Posted on 02/26/2010 9:44:58 PM PST by neverdem
Allen Brooks is to be complimented for writing this piece to stimulate discussion on the gas capacity and economics of one of the most important new reservoirs, the Haynesville Shale.
I rarely respond to our guest commentators but in this case I wear two hats. I happen to be, as many of you know, a petroleum production engineer, with more than 25 years of experience in hydraulic fracturing. I was also among the first people in the industry to have used this type of well completion on horizontal wells.
The deployment of these two technologies, along with geosteering, new instrumentation, and advances in completion and stimulation fluids, is arguably one of the most resounding successes of the petroleum industry in the last two decades, on par with the ability to find, drill and produce oil in 10,000 feet of water and another 20,000 to 25,000 of earth below that.
I understand Allen's qualified skepticism, but let me remind all that as late as 2005, the US Geological Survey was rating both the Haynesville and the Marcellus Shales at about 1 trillion cubic feet of recoverable gas. There have been some astonishing escalations of these numbers, published by reputable people, larger than any other in memory: up to 300 Tcf for the Haynesville, and more than 500 Tcf for the Marcellus. These volumes would put them at the #2 and #3 positions in world natural gas reservoirs, below the combined Iranian South Pars, yet undeveloped, and the Qatari North fields, but ahead of the Urengoy field, Russia's largest. Even the most conservative estimates put the two US shale gas fields at a minimum of 30 Tcf, truly remarkable in any case.
It is the US shale story that prompted the International Energy Agency in November to increase its estimate of global gas resources from the previous year's 14,000 Tcf to over 30,000 Tcf.
The fact that newer wells in the Haynesville produce at lower initial production should be expected and is likely because of reservoir pressure depletion or because of lower reservoir permeability in outlying locations. Executing more fracture treatments is an easy way to remedy the problem and because of the very low reservoir permeability, they interfere very little with each.
It is true that at lower natural gas prices activities in the two shales will likely suffer somewhat but in my view, gas at $5 is exactly equivalent to $30 oil. At $5, gas production from the shale is still quite attractive, certainly not as good as $10, but still do-able. More so, I look at the glass as have full rather as half empty. At such prices some smart guy will figure how to use CNG for transportation in a big way and the gas shales will come in quite handy. Such a national game changer will happen before too long. T. Boone Pickens who was on a silly tangent with his windy plans, may be onto something in converting tractor trailers from diesel to CNG.
The Haynesville and Marcellus Shales are bona fide national treasure troves.
Yep, and Economedies knows his stuff.
ping...
OOpsie.
Wrong administration. This area is now declared a natural disaster area (er, wildlife free range preserve, and nobody is permitted on it - except wildlife free range photographers.
(We’re running out of, the sky is falling!) conventional energy ping.
Here’s the technology natural gas will pair up with very nicely. By the way, I have relatives in North Louisiana with land leased in the Haynesville shale and there have been reports there for a year or more of exceptionally fast depletion rates at some of the wells being drilled there. Just sayin’.
http://dealbook.blogs.nytimes.com/2010/02/24/bloom-energy-claims-a-new-fuel-cell-technology/
I live in the Marcellus Shale region in Pennsylvania.
The drilling pace is going from fast to furious. The existing wells are producing strong.
Other than NIMBYs and Enviro-Whackos, this has been the biggest economic shot in the arm for the region in decades.
One problem with CNG powered 18-wheelers, CNG does not have the energy density to power this type of vehicle. This would also impact the range before having to stop and refuel.
If it cuts the fuel cost in half, I think that will justify making a few, nay quite a few, extra pit stops.
Are NIMBYs winning or making strides there to kill exploration and extraction?
They get much attention from the media, but so far, their impact has been muted.
The biggest threat comes from Gov Rendell and the state gov't that is seeking all sorts of new taxes on the drillers.
Dems love success so much they tax it.
bump
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