US oil production

[Mr. H.]

I'm happy to hear Obama supports Fraccing and the GMO-Corn Ethanol Market.

Ethanol?

 

[Samson]

I'm happy to hear Obama supports Fraccing and the GMO-Corn Ethanol Market.

Ethanol?

Not just any ol' Ethanol; ethanol derived from GMO Corn.

But my point is that Gasoline prices are low, because Ethanol volumes used fuel blends have increased whilst ethanol supply has increased and price has remained relatively consistant.:

 

[Corrigendum]

I am assuming that this post was made in jest, but I have heard people say in all seriousness that the Obama administration is somehow responsible for rising oil production in the United States. This is, of course, completely false.

The explosion of US oil and gas production is coming from advances in horizontal drilling and hydraulic fracturing. Wells are drilled to the depth of the source rock (low permeability shale) and kicked-off in a horizontal direction with lateral sections thousands of feet long. The rock is hydraulically fractured in multiple stages to increase the flow rate of the hydrocarbon. While hydraulic fracturing has been around for decades, it has only recently been combined with horizontal drilling to allow these reservoirs to be economically produced. It is unlocking resources that have, until now, been inaccessible.

The Left has made several attempts to limit hydraulic fracturing and oil development in general, and the Obama administration is no exception. Obama-appointed EPA officials, for example, humiliated themselves after their negligent accusations against EnCana in Pavillion, WY and the agency has since backed off the topic of fracking. (The EPA drilled its monitor wells into a hydrocarbon-bearing formation and claimed that the groundwater had been contaminated, among other embarrassing blunders.)

This explosion has come in spite of Obama rather than because of him. If we were to free up the energy industry, we would see even higher rates of production growth.

 

[RGR]

The explosion of US oil and gas production is coming from advances in horizontal drilling and hydraulic fracturing.

Bullshit.

It is unlocking resources that have, until now, been inaccessible.

Bullshit.

If we were to free up the energy industry, we would see even higher rates of production growth.

Correct.

1 out of 3….could be worse, if you were Matthew you would have somehow managed to get 4 wrong.

 

[Mr. H.]

The explosion of US oil and gas production is coming from advances in horizontal drilling and hydraulic fracturing.

Bullshit.

It is unlocking resources that have, until now, been inaccessible.

Bullshit.

If we were to free up the energy industry, we would see even higher rates of production growth.

Correct.



1 out of 3….could be worse, if you were Matthew you would have somehow managed to get 4 wrong.

I'm honestly curious about your bullsht labels.

 

[rdean]

Inferring?

Can't you read?

I didn't "infer" anything at all. I stated it outright.

See how dumb you get when you watch fux?

They can't give Obama credit for anything. They even try to take credit for taking out Bin Laden after Republicans let him go and stopped looking for him. What happened to that party?

 

[Corrigendum]

The explosion of US oil and gas production is coming from advances in horizontal drilling and hydraulic fracturing.

Bullshit.

It is unlocking resources that have, until now, been inaccessible.

Bullshit.

...then what is it? Unicorns?

 

[RGR]

I'm honestly curious about your bullsht labels.

Explosion because of advances in.....

Horizontal wells are 85+ year old technology, hydraulic fracking about 60+.

No advances were required to do both, and both ave been done before. What was required was an idea. That idea being that using water to stimulate shales was okay, whereas us frack engineers in the early 90's were forbidden to do so because it was believed to swell clays shut, so we stuck to nitrogen and cross linked gel fracs on shale wells, or tried to limit our perf interval to the stringers inside shales.

The explosion doesn't come from advances in anything, rather a change in what engineers thought was "okay".

Unlocking resources that until now were inaccessible...

Shale gas was being produced in 1825. Shale oil in SE Ohio by 1870-1880. Shales have always been ACCESSIBLE.

If someone had wanted to put a vertical well into the Marcellus shale in Susquehanna County Pennsylvania and fracked it using the same multi-stage techniques employed in the early 90's, there was no INACCESSIBLE.....natural gas would have come out, and people would have been happy.

But because a vertical well with minimal sand face contact area wouldn't have brought back a high enough IRR, the idea would have stopped shortly thereafter, without a NG price of $20/mcf to justify it.

Throwing waters on the shales and them NOT causing the clays to swell, while changing the cross sectional formation area by orders of magnitude, brought production rates high enough to satisfy the IRR conditions. It is easily possible to bring up the same amount of NG per unit area using vertical wells, problem being it might take 10 vertical wells to equal the performance of 1 horizontal. Horizontal costs more per well, but the initial production hit and time and cost to drill it is cheaper than the 10.

