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Natural gas shocker: Appalachian basin could hold 750 trillion cubic feet of gas reserves

Natural gas is the cleanest-burning and most efficient of all the fossil fuels. Because of the age of the Appalachian Mountains, 480-600 million years old, a wealth of fossil fuels, i.e. coal, oil and natural gas was created by Mother Nature ripe for the picking by this country and probably enough to keep the US fuel-independent for a very long time.

Natural gas drilling has been going on for a very long time in West Virginia. I had the pleasure of speaking with Mr. Corky DeMarco, the Executive Director of the West Virginia Oil and Natural Gas Association (WVONGA) and he has provided me with a wealth of information. The first commercial well started producing in 1859 and here’s a bit of trivia for everyone: George Washington even surveyed a natural gas well there in 1750.

There are currently 60,000 active NG wells in West Virginia, with 300 of them being in the Marcellus Shale. Because of the unique properties of shale, special and different drilling techniques must be used. The problem with shale is it has insufficient permeability to allow enough fluid flow to a well bore. Because of the unique properties of shale, the extraction of natural gas in these areas requires a different method called “hydraulic fracking.” This “fracking” or “fracturing” of the rock can be either natural or man-made and is extended by internal fluid pressure which opens the fracture and causes it to grow into the rock. Man-made fractures are created by pumping a cocktail of various chemicals through a bore hole. The fracture must then be kept open, usually by sand. This process can be controversial and environmentalists and citizens have chimed in. Please see my previous post on hydro-fracking for more in depth info and a power-point presentation of the process.

Below is a map of the Marcellus Shale, courtesy of the USGS, which covers most of West Virginia, a good part of Pennsylvania, southern New York and eastern Ohio:

marcellus-shale-map

Because shale NG extraction is relatively new to West Virginia, WVONGA commissioned an independent economic impact study by the Bureau of Business and Economic Research College of Business and Economics West Virginia University. This 57-page study was released on January 25, 2011 at a press conference in Charleston and can be seen here. Below is a one-page summary:

WVONGA_SummaryPts

As one can see, many jobs will be created. Of key note is the point:

Future development of Marcellus Shale in West Virginia is dependent on changes to federal and state policies [emphasis mine] as well as changes to tax and environmental policies in other Marcellus Shale states.

Please see my post on the EPA recently revoking an already-in-use coal mine permit in West Virginia, so naturally one of Mr. DeMarco’s key statements to me was:

When the EPA comes in and withdraws permits it is certainly disconcerting and what it really amounts to is a “taking” of the company and assets which have already invested. We can’t expect to compete in a global economy if we have uncertainty in the industry.

Mr. DeMarco explained to me originally in the Marcellus, drilling took place where oil pooled, not in the source rock. As a result 60-80% of the NG in those wells was left, however those wells can be revisited with the new technology used to drill in shale. And here is the shocker. According to Mr. DeMarco the US as a whole uses less than 30 trillion cubic feet of natural gas annually. At a meeting 2 years ago in Pennsylvania, estimates were the Appalachian basin collectively with the Utica shale in Ohio held 180 trillion cf of natural gas. Later estimates rose to 500T cf, and now current estimates are a whopping 750 trillion cubic feet of reserves, enough to keep this country energy independent for a very long time, of course if there is no interference from the Feds and companies are willing to invest the huge amount of dollars it would take. These reserves if correct even far outweigh those in the Middle East. And yes, I am positive I heard him correctly. I even asked him to repeat because I was so stunned.

Rep. Tim Murphy (R-PA) and Rep. Dan Boren (D-OK), co-chairs of the Natural Gas Caucus sent this letter off to Interior Secretary Ken Salazar on January 5 of this year because of concerns

the Department of the Interior may seek to impose new regulations on the natural gas extraction process on federal lands and urge you to not institute any new regulatory burdens before the completion of the 2010-2012 Environmental Protection Agency study on hydraulic fracturing.

Check out the other signatories. And of course, not to be outdone progressives in Congress led by Maurice Hinchey (D-NY) fired their own letter off to Salazar on the 12th to

express our strong support of your recent announcement of plans to develop a new policy for the public disclosure of chemical compounds used in hydraulic fracturing, also known as fracking on public lands. This is a critical step forward in encouraging the oil and gas industry to be more transparent and responsibly address the potential implications of hydraulic fracturing on water supplies and public health.

I can’t make out all the signatories, but we have many of the “usual suspects” such as Frank, Kucinich, Moran, Woolsey, et al. And on the heels of Obama’s State of the Union address, even before he finished speaking, I had this statement from Doc Hastings, Chair of the House Natural Resources Committee in my email box:

WASHINGTON, D.C., January 25, 2011 – House Natural Resources Committee Chairman Doc Hastings (WA-04) released the following statement regarding the President’s State of the Union address:

“The President spoke at length tonight on the need to increase our economic competiveness and create new jobs. However, it’s the spending and job-destroying policies of his Administration that are jeopardizing our economic future.

“Today, American families are facing the harsh realities of rising gas prices, higher electricity costs and near double-digit unemployment. Instead of addressing these issues head-on, the Administration has spent the past two years blocking access to America’s resources that create jobs and produce more energy. These policies have only succeeded in driving American jobs overseas, threatening our economic recovery and making us more dependent on hostile foreign nations for our energy needs.

“A strong economy needs access to an abundant and affordable energy supply – we have both here in America. The President needs to embrace a robust plan to produce all types of American energy – from renewable to American-made oil and natural gas – and it has to be done without harmful government subsidies or unrealistic mandates. America cannot regulate its way back to prosperity. Certainty in the free market, not fear of red tape, is what will ultimately create jobs and grow the economy.

While it certainly appears that West Virginia is well on its way, at least at this point, with proceeding with drilling more wells in the Marcellus, the same cannot be said for New York. Ex-governor Paterson recently Executive Ordered a ban on horizontal fracking in NY after ACORN-spawned Working Families Party convinced the State Assembly to pass a bill placing a moratorium on all hydrofracking for fears residents might be able to set their tap water on fire. Here is Mark Ruffalo, spokesman for WFP or this subject:

Guess what Ruffalo: you may be a looker but no way will I be going to one of your movies, ever again. And yes, I know WFP was leading the charge because I signed up for their emails long ago and have been following the progress of this. Mr. DeMarco assured me if the process is done correctly, with cement and steel casings on the drill pipes at least 100 feet down, hydrofracking is extremely safe.

I just checked our natural gas bill. We used 189 cubic feet in December. In northern Ohio. $148 at the rate of $0.59360 per CCF for a 3,000 sq ft house kept at 70 degrees. Imagine what 750 trillion cf can do.

Fuel for thought.

Please visit the WVONGA website for a wealth of info on natural gas, including this interactive map of wells there.

Crossposted at Conservative Outlooks

Crossposted at Procinct.net

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