Buchanan Energy Co-Chair Sean W. Moran Featured in WHIRL Magazine Article on Marcellus Shale

Buchanan Ingersoll & Rooney Energy Co-Chair Sean W. Moran was featured in "Drilling for Answers," a WHIRL magazine article that polled industry leaders on new developments surrounding the Marcellus Shale and the energy boom.

Asked "What is on the horizon for the oil and gas industry in Pennsylvania," Moran explained –

The industry works in three basic segments — the production segment (i.e., the companies that find the gas and extract it from the ground), the transportation and processing segment (i.e., the companies that take the gas from the well, treat it so it can be used, and transport it to market), and the end-users (e.g., utilities that generate electricity or supply gas, manufacturing plants, etc.). The development of shale gas resources in the U.S. has created a natural gas glut, which has led to historically low gas prices. On the production segment, since natural gas extraction is very expensive — more than $5 million per well — low prices make it difficult for many producers to make money. This makes it possible for only the largest of companies, who have the financial staying power, to stay in business. This will lead to consolidation in the production side of the industry.

Even at low gas prices, gas is a valuable commodity and, for a variety of reasons, gas production will continue to rise and will need an avenue to get to market. So, from the transportation/processing perspective, which is paid on a fee-for-services basis (and receives its fee irrespective of gas prices), we will continue to see the transportation and processing industry continue to develop in Pennsylvania.

The potential developments to the end-user segment is probably the most interesting and least known at this point. To be sure, cheap gas and environmental regulations will lead to the continued retirement of coal fire power plants and development of gas plants. Cheap gas will help lead to an increase of manufacturing, which uses natural gas and related products as both a fuel source and feed stock.

As consumers, all of our natural gas bills have decreased dramatically, so we all have benefited and should continue to benefit for a while in that way. One really interesting possibility is the widespread adoption of natural gas vehicles. You would also be able to plug your car into a natural gas line in your garage and refuel it overnight while you are sleeping.

Read the full article: "Drilling for Answers," (WHIRL Magazine – February 25, 2013)