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Report: Appalachian, Illinois Basins Have Plenty of Life Left Despite Their Age

The Appalachian and Illinois basins may have produced five billion bbl of oil and 50 Tcf of natural gas over the last century and a half of operation, but according to a new report by the Department of Energy's (DOE) Office of Fossil Energy, these under-explored areas still have plenty of gas and oil left.

Current estimates show as much as 79-96 Tcf of recoverable natural gas and 4.8 billion bbl of oil still in the ground, according to "Mature Region, Youthful Potential," a report by the Interstate Oil and Gas Compact Commission (IOGCC) in cooperation with the DOE's Office of Fossil Energy and the National Energy Technology Laboratory. The IOGCC represents the governors of 30 member and seven associate member states. The report was released at the IOGCC's annual meeting in Jackson Hole, WY.

Richard Beardsley, a geologist with extensive experience in the Appalachian basin, calls it "the most drilled and least explored basin in the world." Although the Appalachian and Illinois basins are mature in terms of shallow production (6,000 feet or less) they are considered young when it comes to deeper exploration (greater than 15,000 feet).

According to the Potential Gas Committee (PGC), only 10-15% of the possible hydrocarbon producing formations within the Appalachian basin have been tested and only 11 wells have been drilled deeper than 15,000 feet. Most of the wells have been concentrated around established producing trends. As a result, vast areas remain unexplored.

In its most recent regional assessment (2005), the PGC estimated that the total existing gas resource (including possible, probable and speculative) in the Atlantic region (Appalachian Basin) was about 103 Tcf, including 85.7 Tcf of traditional resources and 17.3 Tcf of coalbed methane (CBM). The existing gas resource in the North Central region (mainly the Illinois Basin) totaled 34.7 Tcf, including 21.9 Tcf of traditional gas and 12.8 Tcf of CBM.

So while gas production in the two basins may have peaked around 1930, there are currently areas of significant growth and the potential for more in the future. For example CBM production began in 1990 in Virginia and has increased every year since then. In Kentucky, gas production has recently peaked, growing steadily since a low in 1983.

"This recent natural gas production hints at the remaining potential of the region," the report states. "So do recent resource discoveries in the Trenton/Black River formations in New York and West Virginia, the [CBM] potential throughout the region, new production from the New Albany Shale gas play in southern Indiana and northern Kentucky, oil discoveries in pinnacle reef formations, resource in tight gas sands, and the potential application of carbon dioxide injections to enhance oil recovery in old oil fields.

"All are clear signs that as far as future oil and gas production potential in the Appalachian and Illinois basins is concerned, the story may be far from over."

The Appalachian Basin is the largest basin by area in the United States. It also was the location of the first natural gas discovery in 1815 at a salt mine in West Virginia. The first intentional attempt to find natural gas was in 1821 near Fredonia, NY. Despite this 184-year history, much of the Appalachian basin remains unexplored.

At the end of 2003, about 11 Tcf of gas reserves had been booked in the Appalachian and Illinois basins. The PGC estimated that "probable" gas resources in the two basins total 20 Tcf, and the National Petroleum Council estimates that the additional "potential" resource may total another 5 Tcf

The report cites five major prerequisites that need to be addressed by a range of private and public stakeholders for the potential of the two basins to be realized: technological progress that can extend well life and allow economic recovery of resources despite a challenging environment; greater access to resources on public lands through supportive policies and resolution of mineral rights conflicts; expansion of gas pipelines, gathering systems and storage; access to quality resource data and data analysis; and supportive and cost-effective regulatory policies that allow producers to balance energy production with environmental protection.

"Collaborative approaches and basinwide perspectives will be fundamental in tackling these prerequisites and accelerating the recovery of natural gas and oil from the Appalachian and Illinois basins," the report stated. "Diverse stakeholders have an interest in the responsible recovery of these resources not only to meet domestic energy needs but also to stimulate economic growth in the region."

For a copy of the report go to http://fossil.energy.gov/.

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