The Marcellus Shale Formation is one of the most frequently mentioned shale formations in the US Oil and Gas industry. This is due to the Marcellus Shale Formation being one of the largest shale formations in the US and its increasing importance as a source of natural gas. Its proximity to the high demand areas of the East Coast also make it very attractive. As such the Marcellus Shale Formation has become one of the major oil and gas plays.
Name and Location
The Marcellus Shale Formation is named from an outcrop, which means an exposed section of it, that occurs near the New York town of Marcellus. However, the full extent of the Marcellus formation is much more substantial than a small section of New York state. The formation actually underlies much of the Allegheny Plateau region which is located in the northern Appalachian Basin.
Beyond New York the formation spans in a southerly direction through New Jersey, Delaware, and Maryland. It also crosses from the southwestern parts of New York into northern and western Pennsylvania and continues into western Ohio as well as occupying most of West Virginia and western portions of Virginia. A small portion of it can be found under Kentucky and Tennessee. In addition to these US States, the Marcellus formation also passes underneath Lake Erie and into Canada, occupying southern Ontario.
Geology
The Marcellus Shale formation first developed about 384 million years ago and is comprised of various types of black shale and limestone. Once the shale has been exposed to the surface the upper portions often split into tiny fragments. The Marcellus Shale erodes easily in areas where its surface meets water. However, a large majority of the shale sits nearly a mile below the surface.
The thickness of the formation itself varies considerably. In the thickest parts around New Jersey, the Marcellus Shale is about 890 feet thick. However, in the thinnest parts in Canada it is only about 40 feet thick. This thickness varies in this range throughout the formation.
In terms of its interest to the oil and gas industry the Marcellus Shale formation is important because it is a very rich source of natural gas. This natural gas is located throughout the East Coast region of the US…an area known for its high consumption that has typically relied on fuel being piped in from the western United States. As the Marcellus region continues to build its infrastructure and production increases – it will only rise in prominence.
Production Output
The production potential of the Marcellus Shale Formation initially was significantly underestimated. Projections as recently as 2002 had estimates that the shale contained about 1.9 trillion cubic feet of gas. While at first that sounds like a lot, in terms of the vast geographical coverage, each acre would probably not contain much.
In 2008 new information lead to a drastic correction in the earlier projections. The new estimate is now at 500 trillion cubic feet of natural gas! That is more than 250X as much as previously thought thus making the region much more valuable and profitable.
Extraction
The Marcellus Shale Formation presented drilling companies with some challenges in terms of extraction. The “joints” in the shale where the gas is located are vertical rather than horizontal. This means that by drilling straight down, many of the joints were missed. As such production rates for new wells tended to be fairly low, and even though they often had a very sustainable output, they tended to steadily decrease over time.
However, advances in drilling technology that was pioneered in the Barnett Shale of Texas was found to have applications for the Marcellus Shale Formation as well. These techniques involve horizontal drilling and hydraulic fracturing. The horizontal drilling means that more of the vertical joints are intersected. The initial flows of these wells are very promising and experts are optimistic about long-term production rates.
In the meantime a greater network of pipelines has also been under construction in the area which will improve the infrastructure. As these advances come together it is clear that the Marcellus Shale Formation will not only continue to be an important oil play, but will only increase in its prominence and profitability.
