Next Thursday, Penn State Professor of Geosciences Terry Engelder, known as the “Father of the Marcellus”, presents a lecture titled, “Marcellus Reserves and Estimates Substantiated by Production Data,” sponsored by the university. The professor has publically stated the purpose of his lecture is to counter the, “…spate of books written by shale-gas naysayers with comments such as the gas shale decline curves are spectacular and the Marcellus is grossly over hyped,” further stating he will, “deflate both notions”. Yet the very production numbers he will be using to counter those he considers as “shale gas naysayers” are in fact all self reported by the shale gas drillers operating in Pennsylvania. State officials simply collect the data “as is” while posting a disclaimer of liability regarding the gas drillers self reported operating results.
The Pennsylvania Department of Environmental Protection recently released consolidated production data showing 1.4 trillion cubic feet of shale gas produced in the state for the first six months of 2013, a record for natural gas production within the Commonwealth. Yesterday the Obama administration approved Dominion Resources request to export liquefied natural gas from Maryland’s Western Shore based on anticipated shale gas production volumes from the West Virginia and Pennsylvania Marcellus formation.
Cornell University Professor Anthony Ingraffea, an expert in the effects of hydraulic fracking stated in an interview this week with Examiner.com, the continued practice of oil and gas industry self reporting is just another sign of the power wielded by the shale gas drillers and how Pennsylvania continues to play catch up when it comes to obtaining verifiable information about the industry’s results.
Professor Ingraffea commented, “The first Pennsylvania Marcellus shale gas wells began operation in late 2004 and state officials had no mechanism in place such as off the shelf remote wireless monitoring to confirm production of shale gas or drilling wastes. Here Pennsylvania officials are today almost nine years later with more than 4,100 unconventional shale gas wells in operation and they still have no mechanisms in place to verify shale gas production or wastes or leaking wells.” Pennsylvania now has more than 7000 unconventional wells in place but not all of them are in active operation.
He pointed out the drillers self report production and drilling wastes as required under Pennsylvania law once every six months but there are no requirements by the state to verify the information reported. Ingraffea commented, “So Starbucks, like most major U.S retailers using real time electronic data transfer technology, can tell you at the end of every business day how much coffee they have sold in America down to the last cup while one of the biggest and most important American industries will only tell you what they produced in Pennsylvania twice a year and you just have to take their word for it.”
With the big push now underway to begin exporting natural gas overseas, Ingraffea further stated, “It would provide more transparency and better decision making if what is being stated by the industry in the way shale gas reserves and production could be independently verified.”
Examiner.com also spoke with energy analyst Bill Powers whose recent book, “Exploding The Natural Gas Supply Myth - Cold, Hungry And In The Dark”, which reviews what the shale gas industry claims in the way of reserves as compared to actual production records from major U.S. shale plays. He pointed to recent large write offs of trillions in claimed shale gas reserves by Chesapeake Energy and Range Resources, along with industry giants, BP, Royal Dutch Shell and BHP Billiton as evidence of major over statements in shale gas reserve claims.
Powers is concerned about the federal government’s Energy Information Agency relying on long time oil and gas industry consultants to provide it with shale gas reserve estimates which at times are cut and pasted directly from the shale gas drilling companies’ investor presentations. Professor Engelder did much the same thing at a Pittsburgh, PA Platts Oil and Gas Conference back in 2008 using slides from Chesapeake Energy. Powers further details in his book how all the major unconventional shale gas plays such as the Barnett, Haynesville and Fayetteville fields, all discovered before the Marcellus, are all now moving into documented decline.
Powers stated, “Yes, today there is record production in Pennsylvania but keep in mind the industry is drilling its best wells right now as they came into the state knowing beforehand where the most prolific parts of the formation were.” He further stated, “They have their own internal cheat sheets based on prior drilling history in Pennsylvania. Will the Marcellus continue to produce ever increasing record amounts of shale gas? It might but I doubt it as this has not been the outcome of the other major U.S. shale gas plays.”
Powers also noted the rising issue of oil and gas operators who have begun to publish their “edges of the identified field” in their investor presentations about the Marcellus such as found in this week’s latest Chesapeake Energy slides to the financial markets. “As has now happened in other U.S. shale gas formations, all which are about 7 to 10 years older on average in active production than the Marcellus development, once these operators begin declaring the edges of a given shale gas field, you may well start to see the downward trend in their overall production levels within the next 24 to 36 months, self reported or not.”
Professor Engelder’s lecture next Thursday is online, open to the public and easy to access with Penn State announcing, “Registration for the webinar is not necessary, and all are welcome to participate by logging in tohttps://meeting.psu.edu/pscems. For more information, contact Carol Loveland at 570-320-4429 or by email firstname.lastname@example.org.”
When asked to comment on Professor Engelder’s upcoming lecture given all the uncertainty about shale gas production numbers, Fractracker.org’s Manager of Data and Technology Matt Kelso stated, “That seems like an agenda”. Fractracker.org is an independent 501C 3 research non-profit which follows the shale gas industry throughout the northeast states.
To learn more about Penn State Professor Terry Engelder role in promoting the Marcellus, go to: http://gantdaily.com/2013/09/10/webinar-to-focus-on-latest-marcellus-shale-natural-gas-estimates/
To see the Pennsylvania Department of Environmental Protection’s disclaimer of liability, go to: https://www.paoilandgasreporting.state.pa.us/publicreports/Modules/Welcome/Agreement.aspx
To see Dominion Resources natural gas exporting plant announcement, go to the U.S. Department of Energy at: http://energy.gov/articles/energy-department-authorizes-dominion-s-proposed-cove-point-facility-export-liquefied
To learn more about Cornell University’s Professor Anthony Ingraffea research work regarding energy development, go to: http://www.psehealthyenergy.org/
To learn more about Bill Power’s work, go to: http://www.bill-powers.com/
Or you can Tweet your comments or questions to Bill at: @billpowers1970
To learn more about Fractracker.org, go to: http://www.fractracker.org/
Full disclosure: The writer holds no U.S. securities at this time in any shale gas drilling company. He has no financial arrangements with any of the entities or people listed in this article and he is not being paid to write on behalf of any environmental or anti-fracking group.