gas shale in Ohio and Michigan

[Stephane Dumas]

I spotted these 2 articles about gas shales in Ohio and Michigan
http://blog.cleveland.com/metro/2011/03/ohio_poised_to_take_center_sta.html

http://www.lexology.com/library/detail.aspx?g=ad4bb93c-6b7d-4b56-b96d-9d946bb86c84

Wolverine gold rush? The Utica/Collingwood Shale gas play: Michigan's answer to the Marcellus Shale

Randy M. Awdish

In 2000, natural gas production from shale formations was only 1 percent. Currently, it is about 10 percent, and the U.S. Department of Energy projects that it will increase to 34 percent by 2030. Current media attention has focused on the Marcellus Shale, as that gas play has seen a lot of activity in recent years. Michigan is slowly entering this arena because of the emerging Collingwood Shale play.   

What Sparked the Hype?

For about two years, Calgary-based Encana Corp. quietly accumulated about 250,000 net acres in seven Michigan counties, centered in Cheboygan, Kalkaska and Missaukee counties, at an average of $150 per acre (with mineral rights pursuant to seven-year terms). Then in the spring of 2010, Encana's subsidiary Petoskey Exploration LLC revealed that it had successfully tested a well in Missaukee County (commonly known as the Petoskey Pioneer 1-3 well or Pioneer well) in the Collingwood Shale formation. The Pioneer well produced at an average rate of 2.5 million cubic feet equivalent per day (including natural gas liquids constituents and condensate) during the first 30 days of production. This well targeted the Collingwood Shale at 9,500 ft. true vertical depth, with a 5,000 foot horizontal penetration utilizing a process known as hydraulic fracturing (also referred to as "fracking" or "fracing").

Fresh on the heels of the success of the Pioneer well, a state auction of mineral lease rights in May 2010 netted the state more than $178 million in bonus payments (breaking the record of $23.6 million set in 1981). The average price per acre paid at the auction was $1,507 (as compared to $26 per acre in previous auctions), with the highest price paid equal to $5,500 per acre. To understand the significance of this auction, the Michigan Department of Natural Resources and Environment (MDNRE) noted that the sum of all previous auctions dating back to 1929 totaled $190 million.

The follow-up state auction in October 2010, however, did not produce nearly the interest the May 2010 auction sale did, raising only $10 million from the lease of 273,000 acres (the state had offered a total of 450,000 acres for lease), amounting to an average price of $40 per acre. This was a far cry from the average price per acre paid at the May 2010 auction.

It can be speculated that sales at this auction were tempered because the production of the Pioneer well dropped to 800,000 cubic feet per day (as compared to 2.5 million cubic feet for the first 30 days of production). It is possible, however, that the oil and gas companies themselves may be trying to cool interest in the Collingwood Shale to drive prices down.

[yanksfan6129]

The environmental consequences are not worth the benefits of fracking. It has been shown that the fluids used to pump the fuel out of the ground seeps into groundwater and has polluted drinking water. This has already happened in and around Pittsburgh, PA.

[PAHighways]

There have been a couple of explosions at fracking sites here.  Pittsburgh banned gas exploration within the city limits last year.

[corco]

Oil shale costs way too much to extract to turn a decent profit- maybe not so much in OH and MI, but out west where you have to deal with water rights it becomes hugely cost prohibitive (it takes a fuckton of water to get the oil out- something crazy like 100 gallons/gallon of oil). They recently found a huge one under Cheyenne/Torrington and they're just going to let it sit

And...gas shale and oil shale are not the same thing. Idiot.

[US71]

There has also been gas shale drilling in Arkansas... or WAS until it started causing earthquakes.

[mightyace]

Northern central PA is also seeing a lot of gas shale exploration.   One area of concentration is around Wellsboro, PA.  I know this because the I've read about the Wellsboro and Corning Railroad getting a lot of traffic hauling in fracking sand.

The Lycoming Valley Railroadwhich serves mainly Muncy,Williamsport and Jersey Shore and the Lehigh Railroad around Mehoopany are also seeing a traffic uptick hauling fracking sand.

There's been a few minor incidents about groundwater contamination but nothing major.