Is the Marcellus Shale Boom Over? - We can only hope!

Is the Marcellus Shale Boom Over?

				Is the Marcellus Shale Boom Over? TUNKHANNOCK -- The natural gas boom helped Tunkhannock recover quickly from the recession of 2008. It helped Twigs Café Restaurant at the center of the Tunk...
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George Stark, of Cabot Oil and Gas, LLC, like most of the other company officials in charge of Marcellus operations in PA, like to talk about the "vast quantities of natural gas in the Marcellus". What they seem to consistently fail to mention is that only 10% is economically recoverable. 

Shale formations are notoriously short-lived with a life span of 7 to 10 years, in comparison to 'conventional' oil and gas wells which can have a life-span of up to 100 years. Unfortunately, we depleted the conventional oil and gas reserves in a little more than 100 years, and the shale oil and gas... or as it's sometimes referred to "tight oil" or "tight gas" is all that;'s left, and what some call, "the last days of the petroleum age".

The Barnett Shale play is a perfect example being nearly depleted after only 8 years. 

To make the point, I refer to the industry's own information published in the Oil and Gas Journal in 2012 

 http://www.ogj.com/articles/print/vol-110/issue-12/exploration-development/evaluating-production-potential-of-mature-us-oil.html     

 

What part of a “boom/bust” cycle don’t people understand? This industry has always been a classic “boom/bust” operation. This state was foolish to ever think this would last “for decades”. The sad reality is, that so many people were willing to believe the industry’s ‘talking points’ of “energy independence, lower energy costs, and job creation”, that they failed to see the “big picture”, and now it’s getting too real to deny. They also didn’t take into consideration the massive jobs that have been lost in the once permanent industries that economic engines that have been the mainstay of PA for over a hundred years in: tourism, agriculture, forestry, recreation, new home construction, and the hardwood industry.

Anytime a region relies too heavily on a single industry for their economic security, when that industry finally moves on, their economy suffers greatly, and sometimes irreparably. Hence the term “boom/bust”.

The industry and the state have known this all along, but refused to publicly discuss it, and many of the people were too blinded by the “promise of wealth” to see the truth. 

The proof is in the Penn State “Marcellus Shale Workforce Needs Assessment” study that was conducted in 2011, and commissioned by the Corbett administration and the Marcellus Shale Commission. Below is an exact excerpt copied from that study that appears on page 22 of the report. You can see this for yourself by using this link: http://www.shaletec.org/docs/PennsylvaniaStatewideWorkforceAssessmentv1_Final.pdf

New York did the prudent thing by 1) waiting to see how things worked out in PA, 2) Conducting an independent public health study, and finally 3) banning this unsustainable unconventional drilling process. - JT

Drilling
 Phase 
Jobs 
vs.
Production 
Phase 
Jobs
:
The
 natural 
gas 
development 
process 
is 
such 
that 
a
 large 
proportion 
of 
the 
total 
industry
 workforce 
will

be 
required 
during
 the 
well
 drilling
 phase, 
while 
a
 small 
minority
of
 the
 workforce 
will 
be
 required
 for

the
 long‐term
 production 
phase.
 Pre‐drilling 
and 
drilling
 phase 
jobs 
are 
grouped 
together
 for 
purposes

of 
this 
section 
of 
the 
assessment.

Pre­-drilling 
and 
Drilling 
Phase 
Jobs:
The
 phase
 of 
natural 
gas 
development
 during 
which 
the 
natural 
gas 
wells 
are 
drilled 
and
 the 
associated

pipeline
 infrastructure 
is 
put 
into 
place
 is 
an 
extremely 
labor‐intensive
 process.
 In 
actuality
 over 
98% 
of

natural 
gas 
exploration 
and 
development 
jobs
 are 
found 
in
 the 
pre‐drilling
 and
 drilling
 phase 
of 
bringing

a
 well 
into 
production,
 and 
this 
segment 
of 
the 
workforce 
will 
no 
longer 
be 
needed
 once
 the
 process
 of

drilling
 gas
 wells
 and
 affiliated
 infrastructure
 in
 an
 area
 is
 completed.
 In
 the
 oil
 and
 natural
 gas

industries,
 this
 drilling
 phase
 period
 is
 often
 referred
 to
 as
 “the
 boom”
 as
 vast
 work forces
 are
 often

suddenly
 required
 to
 perform
 tasks
 associated
 with
 natural
 gas
 development.
 Conversely,
 the
 drilling

phase
 can
 suddenly
 decline,
 which
 is
 often
referred
 to
 as
 the
 “the
 bust”. Given
 the
 level
 of
 mobility

required,
 many 
employees 
in 
the 
drilling 
phase 
of 
gas 
development 
maintain 
temporary 
residency 
in 
a

given 
area
–
such 
as 
in 
motels/hotels, 
RVs,
“man
camps”,
monthly 
apartment/house
leases,
etc.

No
 one
 can
 accurately
 estimate
 how
 long
 the
 drilling
 phase
 will
 last
 within
 Marcellus
 Shale
 or
 within

specific
 areas 
of 
the 
shale 
formation.