The Haynesville Shale, found in East Texas and Louisiana, last week surpassed the Marcellus for total number of active drilling rigs. That’s the first time the Haynesville has had more active rigs than the Marcellus since 2011–six years. What’s up with the “sleepy” Haynesville? It’s not so sleepy anymore. Last year one of the biggest and best drillers in the Marcellus, Range Resources, paid $4.4 billion to buy out and take over a Louisiana driller (see Range Resources Buys Louisiana Driller in Deal Worth $4.4B). Range drills in the Terryville Field in Louisiana, which sits just over top of the Haynesville. This year Range is spending 34% of their capital expenditure budget on Louisiana drilling–money that could have been spent in the Pennsylvania Marcellus. Why is the Haynesville picking up again? (1) It costs less to drill in Louisiana because taxes and other drilling costs are lower, and (2) pipeline infrastructure is already in place to sell the gas into higher-paying markets. This is a very loud warning to those in PA who say “drillers won’t go anywhere else ’cause the gas is here” as a justification for slapping a severance tax on top of the impact fee on top of a corporate state income tax: THEY’RE ALREADY LEAVING PENNSYLVANIA, going to the Haynesville and other plays. How obtuse can you be? How stupid is it to RAISE taxes when drillers are already shifting away from the state? If PA lawmakers insist on slapping drillers with a severance tax, drillers will be happy to turn the spigots off for a while until prices go up and they can afford to pay the tax. Drillers are equally happy to spend their money drilling new wells in other states, given regulatory problems and high taxes. And then where will your “easy money” come from to balance an overspent state budget?…
