Highlights From Yesterday’s US Senate Shale Gas Hearing
US Sen. Jeff Bingaman (D-NM), Energy & Natural Resources Committee Chairman
- “In recent years, a number of factors have raised the prominence of natural gas as a resource. Technologies such as horizontal drilling and hydraulic fracturing have led to more domestic natural gas production and led to a reassessment of the U.S. technically recoverable resources. The international focus on reducing greenhouse gas emissions has favored the lower carbon intensity of natural gas for power generation.” (Testimony, 10/4/11)
US Sen. Lisa Murkowski (R-AK), Energy & Natural Resources Committee Ranking Member
- “Natural gas is clean-burning and abundant; it’s well understood and scalable; and it’s clearly in our best interest to take steps to ensure that we maintain a stable and affordable supply into the future by encouraging its safe and responsible development. … We’ve witnessed game-changing technological innovations that have unlocked tremendous volumes of previously inaccessible natural gas. These resources are already benefitting our nation by further diversifying our energy supplies, growing our economy, and creating thousands upon thousands of well-paying American jobs. … Greater use of natural gas would move our nation in the right direction in terms of energy security, economic growth, and environmental protection.” (Testimony, 10/4/11)
- Wide variations in geology among shale gas formations mean that what works best in the Northeast might not make sense in Texas, Murkowski said. The U.S. shouldn’t “try to apply a one-size-fits-all” approach to shale gas extraction. (Houston Chronicle, 10/4/11)
- “Responsibly developing all our resources is of paramount importance to us,” Murkowski said. “These resources are already benefiting our nation by diversifying our energy jobs,” she added. “America should allow for this kind of ingenuity in the private sector.” (AOL Energy, 10/5/11)
US Sen. and Fmr. Gov. John Hoeven (R-ND), Energy & Natural Resources Committee
- “We need to [regulated hydraulic fracturing] it in a way that empowers the state and empowers the industry to move forward, versus falling back to the EPA stepping in and saying, ‘Everybody needs to do it this way.’” (Politico, 10/4/11)
Dr. Daniel Yergin, IHS Cambridge Energy Research Associates
- “Almost overnight, in energy terms, shale gas has become a major and critical national resource. … Today shale gas accounts for about 30 percent of total US natural gas production, and this is expected to rise dramatically in the foreseeable future. Natural gas itself is one of the backbones of our economy, providing about a quarter of the country’s total energy. … Shale gas—the unconventional natural gas revolution—has been called the biggest energy innovation of the past few decades.” (Testimony, 10/4/11)
- Industry officials have resisted calls for federal regulation of shale gas drilling and hydraulic fracturing, insisting that states are better poised to keep an eye on that work. The advisory committee members testifying today echoed that view. “There’s a gap in perceptions,” Yergin said. “There’s this view that oil and gas activities are not regulated. But we were all impressed by the quality and experience of the states in regulating oil and gas.” (Houston Chronicle, 10/4/11)
- Testifying before the Senate Committee on Energy and Natural Resources, subcommittee member Daniel Yergin, consultant and author, said, “We were all impressed with the states’ regulation of oil and gas.” Yergin added that the strength of state regulation of the industry was “not well recognized” by the general public. (Platts, 10/4/11)
- Yergin emphasized that fracking has been happening already for decades and in that time states have taken the lead in regulation. “I come out very impressed by the extent and seriousness of the states,” he said. The problem with regulating from the federal government: there is a danger, he said “of a superstructure on top of a superstructure.” (AOL Energy, 10/5/11)
Dr. Stephen Holditch, Petroleum Engineering Department Head, Texas A&M University
- I have been working on…hydraulic fracturing since 1970. … The United States has a real opportunity to develop it’s unconventional gas reservoirs to dramatically improve the energy security in the United States. The U.S. can use the abundance of Natural Gas to generate electricity and for motor fuel, which should reduce oil imports. … Horizontal drilling and hydraulic fracturing are currently being used in South Texas, West Texas, the Bakken Formation in Wyoming and North Dakota, and most recently in Ohio to increase oil production in the United States. Oil production in the Lower 48 states has increased during the past year for the first time in decades. (Testimony, 10/4/11)
