Charleston Gazette, editorial:
23 November 2008
West Virginia seems ready to add another dimension to its role as America's energy powerhouse. Billion-dollar ventures are poised to capture a natural gas bonanza in a deep layer of porous rock called the Marcellus Shale.
Already, Norway's Statoil-Hydro oil company has paid $3.4 billion for a one-third share in Marcellus drilling by Chesapeake Energy Corp., whose Appalachian headquarters is in Charleston. This implies that the impending exploration may amount to at least $10 billion. It promises to create still more good-paying jobs, in addition to the 436 that Chesapeake currently has in West Virginia. More landowners may get lucrative lease payments. All this is good news.
The Marcellus Shale is named for the town of Marcellus, N.Y., where the 6,000-foot-deep layer was found in 1839. It's a thick, dark, slightly radioactive stratum that was formed in an ancient ocean bed nearly 400 million years ago. Since then, geologists have determined that the Marcellus underlies the entire Appalachian Basin.
Past drillers found meager amounts of methane in the Marcellus. Apparently, that's because the dense rock allows gas to seep through only slowly. But fracturing the underground rock with water pressure opens more flow. And a costly new method of "horizontal drilling" - bits bore downward 6,000 feet, then turn at a right angle to penetrate level through the stratum - intercepts natural underground fractures, freeing more gas.
Drilling down 6,000 feet costs about $1 million - then veering sidewise magnifies the expense greatly. Therefore, gas strikes must be rich indeed to repay the drilling investment.
In 2002, the U.S. Geological Survey estimated that the entire Marcellus Shale contained less than 2 trillion cubic feet of gas. But some wells began finding valuable strikes in the stratum. Geology.com says:
"In early 2008, Terry Englander, a geoscience professor at Pennsylvania State University, and Gary Lash, a geology professor at the State University of New York at Fredonia, surprised everyone with estimates that the Marcellus might contain more than 500 trillion cubic feet of natural gas. Using horizontal drilling and hydraulic fracturing methods ... perhaps 10 percent of that gas (50 trillion cubic feet) might be recoverable. That volume of natural gas would be enough to supply the entire United States for about two years and have a wellhead value of about $1 trillion."
Pennsylvania has issued permits for 375 new wells in the Marcellus layer. But New York temporarily halted drilling until authorities decide whether environmental risk is posed by millions of gallons of chemical-treated water used for mile-deep pressure-fracturing. West Virginia should keep an eye on the New York inquiry. We hope the hazard proves minimal, and this burgeoning field brings an economic boost to the Mountain State.
Naturally, any energy boom brings concerns that state leaders and regulators must address. Already, West Virginia has been jolted by huge lawsuits by landowners who weren't paid sufficient royalties. And some landowners fear that their surface property may be damaged by massive drilling efforts. Hydraulic fracturing requires millions of gallons of water. How will ridge-top wells acquire this supply, and where will it be dumped after it's used and brine-laden?
Last week, Pennsylvania reported a shortage of examiners to review the flood of drilling permits. In West Virginia, regulators and industry are battling over which state agency has responsibility to police the growing enterprise.
As we said, we hope the Marcellus helps West Virginia's economy - if state regulators do their job to ensure minimal harm.