May 2025, Vol. 252, No. 5
Features
Marcellus and Utica Push Ahead Despite Regulatory Hurdles
By Richard McDonough, U.S. Correspondent
(P&GJ) – With the inauguration of President Donald Trump, there are many discussions about changes coming from the U.S. Administration that directly affect the activities in the Marcellus Shale Region.
Thus far, most of the discussions focus on ways to increase oil and natural gas production in the region. Pipelines are part of the infrastructure that will be needed to make some of these changes translate from statements on paper and video into actual transit of natural gas and oil.
The United States Energy Information Administration (EIA) estimated that 35.6 Bcf/d of natural gas was produced in the Appalachia Region in 2024.
The 2024 natural gas production from shale/tight formations in the Appalachia region — a combination of estimated production for two shale plays — was estimated by the EIA to be at 25.9 Bcf/d in the Marcellus Shale Formation and at 6.6 Bcf/d in the Utica Formation.
As for oil production in the Appalachia Region, the EIA estimated 160,000 bpd was produced in 2024.
No separate estimated statistic for 2024 oil production from shale/tight formations in the Appalachia region was listed because the estimated production from shale in Appalachia was below the EIA threshold for estimating independently. Instead, the production amount was grouped into the “Other US formations” category; the EIA estimated this category at 330,000 bpd in 2024.
Several leaders within the region provide their perspectives on what they would like to see happen by the new Administration — both in direct policy changes in Washington, as well as changes in policy directions by individual states and local jurisdictions.
IOGANY of New York
A number of regulations negatively affect the oil and natural gas industry in New York State, according to Mary Gilstrap, executive director of the Independent Oil and Gas Association of New York (IOGANY).
Among those, the new wetland regulations went into effect in late 2024 within New York State and impacted project development timelines by expanding the definition of wetlands within the state. These regulations also made the New York Department of Environmental Conservation (DEC) the lead agency for defining wetlands and determining the impact on projects.
“Anyone who wants to develop a project in the state must submit an online request to the state, to determine if wetlands exist on the property of interest,” Gilstrap said. “This determination should be complete in 90 days but can be extended to 180 days before a definitive wetland existence is made. Previously, maps were available to complete the initial screening for a wetland. Under the new definitions, the maps are no longer considered valid.”
Regulations for building new structures are also changing.
New York State incorporated into statewide building codes that, starting in 2026, new construction of homes and smaller business buildings will be all-electric. There are exceptions for certain types of small businesses (such as restaurants), but new homes will be electric.
Also, reductions in carbon emissions remain a priority in New York State.
New York State leadership continues to work toward the emission reduction goals established in the state’s Climate Leadership and Community Protection Act (CLCPA), even though the New York State controller’s audit recommended an assessment of the goal’s attainability.
Additional regulations are faced by energy firms if they seek to construct new facilities and infrastructure in certain areas of the state.
“Oil and gas producers and certain other industries developing projects within the state now must determine if the planned work is within a half mile of a Disadvantaged Community (DAC) border,” Gilstrap said. “If so, the project must be reviewed to determine if it will cause additional burdens on these communities. The first drilling wells are currently being reviewed under this Disadvantage Community impact review. This is resulting in additional delays to secure approvals to move forward with drilling wells.”
She indicated that the IOGANY continues to seek the “repeal of the large volume hydrofracturing ban in the state, to support development of the Marcellus and other formations within New York State.”
Northeast Gas Association
“Across the Northeast, we continue to see state and local regulators and policymakers focus on natural gas in their attempt to meet climate and emissions targets,” said Alana Daly, vice president of Communications and Public Policy of the Northeast Gas Association (NGA).
She added that a number of legislatures are considering policies to limit new gas infrastructure, including in New York, where the NY HEAT Act was recently reintroduced.
“This is only a small sampling of the many proposals being considered across the Northeast,” Daly said. “Generally, if enacted, these proposals would make it more difficult and costly for new customers to access affordable, reliable natural gas.”
While the existing pipelines bringing natural gas to communities throughout New England are important infrastructure in the region, new pipeline capacity is critical. Almost one-third of the demand for natural gas is being met today by imported products.
“We would emphasize the essential importance of natural gas in the Northeast’s energy makeup — in the Northeast, 54% of homes are heated with natural gas,” Daly said. “About half of the region’s electricity is powered by natural gas. Due to the constraints on the region’s gas system, on peak days, 35% of New England’s gas demand is met by imported liquid natural gas (LNG), which is often much more expensive than domestically produced natural gas.”
