Oil and Gas Industry Creates Jobs: America Should Be Proud And Thankful

Let's look at the bright side of things in America: the oil and gas industry.  During these unusually hot summer days I wonder how many people understand how the electricity is generated that powers their air conditioners enabling them to live so comfortably.  The same applies to heating in the winter, and the abundance of food made available to us year-round.  The source of these wonders is mostly oil and gas and coal.  And of course the production of these commodities creates jobs, which creates taxes, which pays (at least partly) the government's bills.  Let's take some time to be thankful for the oil and gas industry and all the people making this possible.
Peter

Oil and Gas: America’s Brightest Job Spot

by Robert Bradley Jr.
July 5, 2012

source: http://www.masterresource.org/2012/07/brightest-jobs-oil-and-gas/

“For many American families, struggling to make ends meet in the jobless recovery, energy development is an answer to a prayer. The fact that the oil and gas boom has been done without taxpayer subsidies—and despite reactionary public policies at the federal level and in some states (such as New York)—means that more economic opportunity is on tap.”

In this so-called “jobless” recovery, aka the Great Recession, an estimated 20 million American workers are unemployed or underemployed. One out of every two college students cannot find work in their chosen fields. Competition for well-paying jobs is likely to become even tougher when thousands of men and women in uniform return home from Afghanistan and look for ways to support their families.

Although many U.S. industries have been reluctant to hire new workers due to political and economic uncertainty, the oil and natural gas industry is booming worldwide. Jobs are available on offshore rigs, at service companies that support energy production activities, and onshore where technologies are unlocking energy supplies from impermeable rock deep underground.

Hydraulic fracturing, directional drilling, and 3- and 4-D computer modeling, among other high technologies, are helping to produce oil and natural gas from shale formations that once were believed to be too difficult or too expensive to tap. In the process, they are creating jobs at large and small companies in dozens of states. In the bigger scheme of things, this renaissance means that the hydrocarbon energy era has an open-ended future.

In North Dakota, where drillers are producing crude oil from the Bakken Shale, workers are finding jobs offering wages that are significantly higher than the national average. Truck drivers are being paid $80,000 a year to start. Some workers on oil rigs are being paid six figures. And yet many jobs are going begging. According to the mayor of Williston, “A lot of jobs get filled every day, but it’s like for every job you fill, another job and a half opens up.” In April, North Dakota had a jobless rate of 3.0 percent, the lowest in the country.

In Pennsylvania’s Marcellus Shale region, tens of thousands of jobs have been created, opening opportunities for unskilled laborers to obtain training and earn excellent wages. According to the state’s Department of Labor and Industry (Center for Workforce Information and Analysis), jobs for drill operators are expected to grow by nearly 85 percent this year, while the job growth rate otherwise in Pennsylvania is projected to be less than three percent.

The expansion of the oil and natural gas industry is also occurring at Texas’s Eagle Ford, Louisiana’s Haynesville Shale, Arkansas’ Fayetteville Shale and other energy-rich rock formations. Taken together, they are increasing domestic energy supplies, making energy more affordable, and spawning subsidiary investments in the private sector creating additional jobs.

A steel plant in Ohio is adding 200 jobs to produce more drill pipe. A new ethane plant in Texas, which will use natural gas to produce plastics, is expected to generate 400 jobs. Frito-Lay is purchasing natural gas-powered trucks to deliver consumer products around the country. New cleaner-burning gas-fired power plants are being built to replace old coal-fueled electricity generating facilities. (But expect coal-fired power to improve its technology too to remain competitive in many respects.)

These jobs are being created by companies, not the federal government. And they are based on “made in the USA” technologies that have the potential to greatly increase nation’s energy security and alter the world’s balance of power. As U.S. oil and natural gas supplies increase, some experts believe American energy independence is on the horizon.

Philip Verleger, an economist at the Peterson Institute for International Economics, believes the United States could be energy self-sufficient in the next 10-plus years and could become a net energy exporter.

Yet, some environmental groups are reluctant to embrace this good news scenario. They see domestic energy’s success as a threat to their green agenda. In their continuing push to reduce carbon dioxide emissions, they are working to stop hydraulic fracturing, shut in oil and natural gas wells, and in the process, slow or stop progress.

Their strategy is to promote fear of hydraulic fracturing worldwide. Concerns over groundwater contamination have prompted France and Bulgaria to ban fracturing and other countries are considering moratoria. Yet, despite efforts to find a link between fracking and drinking water pollution, U.S. Environmental Protection Agency (EPA) investigations have found no credible evidence to support the claim
.
Energy experts believe the reluctance of other countries to develop their shale resources is giving the United States a market advantage, prompting interest in exporting liquid natural gas (LNG) from the Gulf Coast. Italy, Lithuania, and Poland are building terminals to accept LNG imports, and LNG imports to the European Union are expected to grow by nearly 75 percent by 2035. Energy expert Daniel Yergin calls Europe “an obvious market” for U.S. LNG.

The home-grown energy renaissance could become a major reversal of fortune, wiping out 40 years of worry over U.S. reliance on foreign energy sources. According to an analysis by Wood Mackenzie, it also could create an additional one million jobs by 2018 if the government opened more onshore and offshore areas to exploration and development.

For many American families, struggling to make ends meet in the jobless recovery, energy development is an answer to a prayer. The fact that the oil and gas boom has been done without taxpayer subsidies—and despite reactionary public policies at the federal level and in some states (such as New York)—means that more economic opportunity is on tap.
—————-
Note: An earlier version of this op-ed appeared in The Hill (Washington, DC

Geosteering Of "Horizontal" Wells

A recent posting on LinkedIn inspired me to elaborate on this subject.  Much more could be written.   The subject under discussion is the drilling of "horizontal" wells, which are so crucial to the great increases in oil and gas production we are now seeing from formerly unproductive shales around the world.  Of course hydraulic fracturing is equally important (and sensational, thus "newsworthy").

I know from experience that it is possible to steer an actively drilling (and fast!) well AND it is possible to keep the drill bit within a few feet, sometimes less, of a desired stratigraphic horizon, "pay zone", or "target".  This is really what determines the success or failure of a well in these new "unconventional" shale plays.

Yes, of course the engineering aspects of drilling and completion are important, (a most respectful hat tip to my engineering friends).  And of course my geophysical seismic-interpreting friends provide an invaluable glimpse into the subsurface before the drilling begins.  However, the real success of these plays is dependent upon a knowledge of the stratigraphy of the rocks.  Some things never change.  I also think this can only be learned and appreciated by looking at rocks in the field, not only via "electric" logs and/or on computer screens.  That is why geologists do field work, sweat, get dirty, and break rocks with hammers.  They should anyway, and the more the better.

So, all new technology, the wondrous ability to turn a well bore from vertical to "horizontal", to follow a layer of rock sometimes only a few feet thick, thousands of feet beneath the surface, all comes down to a geologist knowing "where" that well bore is relative to the local stratigraphy.  If this is not correct, all the best seismic, fracture detection, petrophysics, geochemistry, and hydraulic fracturing are for naught.  If your well bore is in the wrong place you're just "outta luck bubba".

