NEW YORK — Supply dynamics in the U.S. natural gas industry are rapidly evolving, and the Appalachian region in the northeast U.S. is a significant proponent of change, according to a new report published by Standard & Poor''s Ratings Services.
The report states that the Marcellus shale could contain recoverable resources equal to almost half of the current proven natural gas reserves in the U.S. Since production in the region is largely undeveloped, increasingly rapid development is attracting new exploration and production activity — a trend that is already affecting long-standing national and regional gas flows, as well as regional pricing.
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"The increased use of specialized technological capabilities such as horizontal drilling and hydraulic fracturing has really sparked the development of this resource," said credit analyst Carin Dehne-Kiley, a director in Standard & Poor''s Oil and Gas group. "The rapid increase in production is clearly reducing the area''s dependence on gas imports from other areas, and this growing independence is affecting national supply dynamics and the premiums that local producers could previously charge."
Because the region has historically relied on gas from elsewhere to meet its significant natural gas demand, the location of the Marcellus shale holds an important advantage for producers and consumers of natural gas — even though natural gas prices have been notably weak in recent months.
The complete article, "How The Marcellus Shale Is Changing The Dynamics Of The U.S. Energy Industry," was published Oct. 15, 2012.