Tech Talk - the new EIA Shale gas report

I had intended to start my country-by-country detailed analysis this week, but with the publishing of the EIA compendium on world gas shale deposits, and a little controversy I got into in comments elsewhere, I thought it worthwhile spending a post looking at the global prospects for gas shale. I am indebted to Art Berman for first bringing some of the problems to my attention, though I have since looked into the issue sufficiently to draw my own opinions, which this article reflects.

The EIA document (actually prepared on their behalf by ARI) begins by noting the importance of this new resource to the US Energy picture:

The development of shale gas plays has become a “game changer” for the U.S. natural gas market. The proliferation of activity into new shale plays has increased shale gas production in the United States from 0.39 trillion cubic feet in 2000 to 4.87 trillion cubic feet (tcf) in 2010, or 23 percent of U.S. dry gas production. Shale gas reserves have increased to about 60.6 trillion cubic feet by year-end 2009, when they comprised about 21 percent of overall U.S. natural gas reserves, now at the highest level since 1971.

Development of US shale deposits began to be aggressive around 2005, and “technically recoverable” gas resources in the USA are now considered to be 862 Tcf. With this discovery of this potential future domestic supply, it became wise to see what the equivalent potential was elsewhere, and thus the report which looked at some 32 countries, 48 shale basins, and 70 formations. The assessed basins (in red with an estimate, in yellow without) are shown in the map below.

Gas Shale resources evaluated by the EIA

Combined, the total resource base is then assessed to be 6,622 Tcf. Now, it is important to draw a distinction at this point, because this is a resource. There is a considerable difference between a resource, which is something out there of value that may or may not be economical to develop, and a reserve, which is that fraction of the resource that is considered viable to develop. In the case of the USA for example, out of the 862 Tcf that makes up the resource, only 60 Tcf (6.9%) is considered to be viable as an addition to the US reserves.

Further (and a point I will get to later), gas from shale is somewhat more expensive to produce, relative to more conventional natural gas deposits. So, when the new volumes developed are put in context of the total natural gas resource available, while gas shales now provide a gain of 40% in the total volume of gas technically available, it may well be that the larger more conventionally available natural gas volumes may be less expensive to produce, and so will be developed preferentially in the next few years.

On the other hand, a domestically available reserve that does not require a nation to expend money on foreign fuels can have considerable benefit, even though it may be comparatively expensive. (And that is a judgment that brings in a lot of additional caveats, but it may very well drive development in countries without many other natural resources, and one thinks of countries such as Ukraine and Poland – where the alternate coal is becoming increasingly politically disfavored). In countries such as Russia and parts of the Middle East where there are already large reserves of comparatively inexpensive natural gas not considered in the study &#8211it is possible that the total volumes available long-term may be understated.

To derive the “technically recoverable” volumes the consultants looked at the volumes of free and absorbed gas available, after having decided the size of the shale deposit, and then used their best judgment as to how much of this could likely be recovered. In general, they though it technically possible to recover between 20 and 30 percent, with some higher and some lower estimates within an additional 5%. They did not consider offshore deposits, nor critically did they consider production costs or accessibility.

‘Free gas’ is gas that is trapped in the pore spaces of the shale. Free gas can be the dominant source of natural gas for the deeper shales.

‘Adsorbed gas’ is gas that adheres to the surface of the shale, primarily the organic matter of the shale, due to the forces of the chemical bonds in both the substrate and the gas that cause them to attract. Adsorbed gas can be the dominant source of natural gas for the shallower and higher organically rich shales.

I am not going to go into the details of the report as it pertains to individual countries, though this is the bulk of the information provided within it. Rather, I am going to include those resource values and the related discussion as I come to discuss the resources available to different countries. But as an illustration that not all the shale is likely to be productive, once could consider, for example, the drilling pattern for the Barnett Shale where most activity is concentrated in the area north of Fort Worth. And there are significant areas with very little activity at all.

Drilling activity in the Barnett shale (EIA)

However, I will comment about the immediate significance of the resource, its size, and what I see as the short-term impact that these volumes will have on the global energy market. My sense is that they won’t make that much difference, once the initial hype and gasps over the size of the numbers has passed.

