New Numbers Show PA Gas Production Will Lead Nation

Penn­syl­va­nia has become a net exporter of nat­ural gas and could become the nation’s lead­ing gas pro­ducer. A report released Wednes­day by the Mar­cel­lus Shale Coali­tion, an indus­try group, says their pro­duc­tion for 2010 was higher than expected. Penn State Uni­ver­sity researchers con­ducted the study, which was com­mis­sioned by the Coali­tion. The 2010 report, by the same researchers, pro­jected 1700 wells and a bil­lion cubic feet of gas. But a sur­vey of gas drillers shows the amount of actual gas pro­duced is dou­ble their pro­jec­tions despite drilling only 1400 wells. The new report says in less than a decade, Pennsylvania’s Mar­cel­lus Shale gas could lead the nation in nat­ural gas production.

Mar­cel­lus Shale Coali­tion pres­i­dent, Kathryn Klaber says this report con­tra­dicts a New York Times piece that ques­tioned the long term eco­nomic via­bil­ity of shale gas drilling, com­par­ing the buzz to a Ponzi scheme. But this excerpt from the Coalition’s report could explain why shale gas devel­op­ment, at least in other parts of the coun­try, could exhibit a boom-bust cycle.

“Unlike con­ven­tional oil and gas devel­op­ment expand­ing pro­duc­tion from shale resources requires con­tin­u­ous drilling activ­ity. Sub­stan­tial cut­backs in drilling sig­nif­i­cantly reduce pro­duc­tion after a few years because the pro­duc­tion decline curve is ini­tially very steep for shale gas reser­voirs. Nev­er­the­less, the sheer geo­graph­i­cal size of the Mar­cel­lus sup­ports sig­nif­i­cantly higher lev­els of drilling.”

In addi­tion to the larger Mar­cel­lus reserves, the Coali­tion says tech­nol­ogy is rapidly improv­ing to boost pro­duc­tion in Pennsylvania.

Crit­ics have called pre­vi­ous Penn State reports biased because they are funded by indus­try. The report relied on sur­vey results of 12 gas pro­duc­ers. But the Coalition’s Kathryn Klaber says the method­ol­ogy has pro­duced an accu­rate por­trayal of gas pro­duc­tion. “The method­ol­ogy here is as true as you can get to what indi­vid­ual com­pa­nies con­fi­den­tially report, indi­vid­u­ally, to the researchers,” she said, “ .…It is what it is.”

Klaber also reit­er­ated her group’s sup­port of an impact fee. On Fri­day, the Mar­cel­lus Shale Com­mis­sion is set to release its rec­om­men­da­tions to Gov­er­nor Cor­bett on tax­ing Mar­cel­lus Shale. Klaber says there are some unmet needs in local com­mu­ni­ties that can be addressed with a “rea­son­able com­pet­i­tive impact fee.”

Mean­while, an offi­cial with the Energy Infor­ma­tion Agency stands by their shale gas pro­jec­tions, and takes issue with the Times piece. Politico reported on the tes­ti­mony of Howard Gru­en­specht at a Sen­ate hear­ing this week. Gru­en­specht said some of the emails cited in the Times piece came from an entry-level staffer, and were heav­ily redacted.