The Marcellus Shale Revolution’s Impact on America

Edward Camp, II
ShaleNavigator Team Lead at Geospatial Corporation

In 2006, the Marcellus Shale formation was just entering the conversations of non-oil and gas industry men and women across the U.S. Fast-forward to 2014, and each of us has seen the massive growth and demand of one of the nation’s most promising natural gas resources and the oil and gas industry as a whole. Shale has not only had a footprint on natural gas production, but also on the economy and society.

Unprecedented attention on the Marcellus shale layer didn’t start until early 2008 when geologists announced it would produce huge gas reserves if it were drilled in a particular way (hydraulic fracturing). The gas that was extracted from the Appalachian Basin was transported through pipelines then to terminals and large cities in the Northeast. This trend is gaining further traction as new pipeline infrastructure is closing the supply/demand gap.

As the extraction process was refined, Americans have seen a spike in job growth as a result. A study commissioned by the Oil and Natural Gas Industry Labor-Management Committee looked at construction employment in the Marcellus Shale related oil and gas industry from 2008-2014. They found that shale development in Pennsylvania, Maryland, West Virginia and Ohio “has been a strong engine of job growth” in the local construction industries.

According to the report, in 2013 over 4,600 construction jobs were created in eight trades. Construction and maintenance spending reached $5 billion in 2013, a 61 percent increase from the previous year. Today, the industry continues to grow at a rapid pace. Just this past year, $6.5 billion has been spent.

The oil and gas industry now supports 9.8 million U.S. jobs, 8 percent of the nation’s economy. Oil and gas industry workers are making more than they ever have before – earning about seven times the federal minimum wage. From 2008-2014, a whopping 35.8 million labor hours came from major plant capital and maintenance work in the oil and gas and related supporting industries.

Marcellus shale development has also impacted communities and businesses, subsequently changing landscapes with the addition of drilling rigs and workers. From 2007 until 2011, approximately 2,400 wells were drilled to extract gas from the Marcellus shale in Pennsylvania alone, with that number increasing each year. Today’s well count stands at over 8,000.

U.S. shale gas’ low cost has benefitted a multitude of manufacturing industries. One example is the fertilizer industry, specifically nitrogen fertilizer. Natural gas is a key element in the Haber process, which creates ammonia to be used in making fertilizer. The process captures nitrogen from the air to create ammonia. Two companies have jumped on the natural gas opportunity: CF Industries and Norway’s Yara International ASA. Together they are working on a $27 billion deal that would create the world’s largest producer of nitrogen fertilizer planned for a Texas location.

The development of Marcellus shale has created economic gains for those who lease their mineral rights for drilling as well. Landowners receive leasing and royalty dollars from gas companies in exchange for drilling access. The landowners estimated share of royalty value per well is around $2.5 million and is paid out over the lifetime of that well. This means that Pennsylvania landowners could receive an estimated $200 billion over the shale’s lifespan.

Geologists say the Marcellus shale still has 30 to 50 years of production potential remaining. America’s shale energy revolution isn’t stopping anytime soon, and we can look ahead to the future using ShaleNavigator . The online mapping and reporting application allows you to stay up to date on critical information relating to the leasing and development of shale plays in the United States. It’s perfect for anyone who wants to learn more about leasing and permitting options in their area. Landowners, financial planners and a variety of shale providers use ShaleNavigator to find the most current information of this fast-growing industry.

Head on over to ShaleNavigator to sign up for a free 7-day account now! Our application is interactive, so you can create, draw and save maps with layers upon layers of continuously updated permits and pipelines.