Reports: Marcellus Reserves Larger Than Expected There's been plenty of debate over the Marcellus Shale natural gas field, but new research adds a twist that could impact political and environmental battles. Two independent financial firms say the Marcellus isn't just the biggest natural gas field in the country - it's the cheapest place for energy companies to drill. One of the reports adds that the Marcellus reserves that lie below parts of Pennsylvania, West Virginia, Ohio and New York are far larger than recent government estimates, while another said the powerful combination of resource, cost and location is altering natural gas prices and market trends across the nation. The Marcellus could contain "almost half of the current proven natural gas reserves in the U.S," a report from Standard & Poor's issued this week said. Another recent report from ITG Investment Research, a worldwide financial firm based in New York, found that a detailed analysis of Marcellus well production data suggested that federal government estimates of its reserves "are grossly understated," according The new information increases the likelihood that natural gas will be used for more and more energy needs, such as city buses, industrial use, and electric power generation, according to Manuj Nikhanj, the head of Energy Research at ITG. And though low wholesale prices have squeezed drilling companies' revenue, the S&P report says the Marcellus has the lowest production cost of any natural gas field in the nation, adding to the likelihood of a continued boom. "The amount of resource that's available at relatively low cost is fairly enormous," Nikhanj said. The Marcellus is a gas-rich formation thousands of feet below much of the four states, but current production is centered in Pennsylvania and West Virginia. Earlier this year, the federal Energy Information Administration sharply lowered its estimates of Marcellus reserves, from 410 trillion cubic feet down to 141 trillion cubic feet. That adjustment was widely reported, including by The Associated Press. But that lowered estimate doesn't correspond with actual well production, said Nikhanj. He said their analysis shows that the Marcellus contains about 330 trillion cubic feet of gas, more than double the size of the next largest field in the nation, the Eagle Ford in south Texas. Some financial firms and critics of gas drilling had suggested that the EIA estimates supported theories that Marcellus production might decline more rapidly than expected, and thus be far less profitable for energy companies. But Nikhanj said a review of actual Marcellus well data shows that on average they're producing more gas than expected, not less. Jonathan Cogan, a spokesman for the EIA, pointed out that its reports have always noted that Marcellus estimates "are likely to continue evolving as drilling continues and more information becomes publicly available." Serious drilling in the Marcellus began only a few years ago, and many areas still have few or no wells, which makes the task of estimating reserves more difficult. The S&P report said the growing output from the Marcellus is putting pressure on energy companies in Canada and the Rocky Mountains, which have traditionally exported large amounts of gas to the lucrative Northeast market. But it appears that in the near future, the Northeast will get most or all of its gas from the Marcellus.