Marcellus-Utica shales: New pipeline capacity, data centers spur greater development

GORDON FELLER, Contributing Editor 

Beneath Pennsylvania’s farmlands, the hills of West Virginia, and eastern Ohio’s valleys lies the most prolific natural gas resource in the U.S.—the Marcellus and Utica shale formations. Together, these geological marvels produce approximately 35 Bcf of natural gas per day, accounting for more than one-third of total U.S. output.  

A NATURAL GAS POWERHOUSE 

Over the past 12 months, from February 2025 to January 2026, the region has witnessed a remarkable transformation: the completion of long-delayed infrastructure projects, a surge in data center-driven demand, strategic consolidation through mergers and acquisitions, and the emergence of Pennsylvania as a critical hub for artificial intelligence’s energy-intensive computing needs. 

While the Permian basin in Texas captured headlines with its oil boom, the Appalachian basin quietly maintained its position as North America’s natural gas superpower. Production has remained steady at 34 Bcfd to 36 Bcfd through the first half of the 2020s, but the past year has marked an inflection point. After years of pipeline constraints that throttled growth, new takeaway capacity has begun to unlock the region’s vast potential. The question facing industry observers is no longer whether the Marcellus/Utica can grow, but how quickly.  

MVP OPENS UP PIPELINE CAPACITY

Fig. 1. Assessment unit map for the Marcellus shale within the Appalachian basin. Map: USGS.

The single-most significant development in 2025 was the full ramp-up of the Mountain Valley Pipeline (MVP). After a decade of regulatory battles, legal challenges, and construction delays, the 303-mi, 42-in. diameter pipeline began flowing Marcellus/Utica gas from Wetzel County, W.Va., to Pittsylvania County, Va., in June 2024. But it wasn’t until January 2025 that MVP achieved a milestone that industry watchers had been anticipating: for the first time, the pipeline flowed its full rated capacity of 2 Bcfd.

The impact was immediate and profound. Prices for natural gas at the wellhead in the Marcellus/Utica region rose, as supply found new markets, while prices in the Southeast dropped, as abundant Appalachian gas arrived via Transco’s Zone 5 Compressor Station 165. The pipeline not only relieved the chronic takeaway constraints that had plagued producers for years but also demonstrated that major infrastructure projects, despite regulatory headwinds, could still be completed. 

MVP’s success story came with significant caveats. The project faced $17,500 in stipulated penalties from the Virginia Department of Environmental Quality in third-quarter 2024 for erosion control issues related to heavy rainfall. Mountain Valley agreed to unprecedented oversight and transparency, working collaboratively with regulators and landowners to complete restoration activities. Nevertheless, the pipeline’s completion after congressional intervention—facilitated by former West Virginia Senator Joe Manchin’s legislative maneuvering—stands as testament to both the political will and economic necessity driving Appalachian gas development. 

GEOLOGIC REALITIES 

The Marcellus/Utica story is actually two stories, Fig. 1. Of the region’s roughly 35-Bcfd production, approximately 11 Bcfd comes from the dry Marcellus in northeastern Pennsylvania—gas composed almost entirely of methane with minimal natural gas liquids. The remaining 24 Bcfd emerges from the wet Marcellus/Utica: roughly 10 Bcfd from northern West Virginia, 9 Bcfd from southwestern Pennsylvania, and 5 Bcfd from eastern Ohio. These wet gas areas produce significant volumes of valuable NGLs, including ethane, propane and butane, with more than 1.0 MMbpd currently being recovered. 

Fig. 2. Thickness of Marcellus shale. Map: USGS.

The geological differences are striking. In northeastern Pennsylvania, the Marcellus sits 5,000 to 9,000 ft below the surface and ranges in thickness from less than 5 ft to more than 250 ft, Fig. 2. The Utica, located several thousand feet deeper, was deposited approximately 450 million years ago—long before the Marcellus’ Devonian-age formation around 390 million years ago. In areas where both formations are developed, well performance in the Utica typically exceeds the Marcellus, due to greater reservoir thickness and higher pressure at depth. 

