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News from SPE ATC 2012: Enormous potential, but public discourse key to making unconventionals conventional

BY PRAMOD KULKARNI, Editor

SAN ANTONIO – Making the public aware of the economic benefits and safety of unconventional oil and gas production was the key thread in the panel discussion at the opening general session at the SPE Annual Technology Conference and Exhibition underway here.

The panel of key industry executives and experts consisted of Mark Albers, Sr. Vice President, ExxonMobil; Tim Dove, President and COO of Pioneer Natural Resources; David Lesar, Chairman, President and CEO of Halliburton; and Stephen Holditch, Director, Texas A&M Energy Institute. The panel was moderated by David Hobbs, Chief Energy Strategist for IHS CERA.

Hobbs opened the topic by stating that it was only a question of time and patience before what is unconventional today becomes commonplace tomorrow.
In the opening presentation, Lesar said there three action items were required: better communicate the economic benefits, make drilling and production sustainable from both economic and environmental viewpoint, and define the roles of operating and service companies.

To prove the point that frac fluids can now be made from safe ingredients that are used in food products, Lesar took a sip from a glass of Halliburton’s Clean-Stim fluid. Urging fellow oil and gas industry members communicate the low impact of unconventional operations, Lesar said the industry uses only 2% of the water for fracing, whereas 20% of the water is used by golf courses, and hundred times more water is required for biofuels production.

Lesar said there are clear lines of responsibilities between service companies and operators in conventional oil and gas production, but complained that it is a “free for all” in unconventional production with several operators running internal geological analyses and fracturing operations.

Albers explained the potential growth of unconventionals in the context of future energy supplies, “Tight oil and oil sand will more than make up for the decline in production of conventional oil and gas.” For the U.S., the import wedge is shrinking and could be down to as much as 1% by 2040. But Albers said it was important to think in terms of energy security rather than energy independence. “I like the fact that the food we eat comes from many locations throughout the world.”

Speaking of the enormous potential for shale, Dove of Pioneer Natural Resources explained how the Wolfcamp was the largest uneconomic play in the Permian before the advent of horizontal drilling and fracing. Now the company is looking for a JV partner to exploit the potential recovery of 150 million BOE per 960-acre section by drilling 55 wells and 7,000-ft laterals.

Texas A&M’s Holditch expects shale gas production to go up from 21% of the U.S. gas production to 46% by 2025. Holditch also revealed the results of a dissertation by Texas A&M doctoral students Zhenzhen and Dong that the oil and gas in place (P50) throughout the world for unconventionals was 125,000 Tcf and technically recoverable resources were over 57,000 Tcf.

Holditch also served on the DOE shale gas production subcommittee, where discussions centered on improving public information and communication with state and federal regulators.

In closing discussions, Albers reminded the audience, “We have a good story to tell. We’ve drilled and produced thousands of unconventional wells safely. We know how to do this.”

10/08/2012

 

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