What's to be done when there is little opportunity left for domestic greenfield exploration and production? For one, go back to where it all started and give the Appalachian and Illinois basins another look. The 1814 discovery of oil in Ohio was an accident; miners were looking for salt. A year later natural gas was discovered in West Virginia. Fredonia, New York, saw the first intentional attempt to find gas, in 1821. In the mid-19th century, wildcatters found gas in Pennsylvania, Ohio and Kentucky. "After more than a century, the Appalachian and Illinois basins still contain at least as much oil and natural gas as have been produced to date," says a recent report developed by the Interstate Oil and Gas Compact Commission's Appalachian and Illinois Basin directors and the U.S. Department of Energy's Office of Fossil Energy and National Energy Technology Laboratory. It is estimated that technically recoverable resources, including proved reserves, are in the range of 4.8 billion barrels of oil and 79- to 96 trillion cubic feet of gas. "The majority of remaining hydrocarbon resources in these basins exists in unconventional settings-primarily in coalseams, Devonian-age shales, and low-permeability (tight) gas sands." Resource estimates are particularly uncertain, though, due to the limited availability of data on past production and on the characteristics of prospective plays. Further, it is not known exactly when the technological advances necessary to produce much of these resources will materialize, according to the report. Coalbed gas production in Virginia began in 1990 and has grown every year since. Gas production in Kentucky recently peaked and has been growing steadily since 1983. Pointing the way to a production renaissance for the region are recent discoveries in the Trenton/Black River formations in New York and West Virginia; coalbed gas potential throughout the region; new production from the New Albany Shale gas play in southern Indiana and northern Kentucky; oil discoveries in pinnacle reef formations; tight gas sand resources; and enhanced oil recover with carbon dioxide injection. While the basins are mature in terms of shallow production (less than 6,000 feet), they are less so at depths of 15,000 and greater. According to the Potential Gas Committee, only 10% to 15% of the possible hydrocarbon-producing formations within the Appalachian Basin have been tested, and only 11 wells have been drilled deeper than 15,000 feet. Wells have been concentrated along established producing trends, and vast areas have yet to be assessed. Currently, coalbed gas is being pursued through horizontal drilling and the use of horizontal/multilateral pinnate completion technology, pioneered by CDX Gas LLC. The technology is an alternative to conventional hydraulic fracturing. In the future, it could be applied to gas shales as well as coal, the report notes. In the Trenton/Black River play, a multi-state study is under way to assess the exploratory opportunities offered. Previously, pinnacle reef reservoirs were often found by chance. More recently, improved technology and more systematic stratigraphic test-well programs are yielding greater success. Approximately 80 pinnacle reefs have been discovered in the Illinois Basin in Indiana and Illinois. While generally considered mature, tight gas sands in the Appalachian could be a substantial source of future supplies. This birthplace of tight gas production has produced more than 9 trillion cubic feet from more than 75,000 wells to date. Future reserves are estimated to be about 3 trillion cubic feet. Since the early 1860s, more than 600 wells have been drilled into the New Albany Shale in Indiana and Kentucky. The New Albany has characteristics similar to the Antrim shales of the Michigan basin. Recent success there bodes well for renewed production in the New Albany, according to the report. Longer term, heavy oil, oil sands and oil shale are large Appalachian resources that could add to domestic supplies. Oil sands, primarily in Kentucky, are estimated to hold 3- to 4 billion barrels of oil in place. New technologies could one day bring these supplies online.

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