New Report: “Marcellus Shale a Game-Changer for the U.S.”

A new report released today from Morningstar, Inc. further underscores what the U.S. and Pennsylvania governments, along with countless other independent experts, have established: “The emergence of the Marcellus Shale—the vast gas-bearing rock formation in the northeastern United States—is a game-changer for the U.S. energy industry.”

And according to this new report — and many others — previous Marcellus Shale production rates and potentials have proven “embarrassingly conservative.”

Here are key excerpts from Morningstar’s report:

  • Over the next few years, the United States is likely to become a major exporter of natural gas, further reduce its dependence on foreign oil and gas, and once again become a cost-competitive chemicals producer, all of which were unthinkable prior to the rise of shale gas, in particular the Marcellus.
  • We predict the Marcellus shale will be the biggest driver of U.S. gas production over the next few years, adding 3 Bcf/d in 2014 and another 2 Bcf/d in 2015, by which time it will account for close to one fourth of domestic volumes.
  • Shale gas has been the biggest driver of domestic production over the past several years, helping boost volumes by 14 Bcf/d (or 25%) from 2007-13, to 66 Bcf/d. Growth has been led by unconventional areas like the Marcellus (+9 Bcf/d).
  • Without the Marcellus, it’s probable that domestic natural gas production would have peaked in late 2011 or early 2012.
  • Going forward, we expect domestic gas growth to be far less balanced, with only the Marcellus and Eagle Ford exhibiting any meaningful uptick in volumes. We project U.S. natural gas production to increase by approximately 3 Bcf/d (or 4% cumulatively) through 2015, to 69 Bcf/d.
  • Since its emergence late last decade, the Marcellus Shale…has fundamentally reshaped how industry participants and observers think about the domestic natural gas complex.
  • The growth of the Marcellus over the next several years is likely to be nothing short of astounding.

Here’s what others are saying about the “Mighty Marcellus”:

  • “Marcellus Gas Will Account For Nearly A Quarter Of The Country’s Gas Production”: Natural gas from the booming Marcellus Shale will represent nearly a quarter of U.S. production by 2015, according to a new report published Monday by investment analyst Morningstar. The report estimates that the Marcellus Shale…will be the biggest driver of domestic dry gas production growth in the coming years, adding 3 billion cubic feet per day this year and another 2 billion cubic feed per day in 2015. Morningstar projects 14 to 20 billion cubic feet per day in gross production from Marcellus by the end of 2015. … Marcellus gas will account for nearly a quarter of the country’s gas production, up from about 20 percent today. “In short,” the Morningstar report says, “the growth of the Marcellus over the next several years is likely to be nothing short of astounding.”  … According to EIA, dry gas production in the Marcellus Shale averaged 10.4 billion cubic feet per day in 2013 — a 61 percent increase from 2012. … “For a variety of reasons…we don’t believe Marcellus natural gas production will reverse course anytime soon,” the report says. (Houston Chronicle, 5/3/14)
  • Driven by Technology, Pa. Rises to Nation’s Second-Largest Natural Gas Producing State: Technology brought gushing wells and newfound efficiency, helping drillers make the most of the gas-rich Marcellus shale formation and pushing Pennsylvania up the charts of the country’s leading producers. … Rigs working here outpace those nationwide, each expected to produce nearly 6,500 cubic feet of gas per day in March — a 30 percent increase from last March, according to the Department of Energy. … Buoyed by success in the Marcellus, Pennsylvania has risen among the country’s natural gas producers. It produced about 3 trillion cubic feet of gas in 2013, according to state production reports, surpassing Louisiana and putting Pennsylvania about on par with Alaska as the second-largest producer, federal data show. … As producers drill, they learn about the land, confirming increasingly larger gas reserves. Consol, Range Resources Inc., EQT Corp. and Rex Energy Corp., some of the most active Marcellus drillers in Western Pennsylvania, all boosted reserve estimates by 26 percent to 44 percent in recent weeks. Range, in its quarterly earnings statement on Tuesday, directly attributed improving expectations to technological advances, noting its efforts to lengthen wells and frack each more. Its newest wells in the Pittsburgh area produced an average of 14.5 million cubic feet per day, enough energy to supply the average home for nearly 160 years. (Tribune-Review, 5/1/14)

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