Shale Gas is the Focus of Two-Day Conference

Balancing the environment, the economy, people and the rights of municipalities is the focus of a two-day Marcellus shale conference underway in Pittsburgh. The goal of the conference is to hash out some of the knowns and unknowns and help chart a course for the future. Kent Moors runs the Energy Policy Research Group at Duquesne University. He says what happens in Pennsylvania will set the tone for nontraditional gas drilling worldwide. Moors believes the state’s ability to properly regulate the activity and the industry’s ability to bring new technologies to the process will be used as a model as far off as Poland and Germany. He says that includes not only dealing with taxing and environmental concerns but, also with issues like supply and demand for clean water, steel, qualified workers and even the price of an egg at the local diner. Many believe the amount of water that could be consumed by Marcellus drillers could force some farms and manufacturing plants out of business as the cost of clean water goes up beyond what they can afford.

It is still unclear how much gas is trapped below Pennsylvania in the Marcellus shale formation. Moors says to get a good handle on that you need to have between 8,000 and 14,000 operating wells. Right now there are 1,400 operating wells in the Marcellus shale but Moors says there is already a trend, “Every indication is pointing to… there is more recoverable natural gas in the Marcellus than originally anticipated, the pressure is higher, the recovery volume is greater, and the overall operating costs are declining.” Moors estimates the average Marcellus well can make money when gas is above $3.60 MMBTU. Some producers say they are pulling gas from prime locations in the state at $2.20. The current price is just more than $3.90. Moors says the lower cost gas will push some of the more expensive gas out of the market. He says companies are rushing to Pennsylvania at the rate of one or two a week looking to get into the market.

A panel at the conference focused on the big unanswered questions with representatives from the business, environmental, legal and research communities all chiming in on the subject. Marcellus Shale Coalition President Kathy Klaber says there needs to be honest and open debate about regulations. She says the state needs to get this right the first time. Klaber says the tax dollars that can be generated by the shale gas industry can be used to pave roads and improve waterways but all sides need to come to the table with an “open attitude.” PA Dept. Of Environmental Protection Deputy Sec. J. Scott Roberts says the industry and the state need to figure out how to make the holes they are punching in the ground safe at all stages of the process including proper bonding of drillers and plans to deal with the wells after all the gas is removed. Thorp Reed and Armstrong Lawyer Clifford Levine says property rights issues and the rights of local government versus the state need to be considered. CMU’s Water QUEST director Jeanne VanBriesen says regulators need to look not only at water quality issues but water quantity issues as well. Penn Environment Director David Masur called on everyone to think about the legacy we will leave our children when the drilling is over. Nearly everyone on the panel agreed that this is a once in a generation opportunity that must not be botched.