Appalachian Basin

Friends of New York Times See Natural Gas Rig “Forest” but Miss the Truth

In his “Dot Earth” blog for The New York Times, writer Andrew Revkin recently wrote (8/31/12) that a  frequent talking point for natural gas foes is “the prospect of gas companies poised to deploy a forest of rigs to drill 50,000 wells.”  A forest of rigs would indeed be a frightening prospect, but it’s really nowhere on the horizon – not now, nor ever.

At last report (8/31/12), the drill rig count for the entire United States — rigs currently in use, that is — was 1,894, and half those rigs were gainfully employed in Texas.  The remainder was divided among 28 other states.  Incidentally, 1,421 of the rigs were being used to develop oil, and only 473, or 25 percent of the total, were being used to develop gas.

How many rigs might really be deployed in New York?   For a “worst case” scenario we can turn to the Bakken formation, which underlies about 200,000 square miles, mostly in North Dakota.  The Bakken is the scene of the biggest oil boom in the Lower 48 and yet the state’s industrial commission reported that just 210 rigs were operating in North Dakota in early July 2012, and state regulators suggest they’re not expecting the rig count to climb significantly.

One rig “tree” in place for but a few weeks doesn’t create anything but an interesting sight.

The Bakken Shale produces oil, not natural gas and, given current market prices, oil is endlessly more attractive to gas companies than the so-called dry gas produced by the Marcellus Shale in northeastern Pennsylvania and neighboring New York State.  And, yet only 200 or so rigs were active in the Bakken Shale.

There’s no doubt that the Marcellus Shale has produced prodigious quantities of natural gas in a narrow strip of land just south of the New York-Pennsylvania line — in northern Sullivan, Bradford and Susquehanna Counties.  But, geologists opine that the Marcellus in New York State will not produce at anything like that level.  Gas wells in the Southern Tier of New York are expected to be good producers, but nothing spectacular.

Natural Gas Well Pad

Natural gas well pad in Lycoming County, Pennsylvania (following development and removal of rig)

And rigs don’t come cheap, incidentally: A rig of sufficient size and power to drill a well in the Marcellus Shale will cost somewhere between $5 million and $10 million new and between $1 million and $5 million used.  You just don’t go out and buy one of these every day.

So when and if development begins in the Marcellus play in New York State, maybe we’ll see a hundred rigs operating in the state one day — a very generous guess, really.  Now, let’s assume that development will be limited to Broome, Chemung, Chenango, Steuben and Tioga Counties, as Gov. Cuomo has hinted. Together, those counties cover 3,952 square miles. E ven if you crowded 100 rigs into that limited area, you’d be averaging just one rig per 39.5 square miles.

That’s still nowhere near a “forest.”


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