lower LNG prices going forward. In the East China Sea, natural gas fields hundreds of miles from shore are now being developed with natural gas pipelines on the seafloor that deliver the gas straight to urban centers. One is a 200-mile long subsea pipeline that delivers natural gas from the Pinghu Field straight to the city of Shanghai [27]. Although the South China Sea [28] has a lot of territorial disputes it is also thought to have about 200 trillion cubic feet of natural gas in proved and probable reserves. Abundant oil and natural gas is also present under the under the Yellow Sea. SOUTH KOREA: South Korea is a major energy importer, producing only about 5% of its domestic energy consumption. The Korea National Oil Corporation is launching projects worldwide to control at least a small portion of the global energy supply. They have projects in Africa, the Middle East, South America, Canada and Asia. In the United States they have projects [29] in the Gulf of Mexico, onshore in Alabama, Texas (23.7% of the Eagle Ford) and New Mexico. QATAR: Qatar, the world's largest exporter of LNG [30] is worried about keeping its LNG customers. The Bloomberg article says: "The greatest threat to Qatar’s enormous wealth is (LNG) competition." ALASKA: The Alaska Senate is debating the largest infrastructure project in the history of the state [31]. It will involve a pipeline delivering natural gas from the North Slope to the Pacific coast where it will be converted into LNG and exported. Presently, lots of natural gas on the North Slope is being flared because it has no access to market. A project like this might capture an enormous natural gas resources that is either undeveloped or wasted. If any US project to export natural gas should be approved this one is it. Hopefully it can be done at a profit. ARCTIC AND SUBARCTIC BASINS: Natural gas from Arctic and Subarctic Basins [32] and the world's largest petroleum basin [33] might be developed using the Alaska project as a model. With warming climate some of these areas are ice free for much of the year. GLOBAL SHALE GAS: Most of the natural gas included in the listings above is conventional natural gas. The amount of unconventional natural gas (mostly from shale) that could become available outside of the United States is phenomenal. The chart below from the Energy Information Administration [34] shows that lots of natural gas could be produced from shale in many parts of the world. Much of this gas is in areas without a significant market and much of it is in the LNG customer countries. METHANE HYDRATES: The people of Japan are not sitting on their islands waiting for others to deliver natural gas. "In March 2013, JOGMEC conducted the first successful testing of offshore methane hydrate production and confirmed Japan's estimates of 40 Tcf of methane hydrates in the Nankai Trough on the southeast coast of the country. Japan hopes to begin production by 2018." Quoted from the Energy Information Administration [35]. India [36] has been working on projects to methane hydrates for the past several years. They believe that 900 trillion cubic feet of methane hydrates exist in their exclusive economic zone. Methane hydrates [37] are found in many parts of the world. When a technology is developed to capture them there will be a new natural gas revolution that will make shale gas look tiny. EXPORTING US NATURAL GAS? With all of the new sources of natural gas being discovered and LNG competition being developed, jumping into the LNG export business with a huge transportation disadvantage to the Asian and European markets seems to be fairly risky. The bottom line questions is: Does it make sense to spend a lot of energy compressing Marcellus gas on the US east coast, then spend a lot more energy shipping it across the planet to destinations where it will compete with a growing number of competitors? That certainly isn't good stewardship of the US natural gas resource and with all of the developing LNG, FLNG and subsea pipeline competition it might not make economic sense. Why ship it to Asia? That gas could be used ten miles from the wellhead! Wouldn't it make a lot more sense to take the billions of dollars to be spent on LNG plants and use it to coordinate pipelines, chemical companies [38], the auto industry, electric utilities and manufacturers within the United States? Or, converting it into alternative fuels [39] here in the United States? [1] http://thehill.com/policy/energy-environment/205710-dems-ask-obama-to-take-sides-on-gas-exports-as-energy-bill-teeters [2] http://www.appea.com.au/oil-gas-explained/operation/australian-lng-projects/ [3] http://www.eia.gov/countries/cab.cfm?fips=AS [4] http://www.reuters.com/article/2014/04/01/russia-rosneft-gas-idUSL5N0MT32R20140401 [5] http://www.gazprom.com/press/news/2014/march/article185616/ [6] http://www.gazprom.com/about/production/projects/lng/sakhalin2/ [7] http://www.theglobeandmail.com/news/british-columbia/woodfibre-lng-project-to-be-running-by-2017-premier-clark/article18503077/ [8] http://business.financialpost.com/2013/09/19/chevron-recommits-to-canada-with-kitimat-duvernay-shale-plans/?__lsa=c74d-fb38 [9] http://www.bloomberg.com/news/2013-09-09/bg-may-buy-gas-fields-in-canada-to-produce-lng-for-asia.html [10] http://uk.reuters.com/article/2014/04/30/shell-canada-lng-idUKL2N0NM1UC20140430 [11] http://www.reuters.com/article/2013/09/10/anadarko-mozambique-lng-idUSL3N0H60ZL20130910 [12] http://www.eia.gov/countries/regions-topics.cfm?fips=EEAE [13] http://www.marketwatch.com/story/statoil-exxon-mobil-in-gas-find-offshore-tanzania-2013-03-18 [14] http://pubs.usgs.gov/fs/2012/3039/ [15] http://www.eia.gov/countries/regions-topics.cfm?fips=EEAE [16] http://www.eia.gov/countries/cab.cfm?fips=NI [17] http://geology.com/articles/oil-fields-from-space/#nigeria [18] http://www.eia.gov/countries/cab.cfm?fips=AG [19] http://www.eia.gov/countries/cab.cfm?fips=EG [20] http://www.shell.com/global/future-energy/natural-gas/flng.html [21] http://fuelfix.com/blog/2014/05/07/is-a-boom-in-floating-lng-facilities-on-the-horizon/ [22] http://www.eia.gov/countries/cab.cfm?fips=ID [23] http://www.upi.com/Business_News/Energy-Resources/2013/09/03/PNG-natural-gas-project-nearly-complete/UPI-68891378212984/ [24] http://abcnews.go.com/Politics/money-chinese-investments-us/story?id=19347795 [25] http://www.cnbc.com/id/101646609 [26] http://www.bizjournals.com/houston/morning_call/2014/03/texas-shale-driving-global-gas-prices.html [27] http://www.eia.gov/countries/regions-topics.cfm?fips=ECS [28] http://www.eia.gov/countries/regions-topics.cfm?fips=SCS [29] http://www.eia.gov/countries/cab.cfm?fips=KS [30] http://www.bloomberg.com/news/2014-04-01/a-little-less-rich-qatar-gas-dominance-challenged.html [31] http://www.adn.com/2014/03/18/3381211/alaska-senate-passes-measure-to.html [32] http://geology.com/articles/arctic-oil-and-gas/ [33] http://pubs.usgs.gov/bul/2201/G/ [34] http://www.eia.gov/analysis/studies/worldshalegas/pdf/fullreport.pdf [35] http://www.eia.gov/countries/cab.cfm?fips=ja [36] http://fuelfix.com/blog/2014/02/14/methane-hydrate-the-energy-source-of-the-future-maybe/ [37] http://geology.com/articles/methane-hydrates/ [38] http://www.nytimes.com/2013/08/16/business/energy-environment/foreseeing-trouble-in-exporting-natural-gas.html?_r=0 [39] http://www.bizjournals.com/sanantonio/blog/eagle-ford-shale-insight/2014/05/heyco-will-build-91-million-plant-to-convert-eagle.html More at Geology.com.