No new technology, nothing inaccessible from a type of formation that as far back as the 1920's was the largest known accumulation of NG on the PLANET (Big Sandy in Kentucky), just one of those "rules" that turned out not to be such a rule after all, and as fast as the cost of drilling big horizontals could be brought down, the lower and lower results could be tolerated to meet a companies IRR.

It might also be noticed that the majors, with different IRR requirements, don't appear to be particular happy with the return they believe are coming from the shale development in the US. But then thats the majors, and they have been a step behind on this one.

 

[Corrigendum]

We have not been able to drill horizontal wells thousands of feet MD and multiple stages of fracks for 85+ years.

And, yes, the advances that have made these kinds of wells possible have unlocked tremendous volumes of new reserves.

Your argument is like saying that because abacuses existed in ancient China, we should have been able to build server farms if only those pesky engineers hadn't gotten in the way.

 

[Mr. H.]

I'm honestly curious about your bullsht labels.

Explosion because of advances in.....



Horizontal wells are 85+ year old technology, hydraulic fracking about 60+.



No advances were required to do both, and both ave been done before. What was required was an idea. That idea being that using water to stimulate shales was okay, whereas us frack engineers in the early 90's were forbidden to do so because it was believed to swell clays shut, so we stuck to nitrogen and cross linked gel fracs on shale wells, or tried to limit our perf interval to the stringers inside shales.



The explosion doesn't come from advances in anything, rather a change in what engineers thought was "okay".



Unlocking resources that until now were inaccessible...



Shale gas was being produced in 1825. Shale oil in SE Ohio by 1870-1880. Shales have always been ACCESSIBLE.



If someone had wanted to put a vertical well into the Marcellus shale in Susquehanna County Pennsylvania and fracked it using the same multi-stage techniques employed in the early 90's, there was no INACCESSIBLE.....natural gas would have come out, and people would have been happy.



But because a vertical well with minimal sand face contact area wouldn't have brought back a high enough IRR, the idea would have stopped shortly thereafter, without a NG price of $20/mcf to justify it.



Throwing waters on the shales and them NOT causing the clays to swell, while changing the cross sectional formation area by orders of magnitude, brought production rates high enough to satisfy the IRR conditions. It is easily possible to bring up the same amount of NG per unit area using vertical wells, problem being it might take 10 vertical wells to equal the performance of 1 horizontal. Horizontal costs more per well, but the initial production hit and time and cost to drill it is cheaper than the 10.



No new technology, nothing inaccessible from a type of formation that as far back as the 1920's was the largest known accumulation of NG on the PLANET (Big Sandy in Kentucky), just one of those "rules" that turned out not to be such a rule after all, and as fast as the cost of drilling big horizontals could be brought down, the lower and lower results could be tolerated to meet a companies IRR.



It might also be noticed that the majors, with different IRR requirements, don't appear to be particular happy with the return they believe are coming from the shale development in the US. But then thats the majors, and they have been a step behind on this one.

Thanks for all that. But wasn't it George Mitchell who combined various existing practices to employ horizontal drilling with high volume high pressure multi stage fracing? That's what made the difference.

 

[RGR]

We have not been able to drill horizontal wells thousands of feet MD and multiple stages of fracks for 85+ years.

Of course we haven't. Hydraulic fracturing is only 60+ years old. What part of simple math can you not understand? And multi stage fracks in shales were exactly what I was doing in vertical wells in the late-80's….with the same bridge plugs, packers, pre-perforated casing, sand screen outs and related techniques now being used in horizontals. Are you seriously telling me that I couldn't have done the same thing in horizontals if I had chosen to? This is only NEW to the maroons who have been fed some diet of nonsense from bloggers and oil-ignorants in the press. Multi stage tracking a horizontal is NO different than fracturing a vertical well with a big perforated interval.

And, yes, the advances that have made these kinds of wells possible have unlocked tremendous volumes of new reserves.

They aren't advances, but they haven't changed the amount of RESOURCE available by a single molecule of gas. What they have done is make some portion of those resources economic, thereby moving them from the resource column, to the reserve column. But they were always possible, as the Marcellus wells I drilled vertically and still producing today in SE Ohio indicate. We didn't even call them "Marcellus", just deep Devonian shale completions.

Your argument is like saying that because abacuses existed in ancient China, we should have been able to build server farms if only those pesky engineers hadn't gotten in the way.

Stupid analogies related to computers are not my area of expertise. Oil and gas wells and field are. So do what you wish with your server farms, and try not to fall for every bit of nonsense written by the oil-ignorant who are as likely to convince you that Texas invented oil as they are that Mitchell was the first guy to frack a shale well.