- If you read recent news articles on hydraulic fracturing, the process is often described as pumping in a mixture of water and toxic chemicals under high pressure. This description is far from the truth. Most fracture treatment fluids consist of 99.5% percent pure water and sand. About 0.5% of the fluid is made up of gelling agents, surfactants, and biocides. Virtually all of these chemicals can be found in a typical home. Gelling agents are typically guar gum, which is used in many food products to viscosify the product. A surfactant is just soap, like Dawn dishwashing fluid. Biocides are use to kill bacteria, like the Clorox we use in our homes. … The concentration of these ‘chemicals’ is very minute and does not pose a danger to fresh water aquifers. … Current drilling and hydraulic fracturing activity does not adversely affect shallow drinking water aquifers. I have been working in hydraulic fracturing for 40+ years and there is absolutely no evidence hydraulic fractures can grow from miles below the surface to the fresh water aquifers. (Testimony, 10/4/11)
- Stephen A. Holditch…said the chemicals used in “fracking” generally make up less than 1 percent of the fracture fluids and that the process does not adversely affect shallow drinking water aquifers. Holditch said there was “absolutely no evidence hydraulic fractures can grow from miles below the surface to the fresh water aquifers.” (The Oklahoman, 10/5/11)
- “There is nothing broken with the [regulatory] system,” subcommittee member Stephen Holditch, the head of the petroleum engineering department at Texas A&M, said. (Platts, 10/4/11)
- As Dr. Stephen Holditch…said a the opening of his testimony: “shale gas is for real.” “The US has a real opportunity to develop its unconventional gas resources,” Holditch said. … Holditch said that one of the biggest concerns of the environmental community, that of chemicals in fracking water, was completely overblown. (AOL Energy, 10/5/11)
Dr. Mark Zoback, Department of Geophysics Professor, Stanford University
- I believe that utilization of domestic shale gas and…domestic shale oil, resources are extremely important to our nation. I personally believe that there is no question that they can be developed in a manner (utilizing horizontal drilling and multi-stage hydraulic fracturing) that protects the environment and minimizes impact on nearby communities. … It is unfortunate, however, that the concern about the safety of shale gas development has focused almost entirely on hydraulic fracturing. As Dr. Holditch testified, the chemicals used in hydraulic fracturing fluids are relatively benign, steps are being taken to make them even safer, and our committee recommends full disclosure of the composition of hydraulic fracturing fluids. … Drilling multiple wells from a single pad…not only greatly improves the efficiency of drilling and fracturing operations, it minimizes land-use, lowers the overall impact of drilling operations on local communities and makes regional planning easier to lessen the cumulative impact of shale gas development activities in a given area. (Testimony, 10/4/11)
- The process of fracturing shale rock to free trapped natural gas thousands of feet below the ground should not be the primary concern, the panel’s experts told the Senate Energy and Natural Resources Committee. “Hydraulic fracturing has sort of become a bumper sticker for everything we have to watch out for,” said Mark D. Zoback, a Stanford University professor of geophysics who has been studying hydraulic fracturing for 30 years. (The Oklahoman, 10/5/11)
- “Hydraulic fracturing has become a bumper sticker,” allowing some groups to object to gas extraction from shales. (Platts, 10/4/11)
Kathleen McGinty, Fmr. PA DEP sec. and White House CEQ chair to President Clinton
- Shale gas resources are abundant in the United States. Shale gas has already generated significant economic opportunity, substantially changed the equation with respect to energy security, and has begun to reshape electricity markets in a way that offers air quality benefits. This point with respect to the robustness of the resource, while perhaps evident, bears stating. Even until quite recently questions were presented as to whether shale wells might produce in a robust manner initially, but then decline rapidly, or alternatively, if they would have staying power. Experience to date in the field shows a very strong pattern of production. … Much attention has also been trained on the fear that fracturing can and has contaminated drinking water. … Yet, fracturing per se seems not to be the culprit. … We found that the initiative “FracFocus” (www.fracfocus.org) is very effective in the collection and presentation of fracturing fluid data–painstakingly reported on a well by well basis. FracFocus has come together in a remarkable way and in short order. (Testimony, 10/4/11)
- “There was nothing that led us to the glaring conclusion that there was [a regulatory] actor missing from the scene. … The states are doing a good job.” (Politico, 10/4/11)
- Kathleen McGinty, a private consultant who once served as secretary of environmental protection in Pennsylvania, said “frack fluids per se are very unlikely to contaminate drinking water.” (The Oklahoman, 10/5/11)
- Witnesses also warned that federal regulation could unduly burden the already heavily state-regulated fracking industry and could potentially slow the economic growth of the industry. “The issues in each state are different,” said witness Kathleen McGinty. “Geologic differences make a world of difference in terms of ensuring water and air safety issues.” (AOL Energy, 10/5/11)
NOTE: A webcast of yesterday’s hearing is available here.
