PSU Professors Hope to Open Path to Successful Gas Drilling in Marcellus Shale
As reported by Cliff White @ Centre Daily Timses
January 19, 2011 8:31am EST
A Penn State-related startup is hoping to prop open a pathway to increase the wealth generated by gas drilling in the Marcellus Shale.
Penn State professors John Hellmann and Barry Scheetz, who together developed a product that may aid in the extraction of natural gas from tight shale formations, including Pennsylvania’s own Marcellus Shale, founded Nittany Extraction Technologies four months ago.
On Tuesday, the company received a $167,000 investment from Ben Franklin Technology Partners of Central and Northern Pennsylvania, a state-funded agency that provides emerging companies with funding and business assistance.
The Ben Franklin investment upped Nittany Extraction Technology’s total seed capital to $500,000, which is being used to commercialize the product, called PennProp.
The product, a propping agent, consists of tiny, spherical objects used to hold open fractures in the rock created during the drilling process, increasing the flow of natural gas out of the formation.
“The opportunity is huge,” said Scheetz, a geochemist in Penn State’s College of Engineering. “The market (for proppant) is very big, and with Marcellus, it just got even bigger.”
Experts estimate the Marcellus Shale formation contains enough gas to satisfy domestic demand for the next 100 years, making it one of the largest gas fields in the world. Thousands of wells will be drilled in the coming years, requiring up to 2 billion pounds of proppant annually, Scheetz said.
Scheetz and Hellmann, a professor in the College of Earth and Mineral Sciences, have worked on and off on the project for more than 10 years, but doubled down on their efforts when Marcellus Shale drilling activity began to increase a couple of years ago. Their hard work was rewarded when Marty Bradley, an entrepreneur who had been hired by Ben Franklin to search the university’s intellectual property office for projects with the potential for commercialization, discovered them.
After investigating their research, Bradley not only recommended their project for funding, but decided to invest himself. Remaining in his job at Ben Franklin would have posed a conflict of interest, so he quit and became Nittany Extraction’s first president.
“I see real potential in this company,” Bradley said. “There’s a trillion dollars worth of resource under the ground here.”
Nittany Extraction’s product has the potential to increase gas extraction rates from shale formations by 30 to 50 percent, according to Scheetz.
While details of Nittany Extraction’s product are not available due to its pending patent, Hellmann said the company is studying the viability of incorporating into its manufacturing some byproducts of local industry such as glass, fly ash, cement-based materials and flash from steel. That would help to reduce the stream of waste that ends up in Pennsylvania’s landfills.
“We’re looking at a whole suite of different raw materials currently part of the waste stream,” Hellman said.
Using those materials will reduce the industry’s environmental impact, Hellman said, while lowering the proppant’s cost.
If the company is successful — and that’s still a big “if,” according to Bradley — the profits will mean revenue for the professors and the university, thanks to royalties on the patent.
In the meantime, the university is receiving a more direct benefit from the company. It’s receiving a portion of Nittany Extraction’s seed money to conduct advanced testing on the company’s product.
Tentatively, testing will be finished by April, Bradley said. If the product checks out, it should be on the market by the end of the year.
Cliff White can be reached at 814- 235-3928 or cwhite@centredaily.com.