The Government Wants to Regulate and Control Hydraulic Fracturing

The process of hydraulically fracturing (fracing) rocks deeply under ground to increase the production or recovery of oil and gas has been done for many decades, with few problems. Do a search on this site to find more information about how this is done and the environmental concerns.
Peter

NAPE: Frac regulation Washington's 'worst threat'

By OGJ editors
HOUSTON, Aug. 26 -- A move to regulate hydraulic fracturing federally is the “biggest threat our industry has ever seen in Washington,” Bruce Vincent, vice-chairman of the Independent Petroleum Association of America, said Aug. 26.

Joel Noyes, IPAA director of government relations and industry affairs, expressed a low expectation for passage of most of the Obama administrations frenzied agenda, much of which contains negative provisions for oil and gas producers.

The atmosphere in Washington is one of “almost chaos,” said Noyes, and the environment is very partisan. The agenda is so congested because of the Democratic desire to push contentious legislation through before the 2010 election year, he said.

Ninety percent of wells are hydraulically fractured, some dozens of times, Vincent told the Summer NAPE E&P Forum in Houston. In the 60 years that the industry has been fracturing wells under state regulation, no case of fresh water contamination by the procedure has been documented, he said (OGJ Online, July 2, 2009).

Greater frac regulation is coming, predicted William Coates, president, Schlumberger Oilfield Services North America. The question is whether the industry can manage enough input that final rules are formed in a cooperative manner, he said.

Careful Drilling Needed To Produce Shale Gas

It is possible to "steer" a well while it is being drilled, "land" it exactly where desired, and keep the well drilling for thousands of feet within a thin target zone, or "sweet spot"........ and for a lot less than $100,000. I speak from experience.
Peter

NAPE: Drastic improvements needed in shale gas

By OGJ editors
HOUSTON, Aug. 26 -- Efficiency improvements of at least an order of magnitude are needed in US shale gas plays because field costs will not stay at the levels to which they have dropped since late 2008, said a speaker Aug. 26 at the Summer NAPE E&P Forum in Houston.

Now that the industry has mastered combination of horizontal drilling and multiple frac stages, the rate of technology growth seems to be slowing, said William Coates, president, Schlumberger Oilfield Services, North America. Taking more measurements in each well may be the key.

Drilling and completion capital costs are not going to stay low, and field service costs may begin to increase within a few months, said Coates.

The proliferation of frac jobs to as many as several dozen per well is inefficient, and most operators don’t take enough measurements in the vertical or horizontal portions of shale gas wells once they have completed their initial reservoir characterization drilling, he said. The move from science mode to gas manufacturing is too abrupt.

Companies should set a goal of obtaining the same ultimate recovery by “doing less,” Coates urged. They must find ways to cut the drilling time of a typical shale well to 7 days from 28, for example, by attaining the capability for a single bit run for the vertical part of the hole and one bit run for the curve and lateral.

Landing the lateral at the depth of the sweet spot at any given well location could result in twice to three times the ultimate recovery if an operator spent an extra $100,000 on measurements, Coates estimated.

Other steps toward efficiency could come in the use of friction reducers and biocides to halve the amount of water required for fracs, laying fiber optic cable outside casing to measure vibration to learn which frac stages are producing, and learning how to conduct fewer inefficient fracs by using log-while-drilling measurements to select perforated intervals.

Colorado School Of Mines Leads The Way In Natural Gas

It's about time America wakes up to the opportunities to create jobs, increase government revenue and provide abundant clean energy from non-foreign sources.
Peter

Mines institute to lead nation in natural gas research

GOLDEN, Colo., Aug. 24, 2009 – Colorado School of Mines has announced the establishment of the Unconventional Natural Gas Institute (UNGI) for the upstream research and development of natural gas, which is clean-burning, helps minimize greenhouse gas emissions, and is in great supply in the United States.

“This lower carbon alternative will contribute to the diversification of our domestic energy supplies. It’s a critical piece in the nation’s energy puzzle,” said Mines President M.W. Scoggins. “Mines is the ideal hub to lead innovative developments in this vital energy arena.”

The UNGI draws from Mines’ unique, specialized expertise in all areas of upstream natural gas research – including petroleum engineering, geology, geophysics, petrophysics, chemical engineering and engineering. And it builds on the school’s already significant research in the area of unconventional natural gas resources, as well as its strong partnerships with industry and government. The institute’s interdisciplinary efforts are directed by Jennifer Miskimins of the Mines Petroleum Engineering Department.

Natural gas is an abundant domestic resource. Based on work directed out of Mines, the Potential Gas Committee recently reported estimates of gas resources increasing from 1,300 trillion cubic feet in 2006 to 1,800 trillion cubic feet in 2008 – with the majority of the increase from unconventional resources such as shale gas.

