They're Going to Be Fracking the Barnett Shale for a Long Time to Come

BarnettShaleRig.jpg
Last week, the number of drilling rigs operating in the Barnett Shale, the massive natural gas reservoir that underlies much of North Texas, dropped to 27, the lowest figure in a decade.

But the boom's not over quite yet. There may be less drilling going on at the moment, but that's more a function of natural gas prices that remain stuck in the basement than a sign that the Barnett is tapped out. Quite the opposite, as a matter of fact.

According to a study by the the University of Texas at Austin's Bureau of Economic Geology, drillers have so far tapped less than quarter of the recoverable gas in the Barnett. Still there for the taking is some 44 trillion cubic feet.

Most of that gas will be pumped out over the next 17 years, albeit in steadily decreasing quantities. According to the study, Barnett production peaked in 2012 at two trillion cubic feet of gas per year. (The United States consumes more than 24 trillion cubic feet of gas annually.) By 2030, that number will be 900 billion. A graph is helpful here:

BarnettShaleGraph.jpg

The forecast comes from crunching production data from more than 16,000 wells drilled in the Barnett. The researchers say this means their study offers a "more accurate and comprehensive view of the basin" than there has previously been.

There's a lot more technical data to wade through, but we'll just stick with the big picture: there's still a shit-ton of gas under our feet, and drillers will be going after it, at least for the next couple of decades.

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8 comments
WCGasette
WCGasette

It has not been "peer-reviewed," yet. It "is being peer-reviewed" at this time if you read the FAQs. Also, Devon Energy and Exxon/Mobil "offered feedback" for the study...so it's industry-influenced.  And also, the study shows that the geologist who conducted the study sits on the advisory boards of 3 oil and gas companies AND receives compensation from them. Other team members own stock in oil and gas.  Tinker speaks regularly to industry...which means he probably accepts financial payment from these industry groups. Here we go again.

Has this study been peer-reviewed?

Five research papers based on research from the assessment are in review in peer reviewed journals.

Before submitting the papers, the BEG team submitted their research to several other forms of peer review, as part of the research process. The BEG team invited an independent review panel with members from government, industry and academia to critique their research. At an open day for academic, government, NGO representatives and industry scientists, 100 attendees were invited to offer additional feedback. Scientists from two of the largest producers in the Barnett, Devon Energy and ExxonMobil, offered feedback on the methodology during two in-house corporate review days. Finally, the BEG hired a consulting company to critique the draft manuscripts and offer suggestions for their improvement of the study.

 Co-Principal Investigator Scott Tinker sits on advisory boards of three oil and gas companies — BP's Technical Advisory Council, Geo Fossil Fuel's Advisory Committee, and P&P LLC's Advisory Board — and receives compensation from them. Tinker also serves on the Geosciences Advisory Board of Sandia National Lab and several university and professional society boards, foundations and advisory committees, and speaks on occasion to industry groups or private companies for honorarium. Team members Eric Potter and John Browning hold stock in oil and gas companies. The university is not aware of potential conflicts of interest for any of the other team members.


holmantx
holmantx topcommenter

Shale gas comes in big and fast, and plays out quick.  No sense pulling it out now when the prices are below the cost to drill a well.

It's cheaper to store it in the ground until the EPA forces the price back up to make alternative fuels . . . viable.

ThePosterFormerlyKnownasPaul
ThePosterFormerlyKnownasPaul topcommenter

What meaning people don't realize is that on average each well will recover less than 5% of the original gas in place.


I would not be surprised to see some of these wells re-fractured after many years of production, or that additional horizontal boreholes may be drilled on the leases.


Despite the bounty folks, just remember that this is the source rock that is being drained.

schermbeck
schermbeck

I thought it was kind of funny that whoever wrote the script for yesterday's pro-drilling Council performances kept using the number "11,000 wells in the Barnett Shale", no matter who was speaking. That's an obsolete number and reflected perfectly that Dallas City Hall was still stuck in a 2008 mind-set.

scottindallas
scottindallas topcommenter

@WCGasette there IS evidence that these predictions might be on the rosy side.  Fracking wells have shown signs of playing out, or diminishing more quickly than the drillers/developers expected.  That said, I might expect the projected reserves might be larger than reality, and I'd expect that those last reserves are increasingly difficult and expensive to extract.  None of that concerns me too much.  I do own Exxon Stock and believe they are an very well run company.  My holdings have zero influence over my views.  My views have influenced my holdings.  I also wish Exxon hadn't jumped into NG as strongly and as quickly as they did. 

ThePosterFormerlyKnownasPaul
ThePosterFormerlyKnownasPaul topcommenter

@WCGasette And your point is?


I surmise that you are unaware of the fact that billions of dollars of capital are spent based on the results of studies just like this one.  These are very difficult and tough economic decisions.  The people making these decisions want unbiased factual data in order to base their decisions.


ExxonMobil and Devon probably supplied their well performance data for the study.  I would be willing to state that the geologists at ExxonMobil and Devon discussed with the BEG geologists how they evaluate their reserves.


Additionally, as publicly traded oil and gas companies, ExxonMobil and Devon have specific SEC requirements for reporting not only the physical commodity reserves, but also the value of those reserves in their annual and quarterly reports.


As full disclosure, I  own positions in both ExxonMobil and Devon.  I believe that these companies are well managed and very effective in their businesses.  I have also used research by the BEG in making my own economic decisions.  I consider the BEG to be a source of reliable factual data and excellent research.

Guesty
Guesty

@WCGasette What's your point?  The study is about the amount of gas, not environmental concerns, safety, etc.  Oil and gas producers desperately want to know accurate information about how much gas is in the Barnett for a whole host of reasons.  They have no interest in getting bad information.  And this is the only way for them to get collective information from all the major producers without risking antitrust violations.  So they outsource to some geology experts at UT, all give their data to them "in the name of science," and get information they desperately want for their business but cannot obtain on their own.  

Do you doubt that there is a lot of gas under the ground in the Barnett?  It may be unwise to get it because of the dangers of fracing.  I haven't spent time analyzing the data and see mostly hyperbole on both sides of any debate of the subject, but I personally would error on the side of caution and would stop doing it until we know more about the negative effects.  But there is no point in pretending that the gas doesn't exist.    


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