In the News
August 25th, 2010
State Dept. forum seeks to export promise and potential of shale gas to markets around the world – but will Administration apply same lessons, encouragement here at home?
Col. Edwin Drake is widely credited with developing the world’s first commercial oil well in Titusville, Pennsylvania in 1859. But here’s something you might not have known about the guy: He wasn’t actually a colonel.
Here’s something else: According to Chinese and Polish historians, Drake didn’t actually drill the first oil well either. In Poland, that honor rests with Ignacy ?ukasiewicz, who described his discovery in 1854 as the advent of a “new branch of industry which shall bear plentiful fruit.” Of course, from China’s perspective, both Drake and ?ukasiewicz arrived on the scene about 1,500 years too late. In their record books, 4th century monks are credited with developing the first-ever oil well, employing cutting-edge technology in the form of bamboo shoots to produce the oil needed to heat water from which deposits of salt could be distilled. Turns out even back then Chinese food had plenty of salt.
But while friendly disagreements may persist when it comes to assigning credit and location for the discovery of oil, when it comes to the discovery of clean-burning natural gas from shale, no ambiguity exists: We found it. And much more important: We invested the time, talent and resources in developing the technologies needed to make its production possible. The upshot? A veritable shale gas “revolution” taking place right here, right now, all across America — with hundreds of thousands of jobs and billions in state, local and federal revenue currently being generated in its wake.
Not yet, anyway. But an event organized by the U.S. Department of State earlier this week sought to begin the process of changing all that. Presided over by David Goldwyn, State’s coordinator for International Energy Affairs, the two-day Global Shale Gas Initiative Conference held in Washington on Monday and Tuesday brought together representatives from 20 countries (including the United States) to share news, views and technical insights related to the business of producing natural gas from shale. What interest does the State Department have in promoting a phenomenon like that? Mr. Goldwyn took on this question directly in his opening remarks:
[O]ur motivation as the State Department to engage on this issue should be clear for foreign policy and energy security reasons. Countries around the world need diversity of energy supply. There are countries with millions of people – in fact, tens and some hundreds of millions of people – without access to electricity services. They need a feedstock and they need it for base load energy. …So it’s understandable that they want to develop shale gas, but we have, in our country, an umbrella of laws and regulations that makes sure this is done safely and efficiently.
But just as no two shale plays are exactly the same, no one nation holds the exclusive rights to producing abundant resources from shale that underlies its land. Just about everybody’s got the stuff, geologists tell us. But not everyone has access to the best and most innovative technologies needed to convert the opportunity of shale into the reality of a stronger economy, a cleaner environment, and a higher standard of living for all who call that country home.
Of course, this conference didn’t exactly come out of left field; according to the White House, the president and his administration continue to be actively involved in spreading the good news of shale gas far and near, even using it as a tool of diplomatic engagement in promoting a clean, sustainable and growth-oriented energy future for some of our closest and most important trading allies across the globe. Back in November, the White House described its efforts to export the promise and potential of shale to our friends in China in the following way:
[The] Shale Gas Initiative will allow the U.S. and China to use experience gained in the United States to assess China’s shale gas potential, promote environmentally-sustainable development of shale gas resources, conduct joint technical studies to accelerate development of shale gas resources in China, and promote shale gas investment in China through the U.S.-China Oil and Gas Industry Forum, study tours, and workshops.
According to Reuters, the Chinese have been more than happy to accept our insight and technical advice in this space, with the country just last week launching a national shale gas research center and announcing a series of goals that include: 1) finding one trillion cubic meters of shale gas, 2) building 15-30 billion cubic meters of production capacity, and 3) ultimately using shale to meet as much as 12 percent of China’s total natural gas demand by 2020. Don’t think they can get there? Smart money says not to bet against them. According to reports, China’s total shale gas potential may soon be measured in quadrillions of cubic feet, not trillions. All they need is the technology and infrastructure to bring these resources to market.
