Shale gas in USA

17.06.2013

Introduction

Matemilola Saheed (32600012)

04/13/2023

Contents Introduction

The U.S shale gas revolution

o Barnett shale play production and drilling history

o U.S. Technically Recoverable Shale Gas Resources Summary

o Annual shale gas production (Trillion cubic feet)

o United States natural gas supply versus consumption

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Introduction Shale gas refers to natural gas that is trapped

within shale formations It occurs in a wide range of colors that

include: red, brown, green, grey, and black It is abundant

Source: geology.com

Fig 1: Shale formation

Fig 2: Shale colors

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The U.S Shale Gas Revolution Barnett shale play as the turning point By 1997, Mitchell Energy combines horizontal

drilling and hydraulic fracturing of the rock U.S shale gas production has increased from

virtually nothing to over 10 billion cubic feet per day (bcfd) between 2000 and 2010

The U.S shale gas revolution have boosted gas production by 25 per cent

Oil and gas import dependence has drop from 60 per cent to 40 per cent

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The U.S Shale Gas Revolution cont’d

Growth in the production of shale gas has led to significant decreases in prices of other natural gas

The United States is now the number one natural gas producer in the world and

Together with Canada, accounts for more than 25 per cent of global natural gas production.

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Map of US shale plays

Source: energy information administration5

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Fig 3: Barnett shale play production and drilling history

Source: Newell, 2011

• By 2005, gas production from Barnett Shale play alone grew to about 5 Bcf per day surpassing total production from other shale plays of about 2 Bcf.

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Table 1: U.S. Technically Recoverable Shale Gas Resources Summary

Source: INTEK, Inc., 20107

• In total only about 1percent of the TRR have been produced 04/13/2023

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Figure 4: Annual shale gas production (Trillion cubic feet)

• Production from the Barnett Shale play has leveled off• production from the Marcellus, Haynesville, Fayetteville and

Woodford shale plays are growing as more wells are drilled in these plays.

Source: EIA, Lippman consulting (2010 estimate)8

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Figure 5: United States natural gas supply versus consumption

• In 2008, the country imported 13 percent of its natural gas supply. That figure is expected to drop to nearly 1 percent by 2035

Source: KPMG Global Energy Institute , 20119

Production/Extraction of Shale gas

Ganesh Nagaraja (3264942)

04/13/2023

Contents Site Preparation

Drilling

Fracking

Fracking Fluids

Disposal of Flow back Fluids

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The Production Process Comprises Six Main Steps Site development and preparation, which involves building

access roads, production facilities and well pads. Vertical drilling to a depth of several thousand meters, where

shale formations exist. Drilling horizontally from the end of the vertical well,

sometimes with several horizontal wells extending in several different directions, once the vertical well is at the appropriate depth.

Hydraulic fracturing of shale formations, using a fracturing fluid comprising of about 99.5 per cent water and sand, plus 0.5 per cent chemical additives.

Recycling or the disposal of the wastewater that was used in the hydraulic fracturing process and any naturally produced water that is brought to the surface.

Well completion and operation, the latter lasting up to a decade or more.

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Factors to be considered while selecting drilling site

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Geology Topography Proximity to wetlands, sensitive wildlife Habitat or significant archeological sites Access roads Pipelines and utilities Proximity to schools and homes Available water sources

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Drilling

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Vertical Drilling Vertical drilling is a technique that does not use extensive

lateral components, though the structure may include some shorter horizontal components.

Horizontal Drilling Horizontal drilling allows wells to move laterally instead of

going straight down, so a larger area can be reached without boring as many holes into the surface. Unlike a vertical well, a horizontal well can stretch for up to two miles along a shale deposit.

Rotary Drilling Rotary drilling is a technology necessary to shale gas and oil

extraction that involves using a sharp, rotating drill to bore a hole in the earth’s crust.

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Drilling models

Average Well Depth in the Marcellus Shale is 5,300 ft.(more than 4 times the height of the Empire State Building)14

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What is Fracking?