I am sure the successful drillers of all the shale plays being developed know these things and more.  Unfortunately, as is usually the case, whether in the oil and gas business, or the mining industry, the little guys make the discoveries and then the big guys swoop in and buy them out.  Think XTO and Exxon/Mobil, Petrohawk in the Eagle Ford, Brigham in the Bakken, or the beginning of the Barnett Shale play with George Mitchell's Mitchell Energy being acquired by Devon, and the list goes on.  Every oil company in the world wants to know how to produce these shales.  However, I'll share a  secret, it is not all computer software and drilling technology.  The secret lies in Wallace Pratt 's dictum that "Oil is found in the minds of men".  (I must add, men AND women with a knowledge of stratigraphy, and I've had the good fortune of being taught by some of the best, e.g. Dott, Pray, Weimer.... to name a few.)

Wallace Everette Pratt (1885–1981) was a pioneer American petroleum geologist.

from Pete  (source)  Subject: Geosteering & Geonavigating Oil & Gas Wells
 • In an attempt to simplify and clarify, I think most drilling and production challenges are directly related to stratigraphy, or the vertical and lateral changes in the characteristcs of sedimentary rocks. Look at any road cut through a layer of sedimentary rocks, look closely at the detail, then imagine drilling through this. The overwhelming influence on hydrocarbon production by the stratigraphy of the reservoir rocks is immediately apparent.

Therefore, whether "proactive" or retroactive, the most valuable form of geosteering or geonavigation is that which can show the drillers and engineers precisely where they are relative to the known surrounding rock layers (stratigraphy). I know this can be done, simply and inexpensively. The key element is the interpreter as much as the tools. The successful developers of plays like the Barnett, Haynesville, Bakken, Marcellus, and Eagle Ford Shales know this, although they tend to keep quiet about it.

(source)

The Permian through Jurassic strata of the Colorado Plateau area of southeastern Utah demonstrate the principles of stratigraphy. These strata make up much of the famous prominent rock formations in widely spaced protected areas such as Capitol Reef National Park and Canyonlands National Park. From top to bottom: Rounded tan domes of the Navajo Sandstone; layered red Kayenta Formation; cliff-forming, vertically jointed, red Wingate Sandstone; slope-forming, purplish Chinle Formation; layered, lighter-red Moenkopi Formation; and white, layered Cutler Formation sandstone. Picture from Glen Canyon National Recreation Area, Utah.

Another New Shale Play: Newfoundland, Canada

It looks like a new oil exploration and development play might be taking shape in Canada's northeastern Province of Newfoundland.  The target appears to be the stratigraphic equivalent of the Utica Shale of the Ohio, and New York areas in the United States.  In the area of interest off the west coast of Newfoundland around Port au Port Bay, they call this the "Green Point Shale".

source: http://seekingalpha.com/article/412511-newfound-billions-of-barrels-of-shale-oil-in-newfoundland?source=email_macro_view&ifp=0



Source: Shoal Point Energy website.
Here is a link to a map showing all of the oil and gas activity in eastern Canada.

Oil exploration and production is well established in the offshore basins of eastern Newfoundland with fields such as Hibernia, Terra Nova, and White Rose producing around 300,00 barrels of light crude per day.  (One wonders why exploration and production off Canada's east coast has been allowed where geologically similar areas off the U.S. east coast are off limits.)  Newfoundland is also "friendly" to the oil and gas business, both environmentally and economically.  There is even a refinery in Newfoundland , a good infrastructure network, and a trained workforce in place, presumably eager to expand and grow.  Again this is a refreshing contrast to the U.S.

The Green Point Shale in Newfoundland apparently compares well with the south Texas Eagle Ford Shale that is attracting so much attention.  These factors include total organic content (TOC) of the shales and the thermal maturity of the shales, that is their ability to contain and produce both oil and gas.  One major difference is the Green Point Shale is far thicker in this area than the Eagle Ford Shale is in Texas.

Apparently the Green Point Shale is much thicker than the Eagle Ford Shale, (and many other shales) because it has been through at least one episode of comressional tectonics, or mountain-building.  This has taken the layers of shale, and compressed them, pushing them together like a deck of cards on a table would be pushed together to overlap into a single large deck of cards.  This is a positive aspect to this play.  The negative to this "mountain building" is the layers of rock are much more structurally complex than the shales in for example, the Eagle Ford Shale, Barnett Shale, Haynesville Shale, and the Bakken Formation.  This makes for more difficult drilling and development.  On the other hand, these shales probably compare more favorably with the successfully developing Marcellus Shale in the Pennsylvania area of the eastern U.S.

The exploration of the Green Point Shale is in its preliminary stages but there are some very positive initial results in the area.  However the claims of "Billions" of barrels of oil seem premature and a bit sensational to me, still this area is very much worth watching.

This activity is discussed in more detail here:

Peter

Do We Have Much Oil And Gas Left In The United States?

Just look at this map.  And this is just the lower 48 for Obama's sake!  Someone tell him or his advisors (handlers).  Didn't he say something like "we can't drill our way" out of this energy crisis?  Sometimes I wonder what he is really smoking.  Look at this map closely.  There is oil and gs all over the place, not all of it easy to recover, but give us a chance Mr. Obama, please?  I? know it's there, I didn't create this map , but I know it's there, I've studied all these places.  Please, let us help you pay your bills and get out of debt.  Please Mr. President, before it is too late.
Peter

Exposing The Myth Of "Gasland"...It Is Just So Much Flatulence

A hat tip and thanks to Jim Kinser for this link to an important and very much-needed documentary reporting on the positive aspects of hydraulic fracturing.  Almost as important as "fracking" is to the production of oil and gas from "unconventional", previously uneconomic shale rocks is the film's exposure of the notoiously inaccurrate, distorted, inflamatory (pun intended) recent documentary film titled "Gasland".

From Jim Kinser, "FYI, there is also a documentary in post-production right now that claims to present our side of the fracking story entitled FrackNation and is soliciting contributions to finish the project. It's purpose is to counter Gasland's propaganda and deception. Check it out at"

http://www.kickstarter.com/projects/1009530098/fracknation

Gasland is, sad to say, is as biased and phony as Al Gore's now completely discredited documentary film, "An Inconvenient Truth".  See here for more on Al Gore and his decades-long hoax and pillage of the public's pocketbooks.

This new, pro-truth documentary about hydraulic fracturing sounds like a very worthwhile project and I encourage all who can to support it.  If we don't fight for the truth, who will?  Certainly not the environmental extremists who want to further damage America's economy.

As a personal aside, one of my first jobs in the oil and gas business was the exploration for, drilling and fracking of wells in the Wasatch Formation in Utah's Uinta Basin about 30 YEARS ago!
Pass this around.  People need to know the truth, or at least the other side of the story.
Peter

Al Gore should have been exposed and discredited long before he caused so much harm.  Nobel Peace Prize, Acadamy Award?  What a collasal joke!

