Thursday, April 19, 2012

The Truth about Fracking with Propane

Link to this article here: TinyURL.com/TruthAboutPropaneFracking

Several essays, letters, and a video about propane fracking:

Index:
  1. Gary P. Hoffman essay
  2. Ruth S. Young guest editorial
  3. Dr. Ingraffea was on The Capitol Press Room
  4. Dr. Ingraffea letter
  5. TX Sharon essay
  6. Chip Northrup blows the whistle on the Tioga Co. propane "clusterfrack" deal.
  7. (video) Industry presentation, Gasfrac's Robert Lestz

The Truth about Fracking with Propane

Gary P. Hoffman -- garyhoffman@appliedthermodynamics.com 4/10/12

Member of the Vine Valley
Hydrofracking Study Group
VVHSG1@gmail.com

Sent to various email lists April 2012

Just when we thought we understood conventional slick water hydraulic fracturing of shale rock for natural gas, along comes a new twist. This one is called propane hydraulic fracturing of shale rock for natural gas. We need to understand the differences and the similarities between these two technologies and be prepared for both.

Slick water hydraulic fracturing of shale rock for natural gas is familiar to many of us by now. We understand that a well bore is sent vertically downward some thousands of feet and then turned 90 degrees and bored horizontally some additional thousands of feet. The horizontal pipe is then perforated with explosive charges to make many small openings in the pipe. Then vast quantities of water, mixed with sand and noxious chemicals are forced down the pipe under enormous pressure using huge compressors, and has the effect of fracturing the shale rock so that the natural gas can flow back.

The problems associated with the chemicals themselves are becoming quite well known. The use of billions of gallons of water, and the disposal of the billions of gallons of resultant waste water are also quite well known by now. The leaking of the methane gas (natural gas) into private and public water supplies is also quite well known to us as a serious problem.

Now along comes propane fracking. How does this work ? Large quantities of liquid propane (expensive and in limited supply) and some Butane also, are turned into a gel by mixing and reacting with a diester phosphoric acid gelling agent. Then the gel is mixed with sand and secret, proprietary chemicals to form a hydraulic fluid.

This gelled hydraulic fluid is then forced down the perforated well bore exactly in the same manner as the slick water is under the conventional method. Once the rock is fractured, the high pressure is released. This causes the gel to flash back into gaseous propane. The propane gas, and the methane gas, now come roaring back up the well bore as a mixed, high explosive gas. Here they are controlled, it is hoped, by a blowout preventer, and are gradually separated into the two gasses.

The methane of course enters the pipelines and is sold. The propane gas is recovered and can be re-gelled and eventually re-used. The secret chemicals supposedly remain buried deep in the ground. Either type of gas, propane or methane, can of course leak around the well casing and enter the aquifers, as the methane has done in the past.

So what is different, and what is the same ?

Different:

  1. Gelled propane instead of slick water is used as the hydraulic fluid.
  2. Proprietary chemicals (completely unknown to us as of this writing) are mixed with the gelled propane, instead of the known, noxious chemicals mixed into the slick water.
  3. Propane gas and methane gas (and some of the chemicals ??) come roaring back up the well bore instead of produced water, and later, brine in the conventional process.

The Same:
  1. Both are heavy industrial processes.
  2. Both involve very large numbers of truck runs, water in the one case, propane in the other.
  3. Both use huge compressors, power generators, and massive amounts of diesel fuel in their operations.
  4. Both employ well pads. Each well pad is home to multiple well bores.
  5. Each well bore is deep, and horizontally very long (5000 ft +++).
  6. Each produces contaminated and radioactive drill cuttings.
  7. Each uses chemicals in large quantities.
  8. Both sets of well bores can leak into the surrounding aquifers and thus contaminate our water.

What Matters to Us about all this ?

Lawyers in Tioga county (including attorney Chris Denton representing the Tioga County Landowners Association) believe that the ban on hydrofracking put in place by former Governor Patterson in New York State does not apply to this new process.

The revised, draft, Generic Environmental Impact Statement (“the SGEIS”) does not apply according to Denton. He has found some in the NYS DEC (spokeswoman Emily DeSantis) who are willing to listen to the argument that the decades old (1992) rules previously in place regarding the use of propane in the state would instead apply. In fairness, she does point out that some kind of a review would have to be done to get a permit.

This review would be a part of the permitting process, which could possibly begin at once, and has apparently begun, albeit informally, in Tioga County.

Does this leave us helpless at the local level ? No.