The reason for this is that this new resource is not cheap to develop. The initial cost comes in sinking the well in which once the initial vertical segment has been drilled, the driller must bend or deviate the drill until reaching the formation with the gas, and it is drilling sensibly horizontally. The driller must then hold the drill in the formation (which may be less than 50 feet thick) while the bit opens a hole that runs out perhaps two miles or more. The ability to sense where the bit is and to guide it along that path is a complex, expensive process, and you can’t take someone off the street and have them run a good well in a week. Over time, the number of qualified drillers who can do this has grown, so that in the week of April 8, Baker Hughes reports that of the 1782 rigs drilling in the USA some 50% were drilling for gas, and of the total 57% were drilling horizontal wells. It has taken some time for that level of expertise to develop.

Yet even with the right rig and crew, success is not assured, or even permission to drill the wells. One has also to get the right permits, and the right prospect. And here one can look to the map of the current producing wells in the Marcellus Shale in the Eastern U.S. to illustrate the point.

Wells in the Marcellus Shale (EIA)

You can see that the activity has concentrated much more in West Virginia than, say, New York State. This is partially due to the different compositions and inclinations of the state legislature in each state.

But even with the rigs, the crews the political support, and a well located in a decent spot in the formation, success is not assured, or even the most likely outcome, because of the nature of the host rock. The major concern that I have had with the expectations regarding shale gas relates to the rock in which it is found. Most natural gas deposits are found in relatively permeable rock, so that it is relatively easy for the gas not intersected by the well or the fractures to travel through the rock to those free spaces, and thus out of the well. The permeability of shale is, to be blunt, pathetic. That is, after all, why the expensive fracturing of the well, and the slick-water injection of proppants into those fractures is so critical. But poor host rock permeability causes a fairly dramatic fall in production from gas shale wells after they are first brought on line. The easily accessible gas close to the fractures and the well makes its way out, and then the rest must struggle through increasingly thick layers of rock to reach the well. As a result there is a dramatic drop in production.

One of the wells that was cited in the comments debate I mentioned at the start of the post was the Day Kimball Hill #A1, which was the highest initial producer that Chesapeake ever drilled, at 12.97 mcf/day when it was brought on line. But:

The Day Kimball Hill #A1 is located in Southeast Tarrant County, Texas, and produced an average of 12.97 million cubic feet of natural gas per day in October 2009. Since shale gas wells decline sharply during the first few years, this Barnett Shale well has seen its production fall to 8.66 million cubic feet in November and 6.79 million in December.

That is a 47% decline in production in 3 months.

It was followed by White South #1H which came in at 17.8 mcf/day, last September. However, because of the low price of NG at the moment, the well has been partially shut-in to produce only 4 mcf/day since. Most shale gas wells don’t produce in this league. There are roughly 15,000 wells in the Barnett, and the wells in Arlington are an exception.

To join (the “monster” wells), a well’s output must average more than 8 million cubic feet of gas per day during its peak month.

Fewer than 1 in 1,000 Barnett wells has attained such a lofty yield for a month, which is enough gas to meet the heating and cooking needs for about 3,300 homes for a year, based on American Gas Association usage data.

While the Barnett Shale underlies more than 20 North Texas counties, the top “sweet spots” are in Tarrant and Johnson counties. All of the 35 biggest wells are in those counties, according to a new report by the Fort Worth-based Powell Barnett Shale Newsletter.

Day Kimball Hill site from Google Earth (Barnett Shale Drilling Activity)

Obviously, if you were a partner in these wells, you made your investment. There is a discussion of well economics which suggests that $5 per kcf is the minimum price (in 2005 costs) at which the wells can profit. But that assumes a 60% decline rate for well production over the first year. But in all the others, even as with these, decline rates from the initial numbers can be dramatically higher. And this is not just true for the Barnett shale. For example, there is a report of a decline curve for the Haynesville shale that shows declines of up to 85% in the first year.

Haynesville shale decline curve (Haynesville Shale)

These high decline rates make it more difficult for the well to generate the return on investment that folk expect when they consider only the initial production volume.

The main problem that I see for the average shale gas well, in the short run, is that (as noted above) the producer really needs a price of better than $6 per kcf (and Art would argue higher) to make any money on the well. But there is a globally sufficient supply of natural gas more conventionally obtainable, and increasingly available as LNG at perhaps $4 a kcf delivered into the United States, so that it is difficult to see the short-term viability of the industry.

