Wiliamsport, Pa. – How has shale drilling activity changed in our area over time? Are we on the "bust" side of the gas "boom"?
We compared unconventional well activity for six counties in our region using spud data from Dept. of Environmental Protection's Office of Oil and Gas Management, for the period of Jan. 1 to Oct. 1, years 2010 through 2020:
The data show a significant downward trend in new drilling activity in our region between 2010 and 2016, from a record high of 659 unconventional wells in 2010, to a record low of 44 in 2016.
In Bradford, Lycoming and Tioga counties, drilling activity modestly rebounded for the years 2017-2019 – but elsewhere in our region, new drilling activity remains fairly stagnant.
DEP's data show the highest number of unconventional wells were spudded between 2010 and 2014, during the proverbial "shale gas boom."
Has the shale gas boom gone bust?
"I always knew there would be a boom in the beginning and then it would flatten off once the infrastructure is built," said state Rep. Jeff Wheeland (R-Loyalsock Township). "In other words, I feel we're hitting more of the mature part of the natural gas industry in PA."
Wheeland listed several reasons why it's "breaks on" for the natural gas industry, including a supply glut, cheap gas prices, not enough pipelines and the negative impacts of COVID-19.
"Can you imagine all the skyscrapers in all the big cities not using natural gas and electricity because they're basically shut down?" Wheeland said of the pandemic's effect on the gas market. "Again, energy is energy. No matter what sector you're in, you're struggling."
The lack of political will for pipelines through adjacent states also chilled the market. Wheeland said some companies have to wait up to 2 years just to get their gas into the Transcontinental Pipeline.
It's a phenomenon known as "stranded gas," gas that's unreachable by pipeline.
Some companies have found workarounds for the stranded gas problem. In Bradford and Tioga counties, stranded gas is converted to LNG for truck transport. But trucking LNG is much more expensive than sending it by pipeline.
In Clinton County, a developer has proposed to manufacture ammonia, hydrogen and urea from otherwise stranded natural gas. The end product would be sold as diesel exhaust fluid.
"I don't think anyone would've predicted that we found so much natural gas and not enough end users," Wheeland said. "It really comes back to the very basics of supply and demand."
If the price of natural gas rebounds to the $2-3 range, "we'd start drilling wells - a bunch of them," Wheeland said:
"But if nobody's using it, what are you going to do with it?"