Fracking is key to expansion of Pa. manufacturing

By John J. Interval

It is hard for a petroleum geologist like me to find good news in the drastic cuts in shale-gas drilling or the calls by some politicians for a moratorium on fracking, but there is at least one silver lining:

Producers in the Marcellus have become much more efficient, using innovative technologies and better knowledge of the shale formation to complete a well in less than half the time it took a decade ago.

Producers are able to drill as many as a dozen horizontal wells from a single location, saving the amount of time, money, and energy spent dismantling and moving equipment to new locations.

According to the latest data released by the U.S. Energy Information Administration, production is up per rig in Marcellus by 10,292 million cubic feet of natural gas per day since 2007. Rapid advances in technology have made the difference, enabling natural-gas production to remain steady, despite a sharp decline in the number of rigs from 140 in 2012 to 30 today.

Vast supplies of natural gas continue to be extracted by a combination of hydraulic fracturing and horizontal drilling, producing a larger share of America's primary fuel source - electricity - while improving air quality and reducing carbon emissions.

Moreover, natural-gas development is now recognized as the engine for economic growth in Pennsylvania - something that would hardly have been considered the last time we were electing a new president.

Thanks to an abundance of cheap gas, we are seeing a resurgence in manufacturing, with the result that fewer dollars are going overseas and more of them are staying at home in Pennsylvania and adjoining states where shale gas is being produced. Now, with the new energy reality, some companies that had relocated overseas are migrating back, bringing millions of dollars in new investment with them - and thousands of jobs.

The economic outlook would not be as bright as it is today were it not for investment in advanced technology such as high-speed supercomputers that statistically analyze massive amounts of data in the search for "sweet spots" in the Marcellus shale.

Hydraulic fracturing is being driven by an extraordinary and daunting growth in data of all kinds. Big data, combined with smart people and smart software, is proving to be very effective in monitoring fracking operations more closely, so they are safe and the impact on the environment is minimal.

Gov. Wolf is upping the pressure on natural-gas producers with his proposed 6.5 percent tax on Marcellus production, which he estimates will bring in $217.8 million for fiscal year 2016/2017. However, with the slump in drilling, this is no time to clamp a severance tax on gas companies.

Such a tax would drive up production costs, destroy jobs, diminish revenues, and harm businesses and consumers. In today's low-price environment, the tax would further erode the earnings of an industry going through its greatest financial crisis in 25 years.

It would make more economic and political sense to develop the Marcellus and invest in new innovative technologies that can be used for the production of natural gas.

Nothing looms larger now than the changing energy picture from fracking in facilitating further growth in manufacturing - and the creation of a lot of new jobs - while doing it in an environmentally sound way.

John J. Interval is a professional petroleum geologist from Bridgeville. jinterval@verizon.net