On the other hand, with alternative sources of fuel failing to live up to various promises made for them, it may now be that natural gas is seen as the next hope for broad use vehicular fuel. Legislation has been introduced to encourage this use, and if this becomes more widely adopted then it may be that the market may rise in this way, and that prices will hopefully rise with increased demand to make the shale gas more viable sooner than I think.

HO wrote: "...and prices will hopefully rise with increased demand, to make the shale gas more viable sooner than I think."

Umm...Yea, I think we're all looking forward to the time when North America can fully exploit the most poisonous means of energy extraction -- gas fracking, tar sands, mountaintop coal removal, deepwater drilling. Now heck, we're doing those things now -- but not nearly on the scale we'd need to make this country completely unlivable for our children & grandchildren. Like Heading Out, I too wish for the coming time when we can shake off these nasty guberment reg-u-lations and get on with the industrial program of ecocide.

'Cause heck, is there really any alternative lifestyle for our species than the industrial model, with its profligate energy consumption? I myself can't conceive of one, & I'm glad the clever folks at TheOilDrum can't either.

So onward ho, brave soldiers of industrialism! 'Cause they're discovering new (& probably better) planets all the time, right?

dan - I couldn't agree with you more. In fact, I'm willing to kick off the movement this morning:


I even have your slogan: "Dan...the man with a plan...maybe not right now but you just wait and see".

ummm...a plan? Begin the transition to lower-energy-consumption lifestyles in this country, maybe? Which part of "unsustainable trajectory" is giving you problems?

Begin the transition to lower-energy-consumption lifestyles in this country, maybe?


What about by burning oil in ways more useful than this one:

  • but maybe that's just too much to ask for..

    That is so cool. Not practical. But cool.

    Way much cooler (form my taste, of course):

  • And you don't have to go to war for it!

    I still prefer this :

    Or this :

    (but a lot of air travel in these stuff, to be honest ...)


    1. Stop pretending we can sustain the unsustainable.
    2. Be honest with ourselves about the challenges ahead & the physical limits we'll face
    3. Start with the lowest hanging fruit while the economy is still intact -- local food systems, appropriate tech (e.g. Greer's blog), local manufacturing of basic needs.

    That'd be a good start, no?

    Heading Out's profoundly troubling hope for a ramping up of one of the more ecocidal forms of energy extraction seems to me a step in the wrong direction.

    I opened this link with grave misgivings just to see what the engineer types are on about these days with regards to energy production. No mention of net energy, lots of talk about money and short-term profit, and one mention of "fracking" with no consideration of what that means. I am dumbfounded that this kind of thinking is still proliferating in the face of the end-game pollution via blowouts, meltdowns, and injecting our aquifers. Dan for president.

    Have we lost our minds?

    On top of the pollutants used in the fracking process there is a large volume (4-8% according to Cornell) of "fugitive" gas AKA “lost and unaccounted-for gas,” or L.U.G. Methane, the main component of shale gas is 21 times more potent a Green House Gas than CO2. I do not know what the LUG component of coal mining is, but just the production of shale gas could be worse for climate change than burning coal.

    But none of that is relevant. We will destroy the planet before we give up our lifestyle. Are we any smarter than yeast?

    Here in Australia we are about to introduce a carbon tax. This is something I happen to agree with (provided it is matched with a dollar for dollar reduction in income taxes). It is really amusing listening to all the carbon intensive industries demanding exemption and/or compensation. Even the coal industry is demanding compensation! Anyway I digress - this is where the subject of fugitive gases came up - they will be included in the carbon tax. And that is good too - it will force the industry into best practice. And as a free market supporter I do support the internalisation of all costs.

    On top of the pollutants used in the fracking process there is a large volume (4-8% according to Cornell) of "fugitive" gas AKA “lost and unaccounted-for gas,” or L.U.G. Methane, the main component of shale gas is 21 times more potent a Green House Gas than CO2. I do not know what the LUG component of coal mining is, but just the production of shale gas could be worse for climate change than burning coal.

