Natural Gas Drilling Boom Heads East

All you folks living in the mid-Atlantic: intensive Western-style drilling for natural gas is ramping up big-time in your neighborhood. One of the hottest targets is a geological formation known as the Devonian-age Marcellus Shale, which lies underneath a vast area encompassing the Southern Tier of New York, western Pennsylvania and eastern Ohio, and much of West Virginia. Unlike in the Rocky Mountain states (where natural-gas drilling has been booming since the mid-1990s), lots of people live over the Marcellus. But just like in the Rockies, most Eastern landowners don’t own the gas and oil under their property, and have no legal right to stop a company from drilling on their land. I’ll bet your realtor didn’t mention that.

How hot is the Marcellus “play”? XTO Energy just spent $600 million to buy mineral leases covering 152,000 acres. They expect to drill at least 1,900 new wells, one every 80 to 100 acres. Plus, of course, a network of access roads, utility corridors, and pipelines to drill and service all those wells.

Hydraulic fracturing operation on a Barnett Shale well (Halliburton photo)

These are expensive and difficult wells to drill. To unlock the gas in this impermeable shale formation, they have to drill thousands of feet down to reach the flat-lying beds of shale, then turn the well 90 degrees so that it runs horizontally through the gas-bearing rocks. The wells are hydrofractured to open up cracks in the shale that allow gas to flow into the well. This takes a lot of serious equipment and a big wellsite – 3 to 4 acres at least. Check out the American Association of Petroleum Geologists’ website on the growing shale play, and their gallery of aerial photos showing fraccing operations on shale-gas wells.

This type of shale-gas production was pioneered in the Barnett Shale play in and around Fort Worth, Texas. There’s a lot of money to be made, and a lot of energy to be produced, but folks living over the Marcellus might want to learn more about the Fort Worth experience.