A Solution for Shut-in and Uncompleted Marcellus Wells?

The Marcellus Shale is producing so much gas and has so many shut-in wells that the gas volume can not be handled by the region's infrastructure. Over 1300 wells have been drilled but can not be completed until there is take-away capacity for the gas. This is putting regional downward pressure on prices. The Energy Information Administration describes pipeline projects that will help with these problems. More at Energy Information Administration.

North Carolina Companies Want Marcellus Gas

An article in The Mercury News explains why companies in North Carolina want Marcellus Shale gas enough that they are willing to invest in a pipeline. More at The Mercury News.

Severance Tax on the Marcellus Shale?

The Commonwealth of Pennsylvania does not have a severance tax that would collect revenue from oil and natural gas production. Although other taxes are levied on energy companies the state has one of the lowest effective tax rates on drilling in the U... More at National Public Radio.

The Fight Over LNG Exports?

Some environmentalists and some politicians do not favor quick approvals of export terminals on the U.S. eastern coast with the intent of supplying natural gas to Russia's current customers. More at Bloomberg.

Shell Studies Dumping Marcellus Investment??

Royal Dutch Shell does not seem to be happy with the return that the are getting from their investment in about a million acres of Marcellus Shale.... they have a lot of dry gas. More at Pittsburgh Post Gazette.