American Science, Technology, and Business At Its Best

Someone tell the Democrats supporting the Obama Administration that the solution to our nation's economic and social problems is within our control.  We have the natural gas and oil resources within our borders to cleanly power our industry, create millions of high-paying jobs and generate the revenue needed to work our way out of debt.  Oh, and don't forget that the entire concept of man-caused global warming is being proven to be a hoax and a fraud, perpetuated by power-hungry losers like Al Gore.  See here: http://petesplace-peter.blogspot.com/

Forget the economic failures that are solar and wind power.  Oil and gas is here to stay, for the foreseeable future.  Horizontal drilling and the proven safe process of hydraulic fracturing these abundant oil and gas producing rocks such as the Marcellus, Bakken, Barnett, Woodford, and Eagle Ford Shales can transform (and save) America.  Pass the word around.  Let's get back on the road to real progress, not the phoney baloney that's been coming out of Washington the last few years.

Let's trust our real scientists and engineers, let real science prevail and take the power away from destructive purely political entities like the Environmental Protection Agency (EPA) and the United Nations (UN).  See here: http://thefellowshipofscientifictruth.blogspot.com/
American can survive the mess we're in.
Peter

FOR IMMEDIATE RELEASE


August 23, 2011

Contact: Travis Windle, 724-312-2230, travis.windle@fd.com

Patrick Creighton, 412-808-1112, patrick.creighton@fd.com



New Federal Data Highlights Staggering Amount of Clean-Burning American Natural Gas from the Marcellus Shale



USGS: 4,100% increase in technically recoverable Marcellus natural gas from 2002





Canonsburg, Pa. – Today, the U.S. Geological Survey (USGS) – an independent research arm of the Interior Department – released an updated assessment of undiscovered, technically recoverable American natural gas from the Marcellus Shale formation, considered to be second largest natural field in the entire world. According to USGS, “the Marcellus Shale contains about 84 trillion cubic feet of undiscovered, technically recoverable natural gas and 3.4 billion barrels of undiscovered, technically recoverable natural gas liquids.” USGS notes that “these gas estimates are significantly more than” its previous 2002 Marcellus assessment, “which estimated a mean of about 2 trillion cubic feet of gas (TCF) and 0.01 billion barrels of natural gas liquids” – representing a 4,100% and 33,900% increase, respectively.



Kathryn Z. Klaber, president and executive director of the Marcellus Shale Coalition, issued this statement upon reviewing the new USGS assessment:



“These new figures are further affirmation that the Marcellus Shale will continue to safely produce prolific amounts of clean-burning American natural gas for generations to come. While advent of shale gas development in the United States was only several years ago, its impact is proving to be profound and lasting.



“Gone are the days of America potentially relying on often-unstable regions and countries around the world to meet our growing natural gas demands. As this responsible development continues to expand across the Marcellus region, and the country, tens of thousands of Americans are finding work in an industry that is fundamentally strengthening our nation’s core.



“While some critics continue to question the viability of responsible domestic shale gas development, it is abundantly clear – as laid out by this new data – that the Marcellus Shale will continue to lead the way in meeting American’s energy needs for years to come.”



NOTE: Click HERE to view USGS’s updated assessment online. The USGS report follows a recent economic impact analysis conducted by researchers at Penn State University, which found that the Marcellus Shale formation could become the leading supplier of natural gas in the United States within a decade.

Barnett Horizontal Shale Gas Production Holds Steady

There is good news from where horizontal drilling and shale gas production was perfected, The Barnett Shale of north Texas. Even though there has been a dramatic decline in drilling activity because of lower gas prices, the production level of the existing and the few new wells appears to be holding steady. I interepret this as good news for the Barnett Shale and good news for all the similar shale gas plays such as the Haynesville, Fayetteville, and Marcellus Shales. Hopefully once these wells are drilled into the optimum stratigraphic location, properly fracture-stimulated and completed, they continue producing at substantial rates for a prolonged period. These are positive economic signals and something we're all concerned about. (Source) From the U.S. Energy Information Administration.
Peter

Prices, Investment, and Drilling Technology Drive Barnett Shale Production Growth. Despite a sharp decline in Henry Hub spot prices from the levels reached in the summer of 2008, natural gas production in the Barnett shale in Texas continued to climb through the middle of 2009 and appears to have reached an undulating plateau since then. Production growth in the Barnett shale comes from several large natural gas producers who continued to maintain strong production even in an environment of relatively low natural gas prices (see Figure). During 2005-2008, growth in the Barnett shale production was driven by high natural gas prices, successful application of horizontal drilling, and hydraulic fracturing, as well as significant investments made by natural gas companies in production assets and state-of-the-art technology. When natural gas prices declined sharply in the second half of 2008, the momentum in production growth continued, in part because of the 3-6 month lag generally observed between changes in prices and a production response. As natural gas prices continued to decline in 2009, so did the number of drilling rigs. However, despite more than a 60 percent reduction in the number of drilling rigs from the peak levels in 2007-08, production in the Barnett shale remained high due to several factors:

Increased per-unit production output as a result of improved production efficiencies from horizontal drilling (which allows multiple horizontal wells to be drilled from a single rig) and an improved understanding of how natural gas is produced from this formation. Large operators hedged a significant portion of their natural gas production on the futures market when natural gas prices were higher. Significant capital investments in acquiring technologies, leases, etc., combined with the resultant large debt, required continuous production so operators could service the debt. Contractual lease obligations require operators to continue drilling or risk losing leases. High initial production rates in the Barnett shale wells decreased the number of drilling rigs required to maintain and even to increase natural gas production output.

Europe Has Much To Learn About Shale (Unconventional) Gas

Before anyone gets too excited about the potential for shale gas or what some term "unconventional" gas potential in Europe, it must be recognized that there are political and environmental issues in Europe that are greatly different from those existing in the United States.

However, with the worldwide attention the problems with deepwater oil production in the Gulf of Mexico is receiving, the potential for finding and producing clean-burning natural gas, onshore, is drawing increasingly greater attention. The demand is there. The technology to find and produce this gas exists. It is the other problems which need to be overcome. Many countries in Europe could use an economic boost right now.
Peter

Does Europe Have Unconventional Gas?

(source)

It provides about half of the U.S. domestic natural gas production. And the U.S. product has already begun to shake up the market for gas in Europe. But the production of unconventional gas, which is usually tightly trapped in rocks and hard to extract, doesn’t seem likely to have a bright immediate future in Europe.

From a geological viewpoint, you could extract unconventional gas in Europe, according to Don Gautier, from the U.S. Geological Service. But that’s not the only thing that matters. Unconventional gas fields, particularly those tapping so-called shale gas, are very large and require the development of hundreds of wells.

Bloomberg

Chesapeake Energy drills on the Barnett Shale.

A field in northern Texas called Barnett Shale has about 8,000 wells covering an area roughly comparable to Belgium, the Netherlands and Luxembourg combined, Mr. Gautier says. “You can’t look at these wells as one well at a time, you have to look at thousands as a development plan,” says Mr. Gautier.

That is almost impossible for Europe, given high population density, regulatory difficulties of getting permits to drill over large areas that sometimes cross borders, and likely opposition from environmentalists and affected residents.

A new technology of digging horizontal wells — drilling vertically drill and then pushing out parallel to the ground — might offer some leeway.

Of course, all of this begs the main question: How much unconventional gas does Europe have and where are the main concentrations?

