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In defence of shale

02nd August 2012

Chris Faulkner, CEO of Texas-based energy company, Breitling Oil and Gas, tells Oil & Gas Technology why he thinks US shale oil and gas, along with Canadian oil sands and Brazilian deepwater – coupled with a gradual decline in demand – will help the western hemisphere become almost totally energy self-sufficient within two decades.

The success of shale gas production in North America, and particularly in the US, has accelerated the exploration of shale gas resources in other regions of the world

 OGT: Can the standstill on global shale gas production be broken with the advent of new technologies? And if so, what are these?

CF: The confluence of growing demand and breakthrough technological advancements has made investments in shale plays attractive in recent years. Advancements in directional drilling and hydraulic fracturing technologies have enabled the achievement of high rates of gas production from deep, low permeability gas shale formations. These breakthroughs have facilitated access to some of the largest undeveloped gas resources in the world.

These technologies have been widely adopted inNorth America, resulting in dramatic increases in the production of shale gas. North American shale gas already produces over 9 billion cubic feet per day and are projected to continue to grow rapidly. Shale gas as a percentage of total North American gas production has increased from virtually nothing in 2000 to 13 per cent in 2009; enabling the US to eclipse Russia as the world's leading producer of natural gas.

The success of shale gas production in North America, and particularly in theUS, has accelerated the exploration of shale gas resources in other regions of the world. Several factors point to dramatic growth and great expectations for the market for shale gas. However, the exploration and extraction of shale gas resources remains a relatively new and developing field. Certain challenges remain to be overcome and debate continues on the estimates of the scale of recoverable resources, the economics of shale gas production, and the environmental impact of shale gas extraction processes.

OGT: What technological plans does Breitling have to deal effectively with waste water from fracking? Can the technology ever be fail-safe?

CF: Breitling Oil and Gas has switched over to centralised fracking and closed loop drilling as of 2012 on all of our drilling locations.  Rather than using water only once and putting in large pits, the drilling/frac fluid is circulated and stored in steel frac tanks.  These tanks can be re-used and moved from site to site.  The solids are removed from flowback water using mechanical and chemical methods and then fresh water is reintroduced to reuse the fluid/chemical.  This method reduces overall water usage, truck traffic and noise on the roads and reduces our mobilization and demobilization of our equipment.  

OGT: What are the challenges and opportunities for the shale gas technology market?

CF: I think the whole thing hinges on water.  Energy exploration has blazed trails for innovative applications of advanced technology throughout its history.  Managing water in drilling operations is its new imperative.  In the wake of the BP oil spill and the controversies over the impact of shale gas drilling upon drinking water supplies, innovations in water technology have become mission-critical to success in the energy industry.  Things we are focusing on are Options for Flowback Water Treatment and Management, environmentally safe chemicals for our frack fluid recipes and alternatives to water as the base fluid for fracking.

OGT: Where are your biggest market opportunities? Who are you currently working with and are there countries you would wish to work with in the future?

CF: We are focusing our business development efforts around opportunities inPoland, theUKandChinacurrently. We feel like these areas have the best geology, the best marketability for gas and the biggest long-term opportunities and growth sectors.

OGT: As a relatively fledgling industry, does it have a long way to go before it makes economic and environmental sense?

I think we have a minimum of 10 years in any non-U.S. market before shale gas becomes a viable piece of any country’s energy mix. It’s an emerging market in any country other than theUnited States. But great progress is being made.  

OGT: What are the most effective technologies to deal with high-drilling density?

CF: From our standpoint it’s multi-well pad drilling. It greatly reduces land use impacts and rig mob/demob time.  It allows for centralised fracturing/closed loop drilling, reduces acreage necessary for wells, reduces truck traffic and reduces setback distances and secondary containment.  It is less risky to ground water if there are only 6 penetrations in one place from the 6 or 8 wells on the centralized pad instead of 24 set at normal single pad spacing.  Further, it lessens the dangers of other environmental concerns because there is less forest fragmentation, less inevitable steam siltation from more access roads. 

OGT: What is your response to opponents who say the industry should be stopped in its tracks because there are too many health and environmental risks associated with the practice?

CF: I would say they are misguided and misinformed.  People who are concerned about the safety of hydraulic fracturing should rejoice that a recent study from theUniversityofTexasconfirms that there is “no direct evidence that fracking itself has contaminated groundwater.”  Hydraulic fracturing is not perfect, but it obviously has a very safe track record when you consider that hydraulic fracturing has been used over 1.2 million times, for over 60 years, and there is no direct evidence that it has contaminated groundwater. No one has found evidence of drilling fluids leaking deep underground, and methane in water wells in some areas is probably due to natural sources. Hydraulic fracturing is subject to regulations at all levels of government that cover every aspect of the extraction process.

The one thing our industry needs to pay very close attention to is well bore integrity. Our job as oil and gas explorers begins the very second the bit hits the ground not just during the hydro fracking process.  I feel if any contamination is going to occur it could only occur near the surface when gases and drilling fluids escape from poorly lined wells or storage ponds. It’s important to drill a good well and manage your flowback and fluids. It’s just as important as understanding what chemicals are going down the hole during the frack and where those fractures are occurring at. 

OGT: What is your technological vision for shale gas extraction in 2030? How will this forecast change the global energy landscape?

If we are going to meet the world wide [energy] demand, hydraulic fracturing will be the linchpin. We will have to make aggressive steps to remove all non-food-grade-safe chemicals, we will have to find a base fluid other than fresh water and we will have to move to 100 per cent recycling and re-use of the fluids if we are going to attack the world markets and extract shale gas in commercial quantities.

Texan based independent energy company Breitling is active throughout North America, drilling both vertical and horizontal wellbores, capitalising on new trends and technology in the industry. One of its key technology areas lies in hydraulic fracturing.

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