Marcellus Shale Pumps Local Economy and Attracts another Oil Company

Checks for over $100,000 went out to hundreds of landowners from around northern Pennsylvania in lease-signing deals costing $5000 to $6000 per acre. Because oil gas companies have the technology to economically tap into the shale wells, they can pursue leasing deals with landowners. Furthermore, Pennsylvania Gov. Ed Rendell and legislative leaders expect to see over $60 million in a deal that leases state forest lands in Marcellus Shale oilfield.

Another large company plans to invest up to $4 billion in Marcellus Shale in Houston-based Anadarko Petroleum Corp.'s assets. Mitsui and Co., the Japanese corporation behind the deal, believes the venture can lead to producing around 400 million cubic feet of natural gas daily.

The two companies have partnered in the past in Mozambique and Indonesia. Mitsui owns businesses in a variety of industries including power plants, freight and textiles. Anadarko, who holds the largest lease in the state’s forests, is working on over 700,000 acres of land in Marcellus Shale with plans to drill 4,500 wells in the years ahead. Currently, Marcellus Shale has 1,100 drilled wells with half in production.

Everything isn't A-OK, however. Due to three chemical spills, the state Department of Environmental Protection put a stop to the use of a well-prep process that is required to extract the natural gas development. Moreover, the deal with Pennsylvania state forest lands doesn't include a severance tax, something other states and citizens believe should be in force.

The Marcellus Shale oilfield is just getting started. Despite being around for centuries, the technology to tap into the shale only came to fruition in the past decade with the first Marcellus Shale well producing in 2005. Marcellus Shale expects to run for 30 years or more.