Hydraulic fracturing has opened the doors for the production of critical and abundant oil and gas reserves in the U.S., and abroad. With over 100 years of clean-burning natural gas now accessible in the U.S. alone, fracturing has increased our domestic energy security while creating jobs and economic opportunities from the well pad to our local hotels and diners. And there’s more good news. Technologies are advancing at breakneck rates, dramatically reducing aboveground land disturbances while heightening environmental safeguards.
Indeed, under the headline “Encana extends capacity of directional drilling,” the Grand Junction Daily Sentinel reports this about the technological advancements that our industry is continually making:
When Encana Oil & Gas (USA) was trying to figure out how to drill for the natural gas beneath a narrow box canyon north of Parachute, it was time for some out-of-the-box thinking.
The company’s solution? It drilled a remarkable 50-plus wells directionally from one well pad of just 4.6 acres. As a result, it developed about 640 acres of underground resources — the amount contained in a square mile — from a single location, based on underground well densities of as much as one every 10 acres. That’s the most wells that Frank Merendino, Encana’s drilling manager for its North Parachute Ranch property, believes has been drilled from an onshore pad anywhere in the United States.
“The reason they’re all here is to drain this massive area … without impacting the environment,” Merendino said as he surveyed the well pad. In the distance behind it, a long, thin waterfall coursed from the rim at the canyon head. It’s one of seven falls on the 45,000-acre ranch property.
The directional drilling prevented the cost and visual impact of trying to build pads on the canyon cliff sides, or drilling through a few extra thousand feet of earth from surrounding plateaus and having to locate pads near the rim, where possible spills into the canyon would be a concern.
Encana’s effort won it a Colorado Oil and Gas Conservation Commission award this summer. It also is appreciated by state wildlife officials because of the reduced disturbance of habitat. Encana’s accomplishment reflects oil and gas technology’s continuing evolution, said Dean Riggs, assistant regional manager for Colorado Parks and Wildlife in Grand Junction.
“Many, many moons ago, we used to have one well per gas pad,” Riggs said. Riggs took over as the manager of the wildlife area that includes Encana’s North Parachute project eight years ago, and back then four wells on a pad was probably normal in the region, he said. “Eight wells per pad eight years ago was a big deal,” he said.
Similar technological advancements are on display in Wyoming. This from yesterday’s Houston Chronicleunder the headline “Remote Wyoming site could help shape fracking’s future”:
Natural gas development in the U.S. will depend not only on what happens in Washington and in statehouses across the country. It could be shaped in part by what happens in a big antelope-dotted field south of this remote valley town.
Here, Shell Oil Co. and others are taking steps – some required and others voluntary – that soon may be the norm for reducing the environmental impact of gas drilling and the extraction process called hydraulic fracturing, or fracking.
Shell, for instance, now recycles more than half the water it uses in fracturing local wells, reducing the need for locally sourced fresh water. It also has installed equipment that is sharply cutting emissions from drilling rigs and has shrunk its surface footprint by drilling more wells at a single site, rather than spacing them out checkerboard style, as is done in some other fields.
And support for America’s oil and natural gas industry – and common sense hydraulic fracturing regulations – runs as deep as the wells being drilled into shale formations. Last week, a diverse group of 119 organizations — including the National Association of Manufacturers, US Chamber of Commerce, Independent Petroleum Association of American, Ohio Grocers Association, and North Dakota Farm Bureau — sent a letter to President Obama highlighting the immense benefits of this energy revolution. This from the letter:
The shale gas and oil revolution in America today has been good news for job creation, economic growth and energy security, and it promises hundreds of thousands of more new jobs, billions of dollars more in revenue to governments, and vast supplies of domestic, affordable and clean-burning energy for generations to come.
