Rigs on the decline
PITTSBURGH — The number of gas drilling rigs is declining in Pennsylvania and nationwide, due to a combination of low natural gas prices and renewed interest in oil.
There were 98 drilling rigs in Pennsylvania during the week of March 23, according to Baker Hughes, a company that monitors national counts. That’s down from a peak of 116 reached during the summer of 2011. Drilling rigs bore the holes and set pipes, but all wells don’t go into production immediately.
Experts said the decline doesn’t mean the natural gas boom is over in Pennsylvania or elsewhere. Now, many companies are investing in pipelines and other distribution facilities.
“Where we’re seeing a lot of development is taking that gas to different markets,” said Kathryn Klaber, president of the Marcellus Shale Coalition, an industry group.
Klaber added that while the number of rigs drilling in Pennsylvania has declined, companies are shifting to target the more profitable “wet gas,” which is used to produce specialty products such as butane and ethane.
The Marcellus Shale has attracted a rush by major oil companies, who have drilled almost 5,000 new wells in the last five years.
But as production boomed, the wholesale price of natural gas dropped. When the shale drilling boom started in 2008, the average price for a unit of gas was about $8. Lately, it’s been about $2.30. The drop has driven a nationwide move toward oil and away from gas wells.
“There is a large shift away from dry gas. There’s a big debate whether people can make money at current prices,” said Keith Crane, director of the Environment, Energy and Economic Development program at Rand Corporation, a Washington think tank.
