JEWETT - The 1.52 billion cubic feet of natural gas produced by Chesapeake Energy's Harrison County Utica Shale well in 2011 would be enough to heat more than 30,000 homes in a year, a pair of college professors agree.
The amount of gas produced by this single well in just 198 days of production last year also equals about 1 percent of West Virginia's annual consumption of natural gas for the entire state in 2010, according to the U.S. Energy Information Administration.
However, as natural gas prices continue to drop near the $2 mark per 1,000 cubic-foot unit, professors Robert W. Chase and Tim Carr caution that such large amounts of gas entering the market could eventually discourage more drilling - unless more transportation or electricity generation switches to gas power.
Natural gas "is in bountiful supply and by substituting it for gasoline, we can lessen our dependence on foreign oil and keep our hard earned cash from flowing overseas," said Chase, chairman of the Marietta College Department of Petroleum Engineering. "The bad news is that low natural gas prices will discourage companies from drilling more wells at least in the short run. This is why it is especially important for our government to realize the potential benefit to our economy and our nation if we can convert our transportation industry to natural gas.
"Not every well that companies drill in Ohio will be this good, but this certainly is a very good well. ... The good news is that there will be more natural gas available for consumers and natural gas prices will remain low."
The Harrison well, when combined with other Chesapeake wells in Carroll County, produced 2.62 billion cubic feet of natural gas in 2011, along with more than 43,000 barrels of oil. According to Ohio Department of Natural Resources records, the Harrison County well is located in the area south of Jewett on property in the name of Buell.
Chesapeake announced plans earlier this year to shift much of the company's focus from drilling in the methane-dominated dry gas regions in much of Pennsylvania to drilling in wet gas areas. This is due to relatively low natural gas prices compared to the price commanded by natural gas liquids, such as ethane, propane, butane and pentane, as well as crude oil.
Tim Carr, professor of geology at West Virginia University, believes the Utica well's numbers are about what he would expect from a typical Marcellus Shale well in Pennsylvania or West Virginia. He said the liquids production is not at the level some anticipated.
"The problem is that no producer wants gas," he said. "I have heard the Marcellus referred to as the world's largest gas storage field with loads of wells waiting to be put on line. The disappointment from the Chesapeake perspective is that the amount of liquids in these wells, while impressive for Ohio, is relatively low."
Carr said with the potential of thousands of new wells to be drilled over the next several years, there is going to be a tremendous amount of gas on the market, making it essential to find new outlets for the product.
"The challenge will be to find profitable, non-direct consumer uses for the gas. It will take a couple years for the pipelines, the chemical industries and the electric utilities to catch up with the producers," he said.
In response to the demand for processing capacity for the liquids found in Utica wells, Chesapeake is partnering with M3 to build a $900 million processing complex. The processing facility to be located in Columbiana County will have an initial capacity of 600 million cubic feet per day. Natural gas liquids will be delivered to a central hub complex in Harrison County that will feature an initial storage capacity of 870,000 barrels. The Harrison County facility will also have fractionation capacity of 90,000 barrels per day, as well as a substantial rail-loading facility, according to Chesapeake.
"It will be interesting if Ohio becomes a major oil and gas producer. That would be a change in the economics and culture for that state," Carr added.