-MINES-

Contact:

Karen Gilbert, Public Relations Specialist / 303-273-3541 / Karen.Gilbert@is.mines.edu

Marsha Williams, Director of Integrated Marketing Communications / 303-273-3326 / marswill@mines.edu

Foreign Energy Companies Invest In US Shale Gas Plays

Foreign energy groups buy into US natural gas

By Sheila McNulty in Houston

Published: August 23 2009 21:57 Last updated: August 23 2009 21:57

A growing number of foreign energy companies eager to tap into America’s vast natural gas reserves is looking to invest in independent companies, while estimates of US supplies continue to increase.

Continued here: http://www.ft.com/cms/s/0/55b24dce-9025-11de-bc59-00144feabdc0.html?nclick_check=1

Finally, The Gas Industry Is Fighting The Nonsense Of Man-Caused Climate Change

Finally industry if fighting back over the nonsense of man-caused global warming.
Peter

Gas Industry Girds to Fight in the Senate Over Climate

By BEN CASSELMAN

The U.S. natural-gas industry, disappointed by the climate-change bill passed by the House of Representatives in June, is counting on new Democratic allies and a stepped-up lobbying campaign to push measures through the Senate that will favor gas over coal and oil.

The climate-change debate in the Senate, which is expected to involve several committees after Labor Day, comes at a critical time for the gas industry. It faces a glut that has driven natural-gas prices below $3.20 per million British thermal units, their lowest level since 2002. In addition, huge new gas discoveries in Texas, Louisiana, Pennsylvania and elsewhere have produced a surge in supply.

The House bill, known as the American Clean Energy and Security Act, focuses on "clean coal" research rather than encouraging natural-gas use. Many in the gas industry concede they were caught off guard by both the coal industry's intensive lobbying campaign and the speed with which the House acted.

"We were not prepared for the pace at which the House legislation proceeded," says Jim Hackett, chairman and chief executive of gas producer Anadarko Petroleum Corp.

But Mr. Hackett says the industry won't repeat its mistake with the Senate. He and other CEOs have formed a new lobbying group, America's Natural Gas Alliance, and pledged about $80 million to the effort, which will include a national media campaign in the fall.

The alliance's members include more than two dozen of the top natural-gas producers in the U.S., including Chesapeake Energy Corp., XTO Energy Inc. and Devon Energy Corp.

David Trice, who is chairman of both the Alliance and gas producer Newfield Exploration Co., stepped down as Newfield's CEO in May in part to focus on the lobbying effort. He says he has met with 20 senators since the group was formed in March.

The gas-industry's goals in the Senate include incentives that will encourage power companies to switch to natural gas from coal and lead truck fleets to convert to natural gas from diesel. Lobbyists will also seek to limit companies' ability to atone for their pollution via carbon "offsets," such as planting trees overseas, which reduce the incentive to switch to cleaner fuels like gas.

At a recent conference on clean energy in Las Vegas, former Vice President Al Gore, Senate Majority Leader Harry Reid and Energy Secretary Steven Chu all spoke positively about using more natural gas.

Following the conference, John Podesta, who co-led President Barack Obama's transition team last winter and who heads the liberal Center for American Progress, co-wrote a paper with former Colorado Sen. Tim Wirth advocating greater use of natural gas.

Environmental groups are also pushing the Senate to embrace natural gas as a "bridge fuel," which would allow the U.S. to move away from coal and oil faster than it could using renewable fuels alone.

"I think people are realizing that instead of gas being an afterthought, gas is a balance wheel of the new market," says Carl Pope, executive director of the Sierra Club, an environmental group.

But the gas industry must overcome major hurdles. Other energy producers are also mobilizing. A major theme of the coal industry has been the relatively stable price of coal compared with volatile natural-gas prices. Meanwhile, major natural-gas consumers, including chemical companies and many utilities, oppose increased use of natural gas because it could drive up costs.

Mr. Trice concedes that the industry was slow to recognize the need to persuade lawmakers that the U.S. can burn more gas without causing price spikes because of the new gas discoveries.

"We weren't up there telling them how things have changed over the last couple years," Mr. Trice says.

"It would've been nice if this organization existed a year ago," he adds. "But we're part of the debate today."

Write to Ben Casselman at ben.casselman@wsj.com

Printed in The Wall Street Journal, page A20

Is America Committing Economic Suicide?

I wonder how much of the information in the following article is true. Is America committing economic suicide by chasing "alternative energy" (solar, wind, biofuels, etc.) while demonizing the oil and gas industry? This is where the radical environmentalists and global warming alarmists have led us. It is way past time to turn this "ship of state" around, because we're headed in the wrong direction.
Peter

A rush for black gold in the Gulf

Examiner Editorial

August 20, 2009

Major new offshore drilling for oil and natural gas in the Gulf of Mexico will soon be a reality. The big question is whether Americans will be part of it. Brazil, China, India, Norway, Spain and Russia have all signed agreements with Cuba and the Bahamas to initiate exploration and production in the Gulf of Mexico within the next two years. So the prospect of seeing Russian oil rigs 45 miles off the Florida Keys -- where American oil companies are now forbidden to drill -- is a very real possibility.