    It sounds thoroughly confused. When companies fracture a well, they inject water and sand under extremely high pressures to fracture the subsurface rock. The sand is used to hold the fractures open after the pressure is reduced. There's no methane involved.

    The whole fugitive gas thing sounds like a red herring. Companies would normally produce the shale gas (mostly methane) up the well tubing and sell it to the consumer, who would burn it in their stove or furnace. It would only get into the air if someone vented it without burning it, which defeats the whole purpose of producing it.

    Shale gas formations are a mile or more underground, so nothing is going to leak out of them to the surface even if you do fracture the the rock. The fractures don't propagate that far.

    Coal seams often contain methane, and it would be released to the surface if it was mined, but I seriously doubt the GHG effect of the methane would be more than that of the coal that was burned.

    RockyMtnGuy said

    Shale gas formations are a mile or more underground, so nothing is going to leak out of them to the surface even if you do fracture the the rock. The fractures don't propagate that far

    See this report: Shale gas: the problem with EROEI

    Contains this:

    Summing all estimated losses, we calculate that during the life cycle of an average shale-gas well, 3.6 to 7.9% of the total production of the well is emitted to the atmosphere as methane (Table 2). This is at least 30% more and perhaps more than twice as great as the life-cycle methane emissions we estimate for conventional gas, 1.7% to 6%.

    re: See this report: Shale gas: the problem with EROEI

    Summary: the author has no idea what he is talking about. He has no experience in the field at all and is just babbling away because he thinks it is important.

    Summing all estimated losses, we calculate that during the life cycle of an average shale-gas well, 3.6 to 7.9% of the total production of the well is emitted to the atmosphere as methane

    How did they arrive at those numbers? I want to know because I used to design computer software to estimate methane emissions from oil and gas facilities, and I know a fair bit about the field. I think they're completely bogus, because I never saw anything like that in any of the projects I was involved in. You don't emit that much methane to the air because you make a point of not having any leaks in the well. You test to make sure.

    Oil facilities can be different, because you can have a lot of methane coming off the stock tanks unless you have a vapor recovery unit. I suspect the authors don't know a thing about that issue, though.

    And, on the subject of hydraulic fracturing - I used to work for a company that was the biggest operator in the biggest conventional oil field in Canada - the Pembina Cardium field. We produced over 1 billion barrels of oil out of it (I have a "1 billion barrels" company pin) and it is on its way to its second billion. Starting in 1953, we had to frac just about every well in the field, multiple times, to do that. This is not exactly new technology, and we never saw any problems like these clowns are babbling about.

    A recent study titled "Methane and the greenhouse-gas footprint of natural gas from shale formations" from a team in Cornell compares total GHG emissions in CO2e including fugitive emissions from shale gas, conventional gas, and coal under a couple of scenarios (can be downloaded here:

    Needless to say that the results are not looking good for ... natural gas. Fugitive emissions during production and transport are a big deal especially given the recently revised equivalency factor for methane's global warming potential (GWP20).

    I would normally want to see the figures for coal production before getting hair-on-fire alarmed, since there is surely methane involved there, and there's no plan to recover it and sell it that I know of (interesting question, though, would it make sense to pre-drill for gas and drain it down?)

    I would expect some leakage in any process where industry meets nature, and if it increases costs by more than N% to trap and sell that last leaking N%, I can see how (in the absence of regulation) it would continue to leak. The producers more or less have a duty to their shareholders to not waste money recovering the last scraps of gas (which is why we need regulations on exactly this).

    Table 3. Chemicals Components of Concern: Carcinogens, SDWA-Regulated Chemicals, and Hazardous Air Pollutants