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Fracking is a well stimulation technique Fracking is basically pumping fluids at high pressures

into producing formations to create fissures to allow more natural gas to escape

Injection of propant allows cracks to remain open Injection fluids are 90% water 9.5% sand and .5%

chemical additives Fracking is not a new development

First frack job was performed in 1947 Millions of wells have been safely fracked in the last 60

years

Generally fracking is done thousands of feet below the surface and below the water table

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Horizontal Drilling and Fracking

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Graphic of hydraulic fracturing

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FRACKING FLUID Water, sand, and chemicals = fracking fluid;

specific composition depends upon the conditions of the specific well being fractured

Friction-reducing additives create “slickwater” to allow the fracturing fluids to be pumped at a higher rate and reduced pressure vs. plain water

Sand allows the fractures to remain open so the gas can escape

Slickwater Ratio: 98% to 99.5% water, 0.5% to 2% additives (U.S. Department of Energy)18

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A NEW ALTERNATIVE PROCESS:LIQUID PROPANE FRACKING

Injects propane gel under high pressure into shale instead of water

Uses 90% propane and a diester phosphoric acid gelling agent for viscosity to carry chemicals and sands

Propane gasifies and returns to the surface during the process, leaving the chemicals behind.

Recovered propane is sold or reused; propane is more expensive initially, though it can be resold.

Liquid propane is highly combustible.19

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Comparison of fracking methods

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Risks to Surface Water: Flowback After fracking, pressure decreases and frack

fluid flows back to the surface.

Amount of frack fluid recovered as flowback varies from 25% to 75%.

Flowback rate in first few days can exceed 100,000 gallons per day Will drop to ~ 50 gallons per day over time

Flowback can have frack fluids and high TDS values, concentrations of major ions (e.g. barium, bromide, calcium, iron), radionuclides, VOC, and other natural occurring elements.Source: EPA Frac Study Plan

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Handling/Disposing of Flowback Flowback and produced water are held in storage

tanks and water impoundment pits prior to and during treatment, recycling, and disposal.

Impoundments may be temporary or long-term. Underground injection is primary method for

disposal for flowback and produced water..

Potential for use of publicly owned treatment works (POTW) or commercial treatment facilities if in populated areas.

Releases, leaks, and/or spills involving storage and transportation of flowback and produced water could contaminate shallow drinking water aquifers and surface water bodies.

Source: EPA Frac Study Plan

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Marcellus Shale

Estimated Basin Area = 246,000 sq. km (95,000 sq. miles)

Depth = 1,200 –2,600 meters

Estimated Technically Recoverable Gas = 260 trillion cu. feet (tcf), or ~ 7.5 trillion cu. Meter

Estimated Water Requirement per well = 15,000 cu. meter

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Distribution and Impact of Shale Gas

Francisca Brago Nimako(3118971)

04/13/2023

Contents Facts about USA

Shale gas basins

Distribution network of shale gas

Impact of shale gas Development

Summary

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Some Facts about USA USA is the third largest both in land and population in the world US has fifty states and District of Columbia with a total land mass of 9,161,966sq km US has a lot of natural resources with coal as the largest reserve in the world-27% of the

world’s total The US has lower 48 shale plays

Fig 1. Map of North America Source: www.cia.gov

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Shale gas basins 23 permits have been issued to the Marcellus wells of which 5 have

started drilling since the beginning of 2011

Fig 2. Shale gas basins in the USA Source: General oil and gas news, November 2011

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Distribution network of shale gas

The USA has a vast natural gas distribution network The network can quickly and economical distribute gas to and from all the 48

lower basin Transmission is done using about 300,000 miles of pipelines Additional 1.9million miles for transport within the utility service area

Fig 3. US natural gas pipeline network Source: Energy information Administration, office of oil and gas, natural gas

division, gas transportation information system26

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Impact of shale gas Development

Most important and profitable basins are the Marcellus, Barnett and the Haynesville shale basins which have contributed massively to the US natural gas reserves