  • We still have home rule, as recently upheld in the Courts in NYS.
  • We still do not have to permit heavy industrial activity in our towns.
  • We still control this through Master Plans and Zoning.
However, this could start right away. Even Moratoria, if written too specifically to apply only to the old slick water fracking system, would possibly not protect us. So we have to act FAST. Right now. Properly written Master Plans and Zoning need to be written and passed into effect right away. As of the moment, unless something else happens at the wider state level, this is our first and best -and possibly, not certainly- our only line of defense. We need to spread the word and get very, very busy.

Gary P. Hoffman
Applied Thermodynamics
585-615-4170



http://www.stargazette.com/article/20120412/VIEWPOINTS02/204120361/Guest-Viewpoint-LPG-fracking-has-many-problems-too

Guest Viewpoint: LPG fracking has many problems, too

7:54 PM, Apr. 11, 2012

Written by
Ruth S. Young


Some things were left out of the March 30 front-page article concerning the use of liquefied petroleum gas for fracking to retrieve methane gas:

There is still a need for large quantities of additional chemicals to add to the LPG solvent that are still present in the return "fluids."

On each site, there is need for a 24-hour-a-day high-density compressor to re-condense the returned propane/butane mixture and additional processing for reuse. They are loud and smelly with toxic fumes, and they use a lot of fuel to run.

This fracking process must be nearly robotic because of risks to personnel on the pad. It caused two explosions and fires in the past year, one quite serious with hospitalizations in Canada.

There will be many truckloads of LPG needed for each fracking job, thus needing the transport of hazardous material on small rural roads.

With tens of thousands of wells projected, LPG is not available in large enough volumes to make this the main method. Propane and butane are also used as fuels and cost more than the present market value of the methane to be obtained in the process. Where is the profit in this?

The only substantive information about this LPG process comes from the company GasFrack, which is using it in Alberta, Canada — in other words, advertising claims. There are no independent empirical analyses of the complete life cycle of LPG fracking.

The materials coming up from the well include the wet heavy metal and radioactive salts that are inherent in the Marcellus Shale layers and thus subject to the same constraints.

Explosions in deep rock still produce openings to faults and old open wells that allow volatile organics to return to surface sooner or later depending on size and angle. As propane is released from deep pressure, it gasifies and is also explosive. Propane is a heavier-than-air gas that can leak and pool in low spots near well pads in large, very explosive amounts.

This information is derived from two experts in petroleum and gas engineering, to whom all credit is given.

Assuming there is a problem with the process that includes the loss of life or limb, are any of the attorneys with the landowners experienced with international lawsuits?

Let's start a worker-owned corporation that helps every household in the Southern Tier that does contracting for energy conservation and energy efficiency and that builds renewable energy products now.

Fossil fuels are just so dangerously yesterday.

Young is a Horseheads resident.



Dr. Ingraffea was on The Capitol Press Room yesterday
(2nd half of the show) and discussed propane fracking, both pros and cons.

http://blogs.wcny.org/the-capitol-pressroom-for-april-9-2012/



My summary of Ingraffea's points, and his original letter is below:

  • There are HUGE risks just by poking a hole through groundwater layers.
  • Propane fracking still presents risk of methane migration into homes and water source.
  • Still lots of chemicals down hole THROUGH the aquifer. (Bad idea)
  • Heavier-than-air propane presents great risk of fires and explosions.
  • Still requires dangerous and loud compression stations (one just exploded in Montrose PA just hours ago).
  • Lower yields over long laterals requires denser well spacing
    ... ... (smaller than 640 acres spacing units, i.e. MORE than 1 pad per sq mi).
  • Propane fracking unproven on a large scale or in NY Marcellus.
  • etc. etc.

Not likely due to lowest gas prices in a decade.
Not likely to happen without a full EIS.
Not likely to happen on my watch

I am not alone.
I stand among a broad coalition of
tens of thousands of NYs
who will not allow this dangerous Franken-tech
to destroy our land, air, water, and out quiet, rural way of life.

