“Until you start to test it, you don’t know where it’s going to be productive.”
He then gave an example of a hypothetical company drilling multiple test wells in an area, but finding only one very good well. The company would then frack the very good well, and publicize its productivity, which would help them to flip the rest of the lease.
“That’s basically the one you take to Wall Street.”
Northrup said that in both the Haynesvile Shale play, primarily located in Texas and Louisiana, as well as the Marcellus Shale play in Pennsylvania, production was consolidated into a few regions, and was not uniform throughout either play.
“They talk a lot about the gushers,” he said, speaking of the media. “They don’t talk about the dry holes.”
As for estimates for New York, he said that while projections had initially estimated over 400 trillion cubic feet of gas in the entire Marcellus shale formation, which covers New York, Pennsylvania, Ohio and West Virginia, the U.S. Geological Survey estimated in 2011 that the Marcellus shale contained 84 Tcf. Nonetheless, Northrup said that the DEC continues to use the higher number in estimating the amount of recoverable gas in New York’s shale.
He said, however, that, based off the area’s geology, as well as the regulations being proposed for drilling in New York State, 80% of New York’s shale gas reserves are not recoverable. With this in mind, he said that a realistic estimate of recoverable gas is 4.2 Tcf, based off the USGS data.
Northrup said that the Trenton-Black River Shale formation, which is located above the Marcellus and Utica Shale, has been tested extensively. These tests also gathered data on the Marcellus and Utica Shale and, according to Northrup, they show that, aside from some areas on the New York border, the Marcellus and Utica shale in upstate New York is not suitable for fracking.