Royal Dutch Shell is spending really big bucks—$4.7 billion—buying most of closely held East Resources Inc., the company operating in the Marcellus Play area for more than 25 years now.
The deal brings Shell (R&T’s Official Fuel Partner, you’ll recall) into direct competition with Exxon Mobil and BP Plc., both of which have been acquiring such reserves. These activities are all in anticipation of attempts to curb CO2 by moving away from coal and into natural gas.
The Marcellus Play is a huge reserve of recoverable natural gas stretching southwest from New York state through a broad swath of Pennsylvania into West Virginia. It’s thought to be the country’s biggest deposit of natural gas, even greater than Texas supplies.
Largely because of this, the U.S. overtook Russia last year in natural gas production. The resource is crucial for heating and electric utilities. It’s also recognized as supporting motor vehicles, both light and heavy duty. In the near term, this would be as CNG (compressed natural gas) and later as one of the feedstocks yielding hydrogen for fuel cells.
The Marcellus Play and similar shale deposits in Colorado and Wyoming call for innovative technologies of extraction. Such unconventional sources are expected to account for a quarter of U.S. natural gas production by 2035.