See attached from Dr. Ingraffea:

-----Original Message-----

From: Anthony R Ingraffea [mailto:ari1@cornell.edu]
Sent: Wednesday, March 28, 2012 10:29 PM
Subject: RE: LPG Frack 3: More

I have sent the following many times to many people, so here it is again:

Fracing with liquified propane, or butane (LPG):

  • still needs large quantities of additional, but different chemicals to add to the LPG;
  • needs HD compressor on each site to recondense returned propane/butane for reuse, and additional processing on each site for reuse;
  • frac process is now nearly "robotic" because of risks to personnel on the pad;
  • have been two explosions/fires in past year, one quite serious with hospitalizations;
  • many truckloads of LPG needed for each frac job-these trucks are transporting hazardous material, not water;
  • LPG not available in large enough volumes to make this "THE" method in any play with tens of thousands of wells projected;
  • the biggies, Schlumberger, Hallliburton, et al. will not like encroachment on their turf..they have billions invested in equipment and personnel training for water based fracing, but they currently say they are "interested" in this new line of research: you make the call
  • the ONLY substantive information about the process comes from the company - in effect advertising claims. There has been no independent empirical analysis of the complete life cycle of LPG fracs.
  • still transports some materials from downhole just like slick water does and will be subject to the same constraints:
  1. communication back to surface via faults and old open wells
  2. communication/migration of methane and other downhole crap via casing sealing failures and leaks (cf the Pavilion/EPA study (11-10-11 released) and the "Duke" methane migration study), and
  3. surface spills of frac related materials that comes back up
  4. the added danger of propane, a heavier than air gas leaking and pooling in low spots near the well pad in large amounts and causing an explosion hazard

Bottom line: no science available to evaluate either env impact of LP frac or the safety thereof. Grasping at straws for a solution to a problem the industry claims does not exist.

A. R. Ingraffea, Ph.D., P.E.
Dwight C. Baum Professor of Engineering
Weiss Presidential Teaching Fellow
Cornell University
www.cfg.cornell.edu
607-351-0043


http://www.texassharon.com/2011/11/23/propane-not-a-good-substitute-for-water-in-fracking/


Propane not a good substitute for water in fracking

by TXsharon on November 23, 2011

in propane frack,Uncategorized

Fracking with propane? Seriously? This keeps surfacing [sorry] so I guess it’s time to address it.

From Reuters:
Propane substitutes for water in shale fracking
* Canadian firm shoots propane gel into wells
* Process saves water, risks fire
* An engineer gets the willies: “It doesn’t burn nicely”
By Anna Driver

GasFrac Energy Services Inc is winning customers, including Chevron Corp , by using a flammable propane gel instead of the water, chemicals and sand typically blasted into rock or tight sand formations to release trapped oil and gas.

Remember where fracking the shale came from. You’ll never guess where GasFrac started this propane frack lunacy–Texas, my Texas, in Oh Canada and now they are using it in the Eagle Ford Shale. I think we could expand on the Molly Ivans quote about electing presidents from Texas and include that you shouldn’t adopt drilling practices from Texas either.

Here’s what one engineer thinks about fracking with propane:

“As a former frack engineer, I get the willies when I think about getting anywhere near a frack that is flammable,” he said. “When it catches fire, it doesn’t burn nicely.”
~Richard Spears, a leading oilfield services adviser to the petroleum industry and a former Halliburton Co engineer

Here’s what another engineer thinks about fracking with propane:

Fracing with liquified propane, or butane (LPG):

  • still needs large quantities of additional, but different chemicals to add to the LPG;
  • needs HD compressor on each site to recondense returned propane/butane for reuse, and additional processing on each site for reuse;
  • frac process is now nearly “robotic” because of risks to personnel on the pad;
  • have been two explosions/fires in past year, one quite serious with hospitalizations;
  • many truckloads of LPG needed for each frac job-these trucks are transporting hazardous material, not water;
  • LPG not available in large enough volumes to make this “THE” method in any play with tens of thousands of wells projected;
  • the biggies, Schlumberger, Hallliburton, et al. will not like encroachment on their turf..they have billions invested in equipment and personnel training for water based fracing, but they currently say they are “interested” in this new line of research: you make the call
  • the ONLY substantive information about the process comes from the company – in effect advertising claims. There has been no independent empirical analysis of the complete life cycle of LPG fracs.
  • still transports some materials from downhole just like slick water does and will be subject to the same constraints:

1) communication back to surface via faults and old open wells
2) communication/migration of methane and other downhole crap via casing sealing failures and leaks (cf the Pavilion/EPA study (11-10-11 released) and the “Duke” methane migration study), and

3) surface spills of frac related materials that comes back up

4) the added danger of propane, a heavier than air gas leaking and pooling in low spots near the well pad in large amounts and causing an explosion hazard

Bottom line: no science available to evaluate either env impact of LP frac or the safety thereof. Grasping at straws for a solution to a problem the industry claims does not exist.