RIG ACTIVITY 

As of January 2026, the Marcellus/Utica maintains 39 active drilling rigs—the highest level in more than a year, Fig. 3. At the time of writing, the count had held steady for five consecutive weeks, with Pennsylvania operating 18 rigs (unchanged for eight weeks), Ohio running 14 (steady for five weeks at its highest level in over a year), and West Virginia maintaining 7 rigs since May 2025. The split favors the Marcellus with 24 rigs versus 15 targeting the Utica. 

The stability in rig counts reflects the region’s unique economics. Major producers like EQT Corporation estimate the free cash flow break-even level at $2 per MMBtu’s following the company’s acquisition of Equitrans Midstream. Range Resources reports that 87% of its core, undrilled Marcellus inventory has a break-even below $2.50/MMBtu. These economics—among the best in North America—allow producers to maintain steady activity, even during periods of price weakness. 

Fig. 3. Storage tanks for produced water from natural gas drilling in the Marcellus shale gas play of western Pennsylvania. Image: USGS.

M&A ACTIVITY 

The Appalachian basin experienced significant consolidation over the past year, though on a smaller scale than the mega-mergers reshaping the Permian. The headline transaction was CNX Resources Corporation’s $505 million acquisition of Apex Energy II’s upstream and midstream assets, announced in December 2024 and closed in January 2025. The deal added approximately 36,000 total net acres in Westmoreland County, Pa., including 8,600 acres of undeveloped Utica leaseholds and 12,600 acres of undeveloped Marcellus tracts, Fig. 4. 

“This transaction represents a rare opportunity to acquire a highly complementary asset adjacent to our existing operations,” said CNX President and CEO Nick Deiuliis. “It underscores our confidence in the stacked pay development opportunities that have been unlocked from pioneering the deep Utica in this region.” The acquired assets were expected to produce 180-190 MMcfed in 2025, with extremely low operating costs of $0.16/Mcfe. CNX funded the acquisition through its secured credit facility, maintaining a strong balance sheet while expecting the deal to be immediately accretive to free cash flow per share. 

Another significant transaction involved Equinor and EQT Corporation’s asset swap in 2024. Equinor exchanged its operated assets in the Marcellus and Utica formations in southeastern Ohio for a 40% stake in EQT’s non-operated interests in the Northern Marcellus formation in Pennsylvania, plus $500 million in cash. The deal allowed Equinor to consolidate its position in what it considers the most robust part of the Appalachian basin while EQT gained approximately 26,000 net acres in Monroe County, Ohio, directly adjacent to its existing operations. 

Fig. 4. CNX’s acquisition of Apex Energy II’s upstream assets in January 2025 gave the firm a rare opportunity to acquire 36,000 total net acres in Westmoreland County, Pa., which have since added to production at a low operating cost. Image: CNX.

These strategic bolt-on acquisitions reflect the maturing nature of Appalachian development. Unlike the frenzied leasing activity of the 2010s, today’s deals focus on capturing operational synergies, reducing per-unit costs, and optimizing development of stacked pay opportunities, where both the Marcellus and Utica can be produced from shared surface facilities. 

DATA CENTERS AND GAS DEMAND 

Perhaps no development has more profound long-term implications for Marcellus/Utica gas than the explosion in data center construction driven by artificial intelligence computing demands. Pennsylvania has emerged as ground zero for this transformation, with projects totaling more than $90 billion in investment announced or under development. 

In July 2025, PPL Corporation and Blackstone Infrastructure Partners announced a joint venture to invest billions in natural gas generation capacity, specifically to serve data centers. The partners plan to develop, build and operate new combined-cycle natural gas plants located directly above the Marcellus and Utica shale basins, with rapid pipeline access and strategic positioning in areas with high data center demand. PPL noted that within its Pennsylvania service territory alone, data center interest has reached over 60 gigawatts of potential projects, with more than 13 GW in advanced planning stages. 