Earthquakes Cause ODNR to Halt Drilling

On Monday, March 10th two small earthquakes in eastern Ohio (M2.6 and M3.0) prompted the Ohio Department of Natural Resources to halt operations at seven nearby gas wells. Industry responded that hundreds of wells have been drilled in the Utica Shale [1] using hydraulic fracturing [2] and horizontal drilling [3] without incident. Related: Utica Shale well density [4] [1] http://geology.com/articles/utica-shale/ [2] http://geology.com/articles/hydraulic-fracturing/ [3] http://geology.com/articles/horizontal-drilling/ [4] http://geology.com/utica.shtml More at Columbus Dispatch.

Chevron Shuts Down Seven Marcellus Wells

Chevron has ceased operations at seven Marcellus Shale [1] wells in Pennsylvania after an explosion at one of their wells killed one worker and produced a fire that burned out-of-control for several days. [1] http://geology.com/articles/hydraulic-fracturing/ More at Natural Gas Intel.

Tapping the Utica ahd the Marcellus from a Single Drill Pad?

A company in Ohio plans to drill wells into both the Marcellus Shale [1] and the Utica Shale [2] from a single drill pad in Ohio. The expect dry gas production from the deeper Utica and liquids production from the Marcellus. Related: Horizontal Well Density in the Utica Shale [3]. [1] http://geology.com/articles/marcellus-shale.shtml [2] http://geology.com/articles/utica-shale/ [3] http://geology.com/utica.shtml More at BizJournals.

The Shale Boom is Just Starting

Ryan Lance, CEO of ConocoPhillips believes that the "shale boom" in the United States is just getting started, with several decades ahead. More at Denver BizJournal.

Natural Gas is the Top Home Heating Fuel in Pennsylvania

"Natural gas (38 percent) provides heat to more Pennsylvania homes than any other fuel, but electricity (29 percent), fuel oil (20 percent), and propane (9 percent) are also widely used in the state." Quoted from the Energy Information Administration. However, even though Pennsylvania is a major producer of natural gas, homeowners there pay a price that is significantly above the national average [1]. [1] http://www.eia.gov/state/rankings/?sid=PA#/series/28 More at Energy Information Administration.

Where Are the Most Productive Marcellus Shale Gas Wells?

An article in TheTimes-Tribune.com reports that the most productive gas wells in the Marcellus Shale [1] are located in Susquehanna County, Pennsylvania and were drilled by Cabot Oil & Gas. [1] http://geology.com/articles/marcellus-shale.shtml More at TheTimes-Tribune.com.

Impatient Landowners Sue New York

Some owners of property above the Marcellus [1] and Utica Shales [2] in in New York are tired of waiting for their state to allow the development of their natural gas resource. [1] http://geology.com/articles/marcellus-shale.shtml [2] http://geology.com/articles/utica-shale/ More at MoneyNews.com.

Reversing the Flow of Natural Gas?

For over 1/2 century the flow of natural gas in the eastern United States has been from producing areas in the south to consuming areas in the north. Now that the Marcellus Shale is producing tremendous amounts of natural gas and production in the Hay... More at Forbes.

Volume of Wastewater Per MCF

Wells producing natural gas from the Marcellus Shale are producing only about 1/3 the amount of wastewater per unit of natural gas produced as conventional natural gas wells. More at Platts.com.

Rising Productivity from Marcellus Shale Gas Wells

The January 2014 Drilling Productivity Report from the Energy Information Administration shows how the productivity of newly-drilled natural gas wells in the Marcellus Shale is rising at a rapid rate. Most of this rise can be attributed to improved te... More at Energy Information Administration.

Rising Production from the Marcellus Shale

The Energy Information Administration's Drilling Productivity Report for January includes a graph that shows the steadily rising production from the Marcellus Shale. More at Energy Information Administration.

Why Natural Gas Prices in Pennsylvania are High

Pennsylvania has become the #2 state in the nation for natural gas production but consumers in the state still pay above average prices for natural gas. An article in the Pittsburgh Post-Gazette explores some of the factors that determine the price of... More at Pittsburgh Post-Gazette.

New Well Gas Production Per Rig

The Energy Information Administration has published a graph that shows how the average new-well gas production per rig in the Marcellus Shale has been climbing rapidly over the past few years. This increase can be attributed to improved technology. Traditionally a growth in the number of rigs in a field could be used as a predictor of increased production. Recently production has increased even with the number of rigs falling. More information. [1] [1] http://www.eia.gov/todayinenergy/detail.cfm?id=13551 More at Energy Information Administration.

Drilling Efficiency in the Marcellus Shale

The Scranton Times-Tribune has an article in which an experienced driller describes how efficiency improvements have cut the amount of time required to drill a horizontal well. More at The Scranton Times-Tribune.