The country which promises most is Poland, where the government has granted concessions for research. However, the first exploration well is just being started, and the first estimates of how much gas is really there won’t come for four to five years, with production in 10 to 15 years, according to Ewa Zalewska, director of the department of geology and geological concessions at the Polish environment ministry.

“Shale gas is the gold rush of the 21st century,” she says. However, “it is too early to answer all the questions.”

Update: Perhaps by the time the first gas emerges, Bronislaw Komorowski, Poland’s likely next president, will have figured out that you don’t dig unconventional gas out of the ground like brown coal.

Horizontal Drilling And Geosteering Enable Shale Gas Production

In all the excitement (in some circles) about the production of gas utilizing the combination of "horizontal" or directional drilling and hydraulic fracturing of these wells, it is rarely, almost never, (outside of technical journals) described or discussed HOW these wells are drilled. How are they guided, how are they "steered" into and through the desired layers of rock, in this case shale? Many technologies are brought to bear in finding and producing this gas. Much of that work is held tight by energy companies and much of it goes unheralded. But that will change.
Peter

The Quiet Energy Revolution

FROM-American

By Max Schulz

How ironic that during the ‘drill, baby, drill’ demonstrations as gasoline prices spiked in 2007 and 2008, a silent revolution with natural gas was already underway that will make those concerns largely irrelevant

The 20th century was the century of oil. Wars were fought over it, and the outcomes of the century’s biggest conflicts hinged on the stuff. In World War I, for instance, Churchill’s conversion of the British Navy to oil gave the crown’s ships supremacy over German vessels. In World War II, when the Nazis and Japanese each failed to secure supplies of oil, they were doomed. Later, President Ronald Reagan, CIA Director William Casey, and America’s Middle Eastern partners manipulated global oil production to bankrupt the Soviet Union and win the Cold War. In the first half of the century, oil policy served as the catalyst for military victory. In the second half, oil helped propel the greatest economic expansion in the history of the world, and liberated mankind from the tyranny of immobility.

All hail oil! But not too much, because the 21st century won’t be defined by oil. It is more likely to be defined by a different fossil fuel: natural gas.

Two monumental shifts in the world of energy are underway right now: one technological, the other financial. They will change the way we power our lives (especially our cars), provide a real measure of energy security, and help curb greenhouse gas emissions. Neither shift has anything to do with the turn to a green renewable energy economy promised by President Obama.

Physics ensures that will never happen, no matter how much wishful thinking (and government subsidy) is applied. Sorry, greens, carbon-based energy will continue to dominate our energy future, not windmills or solar panels.

The first profound shift was made possible by a little-noticed technological breakthrough in the last three years that has changed the way we extract natural gas. Engineers now make use of two important innovations.

One is horizontal, or directional, drilling, which permits wells to move laterally beneath the surface instead of going straight down. This technology minimizes the number of holes that have to be drilled, leaving a smaller surface footprint and accessing a larger area.

The other technology is hydraulic fracturing, used to extract gas trapped in porous shale rock. In this process, also known as fracking, water and chemicals are pumped at tremendous pressure into shale rock formations to push gas into pockets for easier recovery.

By marrying and perfecting the two processes into a technology called horizontal fracking, engineering has virtually created, from nothing, new natural gas resources, previously regarded as inaccessibly locked in useless shale deposits. Suddenly, the mammoth shale formations in Texas, Pennsylvania, Ohio, New York, North Dakota, and elsewhere have the potential to produce abundant amounts of gas for decades to come.

How significant are these developments? Exxon Mobil announced in December that it will pay $41 billion—that’s right, billion—to acquire XTO Energy and its expertise at extracting unconventional natural gas resources. The French energy company Total SA, meanwhile, is paying $2.2 billion to acquire a 25 percent stake in Chesapeake Energy’s Barnett Shale operations in Texas.

Human ingenuity has turned theoretical gas reserves—too costly ever to be exploited—into practical resources. And just in time. Less than a decade ago, experts were noting that conventional natural gas production had begun to plateau, despite annual increases in the number of wells drilled. The National Petroleum Council warned in 2003 that “North America is moving to a period in its history in which it will no longer be self-reliant in meeting its growing natural gas needs.” In the spring of 2004, Federal Reserve Chairman Alan Greenspan warned that, driven by these looming shortages, wellhead natural gas prices might top $6 per thousand cubic feet by summer, roughly double 2002 prices; and indeed, until the recession brought down demand, natural gas did sell in the $5–$9 per thousand cubic feet range.

Horizontal fracking has helped eliminate many of those grave worries. As Pulitzer-prize winning author and energy analyst Daniel Yergin and his colleague Robert Ineson wrote recently in the Wall Street Journal, production in the lower 48 states “surged an astonishing 15 percent from the beginning of 2007 to mid-2008.” And this is just the tip of the iceberg, as production ramps up in the nation’s shale formations, such as in Marcellus, Bakken, and Haynesville. What was once a shortage has given way to a glut, or, as Yergin and Ineson put it, a “shale gale.”

Proven reserves of natural gas in the United States have been revised upward by 50 percent in the last decade, and those numbers are sure to climb higher as more shale gas is discovered. Perhaps not surprisingly, other nations are sending geologists to the United States to study techniques for extracting gas from unconventional sources. China, India, and Australia all have enormous shale fields. In the coming decades, the shale gale won’t be just an American phenomenon; it will blow all over the globe.

A technological advance created the first shift, driven by free markets not by government edict. The second shift complements the first, and has taken place again because of the way free markets work. That is the formation of a global market for natural gas, much the same as the global petroleum market.

We are accustomed to think of crude oil as a global commodity, its price the same roughly all over the world. Partly that is because oil is so easily transported. Turn on the taps, and a tanker ship can be filled with liquid crude before heading for any seaport on the planet. On land, oil can travel by pipeline, by truck, or even by the barrel or the one-gallon container. The portability of oil helped an international market begin to blossom more than a century ago.

Natural gas and natural gas markets, however, are different. Ethereal and highly flammable, natural gas poses significant transportation problems. A tanker ship can’t simply fill up and shove off. For this reason, there has been no single global market for gas, but a number of balkanized, regional markets all over the planet. The price of natural gas in one region has little connection to the price in another, and for many years regions facing shortages could not be relieved by gas from regions with excess capacity.

That is changing, not as rapidly as the shale gale has transformed America’s gas picture, but still rapidly compared with other business transformations. The reason is liquefied natural gas (LNG). Innovations in liquefaction and re-gasification technologies allow gas to be condensed to 1/600th its size, which then can be shipped by sea. Major infrastructure investments by energy companies and governments, along with the development of specially designed double-hulled tankers to transport LNG, are creating a robust, integrated market for natural gas.

The implications are profound and largely positive. The new mobility of LNG will bring a sorely needed measure of market stability after the past five years of unpredictability in price and supply.

On the other hand, some observers fear that creating a global marketplace will spur the establishment of a nefarious natural gas cartel similar to oil’s OPEC. Such worries, however, overstate a potential cartel’s capacity to manipulate a diversified, global market, particularly one in which nations like Australia, Canada, and the United States will be heavyweights. Indeed, one truly positive benefit is that the emergence of a market for LNG will severely limit Russia’s ability to use its significant gas resources as a political and economic weapon, as Moscow has done in recent years with its European neighbors.

