Estimates lowered on N.C.'s natural gas supply

jmurawski@newsobserver.comMay 22, 2012 

Fracking was originally billed as the golden key to unlocking a 40-year supply of natural gas and reversing North Carolina’s dependency on other states for energy. Proponents said it was the state’s ticket to an economic revival and newfound status as an energy supplier.

Now with the state legislature poised to pass laws allowing fracking, estimates for North Carolina’s natural gas supplies are more modest: closer to an amount that’s equivalent to about five years of the state’s natural gas use.

“There were wildly optimistic early predictions, I’ll say it that way,” said assistant state geologist Kenneth Taylor. “We started off with colleagues in energy companies telling us, ‘This is how much you have.’ ”

Fracking is industry shorthand for hydraulic fracturing, a technology that is combined with horizontal drilling to flush out natural gas deposits trapped in prehistoric shale rock formations. Both technologies are illegal in North Carolina, but state legislators are moving aggressively this week to advance sweeping legislation to legalize fracking and create new regulations and agencies to govern the practice. On Monday, Gov. Bev Perdue weighed in with an executive order that established a task force to develop regulations on fracking.

The amount of natural gas here will ultimately determine how many energy exploration companies bring their derricks, well pads and pipeline operations to the state and how many jobs are created. Smaller amounts would likely mean that the domestic natural gas would supply local manufacturing, brick making and small industries, but not a large-scale economic boom, Taylor said.

The actual amount of natural gas in the state remains a mystery. Estimates are not part of the lengthy fracking report issued last month by the N.C. Department of Environment and Natural Resources.

Ever since state geologists realized in 2008 that North Carolina’s geology could hold significant amounts of natural gas, the amount has always remained guesswork. The main reason for the lack of information is the state’s sparse history of energy exploration.

Taylor said this week that nearly half of the Triassic basins are not good candidates for natural gas. Some sections, like the Wadesboro basin east of Charlotte and the southeastern Chatham County section of the Sanford basin, likely lack gas because the shale rock seams are too close to the surface, he said. The Durham basin could be promising, but sections are too densely populated for drilling operations, he said.

Other areas will likely be off-limits to drilling because of solidified magma slabs that millions of years ago punctured rock formations and now create the risk for chemical seepage into groundwater reservoirs suspended above the natural gas deposits, he said.

The U.S. Geological Survey is expected to issue a more definitive estimate of North Carolina’s natural gas resources this year. But actual amounts won’t be known until energy companies sink test wells and measure the gas coming out of the ground.

With the cost of natural gas projected to be near historic lows for at least a decade, it’s not clear when such testing would get under way.

The suspense, hype and letdown has caused some to block out the speculation.

“I’m not getting very excited about the fact that we have 40 years, 80 years, or 8,000 years,” said Lee County resident Russ Knight. “Until they prove it, it means absolutely nothing.”

State geologists now believe the only safe assumption is that the gas is concentrated around Lee, Moore and Chatham counties .

“It looks more like a resource for just our state,” Taylor said. “If someone thinks we’re going to start exporting gas to other countries, or overseas, or other states, we don’t have enough for that.”

Shale gas, considered too expensive to drill just a decade ago, now supplies nearly 25 percent of the nation’s natural gas and is projected to account for nearly half the nation’s natural gas production by 2035. The bonanza has spawned boom towns in depressed rural areas but also resulted in accidents, investigations, fines and a backlash.

Based on two test wells drilled in Lee County, last month’s 484-page report from the state environmental agency estimates that area shale gas reserves could accommodate 368 wells in a 92-square mile area near Sanford.

Taylor said that extrapolating the well data over the entire 1,226-square mile area of the Triassic basins, which run through the state’s mid-section, would mean that North Carolina has about 2 trillion cubic feet of natural gas. That factors in the areas that either lack gas or are not safe for drilling.

Even if this maximum potential panned out, it would represent less than 1 percent of 273 trillion cubic feet of the nation’s proven gas reserves.

Taylor said two wells simply can’t be generalized over a multi-county area running from Durham into South Carolina.

“The reason we were wildly optimistic is we didn’t know,” Taylor said. “It may be confined to a very small area – like one or two counties.”

Murawski: 919-829-8932

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