Speaking of jobs: A new Ohio Oil and Gas Energy Education Program study highlights the potential of the emerging Utica Shale formation last week. The Cleveland Plain Dealer reports “Ohio’s natural gas and oil reserves are a multibillion-dollar bonanza that could create more than 204,500 jobs in just four years.” Here are key study experts:
- Ohio’s natural gas and crude oil industry’s could reinvest approximately $246 million on new exploration and development in 2011, and is estimated to ramp up to $14 billion by 2015;
- Between 2011 and 2015, Ohio’s natural gas and crude oil industry will help create and support more than 204,520 jobs; and
- Ohio’s natural gas and crude oil operators (producers) could distribute more than $1.6 billion in royalty payments to local landowners, schools, businesses and communities based on an estimate of 2,837 new Utica wells drilled and completed between 2011 and 2015.
And it’s not just here at home. The shale revolution — enabled by American technology and know-how — is going global. From South America to eastern Europe, vast oil and natural gas supplies are being responsibly leverage into a more stable energy supplies for consumers while generating enormous economic benefits.
ARGENTINA
“Argentina minister: Boom set in unconventional gas”: Argentina’s vast unconventional natural gas resources will become an important contributor to the South American nation’s energy matrix within the next four years, according to a top minister. …”We, together with [gas rich] Bolivia, are going to become an gigantic source of gas in South America with opportunities for industrialization,” he said. According to recent U.S. Energy Information Administration report, Argentina ranks No. 3 in the world in terms of technically recoverable shale-gas resources with 774 trillion cubic feet of gas.”
POLAND
Shale gas “could reduce Poland’s dependence on Russia for gas, create tens of thousands of jobs and fill state coffers”: Outside the U.S., Poland is the first country where companies are making a serious effort to develop shale gas, which Polish Prime Minister Donald Tusk has called the country’s “great chance,” as it could reduce Poland’s dependence on Russia for gas, create tens of thousands of jobs and fill state coffers.
UNITED KINGDOM
“Firm finds shale gas near Blackpool “:A company exploring for controversial “shale gas” in the UK says it could drill hundreds of wells in Lancashire to tap into vast gas resources underground. Cuadrilla Resources, whose exploration efforts near Blackpool had to be halted earlier in the year amid concerns they were causing tremors, said there were 200 trillion cubic feet of gas under the ground in the area. A percentage of the gas could be recovered for use in the UK’s energy mix, providing up to 5,600 jobs, including 1,700 in the local area, at the peak of production, the company has suggested.
Ireland, Canada, and Bulgaria, to name a few, are also evaluating the promise of oil and natural gas development – enabled by hydraulic fracturing – from shale formations. The trend is catching on — the world wants competitive and efficient energies that can keep up with expanding global demand.
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According to a recent Rasmussen Report survey, “Most voters continue to feel America needs to do more to develop domestic gas and oil resources. They also still give the edge to finding new sources of oil over reducing gas and oil consumption.” “Seventy-five percent (75%) [of Likely Voters] do not think the country is doing enough [to develop its own gas and oil resources],” according to the survey.
Are you one of these voters that’s concerned about America’s energy security? If so, you’ve come to the right place for up-to-date news and information about domestic oil and natural gas production. Here’s how to stay informed:
- Twitter: @EnergyinDepth — Join the more than 2,800 other EID Twitter followers for the latest news stories, issue alerts and press releases about hydraulic fracturing, and job creation associated with American energy production.
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- YouTube: YouTube.com/user/EnergyinDepth — President Obama’s EPA administrator, Lisa Jackson, recently told Congress this about hydraulic fracturing: “I’m not aware of any proven case where the fracking process itself has affected water.” This video, and a host of others, are all here.
- Online Resources: Bookmark www.EnergyinDepth.org, and visit our interactive blog and comprehensive library for fact-based information about hydraulic fracturing.
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New Govt. Data Underscores America’s Enormous Oil, Natural Gas Resources
Fmr. NH senator: “Extracting natural gas from shale is safe, economically sensible”
Late last week, the U.S. Energy Information Administration’s (EIA) – an independent arm of the Energy Department which “collects, analyzes, and disseminates independent and impartial energy information to promote sound policymaking, efficient markets, and public understanding of energy and its interaction with the economy and the environment”, according to its website — released a 105-page report on America’s oil and natural gas resources found in shale formations entitled “Review of Emerging Resources: U.S. Shale Gas and Shale Oil Plays.”
While some in the media (NOTE: EIA deals in straightforward facts) and elsewhere continue to question the economical and environmental viability of oil and natural gas production from shale formations across the country, EIA’s report independently underscores the significant and growing amount of homegrown resources we have in the United States.
