Natural Gas Drilling Trends

In Marcellus Shale country, drill rig counts have dropped, while drilling pads and gas well counts have super-sized.

Welcome to the next fracking decade. What used to be 6-well pads are doubling, tripling or even bristling with seven-times more wellheads. Well laterals have lengthened from being just over a mile long, to just under four miles long.

Video: The #13H well bore from the Augustine Pad in Cecil Township, Pa. extends down 1.3 miles vertically, then another 3.8 miles horizontally, for a total well “depth” of over 5 miles!

Years ago, we heard gas producers say they couldn’t make any profit on gas selling for less than $4. In fact, there was even this graphic below from 2014, showing how one company was spending $4 to produce $1 worth of fracked gas.

With Marcellus Shale gas hovering in the $2 range for so long, the fracked financials have caught up to this struggling shale gas industry for a second time in western Pennsylvania. There have been bankruptcies, fire sales and major exits by majors, ditching this ‘money pit’ of a business venture. What would they ever do without investors and BIG subsidies, selling the sizzle, not the steak!
From the PennFuture report (PDF) in 2015:

Fact Sheet: Fossil Fuel Subsidies: A Closer Look at Tax Breaks and Societal Costs
July 29, 2019 – The United States provides a number of tax subsidies to the fossil fuel industry as a means of encouraging domestic energy production. These include both direct subsidies to corporations, as well as other tax benefits to the fossil fuel industry. Conservative estimates put U.S. direct subsidies to the fossil fuel industry at roughly $20 billion per year; with 20 percent currently allocated to coal and 80 percent to natural gas and crude oil. European Union subsidies are estimated to total 55 billion euros annually. Rather than being phased out, fossil fuel subsidies are actually increasing. The latest International Monetary Fund (IMF) report estimates 6.5 percent of global GDP ($5.2 trillion) was spent on fossil fuel subsidies (including negative externalities) in 2017, a half trillion dollar increase since 2015.

Source: EESI

Data from “The Health Costs of Inaction with Respect to Air Pollution,” by Pascale Scapecchi, Organization for Economic Cooperation and Development, Environmental Working Papers No. 2.

MORE: 2020 Sustainable Energy in America Factbook

ANOTHER SOURCE SHOWED THIS STARK CONTRAST IN U.S. SUBSIDIES:
Fossil Fuels received 25-times more Energy Subsidies in the US
Renewables $27 Billion (2013)
Fossil Fuels $699 Billion (2015)

Most importantly, their climate has changed, literally and figuratively. With our planet burning up from climate change induced bush fires, ocean rise threats extending from Key West to Cape Cod, and Generation Z now on the march, the pressure is on to ditch fossil fuels. Time is of the essence.

Some gas producers and frackers have hung on, repeatedly cutting their workforce, flipping mineral rights at huge discounts, and trying to become ‘lean and mean.’ With gas prices remaining low, and pipelines struggling through citizen uprisings, criminal investigations and self-induced multi-million dollar fines, the outlook for gas producers remains stark.

Image: Scores of violations and this Revolution Pipeline explosion in Pennsylvania led to a $30.6 million fine, highest ever levied by the Pa DEP.

Investors finally ‘woke up and smelled the coffee’ on a couple key facts; the high risk of many shale gas investments, and even more importantly, realized their grandchildren need a livable planet without ever increasing floods, super storms, or ‘fire and brimstone.‘

Time has run out on the disinformation campaigns funded by fossil fuel lobbyists and industry spin doctors. Yet they still bad mouth free wind and free solar energy from the sun, even as the price of renewables has become far more favorable over time. These two images speak volumes about our real, sustainable energy future:

Image: Enough solar energy reaches Earth every hour to fill all the world’s energy needs for a full year. Source: Climate Reality Project

Image: Globally, wind could supply worldwide electricity consumption 40 times over. Source: Climate Reality Project

With the advent of electric vehicles, far more research is being done on battery storage and other ways to store energy for those times when the sun isn’t shining, and the wind isn’t blowing. Batteries have come a long way, while work continues to make them less expensive, lighter weight and more energy dense.

Meantime, newer Marcellus Shale drilling pads are super-sizing well counts. What used to be 6-well pads are hosting up to 7-times more wells. Well laterals are now reaching miles further horizontally. Unfortunately, these larger well pads still end up close to dream homes and residents who have valid concerns about truck traffic, light splash, air pollution, spills and noise — industrial-grade activities that can extend from months to years.

Image: The closest residential lot in this new plan of homes is only 850 feet from the Augustine Well Pad in Cecil Township, Pennsylvania. Residents have created a FaceBook page.

But other than producers struggling with cheap gas prices, the elephant in the room remains rapid production declines — making most shale wells a ‘flash in the pan’ — where most of their production is in the first few years. They drop like rocks. The other problem is these new super wells require more strip-mined frac sand, more fluids and proprietary frac chemicals, while creating more toxic waste and carbon pollution from thousands of diesel-powered truck trips, including frac arrays running full blast 24-7.

Image: Book review on “Amity & Prosperity.”

These longer well laterals are thought to mean fewer well pads, but we don’t seem to be seeing that theory play out. Partly because some of the new well pads still have wells with shorter laterals. So past expectations of a well pad every mile still seems likely, and unlike shale plays where the ground is level, our terrain requires 5 to 10 acres to be clear-cut for each drilling pad. Gathering pipelines add more tree-barren acreage that extends from each well site to a compressor station.

Image: Washington County Pennsylvania commissioners signed a gas lease allowing for multiple drilling pads to be developed inside Cross Creek County Park. A spill and fish kill set the tone when some of the first wells were being fracked in 2009. Industrial grade gas production activities soon led to the moniker — Cross Creek Industrial Park.

Pennsylvania and Pillage have almost begun to rhyme, as our short-sighted future resembles an ugly environmental past. The alarming difference this time around, is all the radioactivity being brought to the surface, along with the oil and gas. Huge volumes of this radioactivity — from solids and liquids with a half-life of 1,600 years — are being trucked into local landfills which were never designed to hold this sort of ‘hot’ waste.

The radioactive leachate from these landfills is now finding its way into our rivers. What’s in your tap water?
Bob

UPDATE: How climate migration will reshape America

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