A Gas Rush
While the political debate swirls around offshore drilling and whether or not to cap-and-trade CO2 emissions, a revolution seems to be unfolding that can profoundly change the energy landscape in the United States. New technologies are unlocking vast amounts of natural gas that are buried under American soil in shale formations – Shale Gas. Different experts estimate that it adds 10 to 40 years of gas supply at present day US consumption rates. That is important, because it can potentially reduce America’s dependence on foreign oil and help the transition to a clean energy supply. Natural gas is the cleanest of all fossil fuels and burning it emits only half as much CO2 as does burning coal. Replacing coal fired power plants by gas fired ones significantly reduces CO2 emissions. And, for instance, making heavy-duty trucks use gas instead of diesel can reduce foreign oil by up to 40%. But if shale gas will be the game changer some claim it to be is far from certain.
All over the US there are large plays of shale that contain huge amounts of gas. Let me draw you some.
Figure 1 - Shale gas plays in the US lower 48 states. Source: Energy Information Administration
The main ones are in Texas and the Northeast, and some in the mountain area.
Shale layers are thousands of feet below the surface and can extend hundred of miles. The gas is locked tight in the dense rock that inhibits the gas from flowing freely. Until a decade ago it was too hard and too costly to get it out. But innovative drilling techniques are now making production of gas from shale economically viable.
The two key enabling technologies are horizontal drilling and hydraulic fracturing. The shale formations are usually thousands of feet deep and several ten to several hundred feet thick. The drill goes down then goes horizontally to follow the shale layer up to 1.5 miles laterally. In this way, much more of the target formation is exposed to the well than would have been the case if one could only do vertical drilling.
They then inject a mixture of mainly water, sand and chemicals at very high pressure, which fractures the rock around the well bore. That’s why it’s called “hydraulic fracturing.” The sand flows into the cracks and keeps them open. Now the cracks provide a path for the gas to flow to the well and up to the surface.
Shale layers are thousands of feet below the surface and can extend hundred of miles. The gas is locked tight in the dense rock that inhibits the gas from flowing freely. Until a decade ago it was too hard and too costly to get it out. But innovative drilling techniques are now making production of gas from shale economically viable.
The two key enabling technologies are horizontal drilling and hydraulic fracturing. The shale formations are usually thousands of feet deep and several ten to several hundred feet thick. The drill goes down then goes horizontally to follow the shale layer up to 1.5 miles laterally. In this way, much more of the target formation is exposed to the well than would have been the case if one could only do vertical drilling.
They then inject a mixture of mainly water, sand and chemicals at very high pressure, which fractures the rock around the well bore. That’s why it’s called “hydraulic fracturing.” The sand flows into the cracks and keeps them open. Now the cracks provide a path for the gas to flow to the well and up to the surface.
Figure 2 - Horizontal drilling and hydraulic fraturing. Source: New York State Department of Environmental Conservation
The technology has been successfully applied in Texas, near Fort Worth, since 2003, and is expanding rapidly. Shale gas’ share in the US gas production grew to 10% in less than 10 years and is projected to continue to grow to more than 20% by 2020. The early success has fueled interest among gas companies to expand to other shale plays and sparked a drilling rush most notably in the Northeast, in Pennsylvania, West Virginia and New York. Companies anxiously apply for permits and knock the doors of landowners to make them lease their property. They promise to make an end to economically hard times.
This procedure is not without issues. The two most important concerns are the risk of contamination of fresh water wells and impact on local communities.
This procedure is not without issues. The two most important concerns are the risk of contamination of fresh water wells and impact on local communities.
One well requires 3-4 million gallons of water. The water is mixed with chemicals and sand and injected into the hole. The chemicals are less than 1% of the mixture, but 1% of millions of gallons is still thousands gallons. And we know that many of the chemicals used are toxic.
The fear is that gas and chemicals migrate to the surface along badly constructed wells or natural faults, or enter the ground water from spills on the surface. more than 1000 incidents have been reported. Incidents that include contaminated private wells near drilling sites, cancers related to chemicals used in hydraulic fracturing, and accumulation of gas in water wells and basements. In the documentary Gasland, which is about hydraulic fracturing, you can see a homeowner put his tapwater on fire with a lighter.
Companies claim that there is no need to worry. The industry has decades of experience with hydraulic fracturing and it refers to an EPA study that concluded that there was no evidence that unequivocally linked the incidents to drilling or hydraulic fracturing. However, there’s no evidence that the incidents are NOT linked to the practice either.
Bottom line is that the risks are uncertain and mistakes can lead to serious consequences, like fresh water sources being contaminated forever. For the mitigation of the risks we rely on the industry itself.
Besides water contaminations there are the thousands of heavy-duty truck trips that haul equipment and water to and from the drilling sites. One well requires about 1000 truck trips. They damage local roads and impact road safety.
In the mean time local and state executives have to deal with the uncertainty while making decisions whether or not to accept permit applications. New York City has decided not to gamble with its water supply and ban drilling in the watershed, which 8 million people depend upon for their drinking water. On the other hand, communities in western Pennsylvania and New York are facing high unemployment rates. They need the extra revenue and the jobs. But they can’t tell what price they will ultimately pay for that.
It’s Wild West. There’s not much experience and there is no specific regulatory framework. Shale gas drilling is a surprise technology that burst onto the scene, causing fierce opposition and proposition, creating winners and losers. Among the developers are good guys and bad guys. There are accounts of aggressive sales techniques and bad behavior, but there are examples of fruitful collaboration with local communities, too. The EPA is now starting to study the connection between hydraulic fracturing and water. The results of that study will likely lead to decisions whether and how to regulate.
Shale gas is a rising star, but whether it can play a crucial role in reducing America’s energy dependence and reduce the cost of greenhouse gas emissions depends on whether the industry can keep a clean safety record and create a positive presence in communities to deserve its license-to-operate.
Mark,
ReplyDeleteA well-written speech. Wish I were there. Two questions: 1- will shale gas development still be economically viable if the market price falls? Any idea what this price might be? 2- Is it possible that part of the push for shale gas development is driven by the weak economy and land-owners looking for income? Perhaps developers are trying to pry open a door that could close in healthier economic times.