The Register-Herald, Beckley, West Virginia

Balancing Act

February 23, 2011

The history of natural gas in West Virginia

BECKLEY — New development of the Marcellus shale has again brought the natural gas industry to the attention of West Virginians, but natural gas has a long history in the state.

Many believe American Indians in present-day West Virginia were aware of and perhaps even utilized natural gas vents, typically found at the mouths of springs. According to adapted material from the West Virginia Geological and Economic Survey, a “burning spring” located along the Kanawha River was visited by George Washington in 1775.

Founding fathers Thomas Jefferson and George Washington both observed natural gas vents in what is now the Mountain State. Washington even attempted to have a square mile of land in the Kanawha Valley set aside for a public exhibit of natural gas vents.

Natural gas, like the West Virginia oil industry, was birthed from the salt industry. Prior to discovering the practical applications of oil and gas as a fuel source, salt miners would often discard it into the Kanawha River, earning the river the nickname “Old Greasy.”

The Burning Springs oil field, first tapped around 1859, was one of two oil fields in America prior to the Civil War. By 1876, there 292 wells in West Virginia.  The new-found wealth played a large role in West Virginia’s journey toward secession from Virginia.

The initial oil booms played a big role in wealth distribution and shaping the future of the state, down to statehood itself.

“With oil selling for $30 a barrel in 1860 and natural gushers being drilled at only 100 feet, the West Virginia oil field quickly made local millionaires,” reads the website of the Oil and Gas Museum in Parkersburg. “The wealth of the first oil barons was used politically in bringing about statehood for West Virginia during the Civil War. Many of the founders and early politicians were oil men — governor, senator and congressman — who had made their fortunes at Burning Springs in 1860-1861.”

From 1906 to 1917, West Virginia led the nation in natural gas production. However, from 1917 to 1934 production declined significantly and then increased until about 1970.

“You always discover the easy stuff first,” said Michael Hohn, state geologist and director of the U.S. Geological Survey. “The less expensive to extract, because it will be shallower. The first wells were pretty shallow, like in the Burning Springs area.”

Technology to drill deeper wells, such as the Marcellus shale, did not exist in the early days of the West Virginia Oil and Gas industry.

“Over time, as pressure decreased in the reservoir and most of the gas or oil was extracted, drillers would go deeper,” Hohn said. “So, the history has been going deeper and deeper, but of course it gets more expensive the deeper you go.”

While there has certainly been a shift in the market since, in 1921, West Virginia commanded approximately 65 percent of interstate natural gas transportation, while only 2 percent of interstate gas originated in Texas, according to Christopher Castaneda, a history professor at California State University - Sacramento.

“The discovery of southwestern gas fields occurred as Appalachian gas reserves and production began to diminish,” Castaneda wrote. “The southwestern gas fields quickly overshadowed those of the historically important Appalachian area.”

The discovery of the Marcellus shale, coupled with new techniques for reaching the gas, including horizontal drilling and hydraulic fracturing, could potentially launch West Virginia and other Marcellus shale states back into the gas game. In addition to its abundance, Marcellus shale gas has a proximity advantage to other natural gas producers.

Distance, and therefore costs associated with transport, to high-population centers such as New York, New Jersey, Virginia and other East Coast population centers, are expected to increase Marcellus shale drillers competitiveness in the marketplace.

“What’s happened with the Marcellus shale is that the market is there to buy it, or is expected to be there, and the technology has been developed enough to make it economic,” Hohn said. “When you have something like gas, or oil or coal underground, you might have a lot of it, you might have a resource, but until it is economic to develop, it is not a reserve yet.”

The ebb and flow of the industry may continue beyond that. Some speculators already have their eye  on the Utica shale, a much broader, thicker formation that has potential to hold gas under the Marcellus shale. However, it is much deeper.

Now, Hohn said, he expects to see some of the other shallower shales be developed once the industry moves into the region. Other, smaller shales in West Virginia, Hohn said, have been overshadowed by the news surrounding the Marcellus play.

“I think what we will see is that as more Marcellus is drilled and the technology for horizontal wells and fracturing increases, then you will see companies applying the same technology to some of our other shallower, organic shales,” Hohn said. “It won’t be quite as exciting, maybe, but there will be more gas that comes out of those shallower units.”

— E-mail: tkuykendall@register-herald.com

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