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What Is Shale Gas and Why Is It Important?

Marcellus Shale Occurrence

Shale gas refers to natural gas that is trapped within shale formations. Shales are fine-grained sedimentary rocks that can be rich resources of petroleum and natural gas. Sedimentary rocks are rocks formed by the accumulation of sediments at the Earth's surface and within bodies of water. Common sedimentary rocks include sandstone, limestone, and shale.

Over the past decade, the combination of horizontal drilling and hydraulic fracturing has allowed access to large volumes of shale gas that were previously uneconomical to produce. The production of natural gas from shale formations has rejuvenated the natural gas industry in the United States. (Courtesy of EIA)

What Are the Marcellus and Utica Plays?

Both the Marcellus and Utica Shale plays are geological formations that were formed by the accumulation of sediment into a sea. This formation was eventually buried over many thousands of years and compressed to produce an organic-rich black shale.

The Marcellus geological formation, which dates back to the Devonian time period, stretches from the northeast to the southeast in direction. The Marcellus starts at the base of the Catskills in upstate New York, stretches across the upstate towards Marcellus, New York (the town from which the formation was named) and southwest to West Virginia, Kentucky, and Ohio. The Marcellus Shale is known to be deeper on the southeast edge of the formation that borders the ridge and valley regions of New York, Pennsylvania, Maryland, and West Virginia. The Marcellus gets more shallow as it heads northeast towards Ohio and Lake Erie.

The Utica geological formation dates back to the Ordovician time period with sediments deposited between 488 and 443 million years ago. The Utica formation underlies portions of Ohio, Pennsylvania, Kentucky, New York, West Virginia, and Maryland. Similar to the Marcellus, Utica Shale is known to be deeper on the southeast edge of the formation that borders the ridge and valley regions of New York and Pennsylvania and in the region of southwest Pennsylvania bordering Maryland and West Virginia. The Utica gets more shallow as it reaches Ohio and upstate New York.

Why Now?

Natural Gas

Although throughout the geological world, Marcellus and Utica Shale plays have been identified as potentially rich in fossil fuels, it was not until recently that the industry has invested into exploration. Two factors are clearly present in the ramp up in exploration and production (E&P) activities related to these plays. First, the success of the Barnett Shale play in North Central Texas has allowed companies to transfer the hydrofracturing technology to other areas, such as the Fayetteville Shale play (Arkansas), Haynesville Shale play (Louisiana and Eastern Texas), and the Marcellus and Utica Shale plays. Second, the population centers of Northeastern U.S. are very close in proximity to the both the Marcellus and Utica Shale plays, which results in lowering the cost of bringing natural gas to the Northeast market.

What Does the Future Hold?

As America demands more and more energy, the role that natural gas will play in that demand is uncertain. One thing that is certain is the Marcellus and Utica plays are shaping up to be key suppliers for domestic natural gas. Impacts from this industry are uncertain as well. Historically, the energy industry has gone through times of "boom and bust" and is driven by the economical conditions present across the nation. The industry is also known for paying a higher wage, on average, compared to an equivalent manufacturing job. One thing that is not uncertain is that the natural gas industry associated with shale gas exploration will give the nation another source to potentially reduce the intake of foreign supplies of natural gas.

The Lifespan of Shale Gas

Dividing the natural gas development process into three phases (pre-drilling, drilling, and production), industry surveys used to create the 2011 Pennsylvania Statewide Marcellus Shale Workforce Needs Assessment show that 98% of natural gas exploration and development jobs are found in the pre-drilling and drilling phases of bringing a well into production. No one can accurately estimate how long the drilling phase will last within the Marcellus and Utica plays, but estimates range from 10 to 70 years which in part reflect uncertainty created by future fluctuations in commodity prices, economic conditions, and technological changes among other variables. A number of drilling scenarios are possible for future shale gas development, and they include a relatively quick flurry of activity that subsides when drilling moves to another location, high-intensity driling that jumps from hotspot to hotspot and moderate and sustained driliing across the Appalachian Basin lasting for decades. Each development scenario changes the direct workforce requirements and opportunities for business development and entrepreneurship. (More information on lifespan and associated workforce needs)

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