Region’s at the top in drilling output

MORGANTOWN – Because of hydraulic fracturing and horizontal drilling, the vast Marcellus shale formation is now the most prolific producing region of natural gas in the United States.

And West Virginia is positioned right in the middle of the “shale gas revolution,” said David McCurdy, president and chief executive officer of the American Gas Association.

“We have the ability to drill horizontally and hit a target the size of a tennis ball a mile away,” said McCurdy during his keynote speech Wednesday at the West Virginia University College of Law’s spring natural gas conference in Morgantown, sponsored by the Steptoe & Johnson law firm.

“The largest producing region in the country today is the Marcellus,” he said of West Virginia, Pennsylvania, New York and Eastern Ohio. Some of these areas, particularly Ohio, are also considered part of the Utica shale region.

McCurdy said increased development of natural gas will continue to keep prices in the $4-$6 per 1,000 cubic-foot range “for a decade or more.” He said this gives the U.S. an advantage over foreign competitors.

“There are 2.4 million miles of natural gas pipelines in this county. No other country is even close,” he said. “We have everything Europe does not have – cheap money, cheap energy and a growing population.”

As McCurdy and others focus on continued natural gas development, Dominion Resources is hoping to export liquefied natural gas, including some from the Upper Ohio Valley, to Japan and India as part of a $3.8 billion project at the company’s Cove Point site in Maryland.

“We are the only company that is close to the Utica and Marcellus proposing to export natural gas,” said Bruce McKay, managing director of federal affairs for Dominion. “We have contracts signed. We just need to get Department of Energy approval now.”

The still-under-construction $500 million Dominion Natrium plant is now part of a $1.5 billion processing and transportation venture between Dominion and Caiman Energy known as Blue Racer Midstream. This network includes facilities across Northern West Virginia and Eastern Ohio that will move gas and liquids out of the Marcellus and Utica shale formations. Some of this could be shipped to heat homes in Asia if Dominion receives the federal clearance.

Although she said she hopes Dominion’s efforts succeed, Jane P. Michalek, vice president of Concentric Energy Advisors, said Dominion faces a challenge. She said plans are taking shape for natural gas to be shipped from British Columbia, Canada, to Asia across the Pacific Ocean, which she said would be more feasible than Dominion’s plan because of British Columbia’s closer proximity to Asia.

Cheryl Roberto, former member of the Public Utilities Commission of Ohio, also spoke during the conference. She said as several coal-fired power plants face retirement over the next several years, natural gas can play a key role in making up for any lost wattage.

McCurdy said he knows there are still some environmental concerns about drilling and fracking to obtain shale gas, but he said most of the problems are “surface issues.”

“Water, transportation, methane leaks – you can manage these problems.” he said.