Update On Marcellus Shale Play

The Marcellus shale is a Middle Devonian-age black (organic rich) shale that occurs in the subsurface beneath much of Ohio, West Virginia, Pennsylvania and New York. About 10%  of U.S. natural gas currently comes from unconventional shale gas plays such as the Marcellus shale. Early in October I wrote an article about slower development expected in the Marcellus Shale. I wrote that the  Marcellus play may slow as a result of problems with drilling permits and environmental concerns. I mentioned that both New York and Pennsylvania would provide the main roadblocks to development.

Associated Press today reported that oil companies are moving their drilling rigs out of Pennsylvania to neighboring states. Executives of drilling companies say the economic windfall expected from the Marcellus shale may not come to pass if Pennsylvania doesn’t get its regulatory house in order. Industry officials complained about the time-consuming and lengthy permitting process and cumbersome regulations making it difficult for them to operate in Pennsylvania. Industry executives also opposed a tax on natural gas that the administration of Gov. Ed Rendell has said it is considering. The oil companies say the new taxes will stymie Marcellus development which could be a boon to the state’s economy.