A recent study by the Northeast Power Coordinating Council (NPCC) showed highlighting constraints to the region’s pipeline system showed that the installation of additional pipeline capacity would be “one of the most economic mitigation measures,” to alleviate these constraints. Also, a recent EIA piece highlighted how the region faces significant pricing volatility (and often higher prices) due to the lack of pipeline infrastructure.
Marcellus Shale Coalition
The Marcellus Shale Coalition sees great potential for growth in the oil and natural gas sectors in Pennsylvania and beyond.
“The federal government’s emphasis on expanding natural gas production and easing infrastructure constraints represents a significant opportunity for Pennsylvania’s energy sector,” said Jim Welty, President of the Marcellus Shale Coalition. “We believe that with strategic investment in pipeline development and infrastructure improvements, the state can help meet the increasing demand for clean, reliable energy. This commitment will not only strengthen Pennsylvania's position as a key player in the nation's energy landscape but also ensure we can better support our global allies with access to this critical fuel.”
The ongoing attention on natural gas and infrastructure constraints is encouraging the view of the coalition and presents a “clear path” to unlocking further growth, creating jobs, and reinforcing energy security both domestically and internationally.
Two of the areas mentioned by Welty that could bode well for growth in the energy sector in the Keystone State involve the expansion of markets and the construction of new pipelines.
These could be spurred by the end of the LNG export license ban and engagement on trying to site and build pipeline infrastructure in the Northeast on the part of the administration.
Challenges remain in Pennsylvania even as the Federal government seeks to increase the energy independence of the United States.
“The permitting process for energy infrastructure remains slow and cumbersome,” explained Welty. “The lack of bipartisan action on streamlining these processes has led to significant delays in deploying critically needed energy resources, restricting not just industry growth but also access to affordable energy for consumers.”
The state’s proposed power generation policies, such as imposing a new tax on generation and allocating the state’s mandated portfolio to the exclusion of natural gas, “have exacerbated these issues,” he continued. “Instead of focusing on a balanced, practical energy strategy that includes essential infrastructure improvements, the Governor’s Administration has largely ignored the critical role natural gas plays in ensuring grid reliability.”
The Marcellus Shale Coalition has identified specific regulatory steps that it would like to see taken to enhance the energy sector in Pennsylvania.
“What is urgently needed is bipartisan action to fix the permitting process, ensuring energy projects can move forward without unnecessary delays,” Welty said. “Until this happens, Pennsylvania will continue to face energy bottlenecks that limit growth and undermine its position as a leader in domestic energy production. The oil and gas industry hopes to see sensible regulatory changes that address both the need for robust energy infrastructure and the long-term security of reliable power generation in the coming year.”
In Pennsylvania, the Department of Environmental Protection (DEP) is considering a rulemaking petition submitted by anti-energy organizations that seeks to impose draconian setback distances for natural gas facilities.
Pennsylvania already has the most stringent setback distances of the top five natural gas-producing states in the nation. We will be working with pro-energy allies in the General Assembly to discourage the PA DEP from moving forward with this proposal, which we believe is not only bad policy but exceeds the PA DEP’s statutory authority.
He added that Pennsylvania must also implement methane standards at the state level to comply with previously adopted U.S. EPA methane regulations and that it is imperative that Pennsylvania adhere to the EPA model rule and not impose additional state-specific standards that simply make Pennsylvania less competitive with no appreciable environmental benefit.
“Predictability and consistency are critically important to attracting capital investment to the state,” he said.
Welty cited a report issued by an international analytical research firm that indicated substantial savings could be secured by consumers if new pipeline capacity were added to transit natural gas to New York State and New England. He also pointed out an environmental report from a national laboratory that is part of the U.S. Department of Energy.
A recent analysis conducted by S&P Global confirmed that additional pipeline build out from the Marcellus Shale could save American consumers an average of $5.5 billion annually.
Another, this one from the National Energy Technology Laboratory (NETL) confirmed Appalachian natural gas has the lowest greenhouse gas emissions intensity of any onshore producing region in the U S and that production here has among the lowest rates of water usage in the nation, with more than 90 percent recycled and reused in future operations
“Combined with air quality improvements – translating to nearly $1 trillion in cumulative health benefits since the onset of Marcellus Shale development – due to increased use of natural gas in the power generation sector, we have the ability to achieve significant economic, environmental, and national security progress if we have the right policies in place at both the federal and state levels,” Welty said.
Richard McDonough writes about energy infrastructure-related issues in the United States, including the column The Nuacht of Pipelines. He can be reached at [email protected].
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