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Marcellus Shale Could Have Major Impact

Published: Thursday, March 25, 2010

Updated: Thursday, March 25, 2010 15:03

Shale

USGS / PD

Marcellus Shale covers about 54,000 square miles, shaded in gray, an area which stretches from upstate New York, spreading across Pennsylvania into Ohio and continuing through West Virginia. It is believed to hold trillions of cubic feet of natural gas.

BC3 is proactive in the development and education of Marcellus Shale gas in and around the Butler County community.

Marcellus Shale covers about 54,000 square miles, an area which stretches from upstate New York, spreading across Pennsylvania into Ohio and continuing through West Virginia. The shale formation is at a depth of 5,000 to 8,000 feet and is believed to hold trillions of cubic feet of natural gas.

BC3 has been approached by local gas companies for leasing purposes of the main campus' 323 acres of land.

"We have made no commitment whatsoever," said William O'Brien BC3 Vice President for Continuing Education and Off-Campus Sites. "Basically when [Gas Companies] knock on your door you listen, and that's where we're at the listening phase."

"Whatever the opportunity, the College does a sound job of analyzing. This case is no different. We will do our homework and talk to the appropriate stakeholders before making any decision," said Dr. Nicholas Neupauer, BC3 president.

BC3's goal is to educate local Pennsylvanians to be able to mine, operate and maintain any Marcellus Shale plants or pipelines that are in Pa. According to O'Brien there will be 5,000 to 13,000 new jobs available in Shale around Pa. in the near future.

Most of the jobs being created in Pa. now are outsourced to other workers from states like Texas, because of their knowledge and on the job training.

BC3 held a meeting April 22 to inform local landowners about leasing their land. On April 26, the College also held a meeting with local gas companies April 26 to help the College create a curriculum for Marcellus Shale drilling.

Rex Energy Corporation and Stonehenge Energy Resources, L.P. recently created a midstream joint venture called the Keystone Midstream.

Midstream companies are responsible for the gas after it has been drilled. These companies process, store, and transport the gas to the retailer.

"Forming the Keystone Midstream joint venture significantly reduces Rex Energy's capital investment in necessary infrastructure in Butler County and leverages the extensive midstream experience of the Stonehenge management team," said Benjamin Hulburt, Rex Energy's President and CEO.

Keystone Midstream will initially invest up to $25 million to build a high pressure gathering system and cryogenic gas processing plant in Butler County. This plant will be located with the existing refrigeration plant in Forward Township, near the Connoquenessing border.

A cryogenic gas processing plant cools the gas to sub-zero temperatures to remove any condensable liquids from the natural gas. These liquids are called Natural Gas Liquids (NLG's) and include ethane, propane, and butane. The NGLs are moved to markets and used for fuels in petrochemical plants and refineries. The remaining gas mainly consists of methane and it is transported by pipeline to markets as fuel for heating, cooking, and generating electricity.

Butler County gas has a BTU level of 1250, which means there are more NGL's. The Cryogenic Plant will take more of the NGL's out of the natural gas than the refrigeration plant. This will make Butler's gas supply more usable in household terms. Normal BTU for natural gas is 1100.

Marcellus Shale is becoming easier to obtain with a horizontal technology that has been used in Texas for the past 20 to 30 years. Rex Energy has drilled two horizontal wells in Butler County in 2010. One reaches about 3,700ft from the vertical well.

Rex Energy plans to drill eight more horizontal wells in Butler County this year. In 2009 Rex Energy drilled its first horizontal well and had four vertical wells drilled in 2008.

"We think Butler County is going to be our best opportunity for retrieving the most natural gas in Pennsylvania," said Julia Williams, Manager of Investor Relations at Rex Energy.

In the process of Horizontal Drilling water is used to fracture the shale and to carry the gas out of the well. This process has gained attention by the Department of Environmental Protection (DEP).

"There are strict laws in place to help ensure that drilling is done safely," said Tom Rathbun, DEP spokesman. Ratbun also stated companies must comply with the DEP to ensure that any drinking water supply is protected, and that the large temporary ponds which hold water for "fracing" purposes are built according to regulations.

Governor Ed Rendell told DEP to hire 68 additional personnel. They will be funded entirely from money generated by new, higher permitting fees instituted in 2009. There is also talk of an extraction tax that Governor Rendell is lobbying for.

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