Every shale formation in the United States has its own story. In fact, they each have at least two. There is the geological narrative of continental plates plowing into one another. This story features valleys in which sediment collects creating new layers of rock and various disturbances to the regularity of those layers, etc. But there is also a human narrative of the early settlers in a region, the first diggers of wells, (possibly looking for water but finding something else). Then the entrepreneurs and innovators who built upon that early work. This story brings us to the creation of the infrastructure of highways, rails, and pipelines that can transport products to the market.

In what follows, we look briefly at the stories of three of the more important plays in the United States today. We discuss two plays that are mostly natural gas with one that is mainly about crude oil. Then discuss plays in the east and west and the locations surrounding the Great Lakes and Gulf Coast. Our point is simply: each region makes the progression through these stages -- discovery, entrepreneurship, innovation, infrastructure -- in its own way.

The History of the Marcellus Formation

The Marcellus shale formation is the standout in the natural gas market. According to the US Geological Survey, Marcellus contains about 84 trillion cubic feet of natural gas. The EIA has a higher estimate.

This is not a newly discovered resource. The history of the exploitation of natural gas dates back to 1821, when -- near Fredonia, New York -- locals got together to sink a well just 27 feet deep, near where they found oil literally bubbling up through the bed of Canadaway Creek. 

The well was a great success. It was deepened in 1850, and it inspired a flurry of exploration along the shore of Lake Erie.

By the turn of the century, it is said, nearly every backyard within a mile of the Erie shore had a well that kept that household lit and heated. To this day, some of those wells are still providing light and heat to Erie County residents.

Beyond Small Pockets

Yet, such small-scale production didn’t make continued exploration worthwhile, and interest faded as light (and sometimes heat) became the gift of electricity, produced by large scale operations and conveyed by miles of wire. Of course, those electrical plants had to be fueled by something, but the oil & gas industry came to see the Marcellus as a region of small “pockets,” not worth sustained activity.

The 1970s saw oil embargoes, long lines at pumps, and a lot of new thinking in the United States. As part of this new thinking, in 1976, the Department of Energy created a multistate program called the Eastern Gas Shales Project (EGSP). The EGSP was to study stratigraphy and evaluate the gas supplies of the Appalachian, Illinois, and Michigan basins.

In the early years of this millennium, horizontal drilling and hydraulic fracturing were introduced into the region of the Marcellus with great success. In this story, the markets were never very far away from the drilling. That has always been part of the attraction. 

As the pie chart below shows, production from the Marcellus is now a big part of the US energy picture.