Despite warnings that the shale gas boom would wither, industry is getting pumped in certain areas as their numbers are only headed higher. That’s according to government analysts, who are drawing special attention to the Marcellus Shale region in the eastern states where production is skyrocketing.

The region is beating its forecasts, which is made possible by the advancement in drilling technologies. In fact, the U.S. Energy Information Administration is saying in a new report that breaks down productivity levels according to region that the gains in new gas wells are more than offsetting the declines from the existing ones. The Marcellus Shale, it adds, accounts for three-fourths of growth in the nation’s production.

“The sky has not fallen down like some have said would happen,” says Michael Krancer, Pennsylvania’s former head of environmental protection, in a speech. “We need to have continued good performance. Bad actors will be bad for business … The difference is that we can now hydraulically fracture together with horizontal drilling. That’s what is unlocking all this availability of American energy … We are just at the tip of iceberg.”

He adds that the Marcellus Shale region is producing the equivalent of 2 million barrels of oil a day, which exceeds the oil production of many OPEC countries. The energy agency, meanwhile, says that 2,203 trillion cubic feet of shale gas here is technically recoverable — enough to last 92 years.

Two decades ago, developers couldn’t find enough gas to pay the cost of production. But today that has changed. Modern technologies translate into new efficiencies: One gas well today can generate twice as much as a single gas well did in 1985, say natural gas groups. The drilling footprint of well pads, meanwhile, has decreased by as much as 70 percent.

The process of exploring for shale gas begins with “horizontal drilling.” Such a technique starts the same as “vertical drilling” but then moves laterally. It uses a drainage network to siphon off the available gas. Vertical wells, by comparison, go straight down. list of sites . And while vertical drilling is cheaper than horizontal drilling, it is less productive. But if developers want the shale gas to start flowing they must then use hydraulic fracturing, which uses a mixture of sand, water and chemicals to stimulate the gas that is a mile beneath the earth’s surface.

If the decision is made to drill for gas, producers must then determine where to establish the drill site. And that depends on the formation of the expected deposits as well as the characteristics of the subsurface geology and the size and depth of the natural gas that it is to be explored. Once geologists determine the most optimal point to drill, developers then go to regulators to get the necessary permits that include the building of gathering lines that in essence create a tributary system from which any gas would flow.

Environmentalists, however, aren’t sold on the new technologies. And nowhere is that battle more passionate than in Wyoming, where the U.S Environmental Protection Agency had previously issued warnings to residents of Pavillion that the water there could contain carcinogens.

Altogether, close to 30,000 natural gas wells exist in the state, which may double in a decade. Wyoming is thought to hold 24 trillion cubic feet of natural gas reserves. Among the drillers doing business there: BP, Devon Energy, ExxonMobil Corp. and Encana Corp., which has been accused of spoiling Pavillion’s water but which disputes the techniques that EPA had used to arrive at its conclusions.

Producers are emphasizing that they are committed to preserving Wyoming’s local habitat and have said they will spend millions to make sure it happens. They are making the same promises around the country. States such as Pennsylvania and West Virginia are welcoming the message where Chesapeake Energy , Range Resources and Shell Appalachia are active. Other places such as New York and Vermont remain highly skeptical.

If all of these gas reserves could get tapped, how would the supplies make it to market? After all, estimates are that natural gas will provide about 40 percent of the fuel used to make electricity by 2035. According to the Interstate Natural Gas Association of America, between 29,000 and 62,000 miles of additional pipelines would need to be built in both the United States and Canada. And between 370-600 billion cubic feet of storage is also required. The cost: Between $133 billion and $210 billion over the next 20 years.

If the incentives are there, the industry and its investors will step to the plate. But such growth and productivity must be done responsibly, or consumers would reject the players and their products.

 

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