Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: Arthur Wildfire! March
Let me clear up what appear to be misunderstandings.

The wells are not mobile. They are, after all, holes in the ground, and the pump jacks seen above the wellheads don't move, except to allow servicing of the well.

Commonly, I have seen the media (who know little about oil wells) label pictures of pump jacks as "oil rigs" or even "drilling rigs". I have also seen images where the media claimed drilling rigs were pumping oil. So let's clear that up.

The thing that does move is the drilling rig (images), which exists solely to drill the well. Once the hole is there, that same rig lowers casing (pipe) into the hole, which is cemented in place, and the well is capped for the next phase, after tools are lowered in the hole and recovered to record how well the cement bonds to the casing and the surrounding rock.

Sometimes, on multi-well pads, the rig is skidded or walked a short distance over to the next wellhead (generally 30 to 50 ft.) and the process repeated for another well. That hole will be drilled in either a different rock layer (formation) or in a different direction, or parallel to the well already in place but some distance away. The beauty of directional and horizontal drilling is that the actual openings at the surface (wellheads) can be 30 ft. apart on the same pad, the ends of the lateral wellbores can be as far apart as the lease will allow from 1250 ft. to about 9500 ft. depending on wellbore configuration on a 1280 acre (two section) lease spacing. Directional tools exist to put the wellbore where you want it, and barring some physical limitations, that can be done.

In the next phase, the drilling rig is moved off of the location and workover rig (images) brought in. Production equipment is moved on site, including the Christmas tree, treaters, separators, and tanks to hold produced fluid, various (short pipe) lines to move fluid around the location, and a flare stack to burn off excess gas (raw, wellhead gas, and sometimes H2S, not something you could use in your furnace). This is hooked up and pressure tested (as needed) in anticipation of producing oil, and the well is completed, using a workover rig. That may involve perforating the casing and fraccing the well, but now the well is producing oil and/or natural gas. If fracced, there is an initial 'flowback' period where the pressure induced by the frac (to crack the rock down hole) is bled off as the well is produced, along with some of the frac fluid.

That workover rig and frac equipment is moved off and the well allowed to flow until production rates decline to the point where it is economical to pump the oil out of the well, and then the workover rig is moved back in, and the pump, sucker rods, and pump jack (images) are installed, to pump oil out of the vertical part of the wellbore, where the formation pressure pushes the oil column up the pipe, just not to the surface.

While workover rigs and drilling rigs are mobile, they don't produce the oil, the well does, and it is literally carved in stone. It stays where it was drilled, unless additional drilling is done from that wellbore (another story).

The next boom

Complying with regulations can cost money. It can save it, too (by averting serious problems with fixed standards), but that depends on the purpose of the regulation.

When the profit is there, things move more quickly, because the money will be invested.

Permits, on the other hand, can take ridiculous amounts of time, and in order to get a permit for a road on Federal land, there must be conducted surveys by Archaeologists (cultural remains), Biologists (for rare/protected animals--especially for signs that raptors ever nested there), Botanists (for rare/protected plants), EIS filed, etc.

Each of those permits will require the report of a specialist in that field, someone paid for by, but not connected to the oil company. Those are pretty specialized fields, so that can be a bottleneck.

In the event a road route has been used in the past and reclaimed, all the surveys must be conducted again if that route is to be used again.

On Tribal Land, other permits and Tribal Government hoops may exist as well.

So that process can take months on Federal Land. It is generally quicker with the State on private or even State owned land. Generally, though, there is nothing fast about it.

The people who deal with permits at the Federal level get paid whether or not a permit is granted. They are seldom in any hurry.

At the State level, the state permit folks seem to take their jobs more seriously in that they are not there to obstruct the process. After all, a well drilled in this state will produce revenue for the State, too. That doesn't mean they will cut any corners, but they will get their job done. It is a subtly different mindset.

Other factors apply, though, in gearing up to drill a lot of wells. The perception is that the Bakken Boom only happened from about 2008 to this year (tailing off now).

Actually, the first attempts to drill horizontal wells in the Bakken date back to the mid 1980s; the present boom has its roots in wells drilled in 2000 in Montana, and spread and grew over 15 years, in a different part of the Bakken formation than the original wells of the 80s.

It takes longer to prove concept than most folks imagine. The leases (privately held mineral rights) and ownership must be sorted out and obtained, as well as the permits, and all that happens before a drilling location is prepared for a rig to be moved on. That's all prep work, tied in with geological evaluations, seismic studies, and the myriad preparatory steps which accompany the drilling of any well, right down to posting reclamation bonds for the wellsites. Millions of dollars may be spent before a drill bit is picked up.

Iron doesn't keep well outside, and drilling rigs are simply too big to put in a shed. If a rig has been stacked (out of operation) for as little as 6 months, it can cost between $50,000 to $100,000 to get it going again, and quite possibly more as rigs are increasingly dependent on computerized systems. That's just one drilling rig, and there were 218 here at the peak. Now, there are roughly 65.

Even so, that is a problem that can be cured with a little time and enough money, given the incentive (potential profit). Money might be harder to get the next time, though, because bankers who were eager to lend during the last boom might not have come out so well on the deal and be less eager to lend for business growth on the next.

Normalcy bias isn't just for day to day stuff. When a boom is on it is funny how many people start acting like it will never end.

Here's the killer, though. Whenever a 'boom' dies out, there will be a contingent of people who stay on, but the vast majority will disperse.

If they rented, the apartment will sit empty as they go back home and live in the house they came to work and save from the bank or go off in search of greener pastures.

The aforementioned normalcy bias blinds landlords to the decreasing income in an area, and the rents don't drop as fast as the paychecks go away, so the people leave.

People don't have much of a shelf life, especially when there are mouths to feed. They get jobs in other fields, maybe even decent ones, and often will not go back to the oil industry. They find jobs in other areas that will get them by, especially if they saved up a grubstake.

Older workers hit retirement age or die off.

Good people get swept out with the dead weight, so having been laid off is not an indicator that someone isn't top quality, just that they were in the wrong place at the wrong time or the people they worked with for decades retired and they lost their network.

There is also the assumption that those who successfully adapted to decades of change in an industry can't handle the "modern' technology. (Funny, really, because they were the ones who developed or proved it.)

So, ramping up to have another boom isn't as simple as throwing a switch. Even on the heels of another boom elsewhere it takes time to move equipment, hire and train people, obtain the fleets of trucks and drivers, and figure out the quirks of the particular formation (geological rock layer) being drilled and produced.

Since booms die as a result of economics, there tends to be a delay of a decade or two between periods of peak activity, unless geopolitical factors bring about another one.

92 posted on 11/11/2015 10:30:01 AM PST by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing.)
[ Post Reply | Private Reply | To 91 | View Replies ]


To: Smokin' Joe

Thank you for the detail! I’ll have to read most of this off-line.

“Permits, on the other hand, can take ridiculous amounts of time ...”

That’s what I thought.

As I understand it [and assuming the future President is anti-leftist], the President has tremendous leeway with many regulations and can sign emergency executive orders to bypass regulatory hurdles.

And if the President needs more anti-regulation power, emergency legislation can provide him/her with greater EO leeway. A sharp increase in gas prices is arguably an emergency, a threat to military budgeting at the very least.


93 posted on 11/11/2015 10:42:57 AM PST by Arthur Wildfire! March (The DNC's 2012 Convention actually 'booed' God three times.)
[ Post Reply | Private Reply | To 92 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson