Chained to the shale drilling rigs
and we’re throwing away the key
by Allen Best
Both breadth and depth were evident on March 21 in Randy Udall’s canvas of what I think can properly be called the revolution in extraction of natural gas and oil in America from formations of tight shales that had previously defied exploitation.
After so much shrill demonizing of the drillers, both for natural gas and for oil, it was a pleasure to hear a thoughtful, and respectful, analysis of the technological advances and persevering businesses that have made this bounty possible.
“It’s wizardry. It’s beyond technology what these guys are doing,” said Udall at a while profiling several of what he called the Steve Jobs of this radical transformation.
George Mitchell’s “17-year overnight wonder” in unlocking the Barnett shale of Texas has been broadly noted, but Udall also points to the work of a trio of oil-and-gas men in the Rocky Mountains: Bill Barrett’s work in the Piceance Basin of Colorado and then an unlikely pair, William “Neil” McMurry, a native of Casper, and Brooklyn-born Ed Warner. Their drive and innovation yielded the huge strikes in Wyoming’s Jonah and Pinedale fields.
In his talk at the Colorado Renewable Energy Society, Udall said the bonanza of gas these pioneers helped produce has been extremely disruptive, in many ways that most people would call good. Relatively cheap natural gas has caused dramatic reduction in burning of coal, allowing the United States to ramp down its emissions of greenhouse gases.
Cheaper gas has also put more money into the pockets of average America, $500 to $500 a year, he said.
How different from the 1980s, when American was “haunted by the specter of depletion.” Despite robust drilling, the supply curve was bending downward. Then, supply was padded by rapid drilling of coal-bed methane, wit the most productive exploration occurring in the Rocky Mountains, in the San Juan Basin of Colorado and New Mexico and in the Powder River Basin of Wyoming and Montana. In the Powder River, 25,000 wells were drilled in just five years.
But while these drilling innovations have produced plentiful, even cheap fossil fuels, there are downsides. Udall specializes in statistics that bowl you over.
For example, to produce the same amount of gas that Kuwait can produce with 35 drilling rigs, in Texas it takes 800.
Also: 100,000 wells have been drilled in the Rocky Mountain states in the last 12 years, half of them in just five counties.
Companies have leased 10 percent of the land in the lower 48 states for mineral extraction
If the natural gas bonanza is a “triumph, and I think it is, there’s also a danger that I don’t think is fully appreciated,” said Udall
“What happens when you run out of drill locations?” he asked? He was speaking of the Bakken shale formation of North Dakota, which is now producing 750,000 barrels of oil per day, but he was, I think, speaking more broadly of the soft underbelly of this bonanza.
Already, he said, oil and gas drilling has become the dominant land use in the United States, and that drilling has only begun.
Even with the technological wizardry, drillers have to drill, drill, drill – because the wells into these tight-sand formations isn’t productive. That’s why 90 percent of wells are drilled using fracturing techniques, because pore spaces between the grains of sand are microscopic, vastly smaller than a human hair.
In other words, this bonanza of cheap energy is, at the very least, misleading.
Houston-based geologist Art Berman (See: Petroleum Truth Report) was making this case based on his studies of the Barnett shale of Fort Worth even before the headlines announced the triumph of natural gas. Speaking at the 2009 conference of the Association for the Study of Peak Oil, Berman explained a concept called depletion rate. Unlike wells in conventional sands, the drilling rigs in the tighter sands have a sharp fall-off in production. This means, more wells must be drilled to produce the same amount as was obtained from the more conventional geologic formations, despite the advances in technology.
In other words, as we shift our electrical production to natural gas, and some of our transportation, too, we depend ever more on drilling that can be sustained, at least in the short term, but only by frantic drilling.
“Drill baby drill is no longer an option. It’s a destiny,” said Udall. “You might say it’s Manifest Destiny.”
Fracking has drawn much attention, and while I have said several times in print that the industry and regulators still have much to prove, it’s really just a side issue. The bigger issue is the sheer bulk of our growing dependency on natural gas. and that dependency begs many big questions.
Udall made the point that the extraction of oil from North Dakota, for all its admitted bounty, has been the stuff of “hype, exaggeration and fantasy.”
Perhaps the same can be said of natural gas. To get the amount of gas that is projected we will need at current consumption, we will have to drill baby drill. A million in the United States by 2040.
These technological advances are a mixed blessing, said Udall. While we are now blessed with enormous amounts of new and relatively inexpensive energy, we are now chained to the drilling rigs, and we’ve thrown away the key.
To see some of Udall’s writing, see Resilience, the site of the Energy Bulletin. Also, see a piece in Christian Science Monitor published in February titled, “The shale phenomenon: fabulous miracle with a fatal flaw.”