Thursday, August 8, 2013

Why drill so many Shale Gas Wells when only 1:10 pay out?


A few puzzling problems exist in the shale-gas story:
  1. SECRECY:

    Why is the industry so secretive about the composition of fracking fluids,
    when there are only 2 companies which dominate the market
    (Halliburton and Schlumberger) who share information, patents,
    and scientists?
     
  2. LOW- YIELD FIELDS: 

    As illustrated by Deborah Rogers below
    with a slide by Art Berman, only 1 well in 10 drilled in the Barnett
    Shale in Texas is profitable. Why would they drill so many wells
    where there is no gas?


    Inline image 1
     
  3.  COST (Financial):

    How can wells be profitable when each one requires so much
    labor, specialized equipment, truck trips, and 80-100 tons of
    specialty chemicals per frack?


    Reports cite these costs at being between $2.3 - $7.6M per well, even for a dry hole:
     
    Here is a way to visualize the amount of chemicals needed to frack 98 wells just once:



  4. COST (Energy):

    EROEI
    is the Energy Return on Energy Invested. If you spend a gallon of gas to get 100 gallons, that's a good deal. But if you spend 1 gallon of gas to get 1 gallon, your net yield is zero.

    When EROEI is 100:1, there is a big party.
    When EROEI is 10:1, there is a small party.
    When EROEI is 1:1 or below, investors are jumping out of tall office buildings in Dallas.

    Consider all the energy which goes into fracking one shale gas well, the diesel fuel for thousands of truck trips, the energy which went into building the specialized drilling machines, the energy which went into manufacturing the specialty chemicals, etc., and the 9 dry holes for the 1 that pays out.


     
  5. Unexpected Chemicals Found:

    Why are chemicals like acetone and methylene chloride (a common industrial solvent) showing up at well sites, when it has not been specifically or functionally been disclosed by FracFocus or any other industry source?

  6. NO Profits:

    Art Berman says no one is making any profits from shale gas:

  7.  
Grand Unified Theory of Fracking
What if a single theory helped to explain all of these?

Keep in mind that

What if a substantial amount of those 80 tons of chemicals needed per frack
were really re-purposed industrial wastes?

Est. 700 Million tons per year of Industrial Wastes in the US in 2013.

There were
  • 4.5 million tons of industrial wastes in the US in 1945,
  • 57 million tons in 1975
  • 265 million tons of industrial wastes generated in the United States in 1990.

Source:
http://www.texascenter.org/almanac/Waste/INDUSTRIALCH9P1.HTML

Extrapolating this yields on the order of ~700 million tons per year in 2013.

So, consider this:
Could shale wells really be disposal wells, which sometimes strike golden gas?

Could this help explain why they drill so many wells when only 1 in 10 pay out?


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