Marcellus Shale is an important opportunity for Pennsylvania and other states along the Northern Appalachian Basin as it is a domestic source of clean burning energy for America. However, the process includes a number of important steps. The first step is establishing ownership of or receiving a lease for the land and minerals beneath the earth’s surface. Additionally, proper permits for everything from drilling the well, to bonds for roads and permits for well pads must be secured.
After the permits are in place, the drill site is leveled off and stabilized. Next, rigs are brought in to drill vertically and horizontally through the Marcellus Shale and to install a solid steel casing. The next step is to open up the inside of the pipe, using a perforation gun, lowered into the well by a work-over rig.
Then, over a few days, hydraulic fracturing takes place. During this process, water, sand and small quantities of hydrochloric acid, friction reducers, scale inhibitors and biocides are pumped under high pressure into the well, breaking up the Marcellus Shale and allowing the gas to move through from the pores of the rock. Following the fracturing process, the work-over rig returns to remove the plugs installed during fracturing and water and gas flow back from the wells. For the first few days the mixture is flared but later it is separated by a mechanical separator or dehydrator. A gathering line connects the wells to a major pipeline that delivers the gas to market.
Gas production is at its highest level the first day and very slowly decreases. It’s estimated that gas will flow from each well for an average of up to 25 years.
Exploration firms are now working with land and mineral owners to gain access to the natural gas minerals through leases. In 2008, approximately $4 billion was spent on natural gas land leases in Pennsylvania. After securing the lease, the exploration and production (E&P) companies act as a contractor throughout the rest of the exploration process.
With their experience in managing complex projects, development firms are also seeing increased business activity by assisting in putting proper infrastructure in place for natural gas development.Developers are working with airports to ensure easy access to drill sites, with railroads to transport the vast amounts of sand, cement and water across the Marcellus Shale fairway, and with townships and transportation agencies to prepare or repair roads for heavy equipment travel and building housing facilities for oil and gas employees.
Natural gas drilling is expected to have a significant economic impact on communities, municipalities and states across the Marcellus Shale play. With that in mind, several state legislatures will likely debate the merits of imposing a severance tax, modifying existing tax structures or bypassing a drilling tax altogether. Currently, 38 states impose some form of tax on drillers; Pennsylvania does not charge any taxes on the gas that comes from the ground. Other states, including West Virginia, are considering an increase in their severance tax plans.
In addition, states should be thinking about the level of control that municipalities have and their rights to impose zoning or stop oil and gas exploration. Finally, pooling and spacing laws need to be addressed. Mineral estates are so divided among various land owners it can cause confusion and roadblocks to accessing all of the Marcellus Shale minerals and can sometimes prevent drilling. Currently there are laws in Pennsylvania that address this issue, but they only apply to the rock below Marcellus Shale. The same attention needs to be paid to the Marcellus Shale formation.
We may continue to see a small amount of site specific issues as shale gas drilling activity increases. These will likely involve workplace safety, endangered species, erosion and sediment control, spills and materials handling. However, of the more than 2,500 Marcellus wells drilled across Pennsylvania, approximately 25 of them have encountered a problem as it relates to well construction and gas migration to water wells. Additionally, the broad debates about environmental policy and hydraulic fracturing will continue.
Education is key. Learn about Marcellus Shale and natural gas exploration. Learn how it works, what it is and what it isn’t. Understand the risks, but also think about the benefits to your community, your state and the nation.