Same goes for our friends in Poland, who view the prospect of shale gas development as a national security imperative more than anything else. You see, as it currently stands, a large portion of the natural gas upon which the Polish economy depends is piped in each day from Russia – and it doesn’t take a Ph.D. candidate in European history to understand the tensions and uncertainties inherent in that arrangement.
Earlier this month, the first-ever application of hydraulic fracturing technology was introduced at the Markowola-1 exploratory well in Kozienice, Poland. How much natural gas will they find? No one can say for certain. But according to one report from Wood Mackenzie, the Polish people may have more than 47 trillion cubic feet of recoverable natural gas trapped in shale deposits beneath their feet – or nearly half the entire proven natural gas reserves in Europe. Who’s laughing now, right Poland?
The story, of course, goes on and on from there: South Africa’s got lots of shale potential; so too does Sweden, Mexico, Canada, Australia, Morocco, Pakistan, India and Armenia – just to name a few. But while the depths and temperatures and technical requirements will vary from play to play to play – one thing will always remain constant: the continued need to use cutting-edge fracturing technology to tap into resources that would be too deep, too diffuse and too difficult to get at otherwise.
As was made clear in Washington this week, the U.S. government understands this reality – at least in an international context. Left to be determined is whether it will apply these same lessons to shale gas exploration here in the United States. Let’s promote shale gas globally, but let’s act locally on it as well. That was the message delivered by the State Department in Washington this week. Any chance the good folks over at EPA heard it?
August 20th, 2010
EPA’s Fracking Hysteria
Forbes.com
Dr. Michael Economides
Aug. 20 2010
- “Though activist campaigns are garnering increasing public interest in the fracking process, two points remain unchanged: its decades-long safety record and its role in America’s prosperity”
- “Environmental and health studies have been conducted for years showing no linkage between fracking and drinking water contamination”
After postponing a hydraulic fracturing (aka “fracking”) hearing slated for upstate New York last week, EPA is planning a new event which reports suggest could turn into a full two-day spectacle sometime in September. Though activist campaigns are garnering increasing public interest in the fracking process, two points remain unchanged: its decades-long safety record and its role in America’s prosperity/ So why all the hype and fervor over a reliable technique that has been around since 1947?
For those that don’t know, fracking is a technique which uses water pressure to create fractures in rock that allows extraction of oil and natural gas. Those who work in the energy industry are rightfully worried that efforts to curb this critical process will also eliminate their jobs. As high unemployment persists — over 7.7 million US jobs lost since the recession began in December 2007 — and the economy struggles to rebound, development of America’s natural gas resources is bringing new investments to communities across the country. In addition to the economic benefits, it is also essential in providing America clean natural gas which fuels public transportation and helps reduce greenhouse gas emissions. Developing jobs and clean sources of energy are just some of the reasons people are so passionately supportive of hydraulic fracturing.
Yet, some activist groups are singling out the technique in a scramble to blame corporations for poisoning our drinking water. While the fracking process uses chemicals, these claims are unfounded to say the least. The ingredients used in hydraulic fracturing include a small dose of chemicals (0.5%) mixed with water and sand (99.5%). Environmental and health studies have been conducted for years showing no linkage between fracking and drinking water contamination. In a 2004 comprehensive report conducted by EPA itself, federal researchers concluded:
In its review of incidents of drinking water well contamination believed to be associated with hydraulic fracturing, EPA found no confirmed cases that are linked to fracturing fluid injection into CBM wells or subsequent underground movement of fracturing fluids. Further, although thousands of CBM wells are fractured annually, EPA did not find confirmed evidence that drinking water wells have been contaminated by hydraulic fracturing fluid injection into CBM wells.
If the EPA study were not enough to vindicate the fracking process, common sense should. Natural gas formations are thousands of feet below drinking water aquifers so for contamination to occur the fracking solution would have to move through multiple layers of rocks. This would only happen however if the rocks were extremely porous, yet if this were the case the natural gas reservoir would have never existed in the first place. The natural gas would have leaked naturally to the surface over the course of millions of years.
