Shale report: pioneer sees bright future for technology
June 30, 2010 17:56
Houston oilman George Mitchell gets award for his work
on hydraulic fracturing
BY ERIC LIDJI FOR GREENING OF OIL
At a recent Pittsburgh screening of “Gasland,” a documentary highly critical of
domestic natural gas drilling, activists lined the lobby of the theatre wearing “No
Frakking” T-shirts. A few weeks later, George Mitchell, the Houston oilman who
pioneered frakking, the drilling process more formally known as hydraulic fracturing,
received a lifetime achievement award from the Gas Technology Institute for his
work.
Hydraulic fracturing helped make shale gas the fastest growing energy play in
America, but in “Gasland,” filmmaker Josh Fox compared the technique to “a car
made in 1890,” advanced enough to drive, but not safe: no air bags, no seat belts,
no antilock brakes.
Mitchell, 91, doesn’t completely agree. He believes his team increased domestic
energy supplies by improving technology that is inherently sound, but not foolproof.
“You’ve got to do a good job, or you’ll have trouble,” he said.
In a traditional gas development, a well enters a reservoir and the natural pressure
underground brings the gas to the surface. Shale gas development, though, requires
drillers to coax the gas from underground rocks that hold it very tightly.
Cracking these rock formations open loosens that grip, allowing more of the gas to
escape. Drilling companies have used hydraulic fracturing for decades to improve
production from oil and gas fields. Mitchell figured out how to do it for shale gas.
Over nearly two decades he drilled more than 30 wells, many at a loss, to test
different techniques for fracturing the Barnett Shale in Texas.
“We tried all sorts of things,” he said, from heavy water to propane. His geologists
told him to quit and save his money.
“We did it anyway,” he said.
Eventually, he found that “slick water,” a combination of water and sand to reduce
friction, opened the shale. “It was a puzzle. Why did fracturing seem to open up the
reservoir? Because every cell is loaded with gas… The fracture broke the bonds so
that the gas could reach outside of the cell. That made the difference,” he said.
Hydraulic fracturing combined with horizontal drilling, which allows a well to touch
more of the flat shale than vertical drilling, is credited with increasing domestic gas
reserves by 35 percent between 2006 and 2008, according to the Potential Gas
Committee.
More than just a wildcatter
Mitchell is both a typical and an atypical oilman. Born in Galveston to immigrant
parents who owned a dry-cleaning business, he got a petroleum engineering degree
and joined a wildcatting company after a stint with the Army Corps of Engineers in
World War II.
He became president of Mitchell Energy & Development Corp. in 1959, and took part
in more than 10,000 wells, racking up more than 550 oil and gas discoveries before
he sold the company to Devon Energy in 2002 for $3.1 billion. During those years,
he also became known for sustainable ventures not directly concerned with energy:
creating The Woodlands, a planned community outside Houston; and helping to
found the Houston Advanced Research Center, a research consortium focused on
sustainable technologies.
Mitchell: shale is not the Gulf of Mexico
Today, Mitchell is very hopeful about shale. He believes natural gas can be developed
across more than half of Pennsylvania, home to part of the Marcellus Shale formation.
He expects shale developments to spring up across Europe and Asia in the next five
years. He gleefully takes credit for bringing down natural gas prices by increasing
supply.
Some of that confidence is the natural optimism of an investor. He retains a stake in
Devon and is a partner in Alta Resources, a smaller company that found early
success in the Fayetteville Shale in Arkansas and is now focusing on the Marcellus in
Pennsylvania.
Those companies have one thing in common. They are both independents, meaning
smaller companies that focus on finding and producing oil and natural gas, as
opposed to “majors” like BP and ConocoPhillips that also move and refine their
products. Mitchell Energy & Development, though very big and very profitable, also
was an independent.
In the wake of oil spill in the Gulf of Mexico, Mitchell notes that many independents
have left the deepwater drilling to the big companies to focus on shale instead.
“Shale development is very simple compared to the Gulf,” he said.
Mitchell thinks shale development will only get better, pointing to seismic technology
that allows drillers to see how the fractures are progressing through the reservoir.
Some concerns are valid
However, he acknowledges the risks of shale development, the largest being how
companies manage the chemicals they add to hydraulic fracturing solutions to
improve recovery rates. Those chemicals come back to the surface in produced water.
“There are volatiles coming out of the production of it, or where you’re storing it, and
you ought to do a better job of watching that,” he said. “So I do think these
complaints are valid.”
The U.S. Environmental Protection Agency is currently studying whether and how
hydraulic fracturing impacts drinking water.
That said, he praised large independents like Devon and Anadarko Petroleum for
their work recycling this produced water, treating it to remove the chemicals and
reusing it.
Mitchell appears to be in the “bridge” camp, those who see natural gas as a
preferable alternative to oil until the United States can support itself entirely on
renewable fuels.
“That’s why shale gas is going to be very important for the next 15 to 20 years,” he
said.
SHALE NEWS IN BRIEF
Schlumberger is promoting a new technology that claims to increase production from
shale by forming channels in the sand that props open fractured reservoirs.
Penn State University is studying the potential impacts of Marcellus Shale drilling on
groundwater and drinking water supplies. A final report is expected by mid-2011.
The Pennsylvania State Police and the Pennsylvania Department of Environmental
Protection took 131 trucks hauling wastewater out of service for violations.
Proposed legislation in the Pennsylvania House and Senate call for a one-year
moratorium on issuing natural gas drilling permits in the Marcellus Shale.
In a report on the future of natural gas, researchers from MIT conclude that “the
environmental impacts of shale development are manageable but challenging.”