Pennsylvania Rig Count from 1987 to 2011. Adapted from Baker Hughes.
There is little doubt that unconventional shale plays have gained a lot of interest in the last few years. While the Keystone State boasts the historical Drake well, generally considered the first successful oil well drilled, the state’s oil industry has remained flat for decades. Since Terry Engelder’s estimate of reserves in the Marcellus in early 2008 Pennsylvania has seen significant interest from the industry. Earlier today the U.S. Geological Survey (USGS) increased their technically recoverable Marcellus reserve estimate by an astonishing 4,100% from 2 trillion cubic feet (TCF) to 84 TCF of natural gas.
Although the USGS’s reserve increase seems unbelievable, it is only a function of an outdated and conservative estimate. As the USGS reports in the press release, “technological developments in producing unconventional resources have been significant in the last decade.” They are noting that longer horizontal wellbores and improvement in completions have increased the recovery potential in tight shales. As technology continues to improve and geological information in the play becomes more abundant, future reassessments may occur. After all, Engelder and Gary Lash conservatively estimated 168 TCF of technically recoverable natural gas.
Top 5 States by Rig Count. Adapted from Baker Hughes. *All rig counts are onshore activity only.
Pennsylvania is not the only state benefiting from shale plays. Despite the Great Recession, shale plays are growing and showing economic resilience. Since 2008 Louisiana, North Dakota and Pennsylvania have had a steady increase in drilling activity. Each of these states hold significant shale plays. By 2009 these three shale states rose into the top 5 most active by rig count.
Despite the recent rig count growth, economic factors will continue to influence growth in the industry. If the historical rig count data is any indication of the future, shale plays will continue to show strong growth for years to come, double dip or otherwise.