NORWICH – The outlook for drilling hundreds of wells and producing large quantities of natural gas from the Marcellus Shale in Chenango County is very good, but the industry is about 10 to 15 years out, said a Colgate University geology professor this week.
Whitnall Professor of Geology Bruce W. Selleck, who conducted a 45-minute presentation Tuesday for the Chenango County Natural Gas Committee, said the subsurface here – particularly in the southeast quadrant of the county – clearly shows significant potential for Marcellus development. But except for one vertical well drilled on a hilltop in Oxford, exploration in the formation is in the infancy stage. With low prices for the commodity in the marketplace and the state’s regulatory situation still undetermined, there’s no reason for companies to come in, he said.
Norse Energy of Norway has been drilling and producing natural gas primarily from the Herkimer shale in the northern part of Chenango County, where they have a pipeline. The company does, however, have hundreds of acres leased for a pipeline it plans to build going south to the Millennium and for more wells.
“It is very likely that there will be Marcellus development in the Southern half of Chenango County once the regs are finished. I will be very surprised it we don’t see other companies coming in and doing what Norse is doing,” the geologist said.
Governor David Paterson effectively stopped all horizontal drilling of shale in New York last fall until the state’s environmental quality review regulations could be updated. Landowners and oil and gas companies hoping to make a profit and municipal economic developers hoping to create jobs have been painstakingly waiting. Just last weekend at a rally in Bainbridge, Senator Tom Libous and Assemblyman Clifford Crouch said they were told to expect the New York State Department of Environmental Conservation to give the go ahead by the end of September.
But Selleck doesn’t expect the DEC to pull through until January or February of 2010. After that, he warned companies and landowners who have leased their mineral rights to expect lengthy legal challenges from the Delaware River Basin Commission and from downtstate officials who fear New York City’s reserviors will become contaminated with formation water and fracking fluids.
“The DRBC will most likely file a lawsuit in federal court regarding water management and safety, further delaying the commencement of large scale drilling in New York until at least 2011,” he said.

Environmental issues
Burning natural gas is much greener for the environmental than burning other fossil fuels, and Selleck said many environmentalists’ concerns “are overblown.”
Nevertheless, he said he wished the DEC had better oversight for casing wells as they are drilled in order to isolate anything from the surface acquirer system. There are dissolved metals in formation water, or brine that’s extracted from drilling, but the concentrations are too low to determine the exact content and testing for them wouldn’t be cost-effective, he said.
“The oil and gas companies know this, and as the technology for horizontal drilling and hydrofraking develops, we are going to see more recycling of water, closed loop drilling and water treatment at the well site,” he said.
Selleck said he expects the U.S. Environmental Protection Agency to play a larger role in water quality monitoring going forward.
“Frankly, I’d rather see brine injected right back into the ground where it came from rather than bring it up, transport it and have it end up in our rivers. Doing brine injection is not a problem if done properly. Trucking it around is asking for trouble,” he said.
Overall, Selleck said the DEC needs 10 times the number of staff to be able to manage the amount of drilling anticipated in the state. Instead of imposing a severance tax on companies’ production, he called for more adequate permitting fees paid to the DEC’s Division of Mineral Resources and more municipal laws to protect roads.

Spacing units
Spacing issues, or what Chenango County Farm Bureau President Bradd Vickers calls “subsurface trespassing issues,” will change the framework of well unitization going forward, Selleck said.
Horizontally drilled wells are only cased with cement on the way down vertically, before they turn and fracture the shale to release the fissures of gas. The typical spacing unit into the Herkimer in Chenango County is between 77 and 90 acres. Members of the gas committee have repeatedly questioned how far gas can travel and whether it could flow from a neighboring property not contained within the unit.
“It’s difficult to discern the footprint of (a formation’s gas) from other gases,” said Professor Selleck. “The regulating agencies know zero about what’s in the spacing unit, only what the companies tell them.”
Chenango County Planner Rena Doing said the county had not received satisfactory answers to questions regarding a well outside of a spacing unit and wells at the edge of spacing units. “It’s never really explained,” she said.
“A lot of people don’t understand they can benefit, and a lot of them don’t want to be integrated but they have no choice. They think the only way they can benefit from a well is from having one on their property. Actually, with a well on the edge of a neighbor’s property, a person could benefit if they have more property in the spacing unit. ... This can become an issue between neighbors and it’s not their fault. It’s how the gas company draws the spacing unit,” she said.
“Subsurface trespassing can and has happened,” said Vickers. “Despite spacing regulations that were designed, in part, to prevent multiple holes in the ground, that’s what’s going to happen as people make sure they have their own well, too. It defeats the purpose of the spacing units.”
Selleck said there are tremendous advantages for the oil and gas industry to set their sights on drilling in the Southern Tier, most of which don’t exist in Texas and other Gulf Coast states where drilling is commonplace. New York is strategically located near abundant water resources needed for drilling and huge populations centers living in cold weather climates that depend upon fuel for heat.
Companies can also sell the gas they produce closer to the actual marketplace here, alleviating transportation accidents and costs. Most of the region’s gas currently comes from the U.S. Gulf Coast states and Canada.
Selleck has been consulting with and assisting the Town of Lebanon on natural gas development since 2004. He is a member of the town’s board, has consulted with the Madison County Public Health Department and made presentations to regional environmental health directors.