Latest USGS Marcellus gas estimate well below others

Posted August 25, 2011

Observer Reporter

By Michael Bradwell

The U.S. Geological Survey on Wednesday increased its estimate for technically recoverable natural gas and gas liquids from the Marcellus Shale, but the new figure is far below what others in the energy field - including the U.S. Energy Department - have estimated.

According to the USGS website, the Marcellus contains about 84 trillion cubic feet of undiscovered, technically recoverable natural gas and 3.4 billion barrels of undiscovered, technically recoverable natural gas liquids.

The new estimates are quadruple the last USGS assessment of the Marcellus Shale in the Appalachian Basin in 2002, which estimated a mean of about 2 trillion cubic feet of gas and 0.01 billion barrels of natural gas liquids.

The USGS said the increase in undiscovered, technically recoverable resource is due to new geologic information and engineering data, as technological developments in producing unconventional resources have been significant in the last decade.

However, the latest figure is far below that of the U.S. Energy Department, which earlier this year more than doubled its estimate of recoverable shale resources to 827 trillion cubic feet, projecting that the country has enough natural gas to heat homes and run power plants for more than 100 years.

The Energy Department estimate came two years after Penn State University geoscientist Terry Engelder estimated that 363 trillion cubic feet of natural gas could be recovered over the next few decades from the 31 million-acre core area of the Marcellus, which includes southern New York, Pennsylvania, West Virginia and eastern Ohio.

Engelder and geologist Gary Lash of the State University of New York at Fredonia helped to create a natural gas rush in the region in 2007, with their study estimating that the Marcellus could yield as much as 50 trillion cubic feet of natural gas.

Engelder did not return a call from the Observer-Reporter Wednesday seeking his reaction to the USGS report.

The USGS noted that since the 1930s, almost every well drilled through the Marcellus found noticeable quantities of natural gas. However, in late 2004, the Marcellus was recognized as a potential reservoir rock, instead of just a regional source rock, meaning that the gas could be produced from it instead of just being a source for the gas.

Technological improvements resulted in commercially viable gas production and the rapid development of a major, new continuous natural gas and natural gas liquids play in the Appalachian Basin, the oldest producing petroleum province in the United States.

The USGS said Wednesday its assessment is an estimate of continuous gas and natural gas liquid accumulations in the Middle Devonian Marcellus Shale of the Appalachian Basin.

The estimate of undiscovered natural gas ranges from 43.0 to 144.1 TCF (95 percent to 5 percent probability, respectively), and the estimate of natural gas liquids ranges from 1.6 billion to 6.2 billion barrels (95 percent to 5 percent probability, respectively). There are no conventional petroleum resources assessed in the Marcellus Shale of the Appalachian Basin.

According to USGS, its new estimates are for technically recoverable oil and gas resources, which are those quantities of oil and gas producible using currently available technology and industry practices, regardless of economic or accessibility considerations.

The Marcellus Shale assessment covered areas in Kentucky, Maryland, New York, Ohio, Pennsylvania, Tennessee, Virginia and West Virginia.

USGS is the only provider of publicly available estimates of undiscovered technically recoverable oil and gas resources of onshore lands and offshore state waters. The agency worked with the Pennsylvania Geological Survey, the West Virginia Geological and Economic Survey, the Ohio Geological Survey, and representatives from the oil and gas industry and academia to develop an improved geologic understanding of the Marcellus Shale.

The USGS Marcellus Shale assessment was undertaken as part of a nationwide project assessing domestic petroleum basins using standardized methodology and protocol.

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