The scale of individual projects is staggering. In western Pennsylvania, the former Bruce Mansfield coal-fired power plant site is being transformed into the Shippingport Power Station—a $3.2 billion natural gas-powered facility with a planned capacity of approximately 3.6 gigawatts, paired with a hyperscale AI data center campus. Natural gas will come directly from the Marcellus and Utica formations, with EQT Corporation participating as supplier. The project is expected to create 15,000 construction jobs and 340 permanent positions, generating over $6 billion in regional economic activity. 

Another massive development, TECfusions Keystone Connect in Upper Burrell, Westmoreland County, will transform 1,395 acres into a data center powered by a 3-gigawatt gas-fired plant. In Indiana County, a separate project will create a more than 3,200-acre campus with a 4.5-gigawatt Marcellus-fired power plant—the largest gas-fired generation facility in the United States. 

The Washington Post captured the significance with a headline that would have seemed improbable just a few years ago: “I have seen the future of AI. It’s in Western Pennsylvania.” The convergence of abundant, low-cost natural gas; existing pipeline infrastructure; and proximity to major population centers has positioned the Marcellus/Utica region to power the next generation of computing infrastructure. 

ECONOMIC BENEFITS 

The Marcellus Shale Coalition reports that the natural gas industry contributed approximately $41 billion to Pennsylvania’s economy in 2022 alone, supporting over 123,000 jobs with an average annual wage of $97,000—113% higher than the state average. Since 2012, impact fees have generated $2.5 billion for local governments, statewide environmental programs, and state agency oversight. 

“The natural gas industry contributes substantially to Pennsylvania’s economy,” said Jim Welty, who became president of the Marcellus Shale Coalition on Jan. 1, 2025. The data center boom promises to amplify these benefits exponentially. Pennsylvania’s data center projects are projected to generate over $65 million in direct tax revenue and create thousands of high-skilled jobs, with multiplier effects amplifying economic impact throughout the region. 

DATA CENTER INVESTMENTS 

The competition among states to capture data center investment has intensified. West Virginia has made serious efforts to attract AI data centers through targeted legislation explicitly designed for hyperscale computing facilities. Ohio, with its growing Utica oil window showing promising results from operators like EOG Resources, is positioning itself as both a gas and liquids play, capable of supporting diverse industrial development. 

The rapid expansion of data centers and associated gas-fired generation has sparked significant concern about impacts on electricity costs and grid reliability. PJM Interconnection’s capacity auction for 2025-2026 reached nearly $14.7 billion—up from just $2.2 billion the previous year. The grid operator initially forecast that large users, including data centers, could increase from less than 10,000 megawatts currently to about 20,000 MW by 2030, but revised that projection to 32,000 MW after several utilities requested adjustments, based on actual connection requests. 

“The primary driver of the increased capacity costs are the projections that we’re going to have the influx of a ton of hyperscale users onto our grid,” explained one PJM analyst. Consumer advocates warn that residential and commercial customers could face substantial rate increases. The Pennsylvania Utility Law Project and PennFuture are pushing regulators to adopt terms and conditions ensuring data centers don’t underpay for electricity, leaving other users to make up losses. 

Environmental concerns remain acute. While natural gas burns cleaner than coal, the massive scale of new gas-fired generation conflicts with climate goals. Critics argue that data centers will delay the retirement of fossil fuel plants and potentially keep coal and oil generation online longer than planned to meet peak demand. The federal Energy Information Administration EIA) projects that electricity used for commercial computing will increase from 8% of commercial sector electricity use in 2024 to 20% by 2050. 

