2014 was a very interesting year for the Marcellus Shale business in Pennsylvania and throughout the Northeast.
The year started with continuing depressed natural gas prices. As a result of the low prices, drilling for new wells decreased substantially. Companies, such as Chesapeake, saw a lot of change. Reduction in leaseholds and shake up of company personnel were commonplace as companies sought to balance their books in a challenging environment.
Notwithstanding the slow down in new well drilling, production and fracking remained steady. Many wells, including several in Wyoming and Susquehanna Counties produced natural gas at record levels.
Along with the continued and surprising production rates came numerous plans for construction of natural gas pipelines throughout the Commonwealth. By years’ end, over six (6) billion dollars in proposed and ongoing pipeline construction projects were “on the books”.
The severance tax debate heated up and became a central issue in the race for Pennsylvania Governor. Newly elected Governor Tom Wolfe supports a reasonable severance tax. Defeated incumbent Tom Corbett always opposed a severance tax. In losing Governor Corbett the natural gas industry lost an ardent supporter.
The Pennsylvania Supreme Court weighed in and found that local communities and their zoning regulations and boards trumped any statewide efforts to govern where natural gas wells can be located.
As the year continued oil prices worldwide collapsed. The dramatic fall in prices has significantly affected most major energy companies. As a result, there is a lot of uncertainty in how much money will be available for continued shale gas harvesting and exploration. 2015 may be a very challenging year in energy unless oil prices stabilize.
New York State decided to ban fracking altogether. Governor Cuomo made his decision toward the end of the year. Natural gas drillers are still weighing their options. Landowners, many of whom has leases, are upset and at this point their leases seem worthless.
Natural gas powered plants are springing up throughout Pennsylvania as more coal powered plants close. A new electric plant is currently under construction in Asylum, Bradford County.
Finally as the year ended the Utica shale play was in the news. A well in Washington County Pennsylvania has become the largest producer of Utica natural gas in the country. Expect to hear much more about the Utica Shale play as 2015 progresses.
