Marcellus Shale Drill Technique Used for Oil
Pittsburgh Tribune Review
10 February 2011
By Associated Press
A new drilling technique is opening up vast fields of previously
out-of-reach oil in the western United States, helping reverse a
two-decade decline in domestic production of crude.
Companies are investing billions of dollars to get at oil deposits
scattered across North Dakota, Colorado, Texas and California. By 2015,
oil executives and analysts say, the new fields could yield as much as
2 million barrels of oil a day -- more than the entire Gulf of Mexico
produces now.
This drilling is expected to raise U.S. production by at least 20
percent over the next five years. And within 10 years, it could help
reduce oil imports by more than half, advancing a goal that has long
eluded policymakers.
"That's a significant contribution to energy security," says Ed Morse,
head of commodities research at Credit Suisse.
Oil engineers are applying what critics say is an environmentally
questionable method developed in recent years to tap natural gas
trapped in underground shale. They drill down and horizontally into the
rock, then pump water, sand and chemicals into the hole to crack the
shale and allow gas to flow up.
Because oil molecules are sticky and larger than gas molecules,
engineers thought the process wouldn't work to squeeze oil out fast
enough to make it economical. But drillers learned how to increase the
number of cracks in the rock and use different chemicals to free up oil
at low cost.
"We've completely transformed the natural gas industry, and I wouldn't
be surprised if we transform the oil business in the next few years
too," says Aubrey McClendon, chief executive of Chesapeake Energy,
which is using the technique.
Petroleum engineers first used the method in 2007 to unlock oil from a
25,000-square-mile formation under North Dakota and Montana known as
the Bakken. Production there rose 50 percent in just the past year, to
458,000 barrels a day, according to Bentek Energy, an energy analysis
firm.
It was first thought that the Bakken was unique. Then drillers tapped
oil in a shale formation under South Texas called the Eagle Ford.
Drilling permits in the region grew 11-fold last year.
Now newer fields are showing promise, including the Niobrara, which
stretches under Wyoming, Colorado, Nebraska and Kansas; the Leonard, in
New Mexico and Texas; and the Monterey, in California.
"It's only been fleshed out over the last 12 months just how
consequential this can be," says Mark Papa, chief executive of EOG
Resources, the company that first used horizontal drilling to tap shale
oil. "And there will be several additional plays that will come about
in the next 12 to 18 months. We're not done yet."
Environmentalists fear that fluids or wastewater from the process,
called hydraulic fracturing, could pollute drinking water supplies. The
Environmental Protection Agency is now studying its safety in shale
drilling.
The agency studied use of the process in shallower drilling operations
in 2004 and found that it was safe.
In the Bakken formation, production is rising so fast there is no space
in pipelines to bring the oil to market. Instead, it is being
transported to refineries by rail and truck. Drilling companies have
had to erect camps to house workers.
Unemployment in North Dakota has fallen to the lowest level in the
nation, 3.8 percent -- less than half the national rate of 9 percent.
The influx of mostly male workers to the region has left local men
lamenting a lack of women. Convenience stores are struggling to keep
shelves stocked with food.
The Bakken and the Eagle Ford are each expected to ultimately produce 4
billion barrels of oil. That would make them the fifth- and
sixth-biggest oil fields ever discovered in the United States. The top
four are Prudhoe Bay in Alaska, Spraberry Trend in West Texas, the East
Texas Oilfield and the Kuparuk Field in Alaska.