West Virginia Natural Gas Drilling Healthy

MOUNDSVILLE - Several Northern Panhandle and East Ohio counties - and numerous residents - have been experiencing an energy-driven economic boom over the past few years as companies drill deep into the Earth attempting to extract natural gas.

The current boom is poised to see a significant increase in the coming years, though, as companies are now planning to tap into what geologists believe is an even more lucrative natural gas source - the Marcellus Shale.

Monroe County alone has 1,504 active gas wells, with more being planned and permitted each month, county officials said. The same is true in Wetzel County, with 982 active gas wells; Tyler County, 842 wells; Harrison County, 472 wells; and Marshall County, 376 wells.

Brooke, Hancock and Ohio counties have little to no activity when it comes to natural gas production. According to information from the West Virginia Department of Environmental Protection, Hancock County has nine active wells while Ohio County has four wells and Brooke County has none.

Belmont County has 61 active wells while Jefferson County has a total of 25.

Ohio County's limited activity could change in the near future, however, as county commissioners last month approved a land lease for a drilling company at the county farm in Roney's Point. Also, about a half-dozen natural gas acquisition companies have been approaching homeowners throughout much of the local area over the past year, seeking to lease their mineral rights as drilling into the Marcellus Shale becomes possible.

But just what is the Marcellus Shale? Geologists believe the 400-million-year-old formation, which is more than a mile below the earth's surface, holds vast quantities of recoverable natural gas, possibly up to 50 trillion cubic feet, according to a recent study by the State University of New York at Fredonia.

The shale found throughout West Virginia and most of Ohio, Pennsylvania and New York holds the most promise, experts believe. And that has caught the eye of private landowners throughout the Ohio Valley, many of whom are contemplating the idea of drilling on their land.

A few landowners in the local area have been offered upwards of $1,000 per acre for their property. Most, however, are being offered in the hundreds of dollars per acre or less.

The West Virginia Farm Bureau held an informational meeting last month in Marshall County to discuss drilling and instruct landowners on how to best negotiate a land lease.

But just how much Marcellus Shale natural gas is in the local area? According to West Virginia University Professor of Geology and Geography Katherine Bruner, the exact amount may not be determined for several years. Bruner, who studies the Marcellus Shale, said that because much of the drilling is in its infancy, there is a lot to be learned about production in the area.

"Because the Marcellus play is very competitive, there is no public information available on production or projections for reserves," Bruner said. "Drilling is just beginning in many areas, and until wells are drilled and we see how they produce, all numbers are only speculation."

While Bruner said there have been informal reports that some Marcellus wells are producing more than a million cubic feet of natural gas per day, there is no concrete information to help determine the life of an active well.

"We do not know how long the wells will continue to produce gas, nor how much gas they will ultimately produce," Bruner said. "In addition, it will take several years of production to begin to understand the reservoir dynamics."

However, Bruner said that what has been estimated is the amount of recoverable natural gas throughout the 34 million acres of land between the state of New York and West Virginia.

"Calculations show 500 trillion cubic feet of gas in place," Bruner said. "If 10 percent of this gas can be recovered, then 50 trillion cubic feet of gas is theoretically available for production."

The study done by Gary Lash, geology professor at State University of New York at Fredonia, indicates that 50 trillion cubic feet of natural gas would satisfy approximately two years of total consumption in the United States.

Lash's study, released in January, placed the total value of the Marcellus Shale's natural gas at $1 trillion.

With the current state of the economy, Bruner said yielding high volumes of natural gas would be a great economic asset to the eastern United States.

"The close proximity of a natural gas supply to high population areas of the eastern seaboard will reduce transportation costs," Bruner said. "The addition of this gas will also help stabilize our natural gas supply - one less worry in uncertain economic times."

Mike McCormac, manager of the Ohio Department of Natural Resource's Oil and Gas permitting section, said there have been about a dozen Marcellus Shale permits issued in Ohio to date, with six of those currently being drilled.

"We are in the early stages (with the Marcellus Shale). We don't regulate leasing but we hear about it. It sounds like that phase is really active in your local counties, which is the precursor before permitting and drilling."

Many companies are taking part in the local drilling bonanza, as numerous wells currently being drilled and operated in West Virginia are owned by entities such as Columbia Gas Transmission and CONSOL Energy.

Laural Ziemba, manager of public relations for CNX Gas, a subsidiary for CONSOL Energy, said the company invested $34 million in natural gas well drilling in Marshall County for 2008. She said 22 wells in the county have already been drilled this year, and the company hopes to have a total of 34 wells drilled by the end of the year.

"CNX Gas is on target to produce 73 billion cubic feet of gas in 2008," Ziemba said. "Daily, that equates to about 200 million cubic feet, 4 million cubic feet of which is currently produced in Marshall County."

Ziemba said each of the 22 wells, which are located in Cameron, Liberty and Webster, costs $1 million to drill, adding that the company has invested $10 million in processing plants for natural gas.

While it's easy to determine how much gas has been produced, Ziemba said determining profit is more difficult.

"Our profit will fluctuate with gas prices," Ziemba said.

While Columbia Gas Transmission does not drill for or produce natural gas, it does have a strong presence in the local area. According to Columbia Gas spokeswoman Kelly Merritt, the company owns two active natural gas storage fields in Marshall County, Victory A and Victory B. He said both were activated in the 1950s as producing fields, but were later changed to storage fields as the natural gas in those fields was depleted.

Merritt said about 6 million cubic feet of natural gas and recyclables travel in and out of those storage fields in one year.

Columbia and several partners also are planning a natural gas processing plant in Majorsville, near the Pennsylvania border. Merritt said several existing Columbia Gas pipelines in Marshall and Wetzel counties, along with pipelines in Washington and Greene counties in Pennsylvania, would serve as the backbone of the gathering system. They would connect with the proposed processing plant, where the raw natural gas would be converted into gas for sale.

The company is expected to offer processing at Majorsville as early as January, bringing the natural gas capacity to about 100 million cubic feet per day by mid-2009 and to more than 200 million cubic feet per day by mid-2010.

"The people in the Northern Panhandle are just sitting on natural gas," Merritt said. "There is a lot of growth and production in that area."