February 08, 2007

Well, I don't know much about geology...

...but I have to tell you, this story sounds like one of the most incredible finds in a long time: Rich gas deposits found in St. Clair

News staff writer

Energy companies are scrambling for drilling rights in St. Clair County, where geologists have discovered a natural gas formation with the potential to rival any in the country. [...]

Geologists compare the area's potential to that of a legendary Texas natural gas field called the Barnett Shale, which has grown to 5,000 square miles and produces more energy than any other onshore gas field in the country. Shale formations in St. Clair County run 9,000 feet thick [emphasis added], dwarfing the 1,500-foot shales in Texas. Thicker shale means more gas per square mile. [...]

"There are many billions of cubic feet of natural gas per square mile in St. Clair County," said Phillip Meadows, an independent geologist based in Hartselle who performed the original analysis of the area. "Once production methods are figured out, we are talking about wells that could easily be in operation for more than 100 years." [...]

The finds in St. Clair are part of a larger energy-rich geologic formation that runs north through Etowah County and into northern Georgia, said Meadows, who began studying the area in the late 1980s. The formation has been ignored until recent spikes in natural gas prices that have made it economical feasible to begin production.

The holdup has been the shale rock. The natural gas is compressed into it, and getting it out requires more expensive production techniques than are used to access gas that's not so tightly bunched.

But things are rolling again after price spikes in 2005 that sent natural gas to an all-time high of $15 per million British thermal units. Energy companies such as Virginia-based Dominion Resources have been paying landowners as much $500 per acre for the right to explore and produce, according to an adviser who represents property owners. [...]

Cascades of cash aren't right around the corner, though. It took many years for drillers to figure out how to get at the tightly packed Barnett Shale gas in Texas. Only recent improvements in using pressurized water to fracture the rock and release the gas made it profitable. Meadows, the geologist, said no one is yet really sure how - or if - that technique will work in Alabama. [...]

Even if it doesn't pan out right now, there's always someone working on a way to make it work. I have always had a passing interest in our mineral assets since it's so much a part of the history around here (Birmingham being one of the few places on Earth where the raw materials for steel production--coal, iron, limestone, water--are all located close to each other, in abundance, and easily accessible) but I never realized that this particular resource is located near here as well. And that it's so HUGE!

It might not pay right now, but from a strategic point of view, it sounds like it's money in the bank.

Posted by Terry Oglesby at February 8, 2007 09:50 AM