SHALE GAS EXPLORATION AND PRODUCTION IN ALABAMA

The state of Alabama has a variety of types of oil and gas resources. Conventional oil has been commercially produced in Alabama since 1944; production of conventional natural gas occurs both onshore and off the coast of Alabama; and Alabama was one of the first states to develop a regulatory framework to facilitate the production of coalbed methane. An additional resource present within the state, but one that has not yet proven to be commercially viable at this time, is shale gas.

The first shale gas well drilled and completed in Alabama was in St. Clair County in 2005 by Dominion Black Warrior Basin, Inc. On petition by Dominion Black Warrior Basin, Inc., the State of Alabama Oil and Gas Board established the Big Canoe Creek Field, also located in St. Clair County, in 2007 to provide for the orderly development the Conasauga Shale Gas Pool. The Gentry Creek Field and the Cleveland Field were established by the Oil and Gas Board in 2010 and 2012, respectively. State Oil and Gas Board records reflect that approximately 70 wells were permitted for the exploration of shale gas, and about 60 wells were drilled within the state. The vast majority of those wells were dry and abandoned, or are now plugged and abandoned due to a lack of sufficient commercial production. However, the Burns 29-9 #1 Well, Permit #14303, has been in production since 2006 and has produced 48,000 mcf of gas through July 2014. This well is the only well in the Gentry Creek Field located in Lamar County.

A major factor in the small amount of commercial production of shale gas in Alabama is the price of natural gas. Between 2008 and 2009 the price of natural gas fell dramatically and has remained relatively low by historic standards. An increase in gas price and new technology could lead to a renewed interest in exploration and production of shale gas in Alabama.