Natural gas below state's deep shale attracts speculators
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HARRISBURG -- David Pursell isn't a native Pennsylvanian, but he knows something important about the Keystone State that few Pennsylvanians know.
Mr. Pursell knows the value of a natural gas-containing rock called Marcellus shale, and it's the reason the research official at Tudor Pickering Holt & Co. flew up here from Houston, Texas, Friday to attend a meeting with hundreds of like-minded American oil and gas representatives.
The energy hunters want a piece of the shale, a valuable underground rock formation that runs from West Virginia to New York -- and encompasses a large swath of Pennsylvania from southwest to northeast, from Greene County to Wayne County.
State Environmental Protection Secretary Kathleen McGinty said that last year the United States developed and used less than 30 trillion cubic feet of natural gas. Penn State University researchers estimate the Marcellus shale holds anywhere from 169 trillion to 516 trillion cubic feet of natural gas.
"This is real-time extraction of resources, real-time putting it into the interstate pipelines and real-time addition the nation's natural gas supply," she said.
After years of waiting for economic conditions to justify drilling deep enough to unlock the gas packed tight into the rock, skyrocketing energy prices are finally making it a profitable endeavor, unleashing pent-up interest from investors far and wide.
But state officials warned Friday that with great prospects also comes great environmental responsibility.
Whereas experts say a traditional gas well may require 40,000 to 80,000 gallons of water pumped into an impoundment to increase pressure on the gas, a single Marcellus well takes from 1 to 6 million gallons of water to drill properly. This worries those who oversee the state's aquifers.
Additionally, state agencies fear that contaminated water could seep back into nearby streams. On May 30, these concerns caused the DEP to order the partial shutdown of two exploratory shale drilling operations in Lycoming County.
On June 6, the Susquehanna River Basin Commission notified 23 natural gas operators currently using or planning to use the river's water to develop Marcellus wells that they now must have approval from the commission and follow water consumption guidelines.
Last week the DEP considered an application addendum required for those looking to drill the Marcellus shale that asks applicants to explain how much water they plan to use, where they plan to get it and how they will treat it afterwards.
"The industry tends to bring this on themselves," Mr. Pursell said. "The reason we had this meeting is because a couple guys apparently dammed up a couple trout streams … You'll hear people complain and moan, but you reap what you sow."
However, many still see the shale as worth their time.
Kent Moors, a Duquesne University professor and oil and gas expert, said that oil's comeback boom in Pennsylvania is only for a "very limited duration." He thinks that natural gas development is far more significant.
Pennsylvania officials say much can be learned from big companies like Anadarko Petroleum Corp. and Chesapeake Energy, with experience at the Barnett shale in Fort Worth, Texas. They've both arrived in the state over the past year.
"This is the first time that they've done something of this size, of this scale and of this type in Pennsylvania," Thomas Murphy of Penn State's cooperative extension program. "They've been drilling for 100 years for some type of natural gas but not to this depth and not into the shale play that they're working on right now. This is a new endeavor."
First Published June 16, 2008 9:18 am