Here’s a key excerpt from EIA’s release:
Although the U.S. Energy Information Administration’s (EIA) National Energy Modeling System (NEMS) and energy projections began representing shale gas resource development and production in the mid-1990s, only in the past 5 years has shale gas been recognized as a “game changer” for the U.S. natural gas market. The proliferation of activity into new shale plays has increased dry shale gas production in the United States from 1.0 trillion cubic feet in 2006 to 4.8 trillion cubic feet, or 23 percent of total U.S. dry natural gas production, in 2010. Wet shale gas reserves increased to about 60.64 trillion cubic feet by year-end 2009, when they comprised about 21 percent of overall U.S. natural gas reserves, now at the highest level since 1971. Oil production from shale plays, notably the Bakken Shale in North Dakota and Montana, has also grown rapidly in recent years.
Importantly, EIA also notes that “Technical advancements could lead to more productive and less costly well drilling and completion.” These technical advancements include hydraulic fracturing, a tightly regulated 60-year-old technology that’s been used to enhance the production of oil and natural gas in the United States since the Truman administration.
While many questions exist about hydrofracturing, shouldn’t the public and the media rely on subject matter experts? Well one expert, former New Hampshire senator John E. Sununu – who earned an undergraduate and master’s degree in mechanical engineering from the Massachusetts Institute of Technology – writes this about the environmentally proven technology in today’s Boston Globe.
This from his column, entitled “Smart fracking: Extracting natural gas from shale is safe and economically sensible”:
Fracking uses high-pressure fluid to crack open shale rock formations thousands of feet below the surface. The resulting fractures allow gas and oil to flow more freely and be recovered economically. In their effort to stop the practice, environmental groups raised the specter of drinking-water contamination, excessive water use, and other supposed risks. The hyperbole about this method comes somewhat unexpected, given that the process has been around for over 50 years.
Almost three decades ago, I spent the summer in a hydraulic fracture lab in a musty basement a stone’s throw from the Charles River. As a rookie, I mostly cast cement blocks used to simulate the shale formations. Researchers injected fluid into the blocks at high pressure and measured the speed at which cracks would grow. Over months of trial and error, we learned to predict and even control the direction of the cracks by putting pressure on the outside of the cement blocks.
For a few weeks each year, the professor supervising the lab would head out to the field to conduct larger-scale tests on working wells. Back then, high operating costs coupled with low oil prices meant that fracking was limited to specific, high-yield areas. About five years ago, however, improvements in horizontal drilling finally came together with better simulation and monitoring of crack growth to make the entire process a big economic winner.
The results have been dramatic for production of both oil and gas. During the past three years, proven reserves of shale gas have more than tripled. Estimates of recoverable reserves in the United States have soared to over 800 trillion cubic feet – roughly 35 times America’s annual consumption – from shale gas alone. North Dakota’s Bakken oil field, a marginal producer five years ago, now pumps 400,000 barrels per day. And yet the full potential of reserves such as the Marcellus shale beneath Pennsylvania and New York still haven’t been fully measured.
…
The industry will continue to innovate, improve productivity, and reduce production costs. Consumers will benefit, the economy will grow, and America will use more natural gas. And that, in the end, will drive the environmental lobby crazy.
Spiraling deficits, worker furloughs, budget cuts, and tax and fee hikes are common these days in state capitals across the nation. Unemployment remains near double-digits nationally, home foreclosures continue to skyrocket and a fear of a double-dip recession persists. And as economic growth continues to lag, stagflation remains a very serious threat to our economy, and to American families.
Thanks to the tightly-regulated 60 year-old oil and natural gas stimulation technology called hydraulic fracturing, however, tens of thousands of good-paying Americans jobs are being created and billions in much-needed revenues are being generated. At the same time, enormous amounts of reliable homegrown energy resources are being safely delivered to American consumers and small businesses, helping to drive down our nation’s dependence on unstable regions of the world to fuel our economy.
In North Dakota, where there’s virtual full employment, the responsible development of the state’s oil-rich Bakken Shale formation, enabled by hydraulic fracturing, continues to be an economic boon for the region. This from a Minot (ND) Daily News story this week under the headline “Oil revenue plays big role in state budget”:
Tax collections from oil and gas totaled nearly $583 million in 2010, a 43 percent increase from 2009 and a 250 percent increase since 2006, said Cory Fong, state tax commissioner. Biennium oil and gas tax collections are expected to total $1.4 billion for 2009-2011 and more than $2 billion during 2011-2013, he said. The state’s general fund budget this biennium is $2.7 billion.
