The Marcellus natural gas trend is a large geographic area of prolific shale gas extraction from the Marcellus Shale or Marcellus Formation, of Devonian age, in the eastern United States. The shale play encompasses 104,000 square miles and stretches across Pennsylvania and West Virginia, and into eastern Ohio and western New York. In 2012, it was the largest source of natural gas in the United States, and production was still growing rapidly in 2013. The natural gas is trapped in low-permeability shale, and requires the well completion method of hydraulic fracturing to allow the gas to flow to the well bore. The surge in drilling activity in the Marcellus Shale since 2008 has generated both economic benefits and considerable controversy.
Although before 2008 the Marcellus Shale was considered to have inconsequential natural gas potential, it is now believed to hold the largest volume of recoverable natural gas in the United States. In 2011, the U.S. Geological Survey estimated that the Marcellus Shale contained 42.954 to 144.145 trillion cubic feet (TCF) of undiscovered, technically recoverable natural gas; the USGS upgraded its estimate to 214 TCF in 2019. The speculated total volume of the Marcellus field is even greater; Chesapeake Energy places its estimate at 410 TCF of shale gas. In September 2012, the Marcellus Shale overtook the Haynesville Shale of northwest Louisiana as the leading producer of both shale gas and overall natural gas in the United States. In February 2014, Marcellus gas wells produced 14.0 billion cubic feet per day (BFCD), a 42 percent increase over the year previous, and comprising 21 percent of all the dry gas produced that month in the United States; this increased to 14.4 BCFD and 36% of all shale gas nationwide in 2015.US Energy Information Administration, Natural Gas Weekly Update, 1 May 2014. By 2018, production had grown further from an average of 19.4 BCFD and reached more than 21 BCFD in December 2018. This increase in production, from the most productive basin in the U.S., has been a major contributor to the significant decline in price for natural gas but continued investment of production appears to be waning in the face of price weakness
Geological formation
The impervious limestone layers of the Onondaga directly below the Marcellus, and the Tully Limestone at the top of the Hamilton Group, have trapped valuable natural gas reserves in this formation. The gas is produced by thermogenic decomposition of organic materials in the sediments under the high temperature and pressure generated after the formation was buried deep below the surface of the earth. The rock holds most of the gas in the pore spaces of the shale, with vertical fractures or joints providing additional storage as well as pathways for the gas to flow; gas is also adsorbed on mineral grains, and the carbon in the shale.
Development history
The industry was long aware there was gas in the Marcellus, but it "occurred in pockets and flows that could not be sustained to make a well." Before 2000, some low production gas wells were completed to the Marcellus, but these had a low rate of return and a relatively long capital recovery period. There are wells in Tioga and Broome County, New York which are 50 years old or more.
From 1976 to 1992, the U.S. Department of Energy funded the Eastern Gas Shales Project, which studied many eastern shale formations. The project drilled and cored five wells in the Marcellus in Pennsylvania. The cores established that there were enormous amounts of gas in the Marcellus, and defined fracture directions that were used in later Marcellus well drilling. Although the great volumes of trapped gas found by the project in the Marcellus and other eastern shales created excitement, the project was less successful at finding ways to recover the gas economically during the low gas prices of the 1980s.
Range Resources drilled an unsuccessful well to the Oriskany Sandstone in 2003. Hoping to save some value by finding producible gas in the shallower formations in the wellbore, Range geologists noted that the Marcellus Formation had some of the same properties as the Barnett Shale of North Texas, which was a prolific source of gas. In late 2004 Range completed the well in the Marcellus, using hydraulic fracturing techniques developed for the Barnett, and started producing the well in 2005.John A. Harper and Jaime Kostelnik, The Marcellus Shale play of Pennsylvania , Pennsylvania Geological Survey. http://www.docs.dcnr.pa.gov/cs/groups/public/documents/document/dcnr_20027757.pdf
To extract the shale gas at more commercially viable rates, directional drilling is done to depths of underground to reach the formation, and then water and a mixture of chemicals is pumped into the rock under high pressure in a process known as hydraulic fracturing to release the gas from the low permeability shale. Drilling horizontally through the Marcellus shale perpendicular to the vertical fractures better connected the natural pathways for gas flow. Early results show that horizontal wells in this formation are producing gas at a rate more than double that of vertical wells, and at slightly lower cost overall, despite the much higher initial cost of drilling. Since parts of this region have been producing gas from wells drilled to the deeper Oriskany Formation sandstone, older wells that are no longer viable can be reused, either by fracturing the Marcellus layer in the existing well bore, or by refinishing the bore using horizontal drilling into the Marcellus. Re-use of the existing infrastructure has both environmental as well as economic benefits, because in addition to avoiding development of new drilling sites and wells, existing transportation facilities can be reused.
By 2008 the Marcellus Formation had become the focus of shale gas development, starting in Pennsylvania. Leasing agents aggressively sought out acreages to lease mineral rights in Pennsylvania.Marcellus Shale Advisory Commission, Final Report, 2012, p.34. The price for leasing rose from $300 per acre in February to $2,100 in April, 2008. Only four Marcellus wells were drilled in Pennsylvania in 2005, but by 2010 1,446 Marcellus wells were drilled in Pennsylvania.
