By: Chris Kemple, Tim Fisher, Steve Reinauer, and Rose Morgans

1
Marcellus Shale

• By Chris Kemple, Tim Fisher, Steve Reinauer, and
  Rose Morgans

2
Location

• Q Dr. Halsors presentation suggested that shale
  gas is geographically best developed in certain
  locations based on geology.
• 1-What are the reserves of shale gas worldwide?
  In the US? In Pennsylvania?
• 2-Approximately how much of the shale gas has
  been tapped at the moment?
• 3-Are some reservoirs too difficult to get to?

3
Location

• Natural gas shale can be found in Canada, Europe,
  Asia and Australia.
• Beach Petroleum Limited (company) is planning to
  drill in the Cooper Basin in South Australia
• A Multitude of companies are drilling in Canadas
  populated cities of British Colombia, Alberta,
  Ontario, Quebec and Nova Scotia.
• Marcellus Shale plays are widespread in China No
  companies or development yet, but US is working
  closely with China to develop technology there.
  There is much opportunity due to geographical
  terrain and land available.

4
Europe

• ExxonMobil has 750, 000 acres of leasehold in
  Germany and developing wells in the Mako Trough
  in Hungary.
• ConocoPhillips (company) is exploring Marcellus
  shale development assets in Poland
• Shell Gas Company is investigating Marcellus
  shale assets in Sweden
• In the U.K., Eurenergy Resource Corporation is
  making preparations for drilling in basins near
  Great Britain.
• India has potential, but a complication with its
  government issued leasing of land for petroleum
  only is making drilling opportunities for shale
  gas virtually impossible at the moment.

5
Locations

• Overall, gas plays of Marcellus shale can be
  found in basins, the oceans and in small amounts
  practically anywhere else.
• In Pennsylvania specifically, solid amounts of
  shale gas arent immediately known, as research
  is wrapping up regarding that full amount. Full
  estimates will be completed by early 2010.
• So far, PA has leased over 74,000 acres of state
  forest to Marcellus shale drilling companies.
• Whitmar Exploration Company, a large drilling
  company with huge amounts of land leasing, is
  planning to start drilling in Luzerne County by
  2010.

6
Marcellus Shale
7
Quantity

• In 2005 there were about 15,000 wells in the US,
  and 4,185 alone were completed in 2007.
• The US has only been producing a small fraction
  of total Marcellus shale gas potential.
• 6 of all natural gas in the US comes from shale
  gas plays (Barnett Oil Field) in Texas
• Total Natural Gas resources in North America
  exceeded 2,300 trillion cubic feet 500 trillion
  cubic feet of this amount is recoverable from
  Shale gas plays. In the lower part of the US
  alone the shale gas amount is estimated at 385
  trillion cubic feet.

8
Quantity

• In 2007, the US Department of Energy stated that
  the US uses 1.4 trillion cubic feet of shale gas
  per year. They also made a rough estimate that
  there is enough Natural gas overall for 90 years.
  An additional 26 years can be added to that
  number due to Marcellus Shale drilling alone. In
  their last statement, the Department of Energy
  noted that a rate of 3 to 4 trillion cubic feet
  would be sustainable for decades.
• In the US so far, 19.3 trillion cubic feet has
  been tapped so far.

9
Difficulty

• Marcellus shales contain radon gas, Uranium and
  Uranium-238, which are radioactive. Marcellus
  shales also contain enormous amounts of Carbon,
  which might make these shales combustible.
• Some gas plays lie in deep basins out in the
  ocean, or in mountainous terrain, making it
  harder to get manpower and equipment out to those
  areas.
• Lastly, when some shales are cut and exposed to
  the surface for mining, acid rain can cause
  decomposition of that exposed shale. This leads
  to toxic runoff from elements within the shale,
  and corrosion as a whole this is a nightmare for
  any roads or industrial structures near the
  exposed shale as landslide/cave-ins become an
  unprepared for hazard.

10
Environmental

• Chemicals are added to the water to facilitate
  the underground fracturing process that releases
  natural gas.
• The resulting volume of contaminated water is
  generally kept in above-ground ponds to await
  removal by tanker or injected back into the
  earth.

11
Social/Political

• Higher natural gas prices in recent years and
  advances in hydraulic fracturing and horizontal
  completions have made shale gas wells more
  profitable.
• Shale gas tends to cost more to produce than gas
  from conventional wells, because of the expense
  of massive hydraulic fracturing treatments
  required to produce shale gas, and of horizontal
  drilling. However, this is often offset by the
  low risk of shale gas wells.

12
Social/Political

• North America has been the leader in developing
  and producing shale gas because of high gas
  prices in that market. The great economic success
  of the Barnett Shale play in Texas in particular
  has spurred the search for other sources of shale
  gas across the United States and Canada.

13
Laws and Regulations

• Natural Gas Act
• In 1938, the federal government became involved
  directly in the regulation of interstate natural
  gas with the passage of the Natural Gas Act
  (NGA).
• This act constitutes the first real involvement
  of the federal government in the rates charged by
  interstate gas transmission companies.

14
Laws and Regulations

• The Natural Gas Policy Act of 1978
• Creating a single national natural gas market
• Equalizing supply with demand
• Allowing market forces to establish the wellhead
  price of natural gas
• This act attempted to accomplish these goals by
  statutorily setting 'maximum lawful prices' for
  the wellhead sale of natural gas and by linking
  interstate gas markets.

15
Laws and Regulations

• The Natural Gas Wellhead Decontrol Act of 1989
• The NGWDA stated that first sales of natural gas
  were to be free of any federal price regulations.