LNG, along with the shale gale, should help keep natural gas prices low for a long time. The average wellhead price for natural gas in the United States had crept to $8 per thousand cubic feet in 2008. There is little doubt that high energy prices were among the contributing factors to the economic downturn that began in the latter half of 2008. An ocean of cheap gas augurs well for America’s and the global economy’s future.

Natural gas may also change how we drive, and enable ordinary consumers to break oil’s monopoly on transportation. As my colleague, Peter Huber, notes in a recent Manhattan Institute report, “Gas-handling technologies [have] improved quite enough to make natural gas a practical alternative” to oil. After all, gas is cheaper than gasoline and diesel per unit of energy. That’s why large stationary power plants that used to run on oil switched to natural gas long ago.

The chief obstacle to developing a natural gas infrastructure capable of supplying service stations and highway rest stops is regulatory. If that is removed—and here we do need government action—we could expect to see trucks, buses, and cars running on natural gas in a relatively short period of time. The reduction in greenhouse gas emissions would be considerable.

We may also see continued inroads of gas into the electricity-generating sector (which can also affect transportation as we move to hybrid and electric vehicles). Gas emits about half as much carbon per unit of energy as coal. With worries about long-term gas supplies allayed, expect regulators and utilities to favor construction of new gas-fired power plants over controversial coal plants, which are more expensive to build anyway. This same thing happened during the 1990s, and gas shot to a 20 percent share of America’s electricity economy as a result.

The Energy Information Administration estimates that U.S. demand for electricity will rise 26 percent by 2030. Gas-fired power is slightly more expensive than coal-fired electricity today and much more expensive when the wellhead price of gas soars. But stable, lower long-term gas prices brought on by the shale gale and the emerging LNG market will ensure that coal’s pricing advantage is not so pronounced. Gas is well positioned to help meet that increase.

The age of oil took off with a boom when the Spindletop gusher blew in 1901. A century later, as the price of oil hit new records, our politics were inflamed by an acrimonious debate over offshore oil drilling and breaching the Arctic National Wildlife Reserve. How ironic that during the “drill, baby, drill” demonstrations as gasoline prices spiked in 2007 and 2008, a silent revolution with natural gas was already underway that could make those concerns largely irrelevant.

Max Schulz is a senior fellow at the Manhattan Institute

More...

Hydraulic Fracturing And Shale Gas

The gas industry needs to be honest and open about the hydraulic fracturing process. The public is understandably skeptical and the environmental media love to exxagerate and inflame people's passions by scaring them in any way they can.

This much we have learned from the battle (that continues) to expose the fraud-based myth of man-caused global warming. The gas industry must maintain the moral high ground while exposing the lies, unethical and illegal behaviour of climate "scientists" exposed in the recent Email and computer code leak from the CRU in England. See here for more information on the great global warming scandal.

Hydraulic fracturing can be and has been done safely for decades. Groundwater acquifers used by people are very well protected. There needs to be an education effort aimed at the concerned public about the basics of subsurface hydrogeology. That said, these shale gas developments and hydraulic fracturing activities need to be monitored in a honest and sensible way. Ask the people living in the Barnett Shale area of north Texas, or the Haynesville Shale Play area in northwestern Louisiana if they oppose gas development and hydraulic fracturing. You can bet they like it.
Peter

Drilling right into a heated environmental debate

By Steven Mufson
Washington Post Staff Writer
Thursday, December 3, 2009 (source)

Oil and gas companies have figured out how to turn shale rock into natural gas gushers, but they have also hit a deep well of anxiety about the environmental impact of drilling in some of the country's most scenic areas.

The debate revolves around a technique known as hydraulic fracturing, which unlocks natural gas by shattering shale rock with high-pressure blasts of water, chemicals and sand.

Starting up a well requires 3 million to 7 million gallons of water. Drillers mix in chemicals that environmentalists say can imperil rivers and springs. Critics say natural gas can seep into drinking supplies, too.

Large volumes of water, containing leftover chemicals and mineral waste, return to the surface once a well is complete; that water requires safe disposal or treatment. Residents fear accidents, even if firms take precautions such as using steel tanks.

Cabot Oil & Gas has been mired in two disputes. Earlier this year, residents of the Dimock, Pa., area reported evidence of natural gas in their water supplies. Inspectors from the state's Department of Environmental Protection discovered that the casings on some of Cabot's gas wells were cemented improperly, allowing contamination.

On Sept. 16, Cabot's contractors, Baker and Halliburton, spilled 7,980 gallons of fluids in Dimock. Cabot said that it included only 0.5 percent chemical lubricating "gel" and that the mixture was "not hazardous or dangerous." But the DEP suspended the company's drilling activities.

Gas exploration companies say that proper drilling techniques seal off wells with concrete and that the shale layer is a mile or more below drinking-water aquifers, providing protection. Moreover, they assert, the water pumped underground contains only a tiny percentage of chemicals. Once the rock is fractured, no further water is needed. Larry Nichols, chief executive of Devon Energy, said the water needed to "frac" a well equals what's needed to water a golf course or fill three Olympic swimming pools.

What chemicals are used isn't clear. In 2005, Congress exempted chemicals used in hydraulic fracturing from the Safe Drinking Water Act and said firms need not disclose the chemicals, which are often viewed as trade secrets. This is widely known as the "Halliburton loophole," after the company whose former chief executive, Dick Cheney, was then vice president.

The Endocrine Disruption Exchange, a nonprofit group run by Florida public health advocate Theo Colborn, has identified 344 hazardous chemicals used in fracturing, including 2-butoxyethanol and formaldehyde. Sen. Robert P. Casey Jr. (D-Pa.) and three House members have introduced bills that would repeal the exemption.

"The environmentalists have come out with long chemical names, but most are in baking soda and things we have around our houses," Nichols said.

Some companies are voluntarily disclosing the chemicals they use. "We as an industry need to demystify [hydraulic fracturing]," Chesapeake Energy chief executive Aubrey McClendon told a conference, according to Reuters.

Oilfield services giant Schlumberger said it is developing "green" fracturing fluids. Range Resources said it has figured out how to recycle 100 percent of the waste water from drilling.

Many environmentalists aren't satisfied. "While toxic chemicals may be found in commonly used household products, they should not be in a home's drinking water," said a report by Environment America. The group's legislative director, Anna Aurilio, said, "Natural gas might be a little cleaner than coal, but drinking water is precious to us."

Scare Tactics About Fracing Gas Wells

Companies have been fracing oil and gas wells for decades with almost no danger to near surface groundwater aquifers. Wells are carefully drilled through these zones and steel casing is set and cemented in place to protect the acquifer. Most, if not all hydraulic fracturing is done thousands of feet below these acquifers and it is near impossible for the frac fluid to get into the groundwater. Do a search on this blog about "fracing" or "hydraulic fracturing".

