PARKERSBURG - The Marcellus Shale and its development are expected to generate billions of dollars in the present and for many years in the future for West Virginia and the surrounding region, according to the speaker at Monday's Parkersburg Rotary Club weekly meeting.
David E. Drennon, marketing and transportation manager with H.G. Energy LLC in Parkersburg, spoke about the development of natural gas from the Marcellus Shale deposits and oil from the Utica Shale deposits in the future.
Drennon said the current development falls into two primary areas, the wells themselves and the infrastructure, from pipelines to processing facilities of various types.
Photo by Wayne Towner
David E. Drennon, marketing and transportation manager with H.G. Energy LLC in Parkersburg, speaks Monday during the weekly Parkersburg Rotary Club meeting at the Blennerhassett Hotel.
The Marcellus Shale development began in 2006 and 2007, with the largest amount of growth starting in 2009. In West Virginia, most of the development is occurring north of U.S. 50 and west of Interstate 79.
A growing number of companies and corporations are interested in Marcellus Shale and Utica Shale production, with facilities built or under construction and more proposed in and around West Virginia, Ohio and Pennsylvania.
"In a short period of time, there has been several billion dollars of wells and infrastructure development because of the Marcellus Shale. This is just the beginning, this will go on for a number of years because there's such a huge resource here underneath our feet," he said.
He expects development and production to continue for at least the next century due to the size of the Marcellus Shale.
Much of the natural gas production under way or planned is separated into two areas, dry gas and wet gas. Dry gas involves wells that typically only produce raw natural gas without any hydrocarbon liquids. Wet gas is natural gas containing significant heavy hydrocarbons which can be liquefied, such as propane and butane.
Drennon said for gas prices, the curve is going the wrong way, partly due to recent success in drilling and the glut of natural gas it has placed on the market. The cost is $3.40 for the main unit measurement of natural gas, down from $10 in 2008.
That drop in price is due to the rise in extraction, he said. It involves dry gas production, which has made it uneconomical now to drill for dry gas.
Wet gas includes a variety of liquid products with the natural gas that can be extracted and used in other products and services. Drennon said those additional potential revenue streams are what is moving interest away from dry gas production toward wet gas production, although he expects interest to return to dry gas.
Drennon said this region's Marcellus Shale has tremendous volumes of gas, but it is a dry gas area. With the focus shifting to wet gas areas, there will be more production in other areas, although that may lead to a similar market glut in the wet glass area.
Drennon believes processing facilities will be built in the local region, becoming an economic engine.
"It's a tremendous economic opportunity," he said.