The Utica And The Marcellus Continue to Defy Skeptics -- October 6, 2016

Updates

October 7, 2016: from the comments below, brought up here so it can be googled --

In addition to the Marcellus (Pennsylvania) and the Utica (Ohio), there are the Upper Devonian formations that hardly anyone even knows about (three times as thick as the Marcellus Shale; does not overlie the entire Marcellus; situated in western New York [where fracking is banned]; western Pennsylvania [the rich get richer]; northeast Pennsylvania; western West Virginia, eastern Ohio; and, eastern Kentucky).

The report last year from Wrightstone Energy, claimed 100 trillion cubic feet recoverable from the UD based on 85 wells' production (total drilled up to that point).

Last several months, there have been dozens of wells turned online targeting the Genesee, Middlesex and Burket formations with output WAY higher than the earlier Wrightstone samples.

I will begin tracking the Upper Devonian at this site.

Original Post

 

This is an incredible article. A reader reminds me often that as big as the Marcellus is and as "famous" as the Marcellus is, the Utica is much bigger. In other words, "we haven't seen anything yet."

Think about that when you read this article from Forbes (a big thank you from a reader for sending me this link).

The "title" of the article: the Utica and Marcellus continue to defy skeptics.

In other words, this article is not about how big the Utica and the Marcellus are. This article is how the Utica and the Marcellus have defied skeptics, continue to defy skeptics, and will continue to defy skeptics.

The same could be said for the Bakken.

There are two threads in this article: a) how big the Utica and the Marcellus are; and, b) how fast things are changing, confounding skeptics.

The two threads may be tangled. But here goes:

• Utica: Ohio
• Marcellus: Pennsylvania
• together they have provided 85 - 90% of US shale production growth since the start of 2012: the ongoing drilling efficiency is a key driver (the operational words are "ongoing"; and "a" -- meaning that drilling efficiency is only part of the story -- remember Hillary wants to shut this success story down -- and we haven't exhausted that drilling efficiency)
• shale business continues to evolve: rig mobility, multi-pad drilling, deeper holes, DUCs, 
• no sign that these giant plays in the Northeast are slowing down (assuming Hillary doesn't shut them down)
• we could see pipeline additions of 18 billion cubic feet/day -- assuming the Native Americans don't have sacred burial grounds across the entire US
• interestingly, despite all that, there is still upward pressure on prices due to demand for power generation, industrial use, and, export

Now this from David Hughes, a fellow at the Post Carbon Institute, 2014:

There may be small, incremental further gains…but I think the biggest gains have already been had…I think the Marcellus is getting pretty close to the peak in [total] production…I wouldn’t be surprised to see a peak in the Marcellus this year, maybe next year (2015) at the latest."

So, how did David's prognostication turn out? Well, I certainly wouldn't hire him as my fossil fuel consultant. I wonder where David is these days? Working for Hillary? Working for Soros?

• Marcellus gas production has jumped 15% since 2014
• the Marcellus play will produce nearly 18 Bcf/day this month
• this is more gas than any other nations in the universe produces, except for Russia or the US as a whole

And there is more:

• Ohio now has about 10 Tcf of proven gas, a ten-fold increase since 2009
• Pennsylvania has over 70 Tcf, a doubling since 2012 alone
• "not even our very best experts at the USGS can keep up"

More:

• the Utica and the Marcellus: basis of some 800 Tcf that can be produced at a break-even price of $3/MMBtu or less
• these plays are why the EIA projects that total US natural gas production will boom nearly 25% by 2025 alone to 96 Bcf/day --" a colossal 85% surge since 2005 when Exxon CEO Lee Raymond infamously declared that our gas production has peaked."
• US gas production has increased every single year since 2006

Much more at the linked article. 

By the way, maybe regular readers remember this article from The New York Times back in 2011.

Link here. (Update, August 30, 2015: this is so interesting. The NY Times has removed this article.)

Natural gas companies have been placing enormous bets on the wells they are drilling, saying they will deliver big profits and provide a vast new source of energy for the United States. 

But the gas may not be as easy and cheap to extract from shale formations deep underground as the companies are saying, according to hundreds of industry e-mails and internal documents and an analysis of data from thousands of wells.

In the e-mails, energy executives, industry lawyers, state geologists and market analysts voice skepticism about lofty forecasts and question whether companies are intentionally, and even illegally, overstating the productivity of their wells and the size of their reserves. Many of these e-mails also suggest a view that is in stark contrast to more bullish public comments made by the industry, in much the same way that insiders have raised doubts about previous financial bubbles.

“Money is pouring in” from investors even though shale gas is “inherently unprofitable,” an analyst from PNC Wealth Management, an investment company, wrote to a contractor in a February e-mail. “Reminds you of dot-coms.”

Amazing, huh?