THE SUCCESSFUL DEVELOPMENT OF SHALE GAS RESOURCES IN THE UNITED STATES

In response to the price hikes and shortages caused by the 1973-1974 oil embargo, the U.S. Energy Research and Development Administration set out to find technological solutions to the “energy crisis,” which included the development of new, domestic sources of oil and natural gas. The goal of the Eastern Gas Shales Project (EGSP) was to assess the technical challenges of recovering natural gas from extensive, organic-rich, Devonian-age shales in the eastern United States. This program became the responsibility of the U.S. Department of Energy when it was created in August 1977.

The major components of the EGSP were resource characterization and inventory, the development of extraction technology, and transfer of that technology to industry. From 1976 to 1982, the EGSP used cooperative agreements with drillers to collect and characterize oriented core from 38 wells targeting a variety of Devonian shales in the Appalachian, Michigan and Illinois Basins. Marcellus Shale core from an EGSP well drilled in 1978 in Morgantown, WV was analyzed by the Institute of Gas Technology in 1986. Results suggested that this shale was capable of containing much more gas than had been previously estimated, and that the resource might be quite large.

Shale gas development awaited improved production techniques. Mitchell Energy had been experimenting on the Barnett Shale in the Fort Worth Basin since the early 1980s, finally beginning successful shale gas production in 1997 from horizontal wells that used directional drilling technology and staged hydraulic fracturing. The Fayetteville and Haynesville Shales in Arkansas were recognized as sharing many of the same gas productive characteristics as the Barnett Shale, leading to the subsequent development of these formations.

Range Resources drilled the Renz #1 well in Washington Co, PA in 2004 to test Ordovician prospects. The target unit had poor gas shows, but evidence of gas in the overlying Marcellus led Range to review DOE reports on shale gas, and then hydraulically fracture the Marcellus in Renz #1. After getting an initial production of 300,000 cubic feet per day, Range drilled and stimulated the first horizontal well in the shale in 2005. Gulla #9 had an initial production of 4 million cubic feet per day. Other Marcellus wells soon followed, developing the play remarkably within five years.