 

[RGR]

Thanks for all that. But wasn't it George Mitchell who combined various existing practices to employ horizontal drilling with high volume high pressure multi stage fracing? That's what made the difference.

Mitchell was the guy who started putting loads of water into shale completions in VERTICAL wells. Same as I was doing in the 80's in Ohio, but I was chasing stringers in the shale rather than the shale itself. As the frac engineers later discovered, you couldn't stay in the damn zone anyway and were still driving fractures out into the shale, but that didn't change the idea of the day, that this was a bad thing.

Mitchell has his technique down in verticals in the original Newark East sweet spot years before whoever did the first horizontals came along and put them into the crappier rock outside the original sweet spot.

By the time the first horizontals were being drilled in the Barnett by Mitchell, or whoever did them (never really checked the date of the first ones, but I know when they were) someone was already pumping single stage fracks into Bakken horizontal wells.

I have not yet determined the first frack in a horizontal well, most of the horizontals I drilled in the early 90's were Austin Chalks wells in Texas, and I drilled them, didn't stick around for the completion. I have to go back now and check the completion reports and see what happened later, it might be eye opening.

 

[Corrigendum]

Of course we haven't. Hydraulic fracturing is only 60+ years old. What part of simple math can you not understand? And multi stage fracks in shales were exactly what I was doing in vertical wells in the late-80's….with the same bridge plugs, packers, pre-perforated casing, sand screen outs and related techniques now being used in horizontals. Are you seriously telling me that I couldn't have done the same thing in horizontals if I had chosen to? This is only NEW to the maroons who have been fed some diet of nonsense from bloggers and oil-ignorants in the press. Multi stage tracking a horizontal is NO different than fracturing a vertical well with a big perforated interval.

They aren't advances, but they haven't changed the amount of RESOURCE available by a single molecule of gas. What they have done is make some portion of those resources economic, thereby moving them from the resource column, to the reserve column. But they were always possible, as the Marcellus wells I drilled vertically and still producing today in SE Ohio indicate. We didn't even call them "Marcellus", just deep Devonian shale completions.

Stupid analogies related to computers are not my area of expertise. Oil and gas wells and field are. So do what you wish with your server farms, and try not to fall for every bit of nonsense written by the oil-ignorant who are as likely to convince you that Texas invented oil as they are that Mitchell was the first guy to frack a shale well.

We haven't been able to drill long laterals with multi-stage fracks for 60+ years, either. That is completely absurd. As you said yourself: "... and as fast as the cost of drilling big horizontals could be brought down, the lower and lower results could be tolerated to meet a companies IRR." Costs don't drop by magic: This happens with advancements in technology.

I said above: "And, yes, the advances that have made these kinds of wells possible have unlocked tremendous volumes of new reserves."

This is why oil production is increasing in the US. No matter how many factoids you throw around a post to appear authoritative -- none of which contradict anything I've argued -- it does not change the fact that my fundamental argument is correct: That advances in horizontal drilling and hydraulic fracturing technologies have caused an explosion of oil production in the US, and that this had nothing to do with Barack Obama.

Incidentally, there are some serious flaws with your understanding of how these reservoirs work if we want to get pedantic.

Throwing waters on the shales and them NOT causing the clays to swell...

Clays that come into contact with water still swell during a hydraulic fracturing operation if they are present. The "surprise" was not that clays do not swell, as you claim, but that fluid-bearing natural fracture networks are so large. Clay swelling still occurs, but it is typically in the rock matrix where permeability is so low as not to affect your production anyway.

Effect Of Clay Swelling On Reservoir Quality

Incidentally, since we're being pedantic, I don't know why we're calling these formations "shales" since this isn't always technically true, either.

...while changing the cross sectional formation area by orders of magnitude...

The cross-sectional formation area doesn't change because fractures don't alter the geometry of the reservoir. I think you meant the cross-sectional flow area.

...brought production rates high enough to satisfy the IRR conditions.

It isn't the production rates per say that satisfy economic hurdles -- of which IRR isn't really a very good indicator on its own as you imply -- but rather the volumes recovered over some amount of time. This might seem like a trivial difference, but you could have an extremely high production rate at POP time that crashes so quickly that the well never pays out.

This is just one sentence I decided to focus on. I could do the same thing with about every sentence in every post you have made in this thread. I am sure you have been in the oilpatch for a long time, and I respect that, but you're not actually contradicting anything I'm saying and you are missing my fundamental point entirely.

 

[Mr. H.]

FYI George Mitchell died recently

 

[Corrigendum]

FYI George Mitchell died recently

We also lost Economides.

 

[RGR]

We haven't been able to drill long laterals with multi-stage fracks for 60+ years, either.

