Driller: Ohio, Marshall Counties More Valuable

Wheeling WV  Intelligencer
31 March 2011
By Casey Junkins, Staff Writer

WHEELING - Due to the presence of ethane, propane and butane, the Marcellus Shale underlying Ohio and Marshall counties is more valuable than in other areas.

"The 'wet' gas has a significant premium over the 'dry' gas," said Michael McCown, vice president of Gastar Exploration. "The current price of gas is about $4 per mcf (1,000 cubic feet), but with the 'wet' gas, it is worth about $7 per mcf."

McCown - along with Charlie Burd, executive director of the West Virginia Independent Oil and Gas Association, and Susan Lavenski, managing partner of the Charles Ryan Associates public relations firm - stopped in Wheeling Wednesday as part of a statewide tour to tout the virtues of natural gas drilling.

"Wet" gas refers to the gas found under Marshall and Ohio counties that is loaded with the valuable ethane, propane, butane and pentanes, in addition to methane. This is different from the "dry" natural gas found in other areas that consists primarily of methane. Also, mcf is an industry term referring to 1,000 cubic feet of natural gas.

McCown's company recently inked a deal with PPG Industries to drill 30 wells on roughly 3,300 acres of PPG property near its Natrium chemical site in Marshall County, with construction and drilling set to begin in the fall.

PPG plans to collect about $50 million from the deal.

Because the gas is wet, it must be processed at centers such as the Caiman Energy plant in Marshall County or the planned Dominion Transmission plant near PPG. The ethane can then undergo further processing at Bayer Corp.'s proposed "cracker" plant to form plastics.

With all of this potential work in mind, McCown and Burd said there will be about 7,000 new jobs created in West Virginia from the Marcellus Shale development over the next few years, with each new worker collecting an annual average of $42,857. Though some express concern that many of these jobs will be going to people from Texas, Oklahoma or Louisiana, McCown said this is not as big a problem as some believe.

"The service and gas companies are out there aggressively trying to hire people," he said, acknowledging that West Virginia Northern Community College officials recently announced plans to offer training for natural gas work force development.

"I am not concerned about out-of-state workers coming in," McCown continued. "Maybe some of those out-of-state workers will become in-state workers."

McCown, Burd and Lavenski also said the natural gas industry made $771 million worth of capital investments in West Virginia last year. McCown said these investments show drillers are in the Mountain State for the long term.

"Wells being drilled today could be productive for 40-50 years. ... The hydrocarbons are in the ground," he said.

During the recent session of the state Legislature, members did not pass drilling regulations that would have increased the fee to drill horizontal wells from $650 each to $5,000 each. Burd and McCown said they were not so much concerned about the increase in fees as they were about the spacing requirements the bill would have placed on drillers. These would have prevented gas drilling from within 1,000 feet of a dwelling or a water source without permission from the surface owner.

"They also wanted to stop drilling from within 2,500 feet of a 'water course,'" said McCown regarding a term that could be anything from a river to a trickle. "That would have shut down our industry."

The industry leaders agree with West Virginia Department of Environmental Protection officials in that horizontal wells are much larger construction projects than are the conventional vertical wells. This work includes building roads, drilling wells, adding tubing and cement to the wells and large water withdrawals for fracking.

Though he knows heavy fracking and drilling trucks do a lot of damage to rural roads, McCown said industry leaders have agreed to pay for some of the road damage via bonds that are set up with the West Virginia Division of Highways.

However, over the past nine months, local residents have seen natural gas explosions, fires, spills, traffic accidents, allegedly unauthorized earthmoving and alleged drinking water contamination as a result of the drilling.

"Our industry is safe," McCown insisted. "I take accidents very seriously. We must keep our people and our environment safe."

"We understand there is a disturbance to the area, but the benefit is of a much greater value," he added of the drilling.