As our officials in Washington monitor the upcoming EPA public hearing let’s hope the scare tactics and rhetoric don’t drowned out the facts and the preponderance of evidence supporting the fracking process. Regrettably as people across America are looking for jobs and struggling to put food on the table, the manufactured controversy surrounding fracking will likely continue. With any luck the unsubstantiated claims by the environmental lobby will not keep us from utilizing our clean natural gas resources or develop a vibrant energy economy here at home.
Economides is among America’s leading energy analysts. A consultant, educator, and PhD petroleum engineer, Economides has done technical and managerial work in more than 70 countries and is a professor at the University of Houston.
NOTE: Click HERE to view this column online.
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Graphic: What’s In Frac Fluids?
August 11th, 2010
Or why the foliation perpendicular to stress in the context of subsurface ductile deformation matters in the debate over shale and hydraulic fracturing
We’ve spent some time over the past couple months taking a critical look at some of the key assertions made in the HBO documentary GasLand, putting forth in that time two separate rebuttal documents that we believe address in a substantive way a number of the misconceptions upon which the film, and its broader political message, is based.
But one of the issues we haven’t tackled yet is the suggestion that fissures made in the process of fracturing a shale formation are so long, and so upwardly vertical, that they have the potential to create conduits (or cleavages) through which fracturing-related fluids can travel to water-bearing formations thousands of feet above – including the water table. In his brief explanation of what the fracturing process is all about, GasLand director Josh Fox includes the following image in his film:
According to Fox, the fracturing process “is like a mini-earthquake,” and “blasts a mix of water and chemicals 8,000 feet into the ground.” At least he gets the depth right. But according to New York Department of Environmental Conservation (page 127 of this document), “No blast or explosion is created by the hydraulic fracturing process. The proppant holds the fractures open, allowing hydrocarbons to flow into the wellbore after injected fluids are recovered.” Guess there’s no need to call in the bomb squad after all.
But basic mechanics aside, the message the director is attempting to advance through the image above is simple: Hydraulic fracturing completely decimates the shale formation, creates massive gaps in the underlying rock, and produces vertical chasms that travel all the way up to the surface. Within that context, it becomes a lot easier to understand how the technology could lead to the drinking water contamination – as long as pathways and pressure exist, who can say for sure what’s actually happening down there, or up here?
Serious geologists have known since time immemorial that such a phenomenon is a virtual impossibility – and so has the EPA, which wrote in 1995 that “given the horizontal and vertical distance between the drinking water well and the closest methane production wells, the possibility of contamination of endangerment of USDWs [underground sources of drinking water] in the area is extremely remote.” And that letter, keep in mind, was in reference to a coalbed methane well – which reside thousands of feet closer to the water table than shale wells.
But thanks to the good folks over at Pinnacle Technologies, we now have some solid data to express this separation in quantitative terms. As reported by Pinnacle general manager Kevin Fisher in July’s edition of the American Oil & Gas Reporter, the following graphs plots actual field data from tens of thousands of fracturing operations conducted over the past decade – this first one, in the Barnett Shale, which shows quite clearly that even the most shallow fissures created through the hydraulic fracturing process remain separated from the water table by more than 3,500 feet:
But that’s just the Barnett, right? Everyone knows there’s no problem out there. Isn’t the real area of concern the Mighty Marcellus – where activists continue to claim that gas, chemicals, salt, metals, and Lord knows what else regularly get dredged up from the depths and beamed into every well, sink and stream in sight? Well, Pinnacle ran the numbers on the Marcellus as well, and although the data set isn’t quite as robust as what you’d find in the Barnett (remember: we’ve been developing that one a bit longer), the story in Pennsylvania, West Virginia and Ohio is remarkably similar. To wit:
Here we see an even greater separation between fractures in the underlying rock and sources of potable water above – with the closest the two shall ever meet clocking in at roughly 4,300 feet.
