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Thursday, September 13, 2012

Gas Drilling: Why Are Horses Still In Starting Gate?

Gas Drilling: Why Are Horses Still In Starting Gate?

Where is this predicted “gas rush” and why has it been delayed for so long? Those questions and many others are addressed in the latest edition of Shale Gas Roundup, which is now available at the county website, pottercountypa.net (click on Natural Gas tab/Monthly Newsletter). A publication of the Natural Gas Resource Center, Roundup summarizes multiple issues related to the gas industry as it affects Potter County. The September/October edition features an analysis of factors that have stalled the level of intense gas-drilling and production that was forecasted by many authorities as far back as 2008. 

Industry analysts are unanimous in their belief that gas exploration and production will be picking up, but they’re hedging their bets on when that will be. Market forces will drive the pace. The lack of pipeline distribution networks and economic recession are factors cited by analysts to explain the local slowdown, which started in the first quarter of 2011 and has shown no sign of ebbing. The logjam will likely continue well into 2013.

Steady decline in wells. In 2010, there were 33 shale gas wells drilled in Potter County. Last year, 16 were drilled. In 2012, DEP reports that through Aug. 1 there were 18 permits issued, but no wells drilled. Yet, companies drilled 101 deep wells in Tioga County, 112 in Bradford, 117 in Susquehanna, and 131 in Lycoming. Gas prices are currently less than $3.00 per MCF. Experts say they have to be at least twice that to produce a good profit. Prices swing widely – they averaged more than $8.00 as recently as 2008.

Clearer Picture Emerging. Data from seismic testing and experimental drilling continue to come in for analysis as companies plot their strategies. Shale thickness, distance from the surface and the proportion of moisture in the gas vary. Some companies have run short of cash as prices lag. Gas output has climbed, contributing to a glut, as drilling has unlocked fuel-rich shale formations. The mild winter of 2011-12 kept market-ready gas in storage. Experts say a cold winter of 2012-13 could break the cycle.

Production/consumption trends. With prices so low, a number of producers have shifted to drilling for gas liquids (“wet gas”) and oil until there is greater demand. In the long term, that is expected to come with expanded exportation, as well as conversion of electricity generation and motor vehicles to natural gas. Meanwhile, the gas that was tapped in 2008-11 is flowing. The January through June production from the Marcellus shale play in Pennsylvania was up more than 80 percent in 2012 from the 2011 totals.

‘Tap and cap.’ Experts say there will likely be scattered “tap and cap” drilling operations in the region over the next couple of years. Some leases with private landowners are automatically extended – typically, the terms are for five years – only if some gas is produced. Companies do not want to lose the favorable terms they’ve negotiated, so they will meet the minimum drilling requirements to trigger a lease extension.

Copies of Shale Gas Roundup are also available by calling the Potter County Board of Commissioners at 814-274-8290, Ext. 207, or sending an email to Sharon Costa at scosta@pottercountypa.net.

8 comments :

Anonymous said...

I dont know where you are talking about but here by Mansfield, the boom is on. And it has been since last year. Yes it has slowed down a bit but I still am blessed with the sounds of truck convoys all day and night hauling water and equipment. I mean who needs sleep anyway. And getting stuck behind said convoys in the morning on my way to work is pretty great too. Besides, I only have an hour to travel anyway so why not do it at 40 mph right? And besides my water looking like a flammable vanilla milk shake, it really hasnt changed much around here. It sure would be a shame if they all had to pack up and leave. I dont know what I would do if i could enjoy the peace and quiet once again and not have to lock all my shit up at night. To the industry, I only wish the worst for you. Have a great day. FRACK THIS!!!!!

Anonymous said...

Lets hope they stay away longer...life is so much nicer here in Potter County without all of the extra traffic, noise and ripped up roads from the water trucks. It has been really nice to be able to be on the stream without having to be hassled by the individuals doing the water withdrawals and it is really nice to be deep in the woods without having to hear the constant noise. I won't even get into how nice it is to be able to sleep at night with the windows open and not have to hear the noise. All of the quite is why I live in Potter County.

Like a huge portion of the population here, if I were interested in economic opportunities, I wouldn't be here. Just like many others I am here because there is nothing but woods and waters...that is what makes this place so very special to me and so many other people.

Anonymous said...

Very interesting. I learned more reading this then I've read on here for the last 3 years including those essays from the woman who is always trying to get landowners to sign up for her real estate deal!

Anonymous said...

The truth is no one wants to do business in potter county. It's become to big of a hassle with the anti everything people!

Anonymous said...

I was out in my back yard doing the Huckelbuck when I realized the trucks on the hill weren't there anymore. Just piece and quiet.

Hang in there. Soon you'll realize the same thing.

Anonymous said...

September 14, 2012 8:10:00 AM
It’s unfortunates you associate the people who express their appreciation for what they value; such as Potter’s beauty and peaceful surroundings with people who are anti-everything.

For many, Potter was their destination because
of their appreciation for a healthier lifestyle.

Their voices were drowned out of the conversation early on; by the people who tried to play hero for economic change & job creation.

They worked to minimize the true impacts, risks, environmental degradation while helping to spread the industry’s and Penn State's lies.

The numbers of anti shale citizens wouldn’t have grown
if it weren’t for scientific studies, opinions from the medical community,certified lab results, FACTS and most of all through firsthand experience while
they watched as their lifestyle degrade.

They were disenfranchised.

My opinion : I couldn’t be more pleased to learn the frackers left Potter and I hope, as many do they don’t come back.

Anonymous said...

6:07: You folks tire me out and wear me down. I am for free market capitalism, and I make no apology for that. In the U.S. over the past 40 or 50 years the extremely vocal minority (you folks) dictate policy and law. I pray each day for that to change.

Anonymous said...

Why should Potter County suffer so that big gas can ship it out of PA and out of the US?