In 2010, Range Resources was the first company to voluntarily disclose the chemicals used at each of their fracking sites. Early experiments in Mount Pleasant Township led to lengthy legal battles over pollution of well water and air. Range Resources spokesperson claimed that more than 2,100 Marcellus wells had been drilled in Pennsylvania by 2010 and at that time of there were "thousands of landowners across the state who have signed leases allowing gas companies to produce on or under their properties" who had not complained and "numerous happy landowners among the hundreds of Range leaseholders in Washington County... are enjoying the economic benefits".
Mergers and acquisitions In November 2008, Chesapeake Energy, which held 1.8 million net acres of oil and gas leases in the Marcellus trend, sold a 32.5% interest in its leases to Statoil of Norway, for $3.375 billion."Chesapeake announces joint venture agreement", World Oil, December 2008, p.106.
Royal Dutch Shell's $4.7 billion acquisition of East Resources in 2010, with acreage in four Marcellus states,"Royal Dutch Shell plc acquires new positions in US tight gas" , Royal Dutch Shell. May 28, 2010. Accessed December 18, 2010 stood out amongst a flurry of acquisitions."Shell pays $4.7 billion for shale gas company". Ben Berkowitz. Reuters. May 28, 2010
Infrastructure Building for infrastructure projects was reported in West Virginia, Pennsylvania, and Ohio to accommodate the growth during 2008–2009, including for pipeline and water treatment services.“Natural gas drilling water treatment plant planned” , iStock News. June 17, 2010. Accessed December 18, 2010“Penn. natgas water treatment plant challenged”, Reuters. November 3, 2009. Accessed December 18, 2010“Pipelines expanding to move Marcellus shale gas” , Pipeline and Gas Technology. September 1, 2009. Accessed December 18, 2010“Kinder Morgan Building New Marcellus Shale Pipeline from Pennsylvania to Michigan”, Marcellus Drilling News. April 2010. Accessed December 18, 2010“Warren Treatment Plant Gets OK to Process Wastewater from Marcellus Drilling”, The Business Journal. December 7, 2010. Accessed November 28, 2017
In 2010, Warren, Ohio's water treatment facility announced plans to become the first in the state to accept waste water from shale drilling, while at the 2010 Marcellus Summit in State College, Pennsylvania, state officials announced they were working with local officials on bonding issues for new infrastructure. In August 2010, Kinder Morgan announced plans to construct a 230-240 mile-long underground pipeline, which would transport recovered natural gas supplies in Western Pennsylvania from West Virginia to Toledo, ultimately connecting with existing pipelines in Michigan and Southern Ontario."New pipeline could impact Muskingum, Coshocton counties", Brian Gadd. Zanesville Times Recorder. 23 August 2010. Retrieved 5 September 2010. The project, named the Rover Pipeline, has had numerous spills during its construction process. The Ohio Environmental Protection Agency has fined the company for over $2.3 million in damages, but the fines have yet to be paid.
Several pipeline projects completed in 2013 carry Marcellus gas to New York and New Jersey, and were expected to result in lower gas prices to consumers in those areas. The Algonquin Incremental Market and Salem Lateral pipeline extensions will carry natural gas from the Marcellus into New England where consumer natural gas prices are higher.US Energy Information Administration, Marcellus natural gas pipeline projects to primarily benefit New York and New Jersey, 30 Oct. 2013.
The Atlantic Coast Pipeline is a pipeline that is planned to enter service in 2019 and will draw gas from the Marcellus formation in West Virginia and run south to North Carolina.
Estimates of resources and reserves
Estimates of recoverable natural gas in the Marcellus Shale have, and still do, vary greatly. Note that "resources" and "reserves" have different definitions, and are calculated differently. Nevertheless, the first to come forward with an enormous number was Terry Engelder (a Pennsylvania State University geosciences professor, and also co-principal with Gary G. Lash of the company Appalachian Fracture Systems Inc., a consulting firm) who announced his startling calculation of natural gas in 2008.
Estimated recoverable gas 2002, United States Geological Survey: 0.8 to 3.7 trillion cubic feet (TCF) of undiscovered, technically recoverable natural gasMilici, R.C., Ryder, R.T., Swezey, C.S., Charpentier, R.R., Cook, T.A., Crovelli, R.A., Klett, T.R., Pollastro, R.M., and Schenk, C.J., 2003, Assessment of undiscovered oil and gas resources of the Appalachian Basin Province, 2002: U.S. Geological Survey Fact Sheet FS-009-03, 2p. http://pubs.er.usgs.gov/publication/fs00903 2008, Terry Engelder, Pennsylvania State University geosciences professor (and also co-principal with Gary Lash of the company Appalachian Fracture Systems Inc., a consulting firm): of recoverable natural gas 2008, Gary G. Lash, State University of New York at Fredonia geology professor (and also co-principal with Terry Engelder of the company Appalachian Fracture Systems Inc., a consulting firm): 49 TCF recoverable 2009, United States Department of Energy: 262 TCF of recoverable gas.US Department of Energy (April 2009): Modern shale gas development in the United States: a primer, p.17, PDF file, downloaded 27 November 2017. 2011 United States Geological Survey: 42.954 to 144.145 trillion cubic feet (TCF) of undiscovered, technically recoverable natural gas