The US mid-term elections concluded yesterday, and the Republicans, as predicted by most pundits, made a good showing. Tom Corbett’s win in Pennsylvania, the gubernatorial election is particularly interesting because of the impact the new governor’s approach to shale development will have on the energy industry in state. Corbett was elected into office with 55% of the vote. Many who are interested in getting into shale production in the region view this as good news. In the course of the gubernatorial debates, the two candidates (both of whom are from Western Pennsylvania, a region of the state that has seen a significant uptake in shale development) have been supportive of shale development. The dividing issue in their debate was whether the state should assess a severance tax on production. Dan Onorato, the Democratic candidate came down in support of the tax, while Corbett, the Republican candidate has opposed it. With Corbett’s win, shale gas producers will have even more incentive to develop the Marcellus shale, a play that runs from southwestern PA diagonally across the state through the northeast and into New York. Activity in this play is growing rapidly. According to a report compiled and released by the Pennsylvania State University (PSU), more than 2,000 wells were drilled in the Pennsylvania portion of the Marcellus between 2006 and May of 2010. Growth has been dramatic. In 2009 alone, 710 shale wells were drilled in the Pennsylvania. In 2010, there are expected to be 1,700 new wells drilled in by year end – more than twice as many as 2009. According to Kathryn Klaber, president and executive director of the Marcellus Shale Coalition, based in Canonsburg, PA, the number of wells drilled this year amounts to about half of what an annual steady state industry would produce. If activity continues at this rate, the Marcellus will achieve that soon. And Pennsylvania will be well on its way to reaching the expected 8.7 Tcf production level forecast for 2020. Of course, there are challenges, two of which were the subject of technology workshops at Hart’s DUG East conference on November 2 – midstream concerns and water management issues. There actually are four significant challenges to shale gas development in Pennsylvania. These include water issues, the need for pipeline infrastructure, HSE concerns, and technology challenges that impact E&P operations. Open sharing facilitated by events like the workshop allows experts to share ideas on water management issues. Another way these hurdles are being negotiated is through investment in research. The National Energy Technology Laboratory, which is part of the Department of Energy, is overseeing 27 shale gas research projects, 14 of which specifically target the Marcellus shale. NETL is managing US $18.5 million in funding with an additional $8 million in cost sharing. Interestingly, of the 27 shale gas projects in progress, 15 focus on water treatment and management challenges. While the federal government funds research that targets solutions and Hart organizes events that promote information sharing, the Pennsylvania state government is throwing the doors open and rolling out the red carpet for investors. For Pittsburghers investing in the Marcellus, good times are on the way.