Utica Shale Oil Discovery In Ohio, News And Maps
Already recognized as an major natural gas discovery, the Utica shale may be one of the biggest oil discoveries in recent decades. The primary focus of this site is on the oil potential of the Utica Shale in the state of Ohio, and getting the word out about what may be one of the biggest oil discoveries in U.S. history.
What is the Utica shale? It is a massive, deep rock formation that lies approximately two to three thousand feet below the Marcellus shale. It is rich in fossils and organic matter such as kerogen (which breaks down into oil and gas), and is black to grey black in color. In Ohio it lies at a depth of between 3000 to 9000 feet. It covers an area covering eight states, from Tennessee to New York, as well as across the border into Quebec. Compared to the Marcellus shale, the Utica shale is higher in carbonate content. This quality allows a “frac job” to break apart the rock more easily than in pure shale, releasing greater quantities of oil and gas. The current epicenter of the oil boom in Ohio is the Utica shale’s Point Pleasant interval. The Point Pleasant interval consists of inter – bedded layers of shale and carbonate rocks.
The “O’s” in Ohio Are For Ordovician Oil
Several major oil and gas companies, including Chesapeake Energy, have begun leasing up vast areas of Ohio, where geologists believe that large quantities of oil will be found. Ohio has a long history of oil production, starting with the first well in Washington county in 1860. There are approximately 64,500 active oil wells in Ohio, most producing less than 10 barrels of oil per day. This boom could make past discoveries seem like “peanuts”. The Utica formation is considered a “source rock” for oil and gas fround in the Cambrian Knox Dolomite, Cambrian Rose Run Sandstone, Lower Ordovician Beekmantown Dolomite, and Middle Ordovician Black River -Trenton Limestone formations. (Source: USGS) Rather than looking for pockets of oil and gas trapped in hard to find “stratigraphic traps”, oil companies are using new technology to go right to the source or the “mother lode” underneath these zones. A big plus for oil and gas exploration in the Ohio is the fact that the state has such as long history of it, and has plenty of disposal wells, pipelines and other infrastructure already in place.
How The Utica Shale Was Formed
The Utica shale is a sedimentary rock which was deposited in ancient seas during the Middle Ordovician age approximately 450-470 million years ago. During that time much of the earth was covered by seas rich in plant and animal life. As these organisms died and decayed, they were deposited on the seafloor, forming a rich organic “muck” that later formed the Utica formation. Below is an illustration of what an Ordovician period sea may have looked like. The muck deposited in these seas formed an organic compound in the shale rock called kerogen. As the Utica shale subsided and was covered by other rock layers, thermal action (the earth’s heat) and organic action (decay) changed the kerogen into oil and gas. It is in the “thermally mature” areas of the shale in Eastern Ohio where the largest quantities of volatile oil are being found.
(What the seafloor of an Ordovician sea may have looked like).
Oil And Gas Companies Paying High Lease Rates In Ohio’s Utica Shale Play
Chesapeake Energy recently announced that they had made a “major discovery” of oil and natural gas liquids in the Utica shale in Ohio. Chesapeake Energy has acquired over 1.25 million acres in Ohio at a cost of over two billion dollars and plans on adding another 300,000 acres in the coming months. Other players in the Utica shale include Devon Energy, which acquired over 110,000 acres, Chevron, which purchased over 600,000 from Atlas Energy, Consol Energy, with 200,000 acres, Shell, Range Resources and Epsilon Energy. While some of the acreage in the play was “held by production”, by small oil companies such as Atlas Energy, much of the acreage in the “oil and wet gas” window of the Utica – Point Pleasant play had to be leased by oil companies. Lease payments have reportedly soared to over $4,000 an acre in the hottest areas of the play. The hottest area right now is the “volatile oil window”. “Volatile oil” refers to light oil which evaporates quickly with minimal residue, as compared to heavier crude. Volatile oil, gas and condensate tend to flow through the tiny pore structure of shales easier than heavier crude. The Utica shale contains four geographic zones, the uppermost western and northwestern zones holds heavier oil, with the middle sections holding volatile oil and natural gas liquids, while the deeper area holds primarily natural gas. A “sweet spot” has been identified where the concentration of volatile oil is the highest and it is in this area that the price per acre paid to landowners for Utica drilling rights has risen the highest.
How Big An Oil Discovery Is The Utica Shale?
