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Good-News Stories from the Shale Plays

Mark Green

Mark Green
Posted May 31, 2012

A couple of positive news items from shale energy country. In Pennsylvania, data from the Energy Information Administration confirms that drillers are doing more with less. In Texas, shale’s benefits are extending beyond the drilling pads in the Eagle Ford play.

The Pittsburgh Post-Gazette notes that advances in horizontal drilling in the Marcellus Shale play have dramatically increased natural gas production using fewer wells:

“Even as the amount of natural gas produced in the Keystone State quadrupled between 2009 and 2011, the number of actual wells fell as drillers used new technology to extract more gas from a single rig. … The development of more efficient horizontal drilling technology severely slowed the number of vertical wells drilled between 2009 and 2011, a period that represents a time when the drilling boom became visible above the Marcellus Shale natural gas formation.”

The report continues:

“Prior to 2009, thousands of vertical – or ‘conventional’ – wells across Pennsylvania produced about 400 million to 500 million cubic feet of gas per day, according to the study. Two years later, with the boom in full swing and horizontal drilling the common technique, the state produced about 3.5 billion cubic feet per day. The preference for horizontal drills was starkly seen in 2011: almost 2,000 new horizontal wells were drilled, whereas only about 500 vertical wells were started.”

The report underscores a couple of things. First, fewer wells obviously means less infrastructure, less disruption, less intrusion. Second, the combination of horizontal drilling and hydraulic fracturing is the engine behind the shale-energy revolution in this country. No fracking, no revolution.

In Texas, the Corpus Christi Caller Times reports that increased sales tax revenues generated by the Eagle Ford Shale play could boost local governments’ creditworthiness:

“A study by Moody’s Investor Service showed increased revenues could have a ‘credit positive’ effect on bond ratings for 61 entities Moody’s rates across a 20-county region of South Texas impacted by Eagle Ford development.”

Moody’s looked at the same area studied in a recent economic impact analysis by the University of Texas-San Antonio, which estimated a $25 billion impact in 2011 from oil and gas production atop the shale formation, the newspaper said. Sales tax revenue growth ranged from single digits in some areas to more than 50 percent in a couple of towns, Carrizo Springs and Pleasanton, Moody’s reported.

This is great news for people in South Texas. Sales tax revenue growth helps fund local services, while improved credit helps municipalities tackle larger projects. Both illustrate the dynamic nature of the shale energy stimulus.

ABOUT THE AUTHOR

Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.