Hydraulic Fracturing and Horizontal Drilling Notes

Water Usage:
- Fracking uses a significant amount of water: 70 to 140 billion gallons annually in the U.S.
- This water is used to fracture approximately 35,000 wells each year.
- This annual water consumption is equivalent to that of 40 to 80 cities with a population of 50,000 each.
Proppants:
- Each well uses 300,000 to 4 million pounds of proppants, such as sand or ceramic beads.
- Proppants hold open cracks in the rock, allowing trapped natural gas to escape.
Process:
- Fracturing fluid (a mix of water, sand, and chemicals) is pumped into the well.
- The pressure causes the surrounding rock to crack.
- Gas flows up the well to be collected.
Chemicals:
- Chemicals make up 0.5% to 2.0% of the total volume of fracturing fluid, equaling approximately 330 tons.
Potential Risks:
- Groundwater contamination.
- Air quality degradation.

Old School Oil:
- Review notes on conventional oil.
- "Played-Out" wells are called "stripper" wells in the industry.

Conventional Oil:
- Gas reservoir in sandstone formations with a seal above.
Unconventional Oil (Fracking Oil):
- Gas/source rock in shale or coalbed methane formations.

Old School Oil:
- Very profitable when on land, with reservoir pressure aiding oil flow.
- Produces thousands of barrels per day for decades.
- Energy Return On Investment (EROI) is about 100:1.
- Produces "light sweet crude."
Fracking Oil:
- Expensive, requires waste water disposal, specialty sand, and chemicals.
- Produces hundreds of barrels per day for about 8 years, with a production decline of 70-90% after just 4 years.
- Energy Return On Investment (EROI) is about 5:1.
- Produces oily water that needs processing.

Shale Plays:
- Lower 48 states have various shale plays, including current, prospective, and stacked plays.
- Examples include:
  - Bakken
  - Eagle Ford
  - Haynesville-Bossier
  - Marcellus-Utica
  - Barnett
  - Woodford
- Some plays are mixed shale & chalk, shale & limestone, or shale & tight dolostone-siltstone-sandstone.

Fracking Produces Natural Gas:
- Shale gas production has increased significantly from 2000 to 2012.
- Key shale gas sources include:
  - Barnett (TX)
  - Fayetteville (AR)
  - Woodford (OK)
  - Haynesville (LA and TX)
  - Marcellus (PA and WV)
  - Eagle Ford (TX)
  - Bakken (ND)
  - Other US shale gas

Groundwater contamination is not likely from fracking itself, but from:
- Leaking wells (all wells will eventually leak).
- Pipelines
- Transfer stations

The Aliso Canyon methane leak (October 2015 to February 2016) produced <50,000 kg/hr, totaling 97,000 tons, about 3% of total methane emission from entire U.S. natural gas operations for 2015.
Substantial venting was observed from liquids storage tanks at gathering facilities. Methane emissions were 3x higher in facilities with substantial tank venting.
Small contributions from thousands of sites can add up.

Methane leakage is a concern because methane is a potent greenhouse gas.
When combusted, natural gas releases less $CO_2$ on a per unit energy basis than coal:
- Coal: $C + O2 \rightarrow CO2$
- Natural Gas: $CH4 + 2O2 \rightarrow CO2 + 2H2O$
Natural gas is composed predominantly of methane ( $CH4$ ), which is a much more potent greenhouse gas than $CO2$ .

Fracking for oil and natural gas involves extensive infrastructure, including:
- Tens of thousands of wells
- Pipelines
- Gathering facilities
- Processing plants

April 17, 2017, a house at 6312 Twilight Avenue, Firestone, CO, exploded and burned, killing two and injuring two. The cause was a pressurized pipeline that was supposedly abandoned.

Shale oil is a short-term boost that robs the future due to financial and technological "tricks."
The cost of financing the Fracking Industry exceeds the value of the oil that is in the ground (US Geological Survey Estimates).
According to Oil Industry Analyst Art Berman, "Shale Oil is a retirement party for the oil industry."

Typical Permian Basin Texas well of 1950s-1960s cost between $400,000 and $500,000.
Shale Oil Well Costs:
- Bakken: $7.1 to $5.9 million
- Eagle Ford: $7.6 to $6.5 million
- Marcellus: $6.6 to $6.1 million
- Midland Basin: $7.7 to $7.2 million
- Delaware Basin: $6.6 to $5.2 million
"Fracking" wells cost over x10 a conventional well.

The Industrialized Modern World needs cheap oil (under $40-$50 per barrel) to run at a serious profit.
Cheap oil peaked in about 2005-2007.
Rising oil costs and availability greatly contributed to the Great Financial Crisis of 2007-2008.
Shale Oil Fields have "sweet spots" that are profitable, but you have to drill the $5M wells to find them.
Rule of thumb: Oil under $85 per barrel bankrupts oil companies, over $85 hurts the economy.

Oil production data from 1965-2022 shows peak oil years for various regions and types of oil.
US NGLs increased after 2010.
US tight oil increased in 2010-2015.
Covid oil demand drop in 2020/21.

Chesapeake Energy, a fracking trailblazer, filed for bankruptcy.
Covia, a fracking materials supplier, also filed for bankruptcy restructuring.
Oil company Diamond Offshore filed for bankruptcy.
Whiting Petroleum files for bankruptcy but has enough liquidity to keep operating
The shale industry will be rocked by $300 billion in losses and a wave of bankruptcies, according to Deloitte.
Deloitte: About 30% of U.S. shale operators are 'technically insolvent'.