Natural gas byproducts could gain as exports

SALEM, Ohio — The secret is out, wells are producing more than just natural gas from the Marcellus and Utica shale.

Many wells are producing other products such as methane, butane, propane, ethane and crude oil in the Utica shale.

Now, some are asking, should some products be exported?

A report conducted by ICF International for the Associated Petroleum Industries says yes.

The Associated Petroleum Industries of Pennsylvania and the Pennsylvania Independent Oil and Gas Association conducted a joint conference call June 6 to talk about the report and potential for the Keystone State.

Background

The Marcellus shale is now considered to have been the beginning of the gas boom in Pennsylvania. Landowners first paid attention to the Marcellus shale in 2004 when leasing and drilling began.

However, the second step is the Utica shale, which is in the farthest western portion of Pennsylvania and eastern Ohio. It is a rock layer located a few thousand feet below the Marcellus shale and is much thicker. It is already yielding large quantities of natural gas, natural gas liquids and crude oil.

Report

Lou D’Amico, president of the Pennsylvania Independent Oil and Gas Association, and Stephanie Catarino Wissman, executive director of the Associated Petroleum Industries of Pennsylvania, presented a joint conference call for the media.

The report says there would be minimal impacts on liquid natural gas prices here in the United States if exports were increased.

The liquid natural gas is methane that is super cooled to a liquid stage so it can be transported.

The report showed that estimates show an increase of 73,000 new jobs in the industry between 2016 and 2035 if exports were increased. In addition, more revenue would be generated for the federal and state governments.

D’Amico said that Pennsylvania has become the number one producer of natural gas in the world because of the shale production. It is also projected that the shale-producing regions in the United States could produce as much oil as Saudi Arabia in the next two years.

Wissman said the report shows that LNG exports are highly recommended because of the economic benefits possible, with little or no impact on domestic prices.

The groups were quick to point out the industry needs prices high enough to justify drilling costs, but not high enough to make natural gas unusable.

“We’ve  seen a rebirth of manufacturing in the USA as a result of the shale gas production. It has created a changeover of plants that were using coal to natural gas,” said Wissman.

Wissman said the export market will benefit greatly because it will mean a stable supply that is not readily available in the world right now.

“Many countries are using unstable suppliers and Pennsylvania can provide this with our supply,” said D’Amico.

He added that industry is increasing in India and that means there is a need for the natural gas. Japan is also growing and that country is already a leading trading partner for the United States.D’Amico said Japan is searching for a replacement fuel since many of the nuclear plants there have been shut down.

Permits for unconventional wells

In 2007, there were 186  permits issued for gas drilling in Pennsylvania, and that increased to 568 in 2008 and 1,984 in 2009, according to the Pennsylvania Department of Environmental Protection.

In 2010, there were 3,270 permits issued; 3,349 in 2011; and 2,464 in 2012. So far, there have been 1,047 permits issued in 2013.

In the primary Farm and Dairy circulation area, there were 225 permits issued for drilling in Washington County, according to the DEP, followed by 306 in 2012 and 108 so far in 2013. In Butler County, the DEP reports, 141 permits were issued in 2011, 103 in 2012 and 57 in 2013.

In Beaver County, the DEP reported two permits filed in 2011, 46  in 2012 and 16 in 2013. In the neighboring Lawrence County, eight permits were issued in 2011, six in 2012 and 13 so far in 2013.

In Bradford County, where the drilling into the Marcellus shale began, there were 729 permits issued in 2011, 389 in 2012 and 240 in 2013.

Drilled wells

Meanwhile, the number of wells actually drilled has also increased, according to the DEP. In 2009, there were 759 Marcellus shale wells drilled and 1,497 ion 2010 in Pennsylvania.

That number jumped to 1,861 in 2011; 1,220 in 2012 and 523 so far in 2013.

About the Author

Kristy Foster Seachrist lives in Columbiana County raising sheep and horses. She earned her degree from Youngstown State University and has worked in both print and broadcast journalism. You can follow her on Twitter at http://twitter.com/fosterk96. More Stories by Kristy Foster Seachrist

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