Natural Gas Development in Madison County, New …€¦ · Natural Gas Development in Madison...
Transcript of Natural Gas Development in Madison County, New …€¦ · Natural Gas Development in Madison...
Natural Gas Development
in Madison County, New York
Bruce Selleck
Department of Geology
Colgate University
Hamilton, NY 13346
bselleck@
mail.colgate.edu
Natural Gas Development in Madison County, New York
Prepared by:
Bruce Selleck
Department of Geology
Colgate University
Natural gas is a fossil fuel that is derived from ancient, buried organic matter. Natural gas is a mixture of methane,
ethane, propane and butane, and is found in many sedimentary rocks. For the gas to be extracted in
commercially viable amounts, a source of gas, a natural reservoir system and a caprockor seal on the reservoir
must all exist.
Natural gas wells have been drilled in Madison County since the late 19thcentury. Small fields in the Towns of
Brookfield and Lebanon saw active drilling on and off from 1920 to the 1950’s. The rising price of gas and the availability
of sophisticated seismic exploration methods have driven renewedexploration and development over the last
decade.
The pages that follow provide basic information about the occurrence of natural gas in Madison County, focusing
particularly on the fields in the Town of Lebanon, which currently produce the great majority of gas extracted in the
county.
Genesee Group
Proterozoic(1.1 billion years old)
Grenville Province
Basement
SW
NE
Hamilton Group
Onondaga Limestone
Devonian
Silurian
Ordovician
BeekmantownGroup
Potsdam Sandstone
Black River and Trenton Groups
Utica Shale
Oswego SS
Syracuse Fm
Oswego SS
Herkimer SS
Appalachian Plateau
Mohawk Valley
OriskanySS
Rock strata in central New York dip gently to the
southwest. This cross-section exaggerates the
dip and shows the sedimentary units and their
ages. The oldest rocks in New York are the
1.1 billion year old metamorphic and igneous rocks
of the Adirondacks. These ancient rocks contain no
oil or gas, but host ore deposits for metals such as
iron, titanium, lead and zinc, and minerals such as talc
wollastoniteand garnet.
The red pattern indicates rock units that may serve as
reservoir beds in central and western New York.
These units contain gas only where the right combination
of caprockand source beds is found.
HelderbergGroup
West Falls Group
Adirondacks
Bruce Selleck4/5/07
Gas and Oil Fields in Central and Western New York
(NYSERDA)
This map depicts the distribution of gas and oil fields in New York State. Virtually all of the historical development
has been in the western part of the state. No oil has been recovered from wells east of the Finger Lakes region, but
there is considerable potential for natural gas.
All of the oil and gas in New York is found in Paleozoic sedimentary rocks which were deposited from 520 to 300
million years ago. Most of these rocks were laid down in a sedimentary basin -the Appalachian Basin
–that stretched across eastern north America from Nova Scotia toAlabama
Hamilton Group
Onondaga Limestone
Genesee Group
OriskanySandstone
HelderbergGroup
Cobleskill Limestone
Syracuse Formation
Ilion Shale
Vernon Shale
Herkimer Sandstone
Oneida Conglomerate
Oswego
Sandstone
Utica Shale
OriskanySandstone
gas
pinch-out of
Oswego Sandstone
Most gas wells in Madison County tap reservoirs in the
Oswego Sandstone. The Utica Shale that underlies
the sandstone is the source bed for the gas. Minor
fold structures in the sandstone help to trap the gas
in commercial quantities. Wells in the Town of
Lebanon are developed in a minor fold structure
where the sandstone is unusually thick. The overlying
Ilion Shale forms a seal on the reservoir sandstone.
Wells are typically 2500-4000’deep.
Deeper wells (greater than 10,000 feet) in the eastern Finger
Lakes region have encountered large reservoirs in the Trenton-Black
River Group trend. Trenton-Black River discoveries are related
to deep fault structures and have proven difficult to locate, but very
profitable when exploited.
Bruce Selleck4/5/07
Schematic model of the Bradley Brook Natural Gas Field
Production was reported
for 23 gas wells in Madison
County in 2005.
19 producing wells were
located in the town
of Lebanon; 4 in the town of
Eaton.
Gas exploration and development
on private lands require that the
landowner sell or lease mineral
rights and access rights to their
property. Landowners are strongly
advised to consult a lawyer to review
any contract before signing.
Modern seismic exploration
involves laying out a grid of geophones
(earth sound sensors) which receive
sound reflections from subsurface
rock layers. The sound source may
be an explosive device, or more commonly
‘thumper’trucks which use hydraulics and
compressed air systems to ‘bump’the
ground.
The information from the geophone
grid is then processed by high-speed
computers to produce 2-D and 3-D
cross-sections of subsurface structures.
Advances in computer processing and
software have made this sort of exploration
more common over the last 15 years.
http://openlearn.open.ac.uk/file.php/2292/S278_1_022i.jpg
Typical Seismic Section (not from the Lebanon area)
The map on the left shows the proposed routes for Vibroseis
exploration in the towns of Lebanon, Smyrna and Plymouth
http://www.omafra.gov.on.ca/english/
engineer/facts/99-029f3.gif
Drilling of a gas well requires construction
of a drilling pad and access roads, and moving
in and out of heavy equipment. Development
of the well may involve installation of casing and
cement sheath, and treatment of the producing
formation to increase gas flow into the well.