A. R. Ingraffea, Ph.D., P.E.

Can we use the term desperate yet?

UPDATE: Apparently this post is on the GASFRAC Energy Services, Inc, Yahoo Financial Page. The link goes to a message board where they call me Sharonick =) and use faulty logic in arguments.

UPDATE 2: More information on propane fracking HERE, where they call it emerging technology and say it is still in its “infancy.”

A search of public research reports on file with the Society of Petroleum Engineers found only two case studies for wells that used propane fracking — one in 2011 and one in 2009.

Propane fracks are currently more expensive than traditional fracking and there is an increased risk from explosion.

“As far as we’re aware, the technology has so far not proved cost-effective for gas wells,” she said. “The technology works best when sufficient infrastructure is in place to allow the propane to be captured and re-used.”

So, in addition to all the infrastructure required to produce, transport and process the gas, now we will have additional infrastructure, all explosive, to transport the propane for fracking. What’s not to love?


Chip Northrup files complaint with NY Atty General's office about possible fraud in Tioga Gasfrac deal:



"To: New York Attorney General's Office

As a former investor in oil and gas projects, I was intrigued by an exploration deal being touted to Tioga County landowners.

Am familiar with private placement offerings, including the sale of working interests, which are securities for offering purposes.

As a plaintiff, I have sued oil and gas promoters under state securities laws - sending one such promoter to prison.

You may have read about the proposed deal between the Tioga County landowners and a gas exploration company.
http://www.stargazette.com/article/20120412/NEWS01/204120400/Environmental-groups-call-impact-statement-new-fracking-method?odyssey=nav%7Chead

This is not an unsubstantial group - over 200 'members' and over 135,000 acres of mineral rights.

They are dealing with a Texas gas exploration company, eCorp, who has proposed a complex and sophisticated structure.


The structure of the deal represents the sort of sharp practice that gives Texans a bad name. As if they needed any help in that department.

Rather than offer a straight overriding royalty interest to the landowners, eCorp is negotiating to sell them a working interest in the well itself.

But, as indicated in this memo to the landowners, these unsophisticated investors don't know what a working interest is :


Tioga County Landowners Group

To All:

I want to take this opportunity to thank all of those who came to the Forum in Binghamton for our kick off meeting. The purpose of the meeting was to meet our operator eCORP and to learn more about our opportunity. I realize that this approach is more complicated and contrary to many of the things we have discussed over the past four years. But then we never expected to have the opportunity to participate in the working interest side of the equation.

Most people don't understand quite what the working interest of an oil and lease is.
The easiest way to explain it is this: In every business there are expenses and there is income. The working interest is ownership of the expenses.
Thus, if you own 66.7% working interest; it means you must pay 66.7% of the bills that are due for that lease. The first question is "Why in the world would you want ownership in expenses?" The answer is quite simple - it is because they are entitled to a percentage of the income, called net revenue interest.

The net revenue interest is the income, the working interest is the expenses. To make this quickly apparent, I want to present a conventional oil and gas lease. One landowner, one oil company. The landowner owns the mineral rights and signs a lease that gives him a 20% royalty. The operator drills and finds natural gas and produces it.

The landowner owns 20% of the net revenue interest, so he receives 20% of the revenues. The operator owns 100% of the working interest, thus pays for 100% of all expenses. However, the operator has 80% of the net revenue interest income or profit. In the conventional lease that profit leaves Tioga County as well as New York State. If the operator sells 50% of their working interest, then they still own 50% of the working interest, and 40% net revenue interest because he would pay half of the landowners royalty.

In our opportunity the landowners in the sharing company own 66.7% or 2/3 share of the working interest which entitles them to 2/3 share of the net revenue interest income. This is in addition to 12½ % royalty set aside for the landowner in a producing unit. This opportunity allows us to participate in a much larger income opportunity than I ever believed possible. With the spot price at the Henry Hub below $2.00 / MM Btu this past week now is an excellent time to develop our play
.
In its April short-term energy outlook, the EIA lowered its estimate for second-quarter average Henry Hub spot prices by 28.9% to $2.20 per million British thermal units from $3.10 in last month's estimate. For the full calendar year of 2012, it expects spot prices to average $2.51/MM Btu, down 20.8% from its estimate of $3.17 last month, for a year-over-year decline of 37.3% from 2011.