Oil and gas tax revenues that have helped create a $1 billion state surplus also are pulling duty to support several spending areas, from property tax relief to schools and local infrastructure.
And in Pennsylvania, where the Mighty Marcellus Shale – the second largest natural gas field in the entire world – is being responsibly developed thanks to fracture stimulation technologies, the Associated Press reports today that the Commonwealth’s “unemployment rate fell for a second straight month in September, as employers added more than 7,000 jobs to their payrolls.”
Today’s Wilkes-Barre Times-Leader puts the historic economic opportunity into perspective, reporting this under the headline “Drilling backer sees 90,000 new Pa. jobs by end of year”:
Natural gas drilling in the Marcellus Shale is not a “flash-in-the-pan gold rush,” Klaber said, but an industry that will add 90,000 jobs to Pennsylvania’s work force by the end of the year and will produce steady employment for decades to come.
Such activity will not only produce drill site jobs, which Klaber said will move from site to site, but will also create careers at drilling company regional offices, many of which have already opened shop in Pennsylvania.
“I think it has happened quickly, but I think the coverage of it has been pervasive. I mean the interest in it has made it seem faster than it really is,” Marcellus Shale Coalition President Kathryn Klaber told The Times Leader on Wednesday.
This morning, the U.S. Department of Labor issued the nation’s monthly jobs report. These headlines speak to the bleak results:
- Los Angeles Times’: “Stagnant labor market seen as unemployment rate holds at 9.6%.”
- USA Today: Obama faces same jobless rate of 9.6% — but fewer jobs
- Associated Press: “Economy loses 95K jobs due to government layoffs,” noting that “The jobless rate has now topped 9.5 percent for 14 straight months, the longest stretch since the 1930s.”
But it’s not all gloom and doom. You see, because of technologies like hydraulic fracturing – a tightly regulated 60 year-old oil and natural gas stimulation process – thousands of good-paying private sector jobs continue to be created at a time when they’re most needed. At the same time, because of this work enable by fracture stimulation technologies, abundant supplies of homegrown, reliable sources of oil and natural gas are coming to market, helping to keep energy costs stable for struggling American consumers, families and small businesses.
Unfortunately, “the federal government has something in the works that, if approved, could paralyze North Dakota’s oil patch,” according to the state’s Department of Mineral Resources chief. It’s called the FRAC Act, and this misguided legislation – which would strip individual energy-producing states of their “commendable” ability to tightly regulate fracturing would deliver a major blow to job growth and domestic energy production without adding any additional environmental benefits.
“University of Pittsburgh environmental engineering professor Radisav Vidic said there is no evidence that fracking alone creates any environmental hazards, as long as all other safety measures are followed,” reports West Virginia’s Wheeling Intelligencer. The FRAC Act is simply another ‘Washington solution’ in search of a problem.
But here’s a quick look at the staggering rates of economic growth in North Dakota, where the responsible development of oil-rich Bakken Shale is putting thousands of Americans to work, as the state’s “oil rig count matches record set in 1981.”
The Dickinson Press: Experts discuss North Dakota oil possibilities (10/7/10)
- “Many great opportunities for all of us North Dakotans with this Bakken play,” said Ron Ness, president of the North Dakota Petroleum Council. “I think we all recognize the influx of people, the influx of wealth and the influx of potential is somewhat of a renaissance for North Dakota.” … “You really can’t understand the magnitude of what’s going on until you get out on the ground you see a drilling rig you see the traffic,” Ness said.
- Kathleen Neset, a geologist and owner of Neset Consulting Service in Tioga, said the Three Forks Formation, which is present in Stark County, is about 370 million years old. Neset said the Bakken play is the largest in the lower 48 states, citing it as a “technology play.” “We knew the oil was there, now it’s a matter of making it work with the technology,” Neset said.
- However, the federal government has something in the works that, if approved, could paralyze North Dakota’s oil patch. Hydraulic fracturing, a high-pressure tactic used to extract oil from rock formations, is at the heart of developing the Bakken Formation. Lynn Helms, director of the state’s Department of Mineral Resources, said it has been proposed that the Environmental Protection Agency be put in charge of hydraulic fracturing. Helms said the state’s geology is much different than others and North Dakota’s regulations are much more stringent than others. “We know how to take care of our resources in North Dakota,” he said, adding protection of groundwater resources is the number one priority. “We’ve been doing it for a long time.”