As with the man-caused global warming myth, people opposed to drilling use the fear tactic of "polluted drinking water" to sway public opinion. Generating fear has become the standard operating procedure for environmental groups, and they are totally shameless about their lies. Think of drowning polar bears, melting glaciers, rising sea levels, monster hurricanes, etc.; all nonsense of course, but such images influence the opinion of uneducated people and politicians.
Peter

Debate continues on frac-ing fluid

Information continues to come out about the safety of chemicals used in hydraulic fracturing. Here's an analysis by an environmental group in the Marcellus Shale.

http://www.preservethefingerlakes.com/id16.html

Closer to home, here's a Star-Telegram story about fracturing chemicals from last year:

Gas-removal method may be subject to more rules

-- Mike Lee

Much More Information About The Barnett Shale

Here is an excellent blog about the Barnett Shale. It contains a wealth of information and is created and maintained by the Fort Worth Star-Telegram.

http://startelegram.typepad.com/barnett_shale/2009/10/another-shale-gas-play.html

Shale Gas Exploration And Development Goes International

It is no surprise to this geologist that the technology used to produce gas from the Fort Worth Basin and its Barnett Shale is finding its way to other parts of the world.

Shale, that often organic-rich, dark gray or black, very fine grained sedimentary rock, is found in every sedimentary basin, both present and ancient, on Earth. It is sometimes called "mud-rock" as is appropriate to its origin.

The organic matter in these shales can be converted into oil and natural gas as it is heated and buried by thousands of feet of additional sediments. The fact that these rocks contain a flammable gas (natural gas) has been known since antiquity. However, from an economic standpoint, shale has mostly just been considered a "source" rock for oil and gas found elsewhere. Times have changed.

Now shale can be considered a source, seal, trap, and reservoir of gas, (and sometimes oil) --- an all in one package. With the proper combination of horizontal drilling and rock fracturing technology these shales can produce very economic quantities of gas. This has been proven in the Barnett Shale in north Texas, and to a lesser, but growing extent elsewhere. Since shales of this nature are so prevalent around the world, it makes sense that the combination of horizontal drilling, the logging and steering of these wells while drilling, and the fracture treatment of the rocks is finding its way to countries outside of the United States.

Natural gas has many uses, from generating electricity, to heating our homes, cooking our food and powering our vehicles. It burns very cleanly and its only by-product is harmless water vapor and carbon dioxide. If it were not so clean, how could we use it in our homes to cook our food? Are you listening EPA?

If President Obama was really interested in stimulating the economy he would be promoting the production and more widespread use of natural gas. Maybe his advisers are just ignorant of the facts. It certainly makes far more sense to use inexpensive and ubiquitous natural gas than it does to spend Billions on solar panels and wind turbines, which can never do more than supply a fraction of our energy needs.

If anyone doubts the jobs, equipment and technology required to drill and produce gas from these shales, they should visit an active drill site, or witness a frac job. They should also consider that for every person working in the field, there are probably tens or hundreds of people working behind the scenes. It is a big and growing business. Browse this blog and you will find many, more relevant articles and information on this subject. Pass it around. Send it to your Congressman. Send it to Mr. Obama.

The following article from the "Fort Worth Star-Telegram" tells more of the story.
Peter

Barnett Shale seen as model for drillers worldwide

Posted Tuesday, Sep. 29, 2009 (source)

By JACK Z. SMITH

jzsmith@star-telegram.com

The search for unconventional natural gas deposits in areas like the Barnett Shale of North Texas not only is dominating gas drilling in the United States, but it will also become pervasive worldwide.

That was the message given Tuesday by two experts at the opening of a three-day energy conference in the Fort Worth Convention Center.

"I think unconventional gas is the future, both in the U.S. and overseas," said Vello Kuuskraa, president of Advanced Resources International, known for his work in energy economics and petroleum recovery technologies.

Unconventional gas includes shale gas, tight gas and coal-bed methane, deposits that require measures such as horizontal drilling and hydraulic fracturing to enhance their recovery and make them economically feasible.

Unconventional gas accounts for more than half of U.S. production, Kuuskraa said, even though what he called two new "rock stars" among shale fields — the Haynesville Shale in northwest Louisiana and East Texas, and the Marcellus Shale in the Appalachian region of the eastern United States — are just beginning to be significantly developed.

Meanwhile, Kuuskraa said he expects his end-of-the-year calculations to show that the Barnett Shale has become the biggest gas-producing area in the U.S., outstripping the San Juan Basin in New Mexico and Colorado.

The U.S. is leading the way in the search for unconventional gas, and developing the technology that will "be used around the world," said Stephen Holditch, head of the petroleum engineering department at Texas A&M University and former president of the Society of Petroleum Engineers-International.

Oil and gas exploration and production companies either based in North Texas or with substantial operations in the region are in the thick of the search for unconventional gas.

That includes three Fort Worth-based companies, XTO Energy, Range Resources and Quicksilver Resources; two Oklahoma City-based companies, Devon Energy and Chesapeake Energy, the top two Barnett Shale producers; and Irving-based Exxon Mobil Corp., which is drilling for unconventional gas everywhere from Colorado to Hungary.

Kuuskraa said Exxon Mobil is said to have gotten encouraging results from initial drilling in the Mako Trough in Hungary.

There are reportedly "massive concentrations" of gas — estimated at 700 billion cubic feet per square mile — in a small area of the Eastern European nation, he said.

Future unconventional gas recovery worldwide could significantly expand supplies, which would help make gas increasingly attractive as a fuel for transportation and electric power generation, Kuuskraa forecast at the Unconventional Gas International Conference & Exhibition, which resumes today.

JACK Z. SMITH, 817-390-7724

National Public Radio Wakes Up To The Benefits Of Natural Gas

It is good to see the traditionally liberal, left-leaning National Public Radio (NPR) doing a story about energy and the environment without beating the "dead horse" of man-caused global warming or climate change.

The following story about the role natural gas can play in helping to solve America's (and the world's) energy problems is one that dearly needs being heard far and wide.
Peter

Rediscovering Natural Gas By Hitting Rock Bottom

by Tom Gjelten (source)

September 22, 2009

Listen to the Story

Interactive Map

Natural Gas: Traditional Drilling Areas And Shale Basins

September 22, 2009

In recent years, natural gas producers in the United States have struggled, mostly in vain, to be taken more seriously in the energy world. Big oil companies like Exxon had concluded that natural gas reserves in the United States were not sufficiently abundant to warrant big investments in exploration and drilling. When small independent gas producers argued otherwise, they were often ridiculed.

"I once had to tell the Exxon people in front of a congressional committee that I respectfully disagreed with every single thing they had presented," recalls Robert Hefner, 74, a veteran gas producer from Oklahoma.

But the natural gas folks now have numbers on their side due to new successes in getting gas out of shale rock. Geologists have always known that shale rock, often found in combination with coal and oil deposits, holds substantial amounts of natural gas. If a piece of shale rock is broken and lit with a match, it will actually burn for a few moments with a small flame.

The shale gas was previously considered unreachable, but advances in drilling techniques have changed that assessment. The result is a dramatic increase in estimated natural gas reserves. The Potential Gas Committee, loosely affiliated with the Colorado School of Mines, reported in June that natural gas reserves in the United States are actually 35 percent higher than believed just two years ago, and some geologists say even that estimate is too conservative.

