2b: Gas Drilling 101

Here's a primer on the type of gas extraction that's going on here and why it's different now than it's ever been before.

The Marcellus Shale

The Marcellus Shale is a 150 to 300 foot thick seam of gas-bearing rock about 7,000 feet down. It extends from Southern NY State through Pennsylvania, Ohio, and West Virginia. It's huge. But Instead of the gas being in big caverns that you can siphon off by putting a hole (well) in it, the gas is bound up in the rock itself and doesn't flow very fast through it when you put a hole in the rock.

If you break up the rock around your hole the gas escapes much faster. People have known about the Marcellus Shale since the 50's or even earlier, but wells that were drilled over the years didn't yield much gas because if you just bored a vertical hole through the thickness like a standard well you'd only end up with 150 to 300 feet of gas-bearing rock in your well and the rock in the well was solid, so the gas flow would peter out very quickly and nobody could make any money out of it.

Horizontal Drilling, and Fracking

These two technical innovations developed by Halliburton have made the Marcellus Shale a huge potential for profit.

Horizontal drilling is accomplished by mounting a tilting 'mud motor' on the terminus of the drillpipe so you don't turn the drillpipe as you drill, you turn only the very end with the bit on the end of the drillpipe, and you can tilt the bit a little in one direction or another relative to the drillpipe, allowing as it descends to drill a slowly curved arc through the stone at a very precise degree of arc so the borehole eventually is horizontal at just the right location to bore through the rock seam you want to access. Now you get the borehole along the thickness of the shale seam and drill for another 3,000 feet and you now have 3,000 feet of gas-bearing rock in your well instead of 300 feet.

Fracking consists of pumping a virulently poisonous fluid down the borehole at fantastically high pressures (7,000 psi) and for 4 or 5 days hammering the entire length of the borehole with vast and violent pressures that break up the shale around the horizontal portion of the hole.

They then pump sand into the fluid still at high pressure to fill all the cracks in the resulting broken up (fractured) shale seam, and when they take off the pressure gas starts flying up the wellhole.

This fracking fluid is what's got everyone up in arms. Nobody knows anything about it (its composition is "proprietary") except that it's deadly poisonous. Nobody knows if the high pressures involved in the fracking process force it to migrate throughout the seams of the rocks around the surface of the wells and pollute the water wells in the area.

There aren't enough treatment plants in the area to process the fluid that comes back out of the well, and sometimes they spill it! Mind you, it takes more than 1 million gallons of frack-fluid (450 tanker trucks) to frack a single well - 6 wells permitted on a single pad.

They can re-use the frack fluid a number of times, but only about 30 to 40% of the fluid comes back up the hole. As well, they've got to get the water in the first place, so obviously they are draining a lot of water from the rivers to feed the wells. Fracking was specifically exempted from the Safe Drinking Water Act by Dick Cheney during his tenure as Vice President.

Slide Show

If you want to see what the various stages of Gas extraction look like at ground level, please see the slide show at http://www.wvsoro.org/resources/how_a_well_is_drilled/index.html

I have visited the drilling sites here at all the various stages of work and it looks just like they have on the slide show.

The Process

  1. The Leasing
  2. The Seismic Survey
  3. Determining the "Pool"
  4. The Permitting
  5. The Pad
  6. The Drill Rig
  7. The Drilling
  8. The Fracking
  9. The Gas
  10. The Pipeline

The Leasing

Leasing starts with an energy exploration company targeting an area for exploration.

A lease is simply a binding agreement between the mineral rights owner and the Gas company that outlines what they can do and how much you get for letting them do it.

They hire independent landsmen to research who owns the mineral rights in the target area and these men contact the owners to begin the negotiation process. These guys are not regulated in any way. They are expert negotiators trying to acquire leases that are strongly favorable to the Gas Company - they try to get the cheapest deal that gives the Gas company the most leeway in what it wants to do.

They keep it quiet as long as they can because once it catches on publicly what's going on, the price skyrockets and the lease agreements undergo ever increasing scrutiny. This scrutiny then develops the lease into an agreement strongly favorable to the landowner.

Bear in mind, the State in no way involves itself with leasing. It's a binding legal agreement between you and the Gas company alone. Anything and everything is negotiable, and enforceable by law once you sign.

In this wildcat environment, waiting is a really good practice - it not only raises the price you'll get, but also eventually reveals the ills of bad leases as they come under more and more public scrutiny. The risk is that at some point the Gas company will stop leasing and start drilling, and you'll be offered nothing.

The Seismic Survey

This is a method by which the 3-dimensional character of the rock layers underneath the target area is imaged. It is used to "show" where the highest potential for gas and oil might be.

The survey itself is conducted by sub-contractors independent of the Gas company. It consists of a team of people that cut trails one car-width wide throughout the entire target area (the whole of Bradford County) on a 220-foot grid.