MIDSTREAM UPGRADES 

The midstream sector has quietly undergone significant technological upgrades over the past year. Williams Companies, owner of the Transco pipeline system, replaced an aging fleet of engines at Compressor Station 165 in Pittsylvania County, Va.—the endpoint of Mountain Valley Pipeline—with new turbines that decrease emissions while occupying far less space. Enbridge has deployed artificial intelligence systems and replaced hundreds of flowmeters with newer models delivering real-time data, improving operational efficiency and reducing methane leakage. 

MPLX has a significant gathering and processing footprint in the Marcellus and Utica, including fractionation capacity acquired through its 2015 purchase of MarkWest. In 2025, MPLX bought out Summit Midstream’s interest in various gathering and processing joint ventures in the Utica for $625 million, expressing excitement about prospects for increasing activity, given existing infrastructure. 

The EIA reported that pipeline projects completed in 2024 increased takeaway capacity by approximately 6.5 Bcfd in key production regions, including Appalachia. This infrastructure buildout has been critical to supporting production growth and enabling the region to reach new markets. 

FUTURE PRODUCTION 

Industry forecasts project Marcellus/Utica production could reach 40 Bcfd by 2035, though the timeline may accelerate, if data center demand materializes, as expected. The region’s competitive advantages remain formidable: among the lowest break-even costs in North America, abundant proven reserves (CNX Resources alone held 8.74 Tcfe, as of Dec. 31, 2023), and existing infrastructure that can be leveraged for expansion. 

The Trump administration’s energy policies, which prioritize domestic production and LNG exports, create a favorable regulatory environment. However, pipeline development remains challenging, despite federal support. The Regional Energy Access Project faced a setback when the U.S. Court of Appeals for the District of Columbia revoked FERC’s certificate, highlighting ongoing vulnerability to legal challenges. 

Several proposed projects could add capacity: Iroquois’s Expansion by Compression Project and Enbridge’s Project Maple aim to bring new takeaway options. The Greene Interconnect Project, proposed as a new interconnection on MVP to deliver 1,000 MMcfd to the Columbia Gas Transmission system, awaits regulatory approval, with an in-service date potentially as late as 2028.

Fig. 5. A drilling rig at a well site in the Marcellus shale gas play of southwestern Pennsylvania. Image: USGS.

The emergence of the Utica oil window in eastern Ohio represents an underappreciated opportunity. EOG Resources acquired Encino Acquisition Partners for $5.6 billion in 2024, establishing the Utica as a “third foundational play” alongside Permian and Eagle Ford assets. EOG planned to complete 20 net wells in the Utica in 2025, up from six the previous year, with results proving competitive with the Permian. The proximity to existing refineries and infrastructure gives Ohio Utica oil a transportation advantage over more remote basins. 

CONCLUSIONS 

The Marcellus/Utica shale has evolved from the shale gas revolution’s original poster child to a mature, steady producer that now stands on the cusp of a second growth wave. After years of pipeline constraints and regulatory uncertainties that limited expansion, the region is poised to capitalize on artificial intelligence’s voracious appetite for reliable, affordable electricity. 

The past 12 months demonstrated that major infrastructure projects can still be completed despite opposition, that operators can maintain profitability even during price downturns, and that innovation in horizontal drilling and hydraulic fracturing continues to unlock resources previously thought uneconomical, Fig. 5. The stacked pay development of both Marcellus and Utica from shared surface facilities represents operational sophistication that has been years in development. 

Whether Pennsylvania, West Virginia and Ohio can successfully navigate the competing pressures of economic development, environmental protection, and grid reliability will determine if the Marcellus/Utica fulfills its potential as America’s energy powerhouse for decades to come. The opportunity is unprecedented: abundant resources, proven technology, willing investors, and surging demand. The question is whether policy, infrastructure, and public acceptance can keep pace with the breakneck speed of AI-driven transformation. 

As 2026 unfolds, all eyes are on western Pennsylvania, where the future of American energy and technology are converging in ways few could have imagined when the Marcellus boom began less than two decades ago. The stakes—for energy security, economic prosperity, and climate policy—could not be higher. 

