With nearly doubled rates in 2012, the Marcellus Shale continues its dominance in U.S. natural gas production.
by Lori K. Ditoro
July 31, 2013

In 2012, the Marcellus Shale was the most productive gas field in the nation. The play that ushered in the shale gas boom is still the dominant production gas field today. Pennsylvania and West Virginia now produce 7 billion cubic feet of gas per day, which is 25 percent of the nationwide production and nearly double 2011’s rate.1

After declining because of the natural gas surplus, prices are beginning to creep up. President Obama’s recent support of natural gas exports and upcoming pipeline projects to help move the vast quantities being produced are helping the rebound in prices. Because of this, natural gas production rates are increasing again as well.2

While those in the industry understand that hydraulic fracturing has been used for decades and is safe when conducted correctly, environmental concerns continue to be at the forefront of production in the area. Doug Walser’s Report from the Field on page 32 discusses the need for and steps to take for responsible production in the area.

This report includes the important concern of water use and treatment. Many well service companies have embraced the challenge of preventing water contamination. They have developed systems to treat and reuse produced water to prevent the depletion of precious freshwater sources (more critical in the arid climates of Texas and North Dakota) and avoid produced water disposal.

Technological developments will continue to improve production and facilitate all aspects of the drilling, completion and production process. During hydraulic fracturing, sand, water and chemicals are sent under extremely high pressure into the shale play. New proppants, called Penn Prop, are beads from recycled glass and other waste items that are used instead of sand. This new proppant could increase Marcellus shale production by 50 percent.2

The economic benefits of the upstream oil and gas industry’s operations in the Marcellus Shale are great. However, the need for infrastructure for transportation and downstream refining of the produced hydrocarbons will prove to be economic drivers as well. In March 2012, Shell Oil Company selected a site about 30 miles north of Pittsburgh for a petrochemical plant to convert natural gas liquids into plastics and antifreeze, but the final decision to move forward is still several years away.

The need to transport the produced gas to areas on the East Coast for processing means that pipeline infrastructure must be added and aging infrastructure must be repaired, updated or replaced. Experts predict that more than 50,000 miles of new pipeline will be laid as a result of Marcellus Shale drilling.3

With surplus natural gas supplies, the U.S. is seeing an increase in its use. Most new-construction power generation facilities are natural-gas-fired, and many municipalities are turning to natural-gas-powered vehicles for their fleets. Since natural gas is a cleaner burning fuel than coal, fewer emissions mean a cleaner environment.

In Pennsylvania specifically—in the center of the Marcellus—a housing shortage is also leading to new construction and adaptation of the hotel industry to accommodate the continued influx of workers to the area—an additional economic benefit for the region.2

References
1. Begos, Kevin, “Marcellus natural gas production expanded in 2012,” Businessweek, Dec. 26, 2012.
2. Carter, Jon, “How to Make Money by Investing in Marcellus Shale,” www.energyandcapital.com, July 19, 2013.
3. Youker, Darrin, “Marcellus Shale Drilling Driving Expansion in Pipelines,” Country Focus, www.pfb.com, January 2012.