Production Declines in Natural Gas Wells

Lots of property owners who signed a lease in one of the natural gas shale plays are now receiving monthly or quarterly royalty payments. Many of these people were pleasantly surprised with the size of their first royalty check -- but then shocked to see the size of subsequent checks fall rapidly. What's happening? More at Geology.com.

More Landscape Disturbance Maps Over the Marcellus

"Landscape change in Pennsylvania's Sullivan, Wyoming, Armstrong and Indiana counties resulting from construction of well pads, new roads and pipelines for natural gas and coalbed methane exploration is being documented by the United States Geological Survey." Quoted from the USGS announcement. More at USGS.

Two Ethane Crackers in the Marcellus Utica?

Nearly two years ago Shell was interested in building an ethane cracker in western Pennsylvania to process the liquids-rich gas being produced from the Marcellus [1] and Utica Shales [2] in the Ohio River Valley. Now Odebrecht and Braskem Americas is talking about building a cracker in the northern West Virginia panhandle and some believe that puts the Shell project in jeopardy. [1] http://geology.com/articles/marcellus-shale.shtml [2] http://geology.com/articles/utica-shale/ More at BizJournals.

Shale Sweet Spots and Production Declines

Some people think that a few "sweet spots" are supporting most of the production in the oil and gas shale plays. They point to the huge annual production declines and speculate that the "shale boom" will not last very long. More at USA Today.

Most Marcellus Shale Wells Are Already Profitable

Even though the average horizontal natural gas well drilled into the Marcellus Shale had a cost of about $5 million, approximately 78% of them have produced enough gas to become profitable. More at PennLive.com.

Pennsylvania Utilities Switching to Marcellus Shale Gas

Pennsylvania natural gas utilities who just a few years ago were sourcing their gas from Canada and a diversity of other sources are now getting most of their gas from Marcellus Shale sources - usually at a cost savings to customers. More at The Times Tribuine.

Marcellus Shale Production PowerPoint

The Penn State Marcellus Center for Outreach and Research has released a PowerPoint presentation that shows the growth in active wells, reported production, online wells, percent producing wells and condensate production in Pennsylvania. If you are in... More at Penn State Extension.

Natural Gas and the Endangered Species List?

Natural gas drillers in Pennsylvania are supporting proposed legislation that would revise how the state's endangered species list is managed. More at National Public Radio.

Fourth LNG Export Facility Authorized

The Department of Energy has authorized a fourth LNG export facility. The Dominion Resources Cove Point terminal in Maryland now has a conditional permit for LNG exports, which will most likely be produced using natural gas from the Marcellus Shale. Related: What is LNG? [1] [1] http://geology.com/articles/lng-liquefied-natural-gas/ More at Reuters.

Naturally Occurring Methane in Household Water Wells

USGS tested twenty household water wells in Sullivan County, Pennsylvania for methane. Seven of the wells contained detectable amounts of dissolved methane and two wells were considered to have an "elevated" methane content. None of the wells tested were located near currently producing natural gas wells. More at United States Geological Survey.

Marcellus Production is Up 50 Percent

Production from the Marcellus Shale in Pennsylvania and West Virginia is 50% higher than last year at this time. Even with that production surge there could still be over 1000 wells "waiting on pipeline". More at Washington Post.

Putting a Throttle on Natural Gas Production?

Reports of rapidly rising natural gas production from the Marcellus, Utica and other shale formations, even while thousands of completed wells are waiting on pipeline, has some experts predicting a slowdown in drilling activity in anticipation of depre... More at WESA FM.

Drilling Impact Fees vs Severance Taxes

An article on Law.com explores the differences between impact fees and severance taxes on natural gas producers working in Pennsylvania's Marcellus Shale. More at Law.com.

The Appalachian Triple Gas Play

A few companies are now finding success in the Upper Devonian Shale, an organic-rich rock unit above the Marcellus Shale and Utica Formation. More at Marcellus Drilling News.

Pumping CO2 into Marcellus Shale Wells?

Penn State researchers are studying whether it would be possible and make economic sense to capture carbon dioxide produced at large point sources and pump it into existing natural gas wells to enhance natural gas production. More at Penn State.

Natural Gas Under the Pittsburgh Airport

The Allegheny County Airport Authority leased 9000 acres of Marcellus Shale drilling rights to Consol Energy. Longer lateral drilling may yield more than the $500 million in expected royalties. More at Shale Reporter.

Methane Sources in Pennsylvania Ground Water

"The findings of a new study in the journal Groundwater®​ suggest that methane concentrations in Susquehanna County water wells in Pennsylvania can be explained without the migration of Marcellus shale gas due to hydraulic fracturing." Quoted from the publication press release. More at National Ground Water Association.