In other words, the deepest formations holding drinking water and the most shallow depth in which you’ll find a fracture in the Marcellus Shale are still separated by the equivalent of three-and-a-half Empire State Buildings – or three Petronas Towers, for our Malaysian friends. And by the way: they’re not exactly separated by air either. Between the two, you’ll find millions of tons of solid, impermeable rock – rock that has for literally hundreds of millions of years acted as an immutable barrier preventing salty water below from communicating with fresh water above.
But just to be sure we got this right, we sent these graphs and data up to Williamsville, N.Y. so that Ph.D. geologist Michael P. Joy might give them a gander and share some technical insights into what makes this phenomenon possible. Below is a (small) excerpt from the email he sent us in reply:
The hydraulic fracturing process creates fractures that are very small, usually an 1/8th inch or less in width. There is not enough pressure that could be exerted on the column of water to create a fracture matrix long enough to reach anywhere close to near surface aquifers. … The gas and water in these deep shale formations exist in hydrostatic equilibrium; the pressure acting down on the formation fluid is equal to the pressure being exerted from the bottom upward and the formation fluids act under the immutable laws of physics and stay in place.
Right. Exactly what he said.
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Press Releases
May 25th, 2010
EID points to PA as linchpin of emerging revolution in shale gas exploration across America
WASHINGTON – The responsible development of the Marcellus Shale in Pennsylvania, a phenomenon made possible thanks to the common and continued use of hydraulic fracturing technology, has the potential to add an additional 212,000 new jobs to the state’s employment rolls by 2020, on top of the thousands of jobs already being created right now. That’s the message that researchers from Penn State University delivered today in the state’s capital of Harrisburg, on hand to share the results of an updated economic study that builds on research first released last year.
“From southern Texas to northern Michigan, the historic opportunities being made possible right now thanks to the responsible exploration of America’s shale gas resources represent a ray of light against an otherwise dreary and uncertain economic backdrop,” said Lee Fuller, executive director of Energy In Depth.
“But in few places across the country has this light been brighter and more hopeful than in Pennsylvania, a state with a long and proud history of providing the energy resources our nation needs to keep moving,” Fuller added. “The release of this report from Penn State today serves to reinforce that status in a modern context, and also make clear to those who oppose this critical work on political or ideological grounds that, at least on practical economic grounds, that opposition could lead to fewer jobs, greater dependence, and a lot less revenue for the state.”
According to the latest numbers from the Energy Information Administration (2008), Pennsylvania contributes a little less than one percent of the total amount of natural gas produced each day in America – roughly 500 million cubic feet of natural gas a day. But all that changes over the next 10 years according to the Penn State report, with the ramp-up in Marcellus-related activities in Pennsylvania slated to bring online an additional 13.5 billion cubic feet a day, a 27-fold increase over current production numbers in the state.
Fully developed, the authors find that the broader Marcellus region, spread out through much of Appalachia, could prove to be second largest natural gas field in the world, behind only a massive gas reserve split between Iran and Qatar. Examined another way, the 516 trillion cubic feet of Marcellus shale gas could hold the BTU equivalent of 87 billion barrels of oil – more than entire proven reserves of nations like Russia, Libya, Nigeria and China.
The study finds that only Texas is expected to produce more natural gas per year in the United States by the 2020 than Pennsylvania – assuming efforts to restrict the innovative technologies involved in producing these resources aren’t successful on Capitol Hill.
For a copy of the updated Penn State study, click here.
May 25th, 2010
EID director sends letter to every member of the
energy panel detailing the serious consequences of amendment
WASHINGTON – The bill might known as the “Assistance, Quality and Affordability Act,” but according to reports on Capitol Hill, the House Energy and Commerce Committee’s markup of the legislation on Wednesday may include a vote on an unrelated amendment targeting a key technology used to tap the enormous potential of America’s onshore shale gas resources.
