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Marcellus Shale Coalition Sees Vindication in EIA, USGS Data

Production data issued by the Energy Information Administration (EIA) Tuesday -- which indicated that increased drilling in the Marcellus Shale has been the leading force in the growth of natural gas production in the northeastern United States -- combined with a recent U.S. Geological Survey (USGS) report, demonstrates that the Marcellus Shale is hardly the shrinking violet some mainstream media reports have claimed, according to the Marcellus Shale Coalition (MSC).

"Most importantly, the latest production estimates remind us that, more than ever before, the dialogue about the Marcellus Shale continues to be rightfully focused on the region's leading role in providing clean-burning, job-creating American energy for our nation," MSC said.

According to EIA, the largest production increases in the northeastern United States since 2009 have come in northeastern Pennsylvania (see Daily GPI, Aug. 31). There have also been noticeable increases in southwestern Pennsylvania and West Virginia, while production across the rest of the Northeast has remained virtually unchanged for several years, EIA said.

The USGS assessment estimated that approximately 84 Tcf of undiscovered, technically recoverable natural gas and 3.4 billion bbl of undiscovered, technically recoverable natural gas liquids (NGL) are contained in the Marcellus (see Shale Daily, Aug. 24). It was the first USGS estimate of the Marcellus since 2002, when the agency estimated about 2 Tcf of gas and 10 million bbl of NGLs. Production and technological development in the intervening years yielded geologic information and engineering data, which prompted USGS to significantly increase its estimate, according to the agency.

After some initial confusion about the USGS assessment, including media reports that it would result in the United States slashing Marcellus gas estimates 80%, the USGS clarified the differences between its results and previous EIA numbers (see Shale Daily, Aug. 29; July 11). The "slashing" reports misunderstood the differences between the USGS and EIA estimates, according to USGS geologist Jim Coleman, and were the result of reporters "not doing an adequate job of due diligence for a number of reasons," according to Terry Engelder, a geosciences professor at Pennsylvania State University.

"Over the course of the past week, while several flawed media reports surfaced regarding the new USGS data, straightforward facts ultimately prevailed," the MSC said Tuesday.

Production growth in the Marcellus and other shale plays "continues strongly," according to Navigant Consulting. "Growing shale gas supply is the key driver behind all North American gas market developments. In fact, at this point it seems clear that factors are in place to sustain a structural surplus that will pressure natural gas prices for the foreseeable future, much beyond the remaining portion of 2011."

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