This article originally provided by The Charleston Gazette
January 28, 2011
20,000 jobs?: Marcellus gas boom
Marcellus shale gas drilling created 7,600 direct and indirect West Virginia jobs in 2009, and presumably added up to 8,500 more in 2010, according to research by economists at West Virginia University. By 2015, the growth could range from 6,600 to 19,600 good-paying new jobs per year.
Altogether, counting the "multiplier effect" through other businesses, Marcellus drilling pumped $2.3 billion into the Mountain State's economy in 2009 -- including $14.5 million in tax revenue -- a new WVU report says. The Dominion energy firm will build a hundred-million-dollar plant near the Northern Panhandle to process Marcellus gas.
Clearly, a boom is occurring, mostly in northern hill regions. A legislative lawyer told two committees Thursday: "I don't think people really understand how significant this particular gas shale is going to be to the state."
Charleston lawyer David McMahon, who represents mountain landowners, assembled a slide show titled "The industrialization of rural West Virginia." The narration begins:
"A few years ago, Marcellus shale gas was unrecoverable, and West Virginia was a relative backwater in the oil and gas industry. New techniques of high-volume hydraulic fracturing and horizontal drilling have made a sea change in all of that. The Marcellus shale is now the second-largest field of gas -- in the world. It is twice the size of gas fields in Saudi Arabia. Major oil companies like Exxon are buying up gas resources here. Conventional shallow wells that cost $300,000 to drill have given way to six to eight horizontal wells drilled from one well site. And each horizontal well costs $3 million or more to drill."
McMahon fears that the drilling upsurge will hurt rural life, wrecking country roads, tainting water supplies and causing other industrial harm.
A couple of upstate delegates commented that many gasfield workers are pouring in -- but they're mostly from out of state. Delegate Mike Manypenny, D-Taylor, said West Virginia must welcome the boom, but "we just want to make sure it's done responsibly." Delegate Bill Hamilton, R-Upshur, added: "We can't operate like it's 1930 or 1950."
The Marcellus shale -- created 300 million years ago as rotting vegetation was buried by overriding strata -- is a mile-deep porous rock layer stretching from southern Appalachia to southern New York. Geologists estimate that it holds 500 trillion cubic feet of natural gas.
It wasn't feasible to tap this energy wealth until remarkable drilling techniques were developed. The unconventional wells go straight down for a mile, then branch off horizontally in several directions. A water-chemical mix under high pressure is pumped in to "frack" (fracture) the strata and let gas escape. A single well can drain gas from a wide area of 600 acres.
During a conference in Charleston this month, drilling executives said a horizontal well costs eight times more than an old-style well, but can produce 40 times more gas. Chesapeake Energy CEO Aubrey McClendon said his firm has invested $600 million in West Virginia since 2008, plus $200 million payments to landowners. He estimated that Chesapeake eventually could pour $37 billion into this state.
Just one Marcellus shale drilling permit was issued in West Virginia in 2002. In 2008, the number jumped beyond 800. A boom is rolling.
Damage that accompanies rapid industrialization must be minimized. The Legislature is pondering a bill to impose strict controls and large fees on the soaring industry. Good idea. We hope acting governor Tomblin and legislative leaders back it.
West Virginia is reaping a bonanza from this new energy opportunity. Wise supervision can minimize unwanted side effects.