In anticipation of that amendment being offered tomorrow, Energy In Depth executive director Lee Fuller sent the following letter to the chairman and ranking member of the Energy and Commerce Committee this morning, copying the panel’s entire membership as well. An electronic version of that letter can be found online here, and the full text is available below:
May 25, 2010
The Honorable Henry Waxman
Chairman, Committee on Energy and Commerce
2125 Rayburn House Office Building
Washington, DC 20515-6115
The Honorable Joe Barton
Ranking Member, Committee on Energy and Commerce
2322A Rayburn House Office Building
Washington, DC 20515-6115
Dear Chairman Waxman and Ranking Member Barton:
This week, the Energy & Commerce Committee is scheduled to markup the Assistance, Quality and Affordability (AQUA) Act of 2010, which seeks, among other priorities, to reauthorize the State Revolving Fund in place under the Safe Drinking Water Act (SDWA).
Among the many amendments to the bill that you and your colleagues are likely to consider, one amendment in particular will seek to rewrite SDWA in a manner that could have serious consequences on American energy producers’ ability to deploy a key technology needed to access abundant energy resources from shale formations onshore. The amendment, which some have indicated may be offered by Rep. Diana DeGette (D-Colo.), will include language taken from H.R. 2766, which the committee has not acted upon in any discernable way since the legislation’s introduction nearly a year ago.
Drafts of the proposed amendment text which have surfaced indicate it will seek to compel service companies to disclose materials used in the fracturing process to the appropriate state agencies or the Environmental Protection Agency (EPA). Before you and your colleagues vote on this amendment, though, you should be aware that the structure of the amendment could result in significant and adverse consequences.
First, it would amend the delegation process under SDWA. For states to maintain their primacy under the Act, they would have to accept the disclosure requirements found in the amendment. As a part of those requirements, states would have to incur the costs of managing the data that would be generated for each fractured well, and post that information on an Internet site.
No funding is provided to pay for these costs; states would have to sacrifice other functions to generate the information. Of course, if they choose not to do that, states would have to give up their regulatory responsibilities under SDWA and turn these functions over to EPA. Not only would this burden EPA – since it is not staffed with the capabilities to undertake daily regulatory responsibilities – but it would also lead to duplicative regulations.
Second, these reporting requirements would undermine other efforts for which some members of your committee have advocated – for example, work related to the development of “green” additives for the fracturing process. Even though state regulatory programs have effectively managed the environmental considerations associated with hydraulic fracturing, some companies are actively working to produce new additive compounds considered to be even more environmentally benign than they are today.
While existing concerns related to Confidential Business Information tend to be focused more on other areas of the broader fracturing debate, the release of information to competitors – both foreign and domestic – on initiatives such as the development of “green” chemicals could have the perverse effect of forcing companies to cut their investment in this important research, or abandon it altogether.
As it relates to the composition of fluids commonly used in the fracturing process today, it’s important to note that greater than 99.5 percent of the mixture is comprised of water and playground sand. The remaining materials, used to help deliver the water down the wellbore and position the sand in the tiny fractures created in the formation, are typically components that can found in your kitchen cupboard and beneath your kitchen sink. The most prominent of these, a substance known as guar gum, is an emulsifier more commonly found in ice cream and peanut butter.
In contrast to the assertions on which this amendment is premised, these materials are well known to state regulators, and are generally available to members of the public upon a quick search of the Internet, or by request to the state. In Pennsylvania, a list of these components can be found easily on the website of the Department of Environmental Protection; in New York, a basic search of the Department of Environmental Conservation’s website returns the same. Lists of these components have also been made available by the U.S. Department of Energy, the Ground Water Protection Council, and on the website of Energy In Depth (EID), of which I have the privilege to serve as executive director.
