May 3, 2010
By Chad Eric Watt
Even if you never saw a drilling rig or a pipeline under construction two years ago, you could still see evidence of the Barnett Shale boom from any Fort Worth highway.
“If you don’t have a gas well, get one,” read one Interstate 30 billboard. Others featured actor and Texan Tommy Lee Jones extolling the benefits of drilling for natural gas in the Barnett Shale on behalf of Chesapeake Energy Inc.
But then came recession. In 2009, Americans consumed less energy than they did the year before. That sent energy prices spiraling downward. The vigorous activity that had dominated Fort Worth and parts west for the better part of the last decade petered out.
Even when economic growth comes back, energy economists say the boom won’t be back — it’s moved on to Pennsylvania. The big gas companies that dominated the Barnett Shale are now focusing on the Marcellus Shale, a larger and more promising formation underneath Pennsylvania, West Virginia and western New York state. . .
Natural gas prices are projected to stay in the $4 to $5 range for the next year or two, putting a damper on more expensive projects, said Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University. “At $4, no matter where you go, the economics are pretty dicey,” he said.
Beyond price, timing is inducing some drillers to explore the Marcellus while sitting tight in the Barnett. After signing a lease for mineral rights, drillers have a set amount of time — often three to five years — to use it, or lose it.
“You’ve got a lot of companies that leased all this acreage, and essentially they’ve got three years to drill it or they’ve got to give it up,” Bullock said. “They’re poking holes in the ground even if it doesn’t make economic sense.”
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