Geologists Sharply Cut Estimate of Shale Gas

Federal geologists published new estimates this week for the amount of natural gas that exists in a giant rock formation known as the Marcellus Shale, which stretches from New York to Virginia.

The shale formation has about 84 trillion cubic feet of undiscovered, technically recoverable natural gas, according to the report from the United States Geological Survey. This is drastically lower than the 410 trillion cubic feet that was published earlier this year by the federal Energy Information Administration.

As a result, the Energy Information Administration, which is responsible for quantifying oil and gas supplies, has said it will slash its official estimate for the Marcellus Shale by nearly 80 percent, a move that is likely to generate new questions about how the agency calculates its estimates and why it was so far off in its projections.

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Report: Shale pipeline costs triple since 2004

The Marcellus region in Pennsylvania was the most expensive, averaging about $300,000 per inch-mile. Gas analyst and the report’s lead author Julia Sagidova said the pipelines generally run 120 miles with a diameter between 24 and 36 inches, bringing the price of a new pipeline to $500 million.

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Insiders Sound an Alarm Amid a Natural Gas Rush

From New York Times Drilling Down articles:

Natural gas companies have been placing enormous bets on the wells they are drilling, saying they will deliver big profits and provide a vast new source of energy for the United States.

But the gas may not be as easy and cheap to extract from shale formations deep underground as the companies are saying, according to hundreds of industry e-mails and internal documents and an analysis of data from thousands of wells.

In the e-mails, energy executives, industry lawyers, state geologists and market analysts voice skepticism about lofty forecasts and question whether companies are intentionally, and even illegally, overstating the productivity of their wells and the size of their reserves. Many of these e-mails also suggest a view that is in stark contrast to more bullish public comments made by the industry, in much the same way that insiders have raised doubts about previous financial bubbles.

“Money is pouring in” from investors even though shale gas is “inherently unprofitable,” an analyst from PNC Wealth Management, an investment company,  wrote to a contractor in a February e-mail. “Reminds you of dot-coms.”

“The word in the world of independents is that the shale plays are just giant Ponzi schemes and the economics just do not work,” an analyst from IHS Drilling Data, an energy research company,  wrote in an e-mail on Aug. 28, 2009.

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AMP’s Natural Gas Power Plant To Fire Up Next Year

Despite the abrupt end of a previous project that left communities on the hook for millions of dollars, the non-profit American Municipal Power says it's getting broad buy-in from members on its next endeavor. ideastream's Bill Rice reports the city of Cleveland signed on earlier this week.

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Local Food Production and Natural Gas Drilling: Are they really compatible?

A compilation or articles, studies and websites that suggest that argiculture and industrilization due to natural gas drilling can not co-exist.

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Documents: Federal Officials Quietly Question Shale Gas

Over the past six months, The New York Times reviewed thousands of pages of documents related to shale gas, including hundreds of industry e-mails, internal agency documents and reports by analysts. A selection of these documents is included here; names and identifying information have been redacted to protect the confidentiality of sources, many of whom were not authorized by their employers to communicate with The Times.

In this e-mail chain from April 2011, United States Energy Information Administration officials express concerns about the economic realities of shale gas production. They describe irrational exuberance in the market, and they suggest that the land rush in shale plays, or formations, which was especially accelerated and costly in 2008, could be the downfall of some shale gas companies.

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