The entire structure of our deal is designed to make the maximum funding available for the development process. We have talked in the past about the cost elements which add into the business expense equation. The finding cost is the first expense to consider. A definition of the term "finding cost" is in order. By "finding cost," I mean only the expenditures on leases, geological and geophysical exploration, and wildcat well drilling. The drilling of field wells and equipping of leases and wells to produce comes under "development cost." The two together are referred to as F&D cost. That said a significant piece of the finding cost is the bonus money. By our lack of bonus money we are able to greatly reduce the finding cost to make our activities show a profit more quickly in a poor market. When we become profitable 2/3 of the profit or net revenue interest income goes into the sharing company money bag. When we prove the play we may continue to produce or we might sell a portion of our working interest to another company "flip the lease". The flip is a very profitable process. STEP working with the sharing company and eCORP could decide to flip 50% of the working interest to a new operator. That would result in 50% of the sharing company 2/3 share or 1/3 being retained and 1/3 flipped to the new operator. The sharing company would now have a working interest in the new operator giving them access to 1/3 of the new operations profit or net revenue interest income. In addition and throughout all of the above the landowner has retained his 12½%

The other thing to note is that all of the above revenue stream stays in New York State and Tioga County along with the associated taxes collected. This will greatly increase the prosperity of all of our citizens and enhance everyone's standard of living.


Nick

A landowner's liability is protected under an overriding royalty interest - essentially paid "off the top" with no liability for the cost or expenses in the well.

In contrast, a working interests represents equity ownership in the well - a share in the project.

It carries with it the risks of ownership - including liabilities for the costs and expenses of operating the well.

In this regard, it is more like a partnership interest in a limited partnership than a common stock - which carries no liabilities above the share price.

The memos to the landowners underscore their lack of understanding of even the rudiments in oil and gas investing.

Many of the landowners are not likely to be sophisticated investors ("accredited" or "qualified" under securities law) and hence not appropriate participants.

And the offer is being made without the benefit of suitable disclaimers or an offering memorandum (such as a Reg, D private placement).

The prospective investors include out-of-state owners, LLCs., individuals, minors, etc.

Other than being participants in the Tioga leasing consortium, they are not otherwise associated in a business.


The proposed business - drilling wildcat exploration wells and fracking them with propane - carries extraordinary financial and environmental risks.

Test wells in the Utica and Marcellus have not been productive in New York.


Nor is it clear that dry shale gas wells will be productive at all for years to come.


Wildcat explorations - in this case, prospecting in the Marcellus and Utica shale for gas - are the riskiest form of drilling.


Propane fracks require the frack to be run robotically - the crew has to be evacuated from the well site when the frack is run.

Despite these precautions, propane fracks have a peculiar habit of blowing up and sending crews to hospital.


Propane fracks fail to address the most insidious problems associated with horizontal wells - their propensity to release gas into groundwater.

In short, the proposed deal may represent a rather large securities fraud - for the following reasons:

1. A working interest in a gas well is a security - it represents ownership in a speculative business venture.

2. Such a security can only be offered to sophisticated investors with appropriate disclaimers. Not sales pitch first, disclaimers later.

3. The securities are being offered in exchange for mineral rights and other consideration (cash to pay for operating costs, etc.)

4. The securities are being offered to over 200 parties, none of whom have been vetted as qualified to buy such securities

5. The offering party, eCorp, does not know any of the 200 + prospective investors, many of whom are not known to each other

6. The securities are being touted by the promoters as offering substantial rewards, while addressing few of the economic or environmental risks

7. The securities are being offered without a Reg. D - or similar - prospectus

8. The working interest owner may be subject to substantial dilution or loss of interest in the even of a "capital call"

9. The working interest owner (the landowner) is liable to sustain substantial environmental damage to their property - with little prospect for gain.

Might be worth looking into this by contacting the offering party, eCorp.

Regards,

James L. Northrup

Cooperstown


northrup49@gmail.com


---------------------------------------------------------------------


Industry presentation:



3 comments:

farmerbob said...

bill, the secret chemicals are, magnesium oxide,used in pepto bismal- iron sulfate, used in geratol or in pills if you lack iron in your body ,truck traffic is reduced by 80% an lp is lighter than water so the truck weight is much less. also engines are powered by lp so emmissions are greatly reduced.

Bill Huston said...

There may be some advantages. There are still many of the same risks as with water-fracking, and many new risks.

Bill Huston said...

PS read the article again. I've added Ingraffea commentary and a letter published in a local newspaper.