Drowning In Natural Gas

Enlarge Tom Gjelten/NPR

A deep drilling rig at the site of a shale rock formation in southwestern Pennsylvania. The rig, which was set up by Range Resources, a leading shale gas player, serves as a brace to support the drill.

Tom Gjelten/NPR

A deep drilling rig at the site of a shale rock formation in southwestern Pennsylvania. The rig, which was set up by Range Resources, a leading shale gas player, serves as a brace to support the drill.

"I used to say the nation is awash in natural gas," Hefner says. "Now I say we're drowning in it."

One area getting new attention is the Marcellus basin, a 400-million-year-old shale formation stretching from New York to West Virginia. That basin alone is believed to hold as much as 500 trillion cubic feet of natural gas, the equivalent of about 80 billion barrels of oil. (There are also large shale gas basins in Texas, Wyoming, Arkansas and Michigan.) It is not clear how much of the shale gas is recoverable, but the new production techniques have boosted all previous estimates.

Shale formations are deep underground — 6,000 feet or more — and the rock is relatively impermeable. Deep drilling is expensive, and in the past the amount of gas that could be reached was not considered sufficient to justify the cost.

Horizontal Drilling

In recent years, however, gas producers expanded the use of "horizontal" drilling. After boring more than a mile below the Earth's surface to reach the shale layer, a drill operator will slowly "steer" the drill bit to one side, until it is heading sideways across the shale layer, thus achieving access to more of the shale than a traditional vertical well could provide.

Enlarge Tom Gjelten/NPR

The drilling platform on a shale gas drilling rig. The shaft in the center is turning a drill bit deep underground. The drilling operation continues 24/7.

Tom Gjelten/NPR

The drilling platform on a shale gas drilling rig. The shaft in the center is turning a drill bit deep underground. The drilling operation continues 24/7.

Even so, the tightness of the shale rock would mean that relatively little of the trapped gas would seep into the pipeline. Gas producers therefore fracture the rock by forcing a water and sand mixture into the formation at very high pressure. This "water fracturing" technique opens millions of tiny cracks in the rock, enabling more of the gas to seep out.

Horizontal drilling and water fracturing are not new techniques in the oil and gas business, but only in recent years have producers used the procedures in combination to produce shale gas, and the results have been dramatic.

"It's the biggest thing I've ever even heard of," says Ray Walker, vice president of Range Resources, a gas exploration and production company. "It's huge. The ability to produce these shale reservoirs is going to revolutionize this industry all over the world."

Walker moved to Pennsylvania from Texas two years ago to direct his Fort Worth-based company's exploration of the Marcellus basin. Since then, Range Resources has dug more than 40 horizontal wells in Pennsylvania, and several dozen more are in preparation. In Texas, Wyoming and other areas, it's the same story.

Horizontal Drilling And Water Fracturing: The Keys To Shale Gas Production

Gas embedded in shale rock formations deep below the Earth's surface has long been considered inaccessible, due to high drilling costs. New horizontal drilling methods, combined with techniques to fracture the rock, have for the first time made shale gas production practical.

Credit: Tom Gjelten, Alyson Hurt and Avie Schneider/NPR

Spreading The Word

"[Shale gas] is the most important energy development since the discovery of oil," says Fred Julander, founder and chief executive of his own Denver-based gas company, Julander Energy.

But the word has not yet spread as far as gas advocates would like. Ian Cronshaw, the top gas analyst at the Paris-based International Energy Agency, highlighted the jump in estimated gas in his most recent energy outlook report, but noted that the news had gotten little notice. "If that had happened in the oil industry, it would be a headline item," Cronshaw said at a recent meeting in Washington. "But because it happened in gas, nobody seems to be paying any attention."

As an energy source, natural gas is cheaper than oil, and when burned it produces only about half the carbon dioxide that comes from burning coal. As long as natural gas reserves in the United States were believed to be nearing depletion, the fuel did not get much attention, but with the upward revision of estimated reserves, that has changed.

"Natural gas is the fuel that can change everything for our nation," says Robert Hefner, who lays out his case in a new book, The Grand Energy Transition. Hefner argues that a big boost in the use of natural gas would dramatically lower greenhouse gas emissions and reduce the U.S. dependence on foreign oil. Much of the nation's electrical power now generated by burning coal could instead come from natural gas, and a switch to natural gas-powered automobiles would produce dramatic results.

"If we were to convert half of our existing vehicle fleet [to natural gas], we would eliminate a little over half our oil imports," Hefner contends. He and other natural gas advocates have been supported in recent months by environmental organizations.

"There's a huge capacity of natural gas that is lying idle," says Timothy Wirth, a former Democratic senator from Colorado who now heads the United Nations Foundation. "That makes absolutely no sense at all when what we're trying to do is clean up the atmosphere."

A 'Transition' Fuel

Natural gas is still a fossil fuel, and when burned it does produce greenhouse gases. Environmentalists working for the use of renewable energy sources nonetheless see natural gas as a transition fuel. One idea is to build mini-power generating stations, each connected to the natural gas pipeline infrastructure. A station attached to a hospital or a shopping mall could produce heat as well as electrical power, cutting energy costs dramatically.

"You can combine that with improvements in end-use efficiency and the development of renewable energy sources, and really see these as a partnership," says Christopher Flavin, president of Worldwatch Institute, an environmental research organization.

"Even the International Energy Agency is saying the path for oil is downward, and suddenly we've got this very different picture for natural gas," says Flavin. "I think it's unfortunately not fully percolated into the understanding of what's possible among policymakers. But I think as that takes hold in the next few years, it's really going to change the game."

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.

US and Canadian Shale Gas Plays Examined

Study analyzes nine US, Canada shale gas plays

A recent study has estimated that nine US and Canada shale-gas plays may produce as much as 24 bcfd by 2018. (source)

Click here to enlarge image

The Oct. 6, 2008, Tristone Capital Inc. study evaluated the gas resources in the Bamett (Fort Worth basin), Deep Bossier, Haynesville, Fayetteville, Woodford, and Marcellus shales in the US and the Montney, Hom River (Muskwa), and Utica shales in Canada (Fig. 1).

Click here to enlarge image

The study expects companies ultimately to recover from these resources 261 tcf of gas, based on various risk factors applied and a long-term average gas price of $8.50/MMbtu. Without the risk factors, Tristone Capital says these shales have a 743-tcf recovery potential (Fig. 2).

Click here to enlarge image

Fig. 3 shows the study’s estimated production from these plays, and Fig. 4 shows its US well completion forecast.

Click here to enlarge image

Several emerging shale plays with limited well control also may contribute additional gas to future production, according to the study. These include the Pearsall shales in the Maverick basin of South Texas, the Niobrara shales of Western Colorado, and the Barnett shale in the Delaware basin of West Texas.

Shale play comparison

The study says that shale-gas plays owe their success to a balance of various parameters along with constantly evolving drilling and completion techniques and infrastructure. “It is commonly said that no two shale gas plays are exactly alike,” the study says.