Three states take action 

The governments of three states‍—West Virigina, Ohio and Pennsylvania—are actively focused on aiding the growth of the shale industry. Here’s a rundown of their activity over the past year or so. 

Fig. 6. West Virginia Governor Patrick Morrisey (Rep.) has been supportive of efforts to improve oil and gas regulations for operators. Image: Official photo.

In West Virginia, the most significant shale-related regulatory development was receiving Class VI primacy from the EPA on Jan. 17, 2025, making it the fourth state in the nation with this authority. This grants the WV Department of Environmental Protection authority to oversee permitting and regulation of Class VI wells used to inject carbon dioxide deep underground for long-term storage. The approval process took less than a year—West Virginia submitted its application on May 1, 2024, and received approval eight months later. The final rule became effective on March 28, 2025.  

WV Governor Patrick Morrisey (Fig. 6) signed House Bill 3336 on May 15, 2025, which changed statewide standards for plugging abandoned and orphaned oil and natural gas wells. The legislation allows abandoned wells to be plugged by piercing the casing and filling it with cement instead of removing the entire infrastructure, which was previously required. 

The 2025 legislature addressed several tax-related matters affecting the industry. Committee Substitute for Senate Bill 22 provided enhanced damages for non-payment of royalties from oil, natural gas or natural gas liquids production. House Bill 2014, signed into law on April 30, 2025, created opportunities for natural gas developers through the Certified Microgrid Development Program, removing the limitation that only renewable resources could generate electricity within microgrid districts. The program established special property tax treatment for High-Intensity Data Centers, effective July 1, 2025, through Dec. 31, 2055. Additionally, Senate Bill 840 proposed withholding WV personal income tax on natural resources royalty payments to out-of-state lessors, effective for taxable years beginning after Dec. 31, 2025.  

The regulatory actions occurred against a backdrop of declining drilling activity. Horizontal gas well permits fell to all-time lows in 2023 and 2024. In the 2023-2024 fiscal year, the natural gas and oil industry accounted for over $660 million in state revenue via severance and property taxes. WV's actions reflected a strategy to support the industry through streamlined regulations and carbon capture infrastructure while addressing revenue collection and environmental compliance. The Class VI primacy represents the state's most transformative policy shift, positioning WV to lead in carbon capture technology deployment, while the microgrid legislation creates pathways for natural gas to power data centers and other high-demand facilities. 

In Ohio, state policy in 2025 largely continued a multiyear pattern of supporting shale gas development and associated midstream and power sector buildout. The Republican-controlled legislature and the DeWine administration had already, in earlier sessions, opened state lands for oil and gas leasing and weakened parts of the renewable energy mandate, which effectively tilted the energy mix further toward natural gas and away from rapid renewables expansion. By 2025, this orientation showed up less as splashy new statutes and more as ongoing administrative approvals and economic development initiatives that assumed continued, largescale shale output. State-backed economic development entities highlighted billions in upstream and midstream shale investment and framed shale sourced gas as critical feedstock for new industrial projects and rapidly expanding data center-driven power demand. Policy messaging from state-supported organizations portrayed shale as a long-term pillar of the state’s industrial strategy and emphasized Ohio’s role, along with West Virginia and Pennsylvania, as part of a “strategic energy asset” region for the U.S. 

One strand of Ohio state activity in 2025 involved facilitation of pipeline and related infrastructure to move shale gas to new loads, especially natural gas-fired power plants serving large computing and datacenter campuses. Analyses commissioned by a state-created economic-development corporation documented construction of new high-pressure intrastate gas pipelines and compressor upgrades that were proceeding under state regulatory oversight and, in practice, enabled higher offtake from Utica shale production areas. At the same time, the legacy of earlier legislative moves—such as prior decisions to classify natural gas favorably in state energy policy and to allow leasing of certain public lands for oil and gas—continued to shape permitting outcomes in 2025, because those statutory frameworks guided how agencies evaluated new shale-related projects. In short, 2025 Ohio state actions toward shale were primarily supportive and facilitative, rather than restrictive, focused on integrating shale gas into industrial growth, power generation, and regional energy security narratives. 