    Methanol (Methyl alcohol) HAP 342
    Ethylene glycol (1,2-ethanediol) HAP 119
    Diesel19 Carcinogen, SDWA, HAP 51
    Naphthalene Carcinogen, HAP 44
    Xylene SDWA, HAP 44
    Hydrogen chloride (Hydrochloric acid) HAP 42
    Toluene SDWA, HAP 29
    Ethylbenzene SDWA, HAP 28
    Diethanolamine (2,2-iminodiethanol) HAP 14
    Formaldehyde Carcinogen, HAP 12
    Sulfuric acid Carcinogen 9
    Thiourea Carcinogen 9
    Benzyl chloride Carcinogen, HAP 8
    Cumene HAP 6
    Nitrilotriacetic acid Carcinogen 6
    Dimethyl formamide HAP 5
    Phenol HAP 5
    Benzene Carcinogen, SDWA, HAP 3
    Di (2-ethylhexyl) phthalate Carcinogen, SDWA, HAP 3
    Acrylamide Carcinogen, SDWA, HAP 2
    Hydrogen fluoride (Hydrofluoric acid) HAP 2
    Phthalic anhydride HAP 2
    Acetaldehyde Carcinogen, HAP 1
    Acetophenone HAP 1
    Copper SDWA 1
    Ethylene oxide Carcinogen, HAP 1
    Lead Carcinogen, SDWA, HAP 1
    Propylene oxide Carcinogen, HAP 1
    p-Xylene HAP 1

    These are the most toxic fracking chemicals, but the list goes on for 19 pages.

    [Edited for appearance & length]

    Oh, sure, the list goes on and on, but let's take a look at some of these toxic fracing chemicals, starting from the top:

    • Methanol (Methyl alcohol)- Also known as wood alcohol, wood naphtha or wood spirits - Used as a solvent, as antifreeze in fuel lines, and windshield washer fluid.
    • Ethylene glycol - Widely used as an automotive antifreeze. Also commonly used in chilled water air conditioning systems, as a deicing fluid for windshields, and as a preservative for biological specimens, especially in secondary schools as a safer alternative to formaldehyde
    • Diesel - Widely used in most types of transportation. The gasoline-powered passenger automobile is the major exception.
    • Naphthalene - Mainly used to make other chemicals (mostly plasticizers), as a household fumigant, and in making concrete, wallboard, rubber, etc.
    • Xylene - Commonly found in ink. Used in the printing, rubber, and leather industries, as a cleaning agent for steel, as a paint thinner, and in paints and varnishes.
    • Hydrogen chloride (Hydrochloric acid) - Naturally found in human stomachs, where it is used to digest food. Also used to clean steel, in the food, pharmaceutical, drinking water industries to control the pH, and in leather processing, purifying common salt, household cleaning, and swimming pools.

    These chemicals are somewhat toxic, but they are widely used in industry and homes for all kinds of different purposes. People are spilling them on the ground and pouring them into sewers all over the place. I mean they shouldn't, but they do.

    Yes, RMG, and there is radiation in bananas, too. Because the problem is multifactorial, it is better to look at overall rates for country-wide populations rather than trying to parse out specific causes in smaller samples.

    We know that more people are being diagnosed with cancer around the globe, even as the death rate for cancer patients has declined. Global cancer rates have doubled during the past 30 years, and are projected to increase 50% by 2020.

    Looking at worldwide cancer rates, a clear continental breakdown is easy to notice. Statistically, North Americans get cancer more frequently than people in other parts of the world, with Western Europe and Australia coming in second as the geographic area with the highest cancer rates.

    The lowest cancer rates are in North Africa, with Central America, Sub-Sahara Africa, the Middle East, and the Indian sub-continent all falling into the category with the second-lowest cancer rates.

    In the US, we know that in 2004, Utah and Hawaii had the lowest rates of cancer deaths, while Louisiana and Mississippi had the greatest number of cancer deaths.

    Maps of cancer trends worldwide show the highest rates of cancer to be in industrialized Western countries. Is this because people in these countries simply have longer life-expectancies, thus increasing the chances they will develop cancer over their lifetimes? Or is there something else to blame?

    While people in the West tend to live longer, they are also living surrounded by an ever-increasing litany of substances with cancer-causing agents.

    In the developing world, up to 23% of cancers are caused by infectious agents, such as hepatitis B and C, while in the developed world where there is better public health, this is the cause of only 8 % of cancers.

    People in the developed world are more than twice as likely to develop cancer, while people with cancer in the developing countries are more likely to be diagnosed only in the late stages of their illness, thus dramatically decreasing their chances of survival.

    Western diet and lifestyle habits contribute to the high rates of cancer. Smoking is the voluntary activity which causes the largest number of preventable cancers. Lung cancer is the most-common type of cancer worldwide.

