Shale boom expected to slow down

Associated Press

PITTSBURGH

Energy experts say the boom in Marcellus Shale natural gas production will slow this year but not because there’s any lack of supply.

The slowdown is happening because drillers are waiting for pipelines to expand, new markets to develop and wholesale prices to rise.

“The hiring has tapered off. What we see is a holding pattern,” said Kathryn Klaber, the president of the Marcellus Shale Coalition, an industry group.

That’s a big difference from the last four years, when production doubled or tripled every 12 months and companies spent tens of billions of dollars on leases, well drilling, and related infrastructure.

Klaber said companies are still confident there’s money to be made, since independent analysts say that the Marcellus is the most economical place to drill for shale gas in the nation.

The Marcellus Shale is a gas-rich formation deep underground that extends across Pennsylvania, West Virginia, New York, Ohio and Maryland, but most of the production is in Pennsylvania and West Virginia.

Bentek, a Colorado company that analyzes energy trends, said figures from the pipelines that take gas out of the Marcellus show that Pennsylvania production rose to about 2 trillion cubic feet in 2012 — roughly double the prior year. Production from West Virginia was about 700 billion cubic feet in 2012, bringing the total Marcellus output to about 2.8 trillion cubic feet.

That’s about 10 percent of the nation’s output of natural gas. Bentek estimates that Marcellus production will grow by about 30 percent this year, though numerous factors could affect the final number. One billion cubic feet of gas is equivalent to about 180,000 barrels of crude oil.