December 27, 2012 at 11:15 AM EST
Marcellus Gas Production
Fracking concerns remain, but development speeds along.

This Article Originally was Published here:

Although the rate of well drilling slowed somewhat, the Marcellus Shale nevertheless became the most productive natural gas site in the country over 2012. Federal energy reports now indicate that the Marcellus wells in Pennsylvania and West Virginia are pumping out natural gas at the rate of some 7 billion cubic feet per day. That accounts for almost a quarter of the nation’s shale gas production, and improves on Marcellus figures from 2011 by twofold.

Of course, location is another very crucial factor. Earlier, natural gas arrived from the Gulf Coast or Canada to the Northeastern U.S.; now, those supply routes are being replaced by the much more economical Marcellus supplies. The Shale underlies parts of Pennsylvania, New York, Maryland, West Virginia, and Ohio.

Fracking, the controversial practice used widely in the shale sector to extract oil and gas from unconventional reserves like the Marcellus Shale, remains a point of heated debate. The EPA, for example, updated regulations to focus on methane and other possible air pollutants; however, these new rules do not apply until 2015. Nevertheless, most oil and gas are already making internal upgrades to ensure compliance with these rules when they come into effect. Bloomberg reports on the importance of gas development and markets:

"The relative fortunes of the United States, Russia, and China — and their ability to exert influence in the world — are tied in no small measure to global gas developments," Harvard University's Kennedy School of Government concluded in a report last summer.

And major companies are staying focused on the Marcellus Shale. Shell Oil Co. will be developing a massive new petrochem plant some 30 miles north of Pittsburgh. The project is some years off, but generous state tax rebates and incentives have helped the decision move forward. Credits amount to almost $66 million annually, or $1.7 billion altogether when the project is completed.

This Article Originally was Published here:

Marcellus Gas Production originally appeared in Energy and Capital. Energy and Capital, a free daily newsletter, offers practical investment analysis in the new energy economy.
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