This resulted in an 11% increase in the total natural gas reserve in 2009 It is also expected that the production of this shale gas will increase to about

47% in 2035 (source: EIA) Shale gas has also contributed to lower natural gas prices since 2008 there

by increasing the demand for this source of energy

Fig 4. U S natural gas production from 1990-2035 in trillion cubic feet Source: EIA 2011, Annual energy outlook27

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Impact of shale gas Continuation Example is the Utica basin in Ohio

Fig 5. Estimated wellhead annual natural gas price without shale gas as against the estimated annual price impact of shale gas with corresponding table.

Source: Continental Economics Inc. January 201228

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Impact of shale gas Continuation For people of this area the decrease in price reflected directly on the

commercial industrial and residential consumers In this same year cost of electric generators also decreased due to

lower natural wellhead prices which translated to lower fuel priced levied by electric utilities company such as Columbus Southern power and Ohio Power Company

Also lower wholesale prices of electricity paid by retailers

Table 2: Estimated annual cost saving for Ohio state consumers

Source: Continental Economics Inc. January 2012

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Continuation On a broader perspective, this is the economic contribution of shale gas in

the US as of 2010

Fig 6. Shale gas employment contribution in 2010 Source: IHS Global Insight study, The Economic and Employment

Contributions of Shale Gas in the United States, released in December 201130

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Summary Natural gas delivery is perceived by

consumers to be more reliable than in the past

It is more environmentally friendly as compared to coal, oil, etc

It is also forecasted to increase 0.6% annually from 2009 until 2035.

It is described as the world energy market changer

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Applications of Shale gas

Sandeep Kalyan(3205469)

04/13/2023

Contents Chemical Composition

Market Potential

Shale Gas Benefits

Security and Sustainablity

Environmental impacts

Conclusion32

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Chemical CompositionSo far, We know that shale gas is natural gas produced from Shale formations.

The chemical makeup of shale gas consists of- Primarily of Methane (atleast 90 percent) Wet gas (approx 10 percent)

**Wet gas: contains and appreciable proportion of hydrocarbon compunds

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Market potential

Potential to turn world‘s energy potential on to its head.

Its abundant It burns cleaner than fossil fuels Its cheap (there are no guarantees that

natural gas prices will ever rise high enough to make the high costs, financial risk, and extended development periods worth the returns)

It offers carbon-friendly way to help in meeting the world energy needs

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Shale gas and its benefits A clean generating source for almost a quarter

of the US electric power Effecient heating, water heating and cooking

for homes and buisiness. Raw materials for fertilizers and

pharmaceuticals, cosmetics, medical implants, sports equipment, electronics, plastic toys and paints.

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A heat source for generating system used in numerous industrial and commerical applications including the steel, plastics, automatic as well as in schools, hospitals and in military bases.

Natural gas can outperform conventional fuels with significantly higher octane rating.

Better fuel efficiency and lower operating costs while reducing the emissions.

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Natural gas consumption is quite dispersed with electric power, industrial, and transportation use driving future demand growth

U.S. dry gas consumptiontrillion cubic feet

Source: EIA, Annual Energy Outlook 2013

ProjectionsHistory

Industrial

Electricpower

Commercial

Residential

Transportation

33%

14%

6%

32%

12%

33%

19%

3%

31%

13%

*Includes combined heat-and-power and lease and plant fuel.**Includes pipeline fuel.

Gas to liquids2%

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Key success factors Supply

Shale gas plays must be big enough to warrant the tremendous investment in time and money required to extract and fully exploit it. The play should be sufficiently close to markets to facilitate distribution

Demand

Natural gas prices are currently depressed in some regions (e.g. the Americas), and the wealth of newly viable shale gas plays could drop prices even farther

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Key success factors Infrastructure

Shale gas production and distribution requires more than wells. Production sites must be adequately serviced by roads and pipelines

Reputational risk

While the environmental safety of shale gas production is still under study, many shale gas developers are meeting strong opposition from environmental groups on the basis of health and safety concerns related to hydraulic fracturing technology and water usage.

