Cumberland Times-News

January 22, 2013

MDE: All drilling permits have been withdrawn

Gas prospects in Md. looking unfavorable

Matthew Bieniek
Cumberland Times-News

— CUMBERLAND — The prognosis for natural gas drilling via fracking in Western Maryland’s Marcellus Shale formations any time soon is looking increasingly problematic, according to a recent presentation by the Maryland Department of the Environment.

All gas drilling permit requests for Maryland have been withdrawn and drilling activity shifted away from dry gas states like Maryland, which are not as lucrative as drilling in states with wet gas, which contains other saleable compounds, according to the MDE.

The economics of natural gas are also cutting into the the possibilities of production in Maryland. The growing abundance of natural gas is driving prices down and discouraging new drilling, according to the report.

The first drilling permit application was filed in 2009; four companies filed for drilling and some of those companies asked for multiple wells, the MDE said.

The applications were “deemed incomplete” and more information was requested, MDE officials said.

Those companies have withdrawn their applications.

In the meantime, the economics of drilling have changed. Pipelines aren’t yet built to carry gas from existing wells. Some regions of the Marcellus and Utica shale regions produce liquids and oil as well as natural gas, making those sites more valuable.

The price of natural gas dropped significantly between 2007 and 2009, with some stabilization since then, according to the U.S. Energy Information Administration.

Gas prices were around $8,000 per thousand cubic feet in 2008 and dropped to between $4,000 to 6,000 per thousand cubic feet in 2011.

And there’s political opposition to the fracking process, essential to getting the gas out of shale formations.

A state moratorium bill, to be introduced by Delegate Heather Mizeur in the House of Delegates and others in the Senate, would prevent fracking from occurring in Maryland until the state completes the series of 14 studies laid out in Gov. Martin O’Malley’s executive order on gas drilling, which also established the commission.

Marcellus Shale formations throughout the eastern U.S. harbor large untapped natural gas resources. The shale formations in Maryland are located only in Garrett and Allegany counties.

In order to get the gas trapped in the shale to the surface, chemicals, water and sand are pumped underground to break apart rock formations and free the gas. The process is called hydraulic fracturing, or “fracking.”

The presentation was made to the Environmental Matters Committee of the Marcellus Shale Safe Drilling Initiative Advisory Commission on Jan. 17 by Robert Summers, secretary of the department.

Contact Matthew Bieniek at mbieniek@times-news.com.