breaking through fact and fiction: fracking” and the...
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Breaking Through Fact and Fiction:
“Fracking” and the Shale Revolution
March 22, 2013
Claude E. Cooke, Jr.
1
Hydraulic fracturing is an important innovation with
impact across the world
35%
23%
21%
15%
6%
Social Media
GPS
iPhone
FrackingTechnology
Other
Participants of WSJ executive conference in Singapore were
asked: “What is the best innovation of recent times?”
Source: Wall Street Journal, Feb 26, 2013
2
Background of hydraulic fracturing
3
Is it “Fracking” or “Fracing” and why do we do it?
Popular / press definition (Fracking)
• “’Fracking’ refers to the entire exploration and production process, including horizontal
drilling, fracturing, and extraction of the gas via the well, rather than an engineering
process for fracturing low permeability rock”
– KKR: Historic Opportunities From the Shale Gas Revolution (2012)
Technical definition of hydraulic fracturing (fracing, “frac’ing”)
• Forming a crack (fracture) in rock using hydraulic fluid pressure
• Classical fracturing: Simple vertical fractures created in vertical well
• Shale fracturing: Complex fracture “network” created in horizontal well
Why fracture an oil / gas well?
• Improve economics in all but high-producing wells (faster payback, more reserves)
• In many reservoirs, rock is not permeable enough to produce oil / gas economically
without fracturing, so wells would not be drilled without fracturing (more reserves)
4
Hydraulic fracturing is not a new technology; oil / gas
wells have leveraged the technology for 60+ years…
• 1947: First well intentionally hydraulically fractured (Hugoton Field, KS)
• 1948: R.F. Farris and J.B. Clark (Stanolind) file patents on the same day
• 1949: First commercial jobs (Oklahoma and Texas) on the same day
First Intentional Fracture First Commercial Fracture
Source: SPE Monograph, Halliburton
5
…However, the last ~10 years have seen a rapid increase
in hydraulic fracturing activity driven by “shale” gas
SPE Papers
Horsepower (MM)
0
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800
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19
61
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4
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0
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5
19
88
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2.1 2.3 2.9 3.9 5.7
7.2 7.9 10.0
15.0 18.0
0
5
10
15
20
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
0.5% CAGR
28% CAGR
15% CAGR
North American pressure pumping horsepower
Society of Petroleum Engineers publications discussing hydraulic fracturing
Source: Society of Petroleum Engineers (publications): Includes: “Hydraulic Fracturing”, “Fracing”, and “Fracking”, Spears and Associates – Tulsa (Horsepower)
6
The “Shale Revolution” will impact much of the USA;
fracturing is a key part of developing the resources
Source: EIA
7
Furthermore, the global impact of the technology’s
application is just beginning to be understood
Source: PacWest Consulting Partners
8
Hydraulic fracturing basics: Geology, theory, and application
9
Hydrocarbons are found trapped in rocks; shale is a
“source rock” for conventional oil / gas
Source: Canada National Energy Board
10
In conventional and shale rocks, oil / gas is held in the
“pores” of the rock; larger spaces are easier to produce
Sandstone
Permeability: 1 Darcy
Limestone
Permeability: 1 Darcy
Shale
Permeability: 0.000001 Darcy
We are now producing oil / gas
from rocks >1 million time less
permeable than ~50 years ago
Source: Kansas Geological Society
11
Rock outcroppings give us a basic view into what might
be occurring in shales underground
Source: ALL Consulting (2008), Brian Cardotte – Oklahoma Geological Survey (2007)
12
Simple Fracture Complex Fracture
Complex Fracture
With Fissure Opening
Complex Fracture
Network
Simple Fracture Complex Fracture
Complex Fracture
With Fissure Opening
Complex Fracture
Network
Fractures are created to allow oil / gas to flow out of the
rock and into the wellbore
In shale
fracturing, the
more fractures
the better
Source: Pinnacle
13
Fundamentals of vertical well fracturing: Pump the “pad”
fluid to open cracks in the rock
Source: Ralph Veach
14
Fundamentals of vertical well fracturing: Pump the
proppant slurry to ensure the fracture stays open
Source: Ralph Veach
15
Fundamentals of vertical well fracturing: Flow frac water
back to surface and put well on production
Source: Ralph Veach
16
Shale fracturing applies the same principles as vertical
fracturing; “stacks” many frac jobs in a horizontal well
The “Shale
Revolution”
would not have
been possible
without
directional
drilling
Source: Canada National Energy Board
17
Horizontal wells are completed in “stages”; each stage
is like a separate frac job
Source: CARBO Ceramics, Marathon Oil
Link to original animation:
http://www.youtube.com/watch?v=mitLngz03dg
Additional hydraulic fracturing animation:
http://www.youtube.com/watch?v=VY34PQUiwOQ
18
Significant water, proppant,
time, and cost incurred too
•Water: ~6 million gallons
•Sand / proppant: 8 million
pounds
•Horsepower: 10,000
•Stages: 8 - 40
•Time: 1 week
•Cost: $1,500,00 - $3,000,000
Hydraulic fracturing is an industrial process and
requires specialized equipment
Heavy equipment is required to
execute a successful frac job
Frac pump
Water tank
Blender
Data van
Source: CalFrac, Trican Services, Dragon Equipment
19
Combined, the equipment makes up a “frac spread”
which moves onto the well site when drilling is complete
Source: Kansas Geological Society, DOE / NETL (Dec 2011)
20
To understand what is happening below the surface,
micro-seismic is often used to measure fracture creation
Source: Pinnacle
21
Micro-seismic can create a detailed picture of fracture
creation and often to optimize the treatment in real-time
Monitoring
well
Horizontal
wellbore
Source: Canada National Energy Board
22
Aggregating micro-seismic data in the Barnett Shale
creates a picture of fracture activity across the “play”
Source: Pinnacle / Halliburton
23
Environmental concerns / Looking forward
24
Recently, the environmental impact of hydraulic
fracturing has come under close scrutiny
Common concerns Background / details of concerns
Air pollution
Groundwater
contamination
Earthquakes
• Release of greenhouse gases by venting
and flaring during flowback
• Estimated 500-1,000 truck loads
per well on local roads
• Small surface spills
• Flowback water can contain contaminants
• Well construction may not seal
off water zone
• Sustained injection for water disposal
into active seismic area
Road traffic / noise
Surface water pollution
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25
Looking forward, there are still many areas for
innovation in hydraulic fracturing
New materials and procedures
to create more fracture length
/ surface area
Technologies to clean or
re-use fracturing water
(less net water use)
Reduce surface footprint and
utilize natural gas-powered
equipment
Create more fracture
conductivity
Develop new
diagnostic tools Pump “Smart” proppant
26
Questions and Discussion
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