Chesapeake Energy’s CEO Aubrey McClendon recently stated that his company believes the Utica Shale is one of the biggest oil finds in U.S. history. Chesapeake Energy expects that the play to hold over 25 billion barrels of oil, as well as trillions of cubic feet of natural gas. He expects that over 25,000 new oil and gas wells will be drilled in the Utica shale in the coming decades, an investment of at least 200 billion dollars. The Ohio Geological Survey predicts that the Utica formation may hold as much as 8.2 billion barrels of oil equivalent (boe). The ultimate recovery potential of the Utica shale may be revised upward as more information becomes available, and as oil and gas drilling and production methods continue to advance. The U.S. imports about 9.5 billion barrels of oil a year. What is contained in the Utica shale, Eagle Ford shale, Bakken shale and other new shale finds could equal a decade (or more) worth of foreign oil imports.
Below is a map of the Utica shale. There is actually a greater overlapping than what the map shows in the eastern counties of Ohio, where the current center of oil activity is located.
Map courtesy of Ohio Dept. Of Natural Resources.
Why Has This Major Oil Discovery In Ohio Been Hiding From Us For So Long?
The reason that there suddenly an ocean of available oil under Ohio, and many other parts of the country such as the Eagle Ford shale of Texas and Bakken Shale of North Dakota, is because of advances in oil and gas drilling, as well as the development of a completion procedure known as hydraulic fracturing or “frac jobs”. Horizontal drilling, or drilling sideways at ninety degrees, was perfected in the Barnett shale formation near Dallas – Ft Worth, which was laden with natural gas locked in tight shale rock. Oil and gas companies soon learned that they could apply a “frac job” which consists pumping of high pressure water, sand and a small amount of chemicals, injected under high pressure, to break apart the shale, and release large quantities of natural gas. This one – time process is done just after the well is drilled. This process is somewhat controversial, since the potential to contaminate groundwater exists if proper measures are not taken. However, so far the process of hydraulic fracturing has been used in thousands of wells with no major incidents of aquifer contamination. Ohio’s water aquifers lie thousands of feet above the Utica shale. Impervious layers of solid rock, heavy cement liners and thick steel casing protect these zones from cross contamination. See Frac Info for more details.
With huge success in the Barnett shale, companies moved on to similar formations such as the Haynesville shale in Arkansas, Texas and Louisiana. Due to their overwhelming success in finding large amounts of natural gas in shales, the market was soon flooded and prices declined. Now the U.S. has a more than 100 year supply of natural gas and prices are severely depressed. The main reason any natural gas drilling is continuing at all in the U.S., is to hold leases which will be lost if no production is established in a certain number of years. Because oil prices remain high, O&G exploration companies are now focusing heavily on shales which contain oil and natural gas liquids. The Eagle Ford shale, a recent discovery in South Texas, is reported to be the largest oil discovery in over forty years. The Utica shale could prove to be an even bigger find, at least that’s what some industry experts predict.
The Economic Impact Of The Utica Shale
The full economic impact of the Utica shale oil discovery will not be fully felt for another few years when hundreds at first, then thousands of wells are drilled and producing oil and gas. Presently, millions of dollars are changing hands between oil companies and landowners in the leasing phase. As these landowner later receive even larger royalty checks, they will begin to spend them, increasing the overall wealth of Ohio. Rust belt refineries, such as those owned by Marathon Oil, are expecting to begin to receive thousands of barrels of Utica shale crude over the next few years. This could boost the refining industry of Ohio and surrounding states by giving companies a source of crude that is much cheaper than imported Brent sea crude. The steel industry in Ohio and surrounding states will no doubt get a major boost from this discovery. Oilfields tend to require large quantities of steel pipe, tanks and other infrastructure, which could be made locally. The amount of jobs eventually created by the Utica play could be in the millions. Whether you agree with oil and gas drilling or not, one thing that is certain, and that is our nation’s security is enhanced by having a source of oil within our borders. So far our cars, trucks, trains and planes don’t run on solar or wind power. Oil and gas energy is used to manufacture things such as wind turbines and solar panels which could eventually make that possible someday. Every drop of oil what we produce in the U.S. is one less that comes from conflict plagued regions or a dictatorship that despises us. Also, as China continues to gobble up world oil supplies, finding another 25 billion barrels here ensures our safety and security and gives us a bridge with which to make the transition to renewable forms of energy. Stay tuned to this site for developments in the Utica shale, America’s most exciting new oil discovery!
As more details about this significant new oil discovery in Ohio are available they will be posted on this site.