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Marcellus Shale gas boom expected to slow in 2013

Published on NewsOK Modified: February 15, 2013 at 1:54 am •  Published: February 15, 2013
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The official 2012 production figures for Pennsylvania and West Virginia haven't yet been released by those states, but Bentek figures are considered very reliable by government and industry sources.

Wall Street analyst Manuj Nikhanj, the head of energy research for ITG Investments, agreed with Klaber's assessments.

"I do think we're going to see growth in 2013, but the rate of growth will slow," Nikhanj said. But he added that drillers are getting "better and better" at improving the output for each well.

In 2011 and 2012, there was a highly publicized debate over the potential of the Marcellus Shale, with some claiming that the industry had exaggerated the reserves. But actual production figures have mostly put that debate to rest. When serious well drilling started in Pennsylvania in 2008, output barely registered on a national level. Now, it's grown to be the nation's most productive gas field.

Now, Klaber and Nikhanj said the bigger questions are over how fast pipelines and new markets for Marcellus gas can expand.

Since the price of natural gas has been relatively low, many companies operating in the Marcellus began to drill wells but have delayed putting them into production for now, Klaber said. "There's a staggering number of wells waiting to go online," she said.

Nikhanj estimated that 700 wells have been drilled but not hooked into production and thousands of wells have been issued permits but haven't begun drilling.