The fact is, hydraulic fracturing has been ably and aggressively regulated by the states almost since the moment of its invention, with regulators compiling an impressive record of enforcement and oversight during that time. It’s a record that continues to be acknowledged by regulators and lawmakers on the federal level as well, most recently by EPA’s director of drinking water protection, who told a reporter in February that there existed “no evidence” that “states aren’t doing a good job already” when it comes to regulating fracturing activities.
In closing, it’s important for members of the committee to understand that, as additional attention has been paid on the technologies that are making the modern-day shale revolution possible, EPA has taken appropriate notice as well, announcing earlier this year the commencement of a new study focusing on the relationship between hydraulic fracturing and drinking water. In 2004, the agency published a report finding hydraulic fracturing to be a safe and well-regulated technology. Notwithstanding those findings, EPA is honoring a request by Congress to study the technology once again.
This research, once complete, will confirm and reinforce the existing record of safety and performance to which hydraulic fracturing has laid consistent claim over the years. However, legislative efforts such as the one proposed by Rep. DeGette should wait until the results of that study are released. Otherwise, why should the time, energy and resources be spent on doing the study in the first place?
Thank you for your forthright consideration of this position. EID stands ready and eager to assist you and your staff should you need any additional information in the future.
Sincerely,
Lee O. Fuller
Executive Director
Energy In Depth
cc: All members of the House Energy & Commerce Committee
May 12th, 2010
WASHINGTON – America’s shale gas resource base is poised to increase 88 percent by the year 2035 assuming key technologies such as hydraulic fracturing remain intact and available to U.S. energy producers. That’s the conclusion released this week by the federal Energy Information Administration (EIA) in Washington. In its Annual Energy Outlook 2010, EIA projects that over the next 25 years, natural gas prices and net imports will decrease by 14 and 44 percent, respectively over the next 25 years — a function, according to the independent agency, of natural gas production in the lower 48 increasing by 17 percent over that time.
Subsequent to the release of the study, Energy In Depth executive director Lee Fuller issued the following statement:
“America’s abundant and clean-burning shale gas resources, and the technologies used to safely produce them, represent a critical and positive turning point for our nation’s energy pathway forward. The results of this independent study not only reinforce this promise and potential, but it also underscores the importance that hydraulic fracturing will continue to play in leveraging these job-creating, homegrown reserves into affordable energy and long-term security.
“And while this study demonstrates that a clear blueprint exists to help drive down energy costs for American consumers, as well as our dependence on unstable regions of the world to fuel our economy, it also highlights what locking up our abundant shale gas resources could mean for our nation. Adding layers of unnecessary federal regulations to hydraulic fracturing – which is tightly regulated by energy-producing states – could put our nation’s energy potential out of reach.”
NOTE: Click HERE to view the section of the study entitled “Importance of low permeability natural gas reservoirs.” Key experts provided below:
The use of hydraulic fracturing in conjunction with horizontal drilling in shale gas formations and the use of hydraulic fracturing in tight gas formations has opened up natural gas resources that would not be commercially viable without these technologies. As shale gas production has expanded into more basins and recovery technology has improved, the size of the shale gas resource base in the AEO has increased markedly.
No Shale Gas Drilling case. Starting in 2010, in this case no new onshore lower 48 shale gas production wells are drilled. Natural gas production from shale gas wells drilled before 2010 declines continuously through 2035.
High Shale Gas Resource case. In this case, the unexploited portion of each shale formation supports twice as many new wells as in the Reference case. The lower 48 shale gas resource base increases by 88 percent, from 347 trillion cubic feet in the Reference case to 652 trillion cubic feet in the High Shale Gas Resource case.
In the No Shale Gas Drilling and No Low-Permeability Gas Drilling cases, lower 48 onshore natural gas productive capacity is less than in the Reference case, and as a result average U.S. natural gas prices are higher, more natural gas is imported, and natural gas consumption is reduced. Conversely, in the High Shale Gas Resource case, natural gas productive capacity is higher, natural gas prices and imports are lower, and consumption is higher than projected in the Reference case.
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