You don't get it. There is nothing special, or new, about doing a multi stage frac in a long lateral, and there isn't anything different about drilling a long lateral, therefore there isn't anything new to be seen here. One day, someone did a single stage and said "CRAP!! If one is good, lets do two!!"

That is completely absurd. As you said yourself: "... and as fast as the cost of drilling big horizontals could be brought down, the lower and lower results could be tolerated to meet a companies IRR." Costs don't drop by magic: This happens with advancements in technology.

Then name one. Because so far, you haven't, you have just claimed that these magical new things have caused Marcellus wells to drop their drilling times from about 3 weeks to 10 days, headed to 8. Economic efficiency is not a new technology either.

I said above: "And, yes, the advances that have made these kinds of wells possible have unlocked tremendous volumes of new reserves."

This is why oil production is increasing in the US. No matter how many factoids you throw around a post to appear authoritative -- none of which contradict anything I've argued -- it does not change the fact that my fundamental argument is correct: That advances in horizontal drilling and hydraulic fracturing technologies have caused an explosion of oil production in the US, and that this had nothing to do with Barack Obama.

I have already said that this has nothing to do with Obama, and nothing to do with half century or older technology. I know exactly why oil production is increasing in the US and I am expected to know why the pablum fed to the oil-ignorant, while amusing, is inaccurate.

Name a single new oil field technology that allowed oil production to increase. We've already discounted two undoubtedly around longer than you have been alive, this increase just started what, 5 years ago now? Name the new technology that allowed it to happen.

Incidentally, there are some serious flaws with your understanding of how these reservoirs work if we want to get pedantic.

I'll put my petroleum engineering degree and experience up against yours any day of the week, and twice on Sunday.

Throwing waters on the shales and them NOT causing the clays to swell...

Clays that come into contact with water still swell during a hydraulic fracturing operation if they are present. The "surprise" was not that clays do not swell, as you claim, but that fluid-bearing natural fracture networks are so large. Clay swelling still occurs, but it is typically in the rock matrix where permeability is so low as not to affect your production anyway.

Wrong again. And it is easy to see why, those large fluid filled fractures? They were producing them from vertical wells in the Devonian shale in Ohio in the late 19th century, only the oil-ignorant are surprised by them. And as I've already explained, the clay issue was what the engineers were told as the basis for avoiding water on the shales, the variability of clay content, and whether or not they swelled a lot, or a little, was irrelevant to rule applied by the engineers doing the frack jobs.

Incidentally, since we're being pedantic, I don't know why we're calling these formations "shales" since this isn't always technically true, either.

Depends on which ones (shales) you are talking about. And which geologist is doing the talking. Some want to make a mudstone argument, others pretend that the shales themselves can't even produce and the entire concept of producing shales should be tossed out.

I put my abstract in last week for a presentation, feel free to round up your professional experience in the matter and join us come August.

URTeC Call for Papers

...while changing the cross sectional formation area by orders of magnitude...

The cross-sectional formation area doesn't change because fractures don't alter the geometry of the reservoir. I think you meant the cross-sectional flow area.

Well where do you think the flow is coming from, NOT the formation?

...brought production rates high enough to satisfy the IRR conditions.

It isn't the production rates per say that satisfy economic hurdles -- of which IRR isn't really a very good indicator on its own as you imply -- but rather the volumes recovered over some amount of time. This might seem like a trivial difference, but you could have an extremely high production rate at POP time that crashes so quickly that the well never pays out.

Who's measure of "pay out"? The drilling engineer and his measure of break even month? PV10 SEC reserves? A cost/supply curve as utilized by the models of the EIA? IRR is a perfectly reasonable metric if only because it is unique to the company, they get to decide what they can, and cannot, afford. Everyone else can choose to do something else. Or not.

This is just one sentence I decided to focus on. I could do the same thing with about every sentence in every post you have made in this thread. I am sure you have been in the oilpatch for a long time, and I respect that, but you're not actually contradicting anything I'm saying and you are missing my fundamental point entirely.

Your fundamental point falls for the "gee whiz new technology" is why oil production is increasing in the US. You could have increased production same amount by drilling with only vertical wells and standard bridge plug, screen off, packer separated frack jobs….just…like…the…80's.

No new technology required. Only the invisible hand of Adam Smith. Feel free to try and sell the "new" and "improved" and whatnot, investors eat that stuff up. Certainly the economic benefits of walker rigs, pad drilling and whatnot is substantial. But petroleum engineers optimizing their drilling program isn't a new technology either.

 

[RGR]

FYI George Mitchell died recently

We also lost Economides.

Him I'll miss.