Marcellus Gas Still Turns a Profit Despite Price Decline

Susan Phillips

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Susan Phillips tells stories about the consequences of political decisions on people's every day lives. She has worked as a reporter for WHYY since 2004. Susan's coverage of the 2008 Presidential election resulted in a story on the front page of the New York Times. In 2010 she traveled to Haiti to cover the earthquake. That same year she produced an award-winning series on Pennsylvania's natural gas rush called "The Shale Game." She received a 2013 Alfred I. duPont-Columbia University Journalism Award for her work covering natural gas drilling in Pennsylvania. She has also won several Edward R. Murrow awards for her work with StateImpact. In 2013/14 she spent a year at MIT as a Knight Science Journalism Fellow. She has also been a Metcalf Fellow, an MBL Logan Science Journalism Fellow and reported from Marrakech on the 2016 climate talks as an International Reporting Project Fellow. A graduate of Columbia School of Journalism, she earned her Bachelor's degree in International Relations from George Washington University.

September 8, 2011 | 5:23 PM

Susan Phillips / StateImpactPA

PJM Interconnect CEO Terry Boston speaks to MarkWest executive John Mollenkopf at the Shale Insight Conference in Philadelphia.

The production of shale gas across the country has done two things — stabilized the gas market, and make it tank. The price today lingers around $4 dollars per million cubic feet. Back in July of 2008, gas was going for as high as $14. But here’s the good news for lease holders in northeast Pennsylvania, the Marcellus Shale is still profitable for gas companies, and may be the only shale play currently giving investors a return. So those royalty checks should continue to come as the gas continues to flow in Bradford and Susquehanna counties.
Terry Boston, who runs PJM Interconnection, says the Marcellus Shale gas will provide a major change in how they do business. PJM runs the largest electrical grid in North America and spoke on a panel Thursday at the Shale Gas Insight Conference in Philadelphia. Boston called shale gas a “blessing” that came just in time to offset stricter environmental regulations for coal fired electricity plants.
Industry analysts on the panel agreed that the price of natural gas will stay low, but rise to between $5 and $6 dollars per million cubic feet within the next five years. Greg Gordon, from International Strategy and Investment Group, said for the first time, natural gas is as cheap as coal. So that, combined with new air quality standards, will set the stage for the conversion of coal to gas fired plants.