    Colon cancer, rare in the developing world, is among the most frequent in the developed world. Diets high in fat and with high rates of meat consumption contribute to colon cancer.

    Environmental factors, such as building materials, cleaning supplies, and environmental toxins can also contribute to cancer. Studies such as the Long Island Breast Cancer Study Project have examined the connection between cancer and the environment.

    As people in developing countries continue to adopt Western dietary habits as they gain wealth, their rates of colon, breast, prostate, and cervical cancer will also increase. The World Health Organization has more information on global cancer rates.

    And Cancer rates due to technologically-based pollution in high-energy-consuming countries doesn't include heavy metals issues such as lead and mercury (among a multitude of other problems with water). I read one goofus' comment on a board today saying he was grateful that he got his water from Lake Erie, where radiation would be diluted?!

    As OECD countries get desperate to replace imported fossil fuels, they will try more and more Hail Mary passes like this. Shale oil (and gas) were not net energy in the 1970s, and they're not net now. They are only providing short term speculative gains for the companies involved, while raping the environment. As OECD countries collapse, there will be bigger and bigger disasters polluting wider and wider areas as we get more and more desperate. There will be a massive increase in desperate, low-budget, non-net efforts to extract energy, which are aided by bad policies and investment residuals.

    Orlov's five stages of collapse (financial, commercial, political, social, and cultural) seems to be a fairly good model for how all of this plays out, except that he has a big hole in his thinking, a blind spot based on his inductive observations. He fails to mention the nature of the pollution of all of the sinks, especially when one is talking about long-term, permanent sources such as heavy metals and radiation. Collapse of one country is not the same as global collapse. One country can import fuels from elsewhere, and they can also export pollution. Global collapse means there is nowhere to draw from, and nowhere to pollute to. There is no there, there. So the model will look different, and a LOT more desperate.

    Five years ago I was heavily focused on the economic issues facing us as the crise de la journée. But as we descend, I have moved on. I am now focused on the sink issues, because I believe that that is where the next threats will come from (on top of the simultaneous political and social collapse). That combination will make it hard to react, and mass migrations will occur, increasingly impacting the safe places that are left and potentiating the problems. That is what happens in overshoot.

    And as fossil fuel supports are pulled away from regions that have been polluted, it is only then that we will be able to see how badly the natural resource bases that we depend on and survive within have been degraded. Fossil fuels have allowed us to live separate from and independent of the local natural resource base for a few short decades of our human existence. It is only when the tide goes out that you can see who's swimming naked. Witness Japan. Their tide went out, and came back in, hard. The tide in Japan has now receded again, revealing what happens when energy production is inadequate to support a population in overshoot. It's just not going to work.

    You are promoting a Bladerunneresque world, RMG. Every word you write promoting shale oil and gas encourages the poisoning of the US groundwater supply permanently, so that any potential life that we could have had during energy descent becomes impossible. And for what? What is the purpose? Is that really where you want to go?

    My point was that if you inject a solution containing a fraction of 1% of car radiator anti-freeze into a natural gas formation a mile underground, it is not going to have a heck of a lot of effect on the surface water.

    If it leaks out of your car radiator and goes into the city storm drains, that could be somewhat different. The same thing applies to windshield washer anti-freeze and diesel fuel. These things are moderately toxic, used in huge amounts by people everywhere, and people do dump them into the sewers and waterways.

    The water is all connected through the water cycle. Surface pollution is bad enough, but groundwater contamination is forever. And the list of toxic chemicals reads like a toxic waste dump. Are the drillers just taking advantage of the lack of regulation to inject industry's wastes? The sad thing is that it takes some time for the groundwater flow to reach aquifers, by which time the IBGYBG saying applies--I'll Be Gone, You'll Be Gone. But it will make living anywhere over those red areas on the map impossible if the water is toxic.

