NGA ISSUE BRIEF: Marcellus Shale

SUMMARY

  • Major shale gas basin located in Appalachian region (WV, OH, PA, NY)
  • Estimated to be the largest natural gas supply basin in the U.S.
  • Production output already extensive, and is expected to grow further in coming years
  • Provides supply security and cost competitiveness for high-priced Northeast region
  • Responsible environmental management a key element of successful development
  • NGA: production can yield multiple benefits: increased supply; source diversity; improved air quality; proximity to high-demand, high-cost demand market; local and state tax revenues; jobs

Source: PA DEP, 5-14

The biggest regional natural gas development is the gas production in the Marcellus Shale, a geographic formation in the Appalachian Basin. The Northeast, long accustomed to being "at the end of the pipeline," now finds itself located next to - and indeed on top of - one of the largest natural gas basins in the U.S.

Location

This shale gas formation extends from West Virginia into Ohio, Pennsylvania and New York.
As shown in the map, its geographic area (around 95,000 square miles) is quite large, leading to great expectations for the ultimate size of the economically recoverable resource base. In a July 2011 report, the U.S. Energy information Administration (EIA) reported the share of Marcellus acreage by state as follows: Pennsylvania, 35.35%; West Virginia, 21.33%; New York, 20.06%; Ohio, 18.19%; Virginia, 3.85%; and Maryland, 1.09%.

Appalachian Production

The Marcellus/Appalachian Shale region is now the largest shale gas producing region in the U.S. - and is estimated to have the largest resource base.
Output had grown to 30 Bcf/d in late-2018. Regarding shale gas, U.S. EIA observed in August 2018 that "Gross production of natural gas in the United States has generally been increasing for more than a decade and in recent months has been more than 10% higher compared with the same months in 2017. This growth has been driven by production in the Appalachian Basin in the Northeast, the Permian Basin in western Texas and New Mexico, and the Haynesville Shale in Texas and Louisiana. These three regions collectively accounted for less than 15% of total U.S. natural gas production as recently as in 2007, but now they account for nearly 50% of total production." Annual production in Pennsylvania alone has grown from 1 trillion cubic feet (Tcf) per year in 2011 to over 5.3 Tcf in 2017. Pennsylvania is now the second largest gas producing state in the U.S., after Texas.
In October 2017, the Kleinman Center for Energy Policy at the University of Pennsylvania released a report by Christina Simeone entitled: Pennsylvania's Gas Decade: Insights into Consumer Pricing Impacts from Shale Gas (2007- 2016). Regarding production, it notes: "Between 2007 and 2016, Pennsylvania's annual natural gas production levels grew by almost 2,800%. The increase was larger than in any other major gas producing state, and made Pennsylvania the biggest driver of America's 32% increase in annual natural gas production. In 2007, Pennsylvania produced less than one percent of the nation's annual gas supply; by 2016 the state contributed over 16% of national annual production."

Managing Environmental Issues

Environmental issues associated with unconventional gas production are multiple but manageable. The issues include infrastructure development, land and water access, air emissions, and water treatment (water is one of the key ingredients in the hydraulic fracturing process used to dislodge the gas from the shale rock formations). Responsible production is not only achievable but essential.
The MIT study on natural gas from June 2011 notes that "the environmental impacts of shale development are challenging but manageable." State and federal agencies have regulatory oversight, with state environmental agencies holding primary responsibility over the drilling process. Industry has the responsibility to ensure that the entire process is conducted in an environmentally safe manner, and to follow "best practices."
In an April 2009 report entitled "Modern Shale Gas Development in the United States: A Primer," issued by the U.S. Department of Energy (DOE), the following was noted:
Photo source: PA PUC

"The primary differences between modern shale gas development and conventional natural gas development are the extensive uses of horizontal drilling and high-volume hydraulic fracturing. The use of hydraulic drilling has not introduced any new environmental concerns. [emphasis added] In fact, the reduced number of horizontal wells needed coupled with the ability to drill multiple wells from a single pad has significantly reduced surface disturbances and associated impacts to wildlife, dust, noise, and traffic...Hydraulic fracturing has been a key technology in making shale gas an affordable addition to the Nation's energy supply, and the technology has proved to be an effective stimulation technique. While some challenges exist with water availability and water management, innovative regional solutions are emerging that allow shale gas development to continue while ensuring that the water needs of other users are not affected and that surface and ground water quality is protected. Taken together, state and federal requirements along with the technologies and practices developed by industry serve to reduce environmental impacts from shale gas operations." (p. ES-5).
NGA notes that Marcellus Shale development, managed with the greatest care for the environment, is helping contribute to a "cleaner energy" path for producing states (and the larger region), and also to create jobs, provide local and state tax benefits, air quality improvements, and diversity and security of regional and U.S. supply.

For Further Information

Pennsylvania Dept. of Environmental Protection Marcellus Shale page

Pennsylvania DEP 2017 Annual Oil & Gas Report, released Aug. 2018

Pennsylvania: Report of Governor's Marcellus Shale Advisory Commission, 7-11

FracFocus Web Site

NGA Issues Brief: Natural Gas & the Environment

U.S. EPA web page on hydraulic fracturing