THE SUCCESSFUL DEVELOPMENT OF SHALE GAS RESOURCES IN THE UNITED STATES

In response to the price hikes and fuel shortages caused by the 1973-1974 oil embargo, the U.S. government initiated a number of research programs to develop domestic sources of oil and natural gas. The Eastern Gas Shales Project (EGSP) was intended to help industry overcome the challenges of recovering natural gas from organic-rich, low permeability, Devonian-age shales in the eastern United States. When the U.S. Department of Energy (DOE) was created in August 1977, the EGSP became its responsibility. The EGSP characterized oriented drill core from 44 wells targeting a variety of Devonian shale formations in the Michigan, Illinois, and Appalachian Basins. The program objectives were to assess the resource, develop effective extraction technology, and transfer such knowledge to industry. The program ended in 1992.

Mitchell Energy had been pursuing shale gas since the early days of the EGSP, and achieved commercial success in 1997 on the Barnett Shale in the Fort Worth Basin of Texas. Mitchell applied offshore directional drilling technology to construct long horizontal wells, and staged hydraulic fracturing to stimulate large volumes of rock. The Fayetteville Shale in Arkansas and the Haynesville Shale in Louisiana were developed a few years later using the Mitchell methods. Range Resources drilled the Renz #1 well in Pennsylvania to a Silurian target formation in 2005, which showed little gas potential. However, evidence of gas in the overlying Marcellus Shale led Range to review the EGSP data, and the well was successfully recompleted in the Marcellus. Thus encouraged, Range experimented with the Mitchell Energy horizontal drilling and hydraulic fracturing techniques on the Marcellus, eventually completing the Gulla #9 well with an initial gas production rate of nearly 142,000 cubic meters (5 MMCF) per day. Other wells soon followed, developing the play remarkably within five years. The success in the Marcellus led to the subsequent development of additional shale resources, including the Niobrara in Colorado and Wyoming, the Woodford in Oklahoma, the Utica in Ohio, and the Eagle Ford in Texas. The development of the gigantic Bakken Shale oil play in North Dakota has made it the second largest oil producing state in the U.S. after Texas. Gas and oil from shale are likely to remain important energy resources in the future.