Industry spending in the Pennsylvania portion of the Marcellus Shale jumped from $3.2 billion in 2008 to an estimated $12.7 billion this year and could top $14.6 billion in 2012, according to a Pennsylvania State University study commissioned by the Marcellus Shale Coalition.

The study updates previous economic impact reports that Penn State released in 2009 and 2010. The studies in the past have been challenged for being commissioned by industry and compiled almost exclusively from industry information, but Marcellus Shale Coalition President Kathryn Klaber said, “Every shale play worth its salt has hired some third party to do an economic assessment. This one is no different. It is relying on facts and figures, not on biased information in any way,” adding that the study is not meant to be a “policy paper.”

That increased spending correlates to increased production and economic benefits, the study found. Barring a significant drop in prices, the Pennsylvania Marcellus alone could become the most productive natural gas field in the country, accounting for 25% of domestic supply.

Through the end of 2010 the Pennsylvania Marcellus produced nearly 2 Bcf/d from more than 1,405 wells. The study projected that by the end of this year 2,300 wells could produce almost 3.5 Bcf/d — making Pennsylvania is a net exporter of natural gas. By 2015 the state could produce as much as 12 Bcf/d from the Marcellus, making it second only to Texas for natural gas production.

And by 2020 the Keystone State could produce 17.5 Bcf/d, surpassing the Lone Star State, according to the study.

The report found that the Marcellus industry increased economic activity in Pennsylvania by $11.2 billion in 2010, generating $1.1 billion in state and local taxes and supporting nearly 140,000 jobs, figures the researchers expect to increase by roughly 10% this year and in 2012.

The report does not include the impact of the Utica or Upper Devonian Shales, liquids production, increased midstream spending or the possibility that a stable natural gas supply could spur a local chemical industry and a revived manufacturing sector in Appalachia.

“There are a lot of benefits of shale gas development that are not in this estimate,” Klaber said.

(To read the full story go to www.shaledaily.com).

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