-Continued..

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Security and SustainablityHow much is there? Enough for 110 Years of Use At the 2009 rate of U.S. consumption (about

22.8 Tcf per year), 2,552 Tcf of natural gas is enough to supply approximately 110 years of use.

Shale gas resource and production estimates increased significantly between the 2010 and 2012 Outlook reports and are likely to increase further in the future. 

* Tcf – Trillion Cubic Feet40

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Key risks that impact Future Shale gas Production How shale gas development will impact

investment in renewable energy sources With price uncertainity, managing costs and

financial risks are top priorities for industry Public opinion of shale gas on environmental

and community impacts As shale gas transforms supply and demand of

the world’s energy mix, geopolitical factors will continue to create risk.

Strict environmental regulations on exploitation Arbitary restrictions on drilling locations

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Environmental impacts

Ground water contamination

Some have asserted that fracking chemicals used in the process could leak into underground rivers and reservoirs.Health effects of long-term exposure to chemicals commonly used in fracking are being evaluated by regulatory agencies

Pic: Dissolved methane contamination in drinking water in Haynesville, US

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Case: Dimock, PA: "Ground Zero" In The Fight Over Fracking

BackgroundTwo facts about Dimock, Susquehanna County are indisputable: Heavy concentrations of methane

contaminated the drinking water of several dozen families.

The town has become “ground zero”in the battle over whether or not hydraulic fracturing is safe.

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*Source: StateImpact Pennsylvania 2009

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GasificationWhen gas migrates into groundwater, the build-up of pressure due to gasification may lead to tremors or explosions.

Water usage risksFrackling can be water intensive depending on the water management methods used.

Surface water and soil risksRise may also arise the volume of chemicals that pollute the surface water and soil

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Conclusion The potentiality of the shale gas

reserves in US proves to be secure and sustainable proportion of natural gas for electricity production.

Measures have to be taken in environmental aspects to avoid the contamination or pollution of the environment. Also regulations should ensure that Shale gas production would not affect the environment.

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Thank you for

Listening

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References Clark, C., Burnham, A., Harto, C. & Horner, R., 2012. Hydraulic

Fracturing and Shale Gas Production: Technology, Impacts, and Policy, s.l.: U.S. Department of Energy.

EIA, 2010. International Energy Outlook, Texas: Texas railroad commission.

INTEK, Inc., 2010. Review of Emerging U.S. Shale Gas and Shale Oil Plays, Washington D.C: U.S. Energy Information Administration.

Jacoby, H. D., O’Sullivan, F. M. & Sergey, P., 2012. The Influence of Shale Gas on U.S. Energy and Environmental Policy, Cambridge: Economics of Energy & Environmental Policy.

KPMG Global Energy Institute , 2011. Shale Gas –A Global Perspective, s.l.: KPMG International.

Martineau, D. F., 2007. History of the Newark East field and the Barnett Shale as a gas reservoir. AAPG Bulletin, Volume 91, pp. 399-403.

Medlock, K. B., Jaffe, A. M. & Hartley, P. R., 2011. Shale gas and U.S National Security. s.l.: James A. Baker III Institute for Public Policy of Rice University.

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References EIA, 2013. Annual Energy Outlook http://stateimpact.npr.org/pennsylvania/tag/dimock/ http://www.britannica.com/EBchecked/topic/641260/wet-gas http://www.all-lc.com IHS Global Insight study, The Economic and Employment

Contributions of Shale Gas in the United States, released in December 2011

Energy information Administration, office of oil and gas, natural gas division, gas transportation information system.

General oil and gas news, November 2011 International Gas Union (IGU) Final Booklet 2012 EPA (U.S. Environmental Protection Agency), 2012b, EPA's Study

of Hydraulic Fracturing and Its Potential Impact on Drinking Water Resources, http://www.epa.gov/hfstudy/index.html, accessed April 27, 2012.

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