Click here to enlarge image

Table 1 summarizes shale-gas play attributes, and Fig. 5 compares the arithmetic average of the attributes. The study notes that the most productive core portions of plays may deviate from the averages.

Click here to enlarge image

Multistage hydraulic fracturing along a horizontal lateral and improvements in stimulation are main factors influencing shale-gas development economics. The study says these factors have improved economics by more than three times from that of vertical well developments by improving both ultimate recovery and initial production rates.

Click here to enlarge image

Table 2 compares typical lateral lengths and frac treatments for the nine plays.

The three types of frac fluid noted are slick water, CO₂-polymer, and gelled cross-linked oil-based fluid.

Slick-water fracs use a nongelled fracturing fluid with low proppant concentrations and a friction-reducing chemical additive that allows pumping the water into the reservoir faster. The fluid often is a brine or potassium chloride (KCl) water to inhibit swelling of clays. The study notes that this fluid is less expensive than hydrocarbon-based fluid and works best in low-permeability reservoirs

Companies pioneered slick-water fracs first in the Fort Worth basin’s Barnett shale.

The CO₂-polymer frac fluid contains emulsified CO₂ in a methanol-water mixture of 5% water and 20% methanol. The study says the mixture appears to minimize reservoir damage and maximize fluid recovery from multiple diversions in the well. Including CO₂ also reduces by 25% the fluid required and provides extra energy, as the gas expands, during frac fluid flow-back greatly to shorten cleanup time, the study says.

The Montney formation in British Columbia is where companies use this fluid. The study notes that stimulating a horizontal well in the Montney typically involves perforating, isolating, and fracturing 6-11 zones at a cost of about $100,000- 120,000/frac interval. It is common to spend more than $1 million for fracturing these wells, the study says. The study describes these jobs as needing 8-10 pump trucks or about 18,000-22,500 hp and taking more than 1 week to complete.

The study notes that companies initially used gelled cross-linked oil-based fluids as the “fluid of choice” for hydraulic fracturing because of its compatibility with most formations and its cold weather attributes. In several basins, slickwater fracs have replaced oil-based fracs because the slick water uses less water and costs less, the study says.

To prevent swelling and permeability loss in the shales, companies typically continue to use oil-based frac fluids in formations that contain extensive water-sensitive clays. The study notes that these fluids are used in the Fayetteville, Haynesville, and Woodford shales.

Fort Worth basin Barnett

Development activity continues to evolve with part of the current activity in urban sites such as Fort Worth and the Dallas-Fort Worth airports.

The study notes that as of Aug. 18, 2008, the Barnett had 8,416 gas wells drilled in 19 counties. Production had increased to 3.8 bcfd in first-quarter 2008 from 219 MMcfd in 2000. The study expects the shale to produce 6-7 bcfd in the next 5 years.

Some of the newer techniques in the play noted in the study are:

• Longer horizontal laterals, up to 3,500 ft, often drilled from pads with multiple wells, especially in the urban areas.
• Testing of tighter well density with laterals, spaced 250-ft apart (25-30) compared with 500 ft between laterals (50-acre spacing).
• Simultaneous fracing of wells to increase recovery.

Deep Bossier

Wells in Deep Bossier of East Texas reach a 15,000-20,000 ft depth, have pressures of about 15,000 psi, and have tested at 65 MMcfd. The study notes that these wells are expensive, costing $10-20/million for a vertical well.

Currently the play has six main fields in four counties: Robertson, Leon, Freestone, and Limestone.

Fayetteville

The Fayetteville shale in Arkansas is the shallower and thinner equivalent of the Barnett shale. The core of the play is in five counties in central Arkansas: Cleburne, Van Buren, Conway, Faulkner, and White.

The study says as of May 31, 2008, the play had 877 producing wells, with production in July of 740 MMcfd compared to only 90 MMcfd in December 2006. The study expects the play to produce 3.15 bcfd by 2018.

Haynesville

The Haynesville shale is in northwestern Louisiana and East Texas. Wells in the play initially have produced 5-20 MMcfd, the study said. The study expects wells to have ultimate gas recovers of 4-8 bcf.

Currently, companies have drilled about 20-25 horizontal wells in the play, and the study expects about 60-80 rigs could be active in the play by yearend 2008, with most of the drilling in Caddo and DeSoto Parishes in Louisiana.

Woodford

The Devonian-aged Woodford shale lies at 6,000-14,000 ft depths in the Arkoma basin of southeast Oklahoma. The study notes that the $6 million well cost in the Woodford is more than the $2-3/million/well cost in the Fayetteville and Barnett shales.

The study estimates that an 80-acre well in the Woodford will recover about 4 bcf of gas.

Marcellus

The Marcellus shale in the Appalachia basin extends over several states, although most wells drilled to date have been in Pennsylvania, the study notes.

It says Marcellus production has been minimal to date because of the need to expand the existing infrastructure to accommodate the high-pressure gas that the gas transportation system in Appalachia cannot at this time handle.

Most companies have so far drilled mostly vertical wells to delineate the play, but the study expects horizontal wells to be the primary means for developing the formation.

Montney

The Montney shale lies in the east-central part of British Columbia. The study notes that continued drilling should increase production to 1 bcfd by yearend 2009 from the current 600 MMscfd in early 2008.

Operators typical include five to eight fracs/well, and the study expects estimated ultimate gas recovery to increase to 7 bcf/well from the current 5 bcf/well as technology innovation continues.

Horn River basin

The Horn River basin in Northeastern British Columbia extends into the Northwest Territories. The Devonian Muskwa shale is the main play although the basin also has other shales with large original gas in place such as the Fort Simpson, the study says.

Initial well production rates have ranged from 2 to 8.8 MMcfd with wells with more fracs stages producing better, the study notes. The study says estimated ultimate gas recovery ranges from 4 to 6 bcf/section.

Utica

The Utica and the overlying Lorraine shales are relatively new plays in Quebec with only a few wells testing the formations to date. The study estimates that recoverable gas could be as much as 40 tcf (150 bcf/section).

An initial vertical well tested at 1 MMcfd; rates should be higher for horizontal wells with multiple fracs, according to the study.

Emerging plays

Three emerging shale plays listed by the study are Pearsall shales in the Maverick basin of South Texas, the Niobrara shales of Western Colorado, and the Barnett shale in the Delaware basin of West Texas.

The study says the Pearsall is as deep as 3,500 m in places, has a 200-300 m thickness, and contains about 30-175 bcf/section of original gas in place. It notes reports that say initial horizontal wells flowed at 0.8-3.8 MMcfd.

The Niobrara shales outcrop in Kansas and Nebraska, but are at more than 2,500 m depths in western Colorado. The study notes that in the eastern shallower portion of the play, the shales are underpressured and wells have low initial rates, while in the deeper overpressure portion, wells may produced at 1 MMcfd and recover 100-150 bcf of gas/section.

The Barnett in the Delaware basin is twice a deep as the Barnett in the Fort Worth basin and therefore holds much more gas per section. One estimate is that the Delaware Barnett has 500 bcf/section compared with 150 bcf/section in the Fort Worth basin. The study notes that developing Delaware Barnett gas will be more complicated and costly.