The above-ground equipment is not visually
obtrusive; pipelines, valves and compressor
facilities pose some safety risk. Properly
designed and maintained wells do not offer
significant environmental hazard.
White Eagle-1 –Hill Road, Town of Eaton
Symonds Farm, Lebanon Road
April 16, 2007
Exploration and development
of natural gas wells can have
negative impacts on local
infrastructure. Heavy drilling
equipment may damage
roads, culverts and bridges.
Property owners should
understand the legal framework
of lease agreements and
carefully document all
exploration and development
activity that takes place on
their land.
The Chenango County Farm
Bureau has an informative
website for property owners
considering natural gas lease
agreements.
( http://www.ccfbny.org
/issues/oil_lease/leasing2.htm)
Gas wells in the
Town of Lebanon
Gas wells in the
Town of Lebanon
Landowners with producing
gas wells may receive a
proportion of the gas produced
in addition to a royalty for the
gas sold by the operator.
Landowners near a producing
well may be allocated some
part of the royalty depending
on proximity to the well and
area of land owned within a
defined spacing distance.
Spacing is controlled by
the characteristics of the
reservoir unit, and is set
legally by the NYS Department
of Environmental Conservation
(NYSDEC)
Gas Wells Drilled
Town of Lebanon, Madison County
1950-2006
05
10
15
20
25
1959
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
Year
Number of Wells Spudded
20 wells drilled in 2006
Bruce Selleck4/5/07
$1.77$2.23
$2.28 $1.74
$2.23
$1.74
$1.62
$3.40
$2.60$6.82 $2.50$4.43$5.21
$8.66
$0.67
$5.92
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
$10.00
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
Average US
January Wellhead Price of Natural Gas
Bruce Selleck4/5/07
Bruce Selleck1/09/09
Natural Gas Production
0
100000
200000
300000
400000
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Year
MCF Natural Gas Produced
Madison County
Town of Lebanon
Bruce Selleck10/25/07
Value of Production*
$47,022
$34,878
$31,258
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Well head value
Year
Madison County
Town of Lebanon
Taxes Assessed
*based on January of year average
price U.S.
Taxes Assessed = ~3.2% of
production value
$8.66
$2,085,051
240768
$2,115,205
244250
2006
$5.80
$1,378,451
237664
$1,396,228
240729
2005
$5.21
$1,356,085
260285
$1,390,341
266860
2004
$4.43
$1,063,887
240155
$1,063,887
240155
2003
$2.50
$692,365
276946
$718,820
287528
2002
$6.82
$1,366,005
200294
$1,405,363
206065
2001
$2.60
$435,570
167527
$451,747
173749
2000
$1.85
$317,688
171723
$317,688
171723
1999
$1.96
$154,434
78793
$169,771
86618
1998
$3.40
$97,342
28630
$105,057
30899
1997
January
wellhead
gas price
Town
Lebanon
Value
Town
Lebanon
Production
MCF
Madison
County
Value
Madison
County
Production
MCF
Year Average household consumption of gas for domestic heating (only)in 2005-06 in the
Northeastern US was 74.7 MCF (costing $1299 at a delivered priceof $17.39 per MCF)
(from http://www.eia.doe.gov/emeu/steo/pub/wf01.html)
The244250 MCF produced in Madison County in 2006 would heat approximately
3,269 average households in the northeastern US;the delivered value of the gas
produced was worth about $4,250,000.
Natural gas production in Madison County is
almost entirely from the Oswego Sandstone-
Herkimer Sandstone-Oneida Conglomerate interval.
While there has been much speculation about the
potential for natural gas development from the
Marcellus Shale, the most likely areas for
development are south of Madison County, where the
Marcellus is at depths great enough (>1500 feet)
to assure reasonable formation pressure and
reservoir integrity.
The map on the left shows areas in southern Madison
and Chenango County where the Marcellus Shale
unit lies at depths great enough (red color contours)
for likely development. Areas with green contours
have Marcellus Shale at depths less than 1500 feet.
The Utica Shale, another potential shale gas target,
underlies all of Madison and Chenango County. No
Utica Shale gas has yet been developed in New York
or adjacent areas.
Marcellus Shale Gas Potential
“Trenton-Black River”reservoirs may exist at greater depths beneath the
current levels of Oswego-Herkimer Sandstone exploration in Madison and
Chenango Counties. The GlodesCorners Field (discovered in 1991) in Tioga County
has been one of the most productive natural gas fields in the Appalachian Basin. These
reservoirs occur at depths of 10,000 to 12,000 feet below the surface.
Trenton-Black River reservoirs have not yet been discovered in Madison County, but may
be present. A deep well drilled in the town of Stockbridge in 2005 tested a possible Trenton-
Black River reservoir, but the flow of gas was not economic.
http://www.netl.doe.gov/technologies/oil-gas/NaturalGas/Projects_n