    James L. Northrup, a 30-year veteran of the oil and gas industry, describes horizontal
    hydrofracking of shale as “effectively the explosion of a massive pipe bomb underground.”23 In
    order to break up the rock, the fracking pressure in a shale gas well must be extreme—15,000
    pounds per square inch, which he notes has three times the explosive pressure of a thermobaric air
    bomb that can be heard up to 100 miles away.24 The horizontal orientation of the wells is particularly
    problematic for drinking water sources, since horizontal wells are much more likely to go under
    aquifers, lakes, streams, springs, and rivers.25 Furthermore, horizontal wells are fracked numerous
    times. This increases the chances of hitting and expanding fault lines, which will carry to aquifers
    and groundwater sources naturally occurring toxic chemicals such as pyrite; radioactive elements
    such as radium26 and uranium27 that are common in dark shales like the Marcellus; the methane gas
    itself; and the additional chemicals (“fracking fluids”) the companies use to maximize gas production
    of the wells.28 Intensive gas drilling has taken place in Garfield County, in northwestern Colorado,
    since 2000.29 A 2009 hydrogeologic study of the area, which like the southern tier of New York has
    active faults and fractures, found that both methane and wastewater from gas drilling was
    contaminating drinking water sources, and that methane contamination increased with the number
    of gas wells.

    Groundwater contamination, blowouts, seismic risks, loss of cement seals, surface water and soil contamination, and aquifer risks. Permanent degradation to the commons, just so some companies can make a fast buck.

    "Which part of "unsustainable trajectory" is giving you problems?"

    Jeez, Dan. You won't find much disagreement about"unsustainable trajectory" here. As for a plan? The majority of American people don't need want no plan; not really. They bargain and react. They hear what they want to hear ("we have 100 years of clean burning shale gas") and reject the rest, as in: "Natural gas is going to be much more expensive than it is now, same with liquid fuels." That part gets lost on folks every time I bring it up.

    "...the transition to lower-energy-consumption lifestyles" you hope for happens when it is forced by conditions on (under) the ground; when folks can't afford the energy they are so convinced they need. When energy sources are available and affordable, people will burn them. That's the plan; always has been. As with healthcare or climate change, for the most part, prevention or mitigation occur after the fact; the great American paradox.

    dan - with all due respect what you just offered was a goal...not a plan. What part of "doable plan" is giving you a problem? LOL.

    Don't take my teasing too hard. I've yet to see anyone offer an achievable idea that could change the foolish attitude of the Amrican public. I would say about 99.8% of everyone on TOD knows exactly what the goals are. That really ain't rocket science. But how do we change the attitude of a public that refuses to even listen to the argument that the system isn't sustainable let alone take actions to correct the situation.

    I have a sugestion: Eco Terrorism.

    Anyone care to join me at a place called "Ras Tanura"? Bring your own C4.

    "But how do we change the attitude of a public that refuses to even listen to the argument that the system isn't sustainable let alone take actions to correct the situation."

    By not appealing to their most base instincts of comfort and BAU, for starters. The pushers of fossil fuels want to keep them addicted as long as they can. That's why you have ideologues sponsored by fossil fuel companies elected as governors and turning down high speed rail, which could easily begin to replace aviation for long haul transportation.

    The ideologues also fight against higher CAFE standards, light rail, even bicycling as transportation. So any 'plan' would have to fight against well-heeled propaganda, always an uphill battle.

    The 'plan' would cut across Federal/State/Local jurisdictions, and hence would have to be several 'plans'. The better plans would include;

    - Greater investment in public transportation (light rail, buses, high speed rail) - Federal/State/Local
    - Higher CAFE standards (e.g., 60mpg by 2020) - Federal
    - Shift significant amounts of road expenditures (especially in outlying areas) to investment in cycling infrastructure - Federal/State
    - Shift urban planning to car-lite and car-free design techniques. Clamp down on sprawl. - Local and Regional
    - Replace large portions of income tax over time with increasing fuel taxes (so that people can plan the transportation purchases in advance) - Federal

    That should get things rolling...

    Building out a new rail network would be required to implement high speed rail without disrupting freight rail. It may be that high speed travel is not sustainable. I for one have never flown commercially, I have never needed to and my desire to do so has been greatly diminished by all the security measures. There are things in this world I'd like to see, but we all get 24 hours in a day and most of us will get three score years and ten at least.

    We are more likely to have "higher" speed rail, but not "high" speed rail in the French or Japanese sense of the phrase. The passenger rail system of the 1950's had trains that averaged 45 mph or so on most routes, rarely more than 60 mph for the most elite trains making few stops. The limits involved track geometry, delays from other tracks, track conditions, and the number of stops made.

