Teasing out some numbers from the DENR report – financial benefits do not meet the costs

Notice in the DENR report, Sections 5A and 5B (pages 190-196) estimates the economic impacts from shale gas development in NC. Examine Table 5-5 on page 196 revealing the estimated total financial benefit of shale gas development of $292,882,000.

Now, scroll back up to Section 5A and review the numbers estimated for the total costs for well development. Calculating the cost for drilling a gas well at $3,000,000 per well, look at Table 5-2 on page 193. In the 6th year alone, the cost for drilling wells is estimated at $369 million.

I am no economist, but these figures seem to tell us the cost of drilling for natural gas in North Carolina far exceeds the financial benefits. I understand that the relative low benefit from natural gas is due to the current low price, but this seems to be a very wide gap between costs and benefits. Stay tuned.



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