Pennsylvania’s 2025 state-level posture toward the shale industry was more ambivalent, reflecting the state’s longstanding role as a top shale gas producer but also rising concern about environmental and community impacts. On one hand, state leaders continued to view Marcellus and Utica production as economically central and supported midstream infrastructure that underpins power exports and industrial activity, consistent with regional arguments that Ohio, WV, and Pennsylvania collectively form a critical energy supply bloc for the country. On the other hand, by 2025, Pennsylvania also faced mounting scrutiny over air and water impacts, methane emissions, and compliance records at shale gas facilities, which put pressure on state regulators and legislators to tighten oversight or enforcement, even if such discussions did not always translate into sweeping new statutes that year.  

Last year saw the continued struggle of petrochemical ventures that had been heavily incentivized by the state in prior years, especially the large ethane cracker complex in Beaver County. Earlier administrations had granted major state tax subsidies premised on the idea that abundant shale gas liquids would anchor a durable petrochemical “renaissance,” but by early 2025 the facility’s reported underperformance and even exploration of a potential sale signaled that those earlier pro-shale, pro-petrochemical bets by state government were not yielding the anticipated returns. While this development does not itself constitute a new 2025 legislative act, it is a direct consequence of prior state decisions vis-à-vis the shale value chain and shaped ongoing policy debates in Harrisburg about whether to continue, revise, or curtail such subsidy-driven strategies. At the same time, watchdog and environmental groups documented continuing violation patterns among shale operators and called on state agencies to strengthen enforcement, implicitly critiquing past regulatory leniency and seeking a shift in how the Commonwealth manages its shale industry going forward. 

Cleveland State University’s Levin College, under contract to JobsOhio, publishes a biannual Shale Investment Dashboard that estimates direct capital spending across upstream (drilling and completion), midstream (gathering lines, processing, pipelines, compression), and downstream (power plants, petrochemicals, fueling, and other gas-using facilities). The most recent publicly described edition indicates that cumulative shale-related investment in Ohio reached roughly $111.1 billion by June 2024 and approximately $114.6 billion by December 2024. Those numbers imply about $2.9 billion in new capital in first-half 2024 and $3.5 billion in second-half 2024, but they do not yet split out first-half and second-half 2025. 

Several trends carried into 2025: a rising share of upstream spending going to oil-rich portions of the Utica; continued midstream investment averaging well over $200 million per six-month period since early 2023; and relatively modest downstream spending, compared to drilling and gas-gathering outlays. It also highlights more than 30 mi of new high-pressure intrastate pipeline construction that began in 2025 to serve gas-fired power plants supplying large datacenter loads in central Ohio. This is one of the few clearly identified 2025 midstream investment initiatives tied directly to shale-derived gas. 

Because the current public dashboard only states cumulative totals through the end of 2024 and then offers qualitative comments about 2025 activity, there is no reliable, officially compiled figure yet for total shale-related capital in either half of 2025. The best documented 2025 item is the start of construction on those 30plus mi of high-pressure intrastate pipeline to move shale gas to new gas fired power plants, which likely falls mainly into first-half 2025, given that the report speaks of construction that “began in 2025” when discussing a 2024 investment baseline. The same set of sources stresses that strong upstream drilling momentum from late 2024, particularly oil-focused wells in the Utica, was expected to continue into the first half of 2025, but again without a dollar breakdown by half-year.  

In summary:  

• Upstream drilling and completion spending remained robust across both halves of 2025, following record drilling in second-half 2024 and a growing oil share;  
• Investment in 2025 included at least one cluster of intrastate pipeline projects totaling over 30 mi to feed power generation for data centers;  
• Downstream investment in 2025 almost certainly remained modest, relative to upstream, with gas-fired power buildout driven by datacenter demand as the key theme.