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West Virginia Gas Activity Driven by Marcellus Shale

Natural gas production in West Virginia is continuing on an upward swing dating back to 2003, thanks in part to development in the Marcellus Shale, a report released this month by the Department of Environmental Protection (DEP) said.

The DEP's triennial "State of Environment Report," which covers 2008 through 2010, also revealed that the number of abandoned oil and gas wells in the state continued to hover around 13,000.

"During the past three years, oil and gas activity has changed significantly, likely due largely to economic conditions and commodity prices," the report said, adding that the Marcellus "is having a tremendous impact on how the natural gas resource is developed and, consequently, the regulatory framework under which such operations are conducted."

The report, which was released Aug. 3, said natural gas production in the state rose from about 180 Bcf in 2003 to more than 250 Bcf in 2009, the last year for which figures were available from the U.S. Department of Energy. The amount of natural gas that was processed also rose during that time frame, from about 120 Bcf in 2003 to about 140 Bcf in 2009. The number of gas producing wells was below 50,000 in 2003 but climbed above that mark by 2009.

The DEP said that since Jan. 1, 2006, its Office of Oil and Gas (OOG) has issued more than 1,200 permits for Marcellus Shale drilling. But the report also said that after a steady increase through 2007, oil and gas permit applications leveled off in 2008 and then declined in 2009 and 2010. Total well work permits issued in 2010 were down 54% from 2008.

Abandoned wells continued to be an area of concern, with the OOG plugging or reclaiming 252 of them at a cost of $6.2 million over the past 10 years.

"There's a variety of reasons why there are so many of these out there," DEP Secretary Randy Huffman told NGI's Shale Daily on Thursday. "We probably should police that a little better. The law requires that if you haven't produced within a year, you have to close the well out. 'Abandoned' sounds like we don't know who is responsible for the well, but some are still under permit. Sometimes companies don't want to close them because they think there may be an opportunity for future recovery."

Huffman said the state also has an inventory of orphaned wells, meaning that no responsible party can be found for them. The report did not identify how many orphaned wells are in the state, but Huffman conceded that they are an issue for the DEP, too.

"We have a few dollars, it's not very many," Huffman said, adding that additional revenue for the OOG to plug or reclaim abandoned and orphaned wells "would be something nice to have. We don't have enough money to address the existing orphaned well inventory that's out there. So we just address them on a priority basis."

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