Five Years On, Marcellus Shale Play a Booming Business
Washington, PA Observer-Reporter
4 October 2009
By Christie Campbell, Staff Writer
chriscam@observer-reporter.com
Five years ago today, the first well drilled into the massive Marcellus
Shale formation produced natural gas.
Known as the Renz well, it was drilled by Range Resources Corp. in
Chartiers Township. The well was an experiment, designed to see if
100-year-old maps and newspaper clippings would help the company in its
search for gas.
The results were promising and even more favorable when a second well
performed similarly to the first.
Drilling for natural gas in Southwestern Pennsylvania quickly has
become a $5 billion industry. The company has leased in excess of
900,000 acres in the Marcellus Shale, most of it in Washington County,
where the company now has 150 wells and seven property owners have
become millionaires.
Numerous other natural gas drillers, such as Chesapeake Energy Corp.
and Atlas Energy, are operating in the region. CNX Gas has 10 wells in
western Greene County, with plans to drill 24 in 2010, according to
Laural Ziemba, CNX's manager of public relations.
This is only the beginning, said Matt Pitzarella, director of public
affairs for Range Resources, during an interview last week. If the gas
play should turn out as predicted, it could be the second largest in
the world, second only to Qatar in the Middle East.
"It was never thought that the United States had this much natural
gas," he said, noting domestic reserves have jumped by 35 percent.
A study released in July by Penn State University predicts the state
could begin exporting natural gas by 2012.
That may not come as welcome news to some folks in Washington and
Greene counties who have watched farmland transformed into industrial
sites complete with drilling activity and 24-hour lighting. They cite
the noise involved with drilling, dirt and excessive truck traffic that
causes congestion and damages local roads. And they fear contamination
of water used in the hydrofracturing process of extracting gas.
Pitzarella doesn't deny there are environmental impacts but says they
are manageable. The industry continues to improve its drilling methods,
he said, citing the creation of a new "walking drill" that can drill
several wells on the same site. It recently opened up seven wells on
one well pad along Wotring Road in Hopewell Township. The company plans
to do most of its gas extraction from now on with multiple wells.
The ability to pull gas out of what is essentially black rock first
occurred in the Barnett Shale in Texas. When attention turned to the
much larger Marcellus Shale, which encompasses most of Pennsylvania as
well as portions of West Virginia, Ohio, Maryland and New York,
geologist Bill Zagorsky used century-old maps and newspaper clippings
that recorded "blow-outs" of oil wells to pinpoint pockets of natural
gas. This historical data was combined with modern seismic activity to
locate the shale formation.
Range's drilling activity from 2004 to 2007 was fairly quiet until the
end of the latter year when the company posted its production data. A
month later, Penn State University geoscientist Terry Engelder, along
with Gary Lash from the State University of New York at Fredonia,
estimated there was 50 trillion cubic feet of natural gas in the
formation, setting off a storm of interest in the gas play. That
estimate has since jumped to more than 500 trillion cubic feet.
The Penn State study estimates $2.5 billion in annual royalties will be
paid to landowners by 2020. But the study also cautions that the
natural gas industry is prone to sharp contractions in drilling
activity, such as swings in costs, prices and taxes.