Williston Herald: Bakken basics: Town hall meeting highlights oil industry activity (10/7/10)
- North Dakota Department of Mineral Resources Director Lynn Helms said activity in the state has reached record-breaking levels across the board. “We are in an unprecedented time in North Dakota history,” said Helms. Helms said activity is booming, with over 320,000 barrels of oil being produced each day, a record number of rigs operating and thousands of jobs available. He added that the long term stability of the state’s oil play grows stronger each day.
- Kathy Neset, owner of Neset Consulting Services of Tioga, said technology has been a key component to the current success in the Bakken formation. Neset explained to the crowd the horizontal drilling technique used to get to the thin layer of Bakken shale. Without the use of horizontal drilling, a huge amount of oil would be unrecoverable. “When we have an unconventional play, we have to go out and do other things,” said Neset. … “This truly is a technological play,” said Neset.
- North Dakota Petroleum Council President Ron Ness said current estimates put the number of employees in the oil industry in the 18-25,000 range. Ness said there are thousands of current job openings available to meet the current demand. In the long term there will be thousands of permanent jobs in the state, from people servicing wells to operating processing plants. Ness said gas processing plants have been announced in Williams and McKenzie counties, among others. He said these will provide large numbers of high-paying jobs to the communities they’re located in.
KFYR-TV: Western Oil Development (10/7/10)
- “They see this as a tremendous opportunity, not just for the current time, but for many years to come,” said Director of North Dakota Pipeline Justin Kringstad. “We’ve got something very sustainable,” said Helms.
The biggest problem facing North Dakotans, aside from the threat posed by the FRAC Act, which could shut down this responsible and tightly regulated development, according to the Associated Press? “The money problem is how to spend it,” where there’s “virtual full employment, according to economists.”
Potential Hydraulic Fracturing Legislation Now Has a Sponsor
Rumors are circling around Washington that an amendment seeking to give EPA authority over the regulation of hydraulic fracturing will soon be added to massive climate change legislation sponsored by Congressman Henry Waxman of California and Ed Markey of Massachusetts. It appears the amendment’s author will be Congresswoman Diana DeGette of Colorado, who sponsored similar legislation in the last Congress (H.R. 7231).
The Colorado Independent reports:
U.S. Rep. Diana DeGette is leading the charge to increase federal oversight of the nation’s natural gas industry, reintroducing a bill that specifically targets a process called hydraulic fracturing.
DeGette and hydraulic fracturing detractors claim the practice harms the environment and is damaging to public health. But Energy in Depth readers (and the EPA) know that’s not the case-and that states already effectively regulate hydraulic fracturing.
The fluids used in the process are more than 95 percent water, and fracturing activities take place thousands of feet below the water table. What’s more, extensive precautions are taken to case wells near the surface to prevent any leakage of fracturing fluid, oil or natural gas.
And while the Independent refers to highlighting the economic consequences of eliminating this safe engineering practice as an industry “tactic,” we’re sure the hundreds of thousands of Americans whose jobs rely on hydraulic fracturing might think differently.
Here are the facts:
- Hydraulic fracturing is responsible for 30 percent of our domestic recoverable oil and natural gas, and has aided in the extraction of more than seven billion barrels of oil and 600 trillion cubic feet of natural gas.
- Up to 90 percent of the wells currently operating today have been fraced, and in the future, 60 to 80 percent of new wells may have to undergo fracturing in order to remain viable.
- In 2007, $226 billion was invested in domestic exploration and production. Those investments drive economic growth, support local businesses and keep Americans working. Royalties paid by producers totaled $30 billion in 2007, and billions were paid to federal and local governments in the form of severance and income taxes.
- Hydraulic fracturing accounts for a significant portion of the total economic activity attributable to domestic energy production. More than 300,000 Americans are employed in the exploration and production of domestic oil and natural gas.
What’s more, regulating hydraulic fracturing out of existence would have disastrous economic consequences, including the loss of thousands of jobs, billions in government revenue and the closure of 150,000 natural gas wells.
America can’t afford to unnecessarily curb domestic energy production and destroy jobs-and the DeGette amendment would do just that.
