Marcellus Shale is potentially a $2 trillion (not billion, but trillion) economic boon to West Virginia, Pennsylvania and New York. It has the potential to make the Mid-Atlantic region second only to Texas in supplying customers with natural gas, a clean burning fossil fuel.
It is the most under-covered political story in the Lehigh Valley both regards to its economic impact, environmental consequences and its ability to fuel the engines of state government.
What is Marcellus Shale?
The Marcellus Shale is a formation of black shale. It is located in Ohio, West Virginia, western, central and northeastern Pennsylvania. It is located underground at various depths and at different thicknesses with a 790 feet dense area located in central Pennsylvania. Non-tradition drilling cannot economically access the natural gas. The existence of natural gas has been known for years. Changes in technology has made drilling for natural gas in Marcellus Shale viable.
New Technology: Horizontal Drilling & Fracturing
A "horizontal well" starts as a traditional vertical well. After reaching the desired depth, new tools are used to curve the well so that the well goes horizontally. The horizontal drilling can proceed thousands of feet. The purpose of horizontal drilling is to create maximum contact with the gas bearing rock formations to release the maximum amount of gas. Horizontal drilling is only part of the equation. It is accompanied by "hydraulic fracturing," meaning pumping water and other chemicals into the well under high pressure to break the gas bearing formations.
Problem With Fracturing
Fracturing requires tremendous volumes of water. Current estimates are that each well may require more than one million gallons of water. Environmentalists worry that "fracturing" exhausts clean water supplies and returns polluted water at the well site. Why pollution? According to the Pennsylvania Department of Environmental Resources, the fracturing process uses up to 80 different chemicals, including Acetic Acid, Boric Acid, Hydrochloric Acid, Titanium Oxide and Xylene to name just a few. The chemicals are added as a friction reducer and a bacteria inhibitor. The problem is that the chemicals have the potential for poisoning our underground water. The subsequent mechanism for disposing the retrieved fluids inserted into the wells creates additional environmental problems.
Every state that permits natural gas extraction imposes a "severance tax' on the drillers. So far, the Pennsylvania Legislature has let the issue of an appropriate severance tax slide.
The industry has been lobbying for a minimal severance tax. As a condition of paying a severance tax, the gas industry wants a mandate that adjacent owners who refuse to lease their land to drilling be forced to give up their gas to the drillers. "Forced pooling" creates a substantial interference in traditional notions of private property rights.
The drillers/producers are also lobbying to be declared utilities so they can have the right to eminent domain both for drilling purposes and for locating their pipe lines to transport the gas. Again, this concept of private companies clothed with the right of eminent domain clashes with tradition notions of private property rights.
The Jobs Benefits
The Christian Science Monitor reported that Marcellus Shale has the potential for creating 282,000 jobs between 2011 and 2020 in Pennsylvania, West Virginia and New York.. Potential tax fall for Mid-Atlantic area can reach $6 billion in local, state and federal taxes. The economic benefits are real. So are the prospect of an environmental catastrophe reminiscent of the Robber Barons of prior centuries. The next State Senator from the Lehigh Valley will be required to address these significant issues balancing economic benefits against environmental protection. As a State Senator, I will support extending the regulatory power of the Department of Environmental Protection to insure that our environment is not ravaged, that a "fair" severance tax be impose, that "forced pooling" be verboten and that the industry will not be clothed with the right of eminent domain.