New estimate raises Marcellus gas estimate forty-fold

Source: Houston Chronicle, August 25, 2011
Posted on:

A new assessment of the Marcellus Shale says the formation in the Northeastern U.S. may contain 84 trillion cubic feet of undiscovered, recoverable natural gas, far more than believed less than a decade ago.

The new assessment by the U.S. Geological Survey updates a 2002 study of the gas-rich formation that stretches through New York, Pennsylvania, Ohio and West Virginia. The earlier study concluded the region had about 2 trillion cubic feet of recoverable gas.

The growth in the USGS estimate takes into account advances in drilling and completion techniques — namely horizontal drilling and hydraulic fracturing — that have made more formations accessible.

Geological data

The agency also estimates the Marcellus contains about 3.4 billion barrels of undiscovered, recoverable natural gas liquids, which currently fetch higher prices than natural gas.

The USGS tapped a wide range of geological information on the formation and production data to reach the new assessment figures.

The assessment is purely geological and doesn’t address factors that could affect actual production from the wells such as the price of natural gas, the infrastructure to produce and transport the gas or regulatory and environmental concerns, said Brenda Pierce, the USGS’s energy resources program coordinator.

Future production estimates appear to be among the subjects of inquiries directed at a handful of exploration and production firms by the Securities and Exchange Commission and the New York attorney general.

Exploration boom

Since the 1930s, oil and gas drillers have noted natural gas when they passed through the Marcellus while targeting other formations. But they largely dismissed its potential as a reservoir rock they could tap for production.

After the 2002 USGS assessment, the industry’s successful combination of horizontal drilling and hydraulic fracturing led to a boom in gas exploration in the Marcellus and other shales throughout the country.

Hydraulic fracturing — pumping millions of gallons of water, sand and chemicals into the shale formations to break them apart and release the gas — has drawn concern from environmental groups, homeowners and some lawmakers because of reports of drinking water contamination near drilling sites.

Homeowners have sued companies alleging that drilling has put natural gas and chemicals in their water. The industry contends that fracturing has not contaminated drinking water because it occurs thousands of feet below aquifers.

Water wells

The Energy Department’s Shale Gas Advisory Board concluded in a report earlier this month that water contamination more likely resulted from poor well construction than from hydraulic fracturing, but said there are reasonable concerns over air emissions from natural gas drilling and production. The board recommended a wide range of data collection and measurement efforts for industry.

The USGS estimate that the Marcellus contains 84 trillion cubic feet of gas represents the mean of estimates ranging from 43 trillion to 144.1 trillion cubic feet.

For natural gas liquids, the range runs from 1.5 billion to 6.1 billion barrels.

Leave a Reply

Your email address will not be published. Required fields are marked *