Natural Gas Development

in Madison County, New York

Bruce Selleck

Department of Geology

Colgate University

Hamilton, NY 13346

bselleck@

mail.colgate.edu

Natural Gas Development in Madison County, New York

Prepared by:

Bruce Selleck

Department of Geology

Colgate University

bselleck@mail.colgate.edu

Natural gas is a fossil fuel that is derived from ancient, buried organic matter. Natural gas is a mixture of methane,

ethane, propane and butane, and is found in many sedimentary rocks. For the gas to be extracted in

commercially viable amounts, a source of gas, a natural reservoir system and a caprockor seal on the reservoir

must all exist.

Natural gas wells have been drilled in Madison County since the late 19thcentury. Small fields in the Towns of

Brookfield and Lebanon saw active drilling on and off from 1920 to the 1950’s. The rising price of gas and the availability

of sophisticated seismic exploration methods have driven renewedexploration and development over the last

decade.

The pages that follow provide basic information about the occurrence of natural gas in Madison County, focusing

particularly on the fields in the Town of Lebanon, which currently produce the great majority of gas extracted in the

county.

Genesee Group

Proterozoic(1.1 billion years old)

Grenville Province

Basement

SW

NE

Hamilton Group

Onondaga Limestone

Devonian

Silurian

Ordovician

BeekmantownGroup

Potsdam Sandstone

Black River and Trenton Groups

Utica Shale

Oswego SS

Syracuse Fm

Oswego SS

Herkimer SS

Appalachian Plateau

Mohawk Valley

OriskanySS

Rock strata in central New York dip gently to the

southwest. This cross-section exaggerates the

dip and shows the sedimentary units and their

ages. The oldest rocks in New York are the

1.1 billion year old metamorphic and igneous rocks

of the Adirondacks. These ancient rocks contain no

oil or gas, but host ore deposits for metals such as

iron, titanium, lead and zinc, and minerals such as talc

wollastoniteand garnet.

The red pattern indicates rock units that may serve as

reservoir beds in central and western New York.

These units contain gas only where the right combination

of caprockand source beds is found.

HelderbergGroup

West Falls Group

Adirondacks

Bruce Selleck4/5/07

Gas and Oil Fields in Central and Western New York

(NYSERDA)

This map depicts the distribution of gas and oil fields in New York State. Virtually all of the historical development

has been in the western part of the state. No oil has been recovered from wells east of the Finger Lakes region, but

there is considerable potential for natural gas.

All of the oil and gas in New York is found in Paleozoic sedimentary rocks which were deposited from 520 to 300

million years ago. Most of these rocks were laid down in a sedimentary basin -the Appalachian Basin

–that stretched across eastern north America from Nova Scotia toAlabama

Hamilton Group

Onondaga Limestone

Genesee Group

OriskanySandstone

HelderbergGroup

Cobleskill Limestone

Syracuse Formation

Ilion Shale

Vernon Shale

Herkimer Sandstone

Oneida Conglomerate

Oswego

Sandstone

Utica Shale

OriskanySandstone

gas

pinch-out of

Oswego Sandstone

Most gas wells in Madison County tap reservoirs in the

Oswego Sandstone. The Utica Shale that underlies

the sandstone is the source bed for the gas. Minor

fold structures in the sandstone help to trap the gas

in commercial quantities. Wells in the Town of

Lebanon are developed in a minor fold structure

where the sandstone is unusually thick. The overlying

Ilion Shale forms a seal on the reservoir sandstone.

Wells are typically 2500-4000’deep.

Deeper wells (greater than 10,000 feet) in the eastern Finger

Lakes region have encountered large reservoirs in the Trenton-Black

River Group trend. Trenton-Black River discoveries are related

to deep fault structures and have proven difficult to locate, but very

profitable when exploited.

Bruce Selleck4/5/07

Schematic model of the Bradley Brook Natural Gas Field

Production was reported

for 23 gas wells in Madison

County in 2005.

19 producing wells were

located in the town

of Lebanon; 4 in the town of

Eaton.

Gas exploration and development

on private lands require that the

landowner sell or lease mineral

rights and access rights to their

property. Landowners are strongly

advised to consult a lawyer to review

any contract before signing.

Modern seismic exploration

involves laying out a grid of geophones

(earth sound sensors) which receive

sound reflections from subsurface

rock layers. The sound source may

be an explosive device, or more commonly

‘thumper’trucks which use hydraulics and

compressed air systems to ‘bump’the

ground.

The information from the geophone

grid is then processed by high-speed

computers to produce 2-D and 3-D

cross-sections of subsurface structures.

Advances in computer processing and

software have made this sort of exploration

more common over the last 15 years.

http://openlearn.open.ac.uk/file.php/2292/S278_1_022i.jpg

Typical Seismic Section (not from the Lebanon area)

The map on the left shows the proposed routes for Vibroseis

exploration in the towns of Lebanon, Smyrna and Plymouth

http://www.omafra.gov.on.ca/english/

engineer/facts/99-029f3.gif

Drilling of a gas well requires construction

of a drilling pad and access roads, and moving

in and out of heavy equipment. Development

of the well may involve installation of casing and

cement sheath, and treatment of the producing

formation to increase gas flow into the well.