A team consists of two "slashers" who cut everything 3" in diameter or less along the trial, followed by two "stick pickers" who clear the debris from the slashers, followed by the drill rig (a custom made tracked vehicle called the "chase buggy" [Max worked on the crews for a month] with a hydraulic drillbit on the back) that drills the dynamite hole, and lastly followed by a glorified ATV that carries all the dynamite and gravel bags.

They drill a 20-foot-deep hole every 220 feet in which dynamite is placed, backfilling the holes with gravel as they progress. On a chosen day they control-detonate the charges in a chosen area then sense the reflections of the sound waves through a series of linked sensors placed on a large area of land. From that pattern of reflections they "image" the strata of the underlying rock. Then they pick it all up and go to the next area.

Determining the "Pool"

From all the imaging data, and looking at the pattern of their leasing program, they choose a spot where they are most likely to find gas. They call this the Pool.

A Pool is a rectangular layout of 640 acres (1 square mile) that lays over many parcels of land that they have previously leased. This pool is serviced by a single drillpad. The Drillpad is permitted for up to 6 individual wells.

Because they're drilling horizontally from a single place, they put all the vertical bore-holes in one location very close to one another, then once they reach the strata of the Marcellus Shale they turn horizontal and bore throught the shale for about 3,000 to 4,000 feet.

The actual pattern of where these horizontal wells is determined at the wellsite. But, the Pool determines who gets royalties and who doesn't. The shape of the Pool is independent of the pattern of the parcels owned by the people who leased, so you might have all your land in the Pool, but you might have only a part of your land in the Pool. They let you know at the time of drilling, not the time of leasing. You are paid royalties only on the portion of the land that is in the Pool.

The Permitting

The Pennsyvania Dept of Environmental Protection issues drill permits. They issue a single permit per well, and allow up to 6 individual wells on a single pad. A single pad services an entire pool (1 square mile). We are coming up towards 1,000 drill permits in Bradford County since 2007

The Pad

The drill pad is a 5-acre dirt lot made by the hugest earth-moving equipment you've ever imagined working day and night for up to 2 weeks to level out whatever mountain, hill, valley, hump, or outcropping might be in the way of where they want to put their wells.

They put a 40-foot wide road up whatever incline is necessary to access the pad. Often the pads are on top of the hills. I asked 'em why, and they said they prefer to do that so when they drill the holes, the groundwater doesn't flow into them. They also try to choose non-soggy ground because the drill rigs can lean over during drilling if the ground is soft and wet, so hills have good drainage. It also means, however, that whatever they spill flows downhill to whatever's along the way to the bottom.

The Drill Rig

This is the Tower. Again, a sub-contractor (they're apparently all from Oklahoma), drives the rig components in on trucks, and takes two days to set it up. It's about 75 to 100 feet tall, weighs a couple 50 tons maybe (including the 7,000 feet of drillpipe that it's holding up) and they're on site for about 30 to 45 days drilling a single hole.

They usually drill a single hole or maybe two in a single pad and then move to another Pool to make another pad and drill another well, and so on instead of drilling all 6 wells for which they're permitted on a single pad.

They do this in order to secure their lease agreements - remember that they only have 5 years to "develop" the land they've leased. That means drilling. But, once they've developed it, the lease is extended for the lifetime of the well. So, they're in a hurry to drill at least one well per Pool (1 square mile) and all the leases in that Pool are now extended beyond the 5 years and they can take their time drilling the other 5 wells for which they're permitted.

The Drilling

This is the messy bit. They dig a slurry pond and line it with plastic (and it never leaks). The drill slurry from the hole settles in this, then the water gets trucked out to a treatment plant. And it goes away. Salt is the big feature in this dirty water. Also, lots of organic junk like what comes out of a coal mine. This takes about 30 to 45 days, though they've had problems like dropping wrenches down the hole, and having drill heads break off in the hole.

The Fracking

This is the poisonous bit. 450 tank trucks of fracking fluid per well. The pressures induced in the local geology during the 4-or-5-day process of fracking have caused methane to appear in local water wells. 40 % of the fluid comes back up the hole, and they use it on the next well, until it gets 'treated'. Then it goes away.

Fracking breaks up the zone of rock around the horizontal borehole - it allows gas to migrate from about 1,000 feet from the hole. Makes for a huge area of recoverable gas - it's the secret to the Marcellus being so profitable.

The Gas

This is the product. You don't pump it. It flies out of the hole on its own pressure. The pressure determines the rate at which it comes. All wells have a "decline curve" during which the initial pressure is very high and the yields (and consequently the royalties) look great, then it declines until it settles at a slow and steady slow decline until the well peters out.

Both the pressures and the decline rates are far more profitable than were expected before drilling, hence the large bonuses and high royalty percentages offered now for leases.

The Pipeline

Once you've got the gas flying out, you still can't sell it. You've got to get it to market, and that means pipelines. We have several major lines, and there are plans to double 'em by 2012. There's a lot of gas, and they believe in it enough to invest billions in new pipelines. Every well has to have a small 2" or 4" line from the well head over to the main pipeline, and it all gets buried in a trench on which you can grow grass, graze cattle, pay taxes, but not much else.

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