The U.S. Geological Survey estimates that the eastern Gulf region contains 3 billion barrels of oil and more than 11 trillion cubic feet of natural gas. Last summer, former President George W. Bush lifted the executive branch moratorium his father signed in 1990 on new drilling in 85 percent of America's territorial waters. The Democratic Congress then wisely let the congressional ban expire as well. So the only thing keeping U.S. firms from drilling off our own continental shelf is President Barack Obama and his secretary of the interior, Ken Salazar, who is slow-walking the approval process that must be cleared before the work can begin. Meanwhile, foreign nations are jockeying for the best spots. The Obama administration, incredibly enough, is giving Brazil a $2 billion loan from U.S. taxpayers to finance that nation's development of its own off-shore energy resources in the Atlantic.

According to the American Petroleum Institute, the development of America's coastal oil and gas resources would generate more than $1.3 trillion in new government revenue and 160,000 high-paying jobs over the next two decades. Senators Lisa Murkowski, R-Ark., and Mary Landrieu, D-La., are bipartisan co-sponsors of a bill that provides coastal states such as Florida their fair share of revenues produced by off-shore drilling and production. The same thing should be done for states on the East and West coasts. California Gov. Arnold Schwarzenegger and the state's lawmakers hope to tap deposits off Santa Barbara to generate billions in royalties, and Virginia's front-running gubernatorial candidate Bob McDonnell has made drilling 50 miles off that state's coast a key component of his energy plan.

Many environmental objections to deepwater drilling have been overcome. For example, 4-D seismic surveys provide pinpoint accuracy for well location. New technology also enables one drilling platform to reach deposits 40 miles away in water up to 10,000 feet deep (note the same technology could help other nations drill just outside our coastal limits while tapping into resources inside the boundary). According to the U.S. Minerals Management Service, less than 0.0001 percent of the 1.4 billion barrels of oil pumped offshore since 1980 has been spilled -- a remarkable safety record and a tribute to American energy ingenuity.

Find this article at: http://www.washingtonexaminer.com/opinion/A-rush-for-black-gold-in-the-Gulf-8127872-53705292.html

Chesapeake Energy And Haynesville Shale Gas Production

Chesapeake Energy is reporting some very significant production results from their Haynesville Shale Gas Play activity.
Peter

By OGJ editors (source)

HOUSTON, Aug. 3 – Chesapeake Energy Corp. expects to hike its Haynesville shale gas output to a gross operated 575 MMcfe/d at the end of 2009 and as much as 1.025 bcfe/d by the end of 2010.

The production rate in late July was 175 MMcfe/d net and 285 MMcfe/d gross operated.

The company plans to average 33 operated rigs in the second half of 2009 and 36 rigs in 2010 compared with 29 currently active.

Chesapeake has added 40,000 net acres since Mar. 31, 2009, and is now the play’s largest leasehold owner at 510,000 net acres. Plains Exploration & Production Co., Houston, Chesapeake’s 20% joint venture partner, owns another 113,000 net acres.

The two companies have drilled and completed 74 Chesapeake-operated horizontal wells.

Assuming a flat Nymex gas price of $7/Mcf for the life of the well, Chesapeake estimated pretax rates of return from a 6.5 bcfe horizontal Haynesville well drilled for $7.5 million of 42% excluding the benefit of drilling carries and more than 345% including carries.

Chesapeake recovered 35% of its $4.7 billion Haynesville leasehold investment with the sale of a 20% interest to Plains, bringing Chesapeake’s net investment in Haynesville leasehold to $6,000/net acre.

Three second quarter completions achieved pipeline-constrained initial 30-day average production of 15.3, 14.2, and 15.2 MMcfe/d. The three wells are in Caddo and De Soto parishes, La.

For a far more thorough discussion of Chesapeake's production activity, see the following article:

http://www.chk.com/News/Articles/Pages/1314522.aspx

The following is a brief summary:

Company Reports 2009 Second Quarter Production of 2.453 Bcfe per Day, an Increase of 4% over 2009 First Quarter Production and 5% over 2008 Second Quarter Production

Company Increases Proved Natural Gas and Oil Reserves by 0.7 Tcfe to 12.5 Tcfe, Anticipates Reporting 2009 Second Quarter Drilling and Net Acquisition Costs of Less Than $1.00 per Mcfe; Company Record Set for Organic Reserve Additions and Reserve Replacement Over a Six-Month Period; Year-End Proved Reserve Targets for 2009 and 2010 Reaffirmed at 14 and 16 Tcfe, Respectively