The above-ground equipment is not visually

obtrusive; pipelines, valves and compressor

facilities pose some safety risk. Properly

designed and maintained wells do not offer

significant environmental hazard.

White Eagle-1 –Hill Road, Town of Eaton

Symonds Farm, Lebanon Road

April 16, 2007

Exploration and development

of natural gas wells can have

negative impacts on local

infrastructure. Heavy drilling

equipment may damage

roads, culverts and bridges.

Property owners should

understand the legal framework

of lease agreements and

carefully document all

exploration and development

activity that takes place on

their land.

The Chenango County Farm

Bureau has an informative

website for property owners

considering natural gas lease

agreements.

( http://www.ccfbny.org

/issues/oil_lease/leasing2.htm)

Gas wells in the

Town of Lebanon

Gas wells in the

Town of Lebanon

Landowners with producing

gas wells may receive a

proportion of the gas produced

in addition to a royalty for the

gas sold by the operator.

Landowners near a producing

well may be allocated some

part of the royalty depending

on proximity to the well and

area of land owned within a

defined spacing distance.

Spacing is controlled by

the characteristics of the

reservoir unit, and is set

legally by the NYS Department

of Environmental Conservation

(NYSDEC)

Gas Wells Drilled

Town of Lebanon, Madison County

1950-2006

05

10

15

20

25

1959

1961

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

Year

Number of Wells Spudded

20 wells drilled in 2006

Bruce Selleck4/5/07

$1.77$2.23

$2.28 $1.74

$2.23

$1.74

$1.62

$3.40

$2.60$6.82 $2.50$4.43$5.21

$8.66

$0.67

$5.92

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

$10.00

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Average US

January Wellhead Price of Natural Gas

Bruce Selleck4/5/07

Bruce Selleck1/09/09

Natural Gas Production

0

100000

200000

300000

400000

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Year

MCF Natural Gas Produced

Madison County

Town of Lebanon

Bruce Selleck10/25/07

Value of Production*

$47,022

$34,878

$31,258

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Well head value

Year

Madison County

Town of Lebanon

Taxes Assessed

*based on January of year average

price U.S.

Taxes Assessed = ~3.2% of

production value

$8.66

$2,085,051

240768

$2,115,205

244250

2006

$5.80

$1,378,451

237664

$1,396,228

240729

2005

$5.21

$1,356,085

260285

$1,390,341

266860

2004

$4.43

$1,063,887

240155

$1,063,887

240155

2003

$2.50

$692,365

276946

$718,820

287528

2002

$6.82

$1,366,005

200294

$1,405,363

206065

2001

$2.60

$435,570

167527

$451,747

173749

2000

$1.85

$317,688

171723

$317,688

171723

1999

$1.96

$154,434

78793

$169,771

86618

1998

$3.40

$97,342

28630

$105,057

30899

1997

January

wellhead

gas price

Town

Lebanon

Value

Town

Lebanon

Production

MCF

Madison

County

Value

Madison

County

Production

MCF

Year Average household consumption of gas for domestic heating (only)in 2005-06 in the

Northeastern US was 74.7 MCF (costing $1299 at a delivered priceof $17.39 per MCF)

(from http://www.eia.doe.gov/emeu/steo/pub/wf01.html)

The244250 MCF produced in Madison County in 2006 would heat approximately

3,269 average households in the northeastern US;the delivered value of the gas

produced was worth about $4,250,000.

Natural gas production in Madison County is

almost entirely from the Oswego Sandstone-

Herkimer Sandstone-Oneida Conglomerate interval.

While there has been much speculation about the

potential for natural gas development from the

Marcellus Shale, the most likely areas for

development are south of Madison County, where the

Marcellus is at depths great enough (>1500 feet)

to assure reasonable formation pressure and

reservoir integrity.

The map on the left shows areas in southern Madison

and Chenango County where the Marcellus Shale

unit lies at depths great enough (red color contours)

for likely development. Areas with green contours

have Marcellus Shale at depths less than 1500 feet.

The Utica Shale, another potential shale gas target,

underlies all of Madison and Chenango County. No

Utica Shale gas has yet been developed in New York

or adjacent areas.

Marcellus Shale Gas Potential

“Trenton-Black River”reservoirs may exist at greater depths beneath the

current levels of Oswego-Herkimer Sandstone exploration in Madison and

Chenango Counties. The GlodesCorners Field (discovered in 1991) in Tioga County

has been one of the most productive natural gas fields in the Appalachian Basin. These

reservoirs occur at depths of 10,000 to 12,000 feet below the surface.

Trenton-Black River reservoirs have not yet been discovered in Madison County, but may

be present. A deep well drilled in the town of Stockbridge in 2005 tested a possible Trenton-

Black River reservoir, but the flow of gas was not economic.

http://www.netl.doe.gov/technologies/oil-gas/NaturalGas/Projects_n