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NorthAmOil COMMENTARY NorthAmOil
USGS boosts Marcellus, Utica reserve estimate
The US Geological Survey has increased its estimate of recoverable reserves in the Marcellus and Utica plays, thought producers appear increasingly likely to take a slower approach to tapping these volumes
APPALACHIAN BASIN
WHAT:
The USGS has raised its estimates for recoverable reserves in the Appalachian Basin.
WHY:
Improved geological understanding and more advanced production techniques allow more gas to be tapped.
WHAT NEXT:
Low gas prices continue to have an impact on how producers in the region operate.
THE US Geological Survey (USGS) has found that the volume of recoverable natural gas in the Marcellus and Point Pleasant-Utica shale plays – located in the US North-East’s Appalachian Basin – is considerable higher than previously estimated. The agency has published a new assessment of the region, estimating that the two formations together contain a mean of 214tn cubic feet (6.1tn cubic metres) of undiscovered, technically recoverable continuous resources of gas.
The latest figure represents a significant increase from previous USGS assessments of the two shale formations. In 2011, the agency estimated that the Marcellus held a mean of 84 tcf (2.4 tcm) of gas, following this up with a 2012 assessment that found the Utica contained roughly 38 tcf (1.1 tcm).
The gas in these formations is classified as continuous because it is spread throughout the assessed rock layers instead of being con- centrated in discrete accumulations, the USGS noted. Breakthroughs in horizontal drilling and hydraulic fracturing technologies over the past 10 years or so are what have allowed such contin- uous accumulations to be tapped. Now, even in a low price environment, production is booming while new resources are being identified.
“Watching our estimates for the Marcellus rise from 2tn [57bn cubic metres] to 84tn to 97tn [2.7 tcm] in under 20 years demonstrates the effects American ingenuity and new technology can have,” said USGS director Jim Reilly. “Know- ing where these resources are located and how much exists is crucial to ensuring our nation’s energy independence.”
The USGS has attributed the latest increase to advances in production techniques, as well as geological understanding of the shale formations.
“Since our assessments in 2011 and 2012, industry has improved upon their development techniques for continuous resources like the shale gas in the Appalachian Basin,” said USGS
Energy Resources Program co-ordinator Walter Guidroz. “That technological advancement, plus all of the geological information we’ve gained from the last several years of production, have allowed us to greatly expand our understanding of these formations.”
Giant resource, giant challenges
The Appalachian Basin is by far the most pro- ductive shale gas region in the US, with the US Energy Information Administration (EIA) forecasting that it will produce 32.8bn cubic feet (929mn cubic metres) this month. This is slightly more than double the amount projected to come from the next largest shale gas region – the Permian Basin – and accounts for about 40% of all gas output from the US’ seven largest shale regions.
But while the region has boomed, helped by the build-out of pipeline infrastructure, it has struggled this year as natural gas prices have languished.
Rig counts in both the Utica and Marcellus have fallen in recent months as producers have
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w w w . N E W S B A S E . c o m Week 40 08•October•2019