CERAWeek '12: US shale board talks fracking feud, hypes water management
By Adrienne Blume
Process Editor
HOUSTON -- Members and associates of the US Shale Gas Advisory Board (SGAB) opened the annual IHS CERAWeek energy conference on Monday by sharing thoughts on the controversies and challenges surrounding shale gas and oil development in the US.
Panelists included John Deutch, SGAB chairman and institute professor at MIT; Daniel Yergin, SGAB advisor and CERA co-founder and chairman; Patrick Schorn, president of Schlumberger's reservoir production group; and Mark Zoback, professor of geophysics at Stanford University.
At the opening of the panel, Mr. Deutch informed attendees that the increase in shale gas production capacity has created hundreds of thousands of jobs and lowered natural gas prices for consumers.
It has also reduced US energy imports, which has, in turn, helped lower the country's energy deficit and brought the US closer to energy independence.
According to Mr. Deutch, the shale energy revolution is the "most important development in the oil and gas industry" of the past 50 years.
However, Mr. Deutch also cautioned that if the environmental impacts of shale energy development are not acknowledged and addressed "in a serious, practical way," development of these resources could be slowed or stopped due to public opposition.
Some concerns associated with shale development include water quality and management, air quality, and public perception of hydraulic fracturing ("fracking") technology.
Optimistically, more than 100,000 new shale wells could go into operation over the next 10 to 15 years if development is carried out responsibly, Mr. Deutch stated.
Responsible development will be built on three key factors: 1) measurement, 2) disclosure, and 3) reported, progressive improvement of environmental effects.
The SGAB's November 2011 report offered 20 recommendations for following these procedures and developing US shale oil and gas resources responsibly and sustainably.
However, Mr. Deutch noted that very little has changed in the field since that time. The differences between federal regulations and state laws governing private land have led to complications in the development of shale resources, especially with regard to water quality and management.
These differences need to be resolved, Mr. Deutch asserted.
Mr. Zoback then spoke about the importance of proper well construction. He noted that all developers have a duty to frack their wells responsibly and that the vast majority of them do; however, the public does not seem to be aware of this fact, due to the massive amount of anti-fracking propaganda in circulation.
"Sadly, when you mischaracterize the problem, you mischaracterize the solution," Mr. Zoback said.
The Stanford professor explained that the best way to improve water quality with relation to fracking operations is to focus on well construction—particularly the appropriate development of best practices and regulations.
Mr. Zoback also addressed concerns about injection-triggered earthquakes, which have occurred in a small number of scenarios where the injection of fracking fluids into wells have created pressure changes along fault lines, stimulating seismic activity.
Mr. Zoback categorized exaggerated worries about fracking-related earthquakes as a "fear-factor problem," and noted that over 140,000 Class 2 injection wells have been operating safely for a number of years, with only a handful of instances of injection-triggered earthquakes.
Mr. Zoback then outlined five steps for the management of injection wells with regard to seismic activity. First, avoid injecting fluids into active faults. Second, reduce pressure changes at depth and know how much fluid can be stored in saline aquifers without causing pressure changes. Third, if earthquakes are a cause for concern, install a localized seismic monitoring network and observe what is happening during injections. Fourth, establish protocols with local regulators for monitoring and responding to seismic activity. Fifth and finally, reduce injection rates if an injection-triggered earthquake appears likely, and be prepared to abandon an injection well if necessary. To prevent problems before they happen and reduce perceived risks, drillers must be proactive at the start of projects, Mr. Zoback asserted.
Schlumberger's Peter Schorn next offered solutions for improving fracking technology and workflows so that less strain is placed on equipment, human resources, and water supplies.
Technology developments underway seek to create an alternative kind of conductivity inside fracks, which will help developers better characterize reservoirs.
Presently, only 35% to 40% of each frack yields recoverable resources; however, with better identification of zones that should be fracked and zones that should not, water use could be reduced by 30% to 40%. Improvements in this area will also result in fewer environmental impacts overall, as well as lower capital spending and energy use.
"What we are trying to focus on is doing more with less," Mr. Schorn affirmed.
The last segment of the panel consisted of a Q&A session wherein attendees were given the opportunity to direct questions to panel members.
When asked to name the most significant environmental challenge to fracking operations, Mr. Deutch and Mr. Schorn spoke about water management. Mr. Schorn noted that many places in the world where shale resources have been discovered do not have an abundance of water, impeding the development of these resources.
This is why careful water management and technology improvements are necessary, he said.
Alternatively, Mr. Zoback called for proper well construction that reflects local geologic conditions, noting the importance of multiple barriers in the event of leakage from lower frack depths.
State regulations are better equipped to address these concerns than are sweeping federal regulations, he asserted.
Another audience question addressed the possibility of a lack of skilled human resources to develop shale resources in the future.
Mr. Zoback contended that universities are not training geophysicists or engineers to work in shale development, and that the industry must work with institutions to change this so that shale resource development can continue.
Mr. Deutch wrapped up the panel discussion by advising the industry to be proactive. He suggested that industry should move ahead of regulators by taking an aggressive approach to measurement, disclosure, and the reporting of environmental effects associated with shale energy development and fracking.
These three factors, if followed dutifully and responsibly, will go a long way toward ensuring the safe and sustainable development of shale resources, he said.
They will also help change public perception of the risks and challenges associated with fracking technology, the SGAB chairman asserted.
The CERAWeek 2012 conference takes place from March 5-9 at the Hilton Americas in Houston, Texas. For more details on the event, click here. Stay tuned to Hydrocarbon Processing for further coverage.
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