    Amtrak is still limited by several of those factors. It generally competes with Greyhound, but the individual driver on an Interstate will usually make better time. On routes with heavy freight, Amtrak trains will get delayed despite the best efforts of dispatchers. In certain urban areas track conditions mandate speeds as low as 15 mph. Just increasing such tracks to 30 mph will cut the travel time in such locations in half.

    "Higher" speed rail would not require extensive new right of way (although some strips might be purchased on selected corridors.) Instead, the approach would be to upgrade track conditions where necessary (say between Louisville and Indianapolis where the speed limit is 30 mph), add long sidings (measured in miles) with high speed turnouts, migrate to positive train control (already an unfunded mandate from Congress), and improve station conditions. Peak speeds would be below 110 mph (avoiding the requirements for grade-separated crossings), and average speeds would be around 60 to 65 mph.

    Extending Amtrak service both in frequency (at least three trains per day in each direction) and in location (such as a Chicago-Atlanta-Florida route) and improving average speed and more consistent schedules will give us a reasonable rail system for the day most of us can no longer afford a plane ticket. Intercity bus will be revived as feeder systems to the rail lines and by integrating rail and bus stations with local transit systems.

    I agree with planning for car-lite cities but not "light rail, buses, high speed rail". Have you ever looked at the US National Transit Database? Operation costs range from $0.50 to $2.00 per pax mile. Add in capital cost it comes to $1.00 to $6.00 per pax mile. Cars powered with $6/gallon gas are still less than $0.60 per mile all-in. Current antiquated technology of public transit CANNOT be scaled without increasing our national debt. Ask the governor of Florida. Taxes should be used for social security, education, police, fire , military NOT TRANSPORTATION.

    We need to figure out how to move people
    1) without huge tax subsidies
    2) without oil or 500 lb batteries.
    3) reducing congestion
    4) faster than driving
    5) in vehicles under 500 lbs

    Only then will people give up their cars. This is not rocket science. Solutions exist.

    I'm a Democrat and I think the defunding of High Speed rail in the 2011 budget was a GOOD thing. Look at France, they have the best TGV but commuters are screaming for urban mobility.

    Travel is BAU ... IMO the new paradigm will return us to living as our forebears did (and how a large proportion of the current world's population still live!) ... travel will be mostly on foot or bicycle and very local.

    Think local, it has been proven to work for hundreds of millions of years.

    There is the day to day getting around to get ur stuff done which should be mainly takne care of by reducing the distance between where u are and where u need to be. Then there is travel. This includes trips across the country, to Europe, and places all over the world. This is done by people like others in my family who claim to care about the environment, their children, and the future. This is mostly self indulgent travel which says you need to see almost every place before u die. That mentality is going to be difficult to work on unless travel is made extremely expensive.

    Think local, it has been proven to work for hundreds of millions of years.

    Wow, 100's of millions of years? What creatures were doing the "thinking" since humans weren't even close to being on the scene yet?

    American cities have very high public transit costs because of the very large amounts of money they have spent on their freeway systems. If people get to drive on the freeway "for free", naturally they are going to do that in preference to paying a fare on a bus.

    If the costs (construction costs, air pollution, noise, reduction in property values, etc) of cars were fully externalized (i.e. charged to the driver) through congestion charges as in London it might seem quite different. If drivers had to pay London congestion charges (over $16 per day) plus British fuel costs (over $8/gallon) it might seem a lot better to take the tube.

    Certainly, after a city has spent billions on roads, the cost to the driver of using them is very low, but that doesn't compensate for the construction costs, air pollution, noise pollution, and social consequences of building them. OTOH, the costs per passenger-mile on the transit systems will be very high if a city builds freeways because transit passenger volumes will fall and costs will have to be amortized over a smaller number of passengers.

    If you want to compare global costs, try reading Toronto as a Global City: Scorecard on Prosperity 2011 which was prepared by the Toronto Board of Trade to benchmark Toronto against other world cities.

    The average transit rider’s cost per kilometre of travel is $0.16 in Toronto, comfortably below London at $0.25, but nowhere near as accessible as Madrid at $0.07 or Barcelona and Calgary, both at only $0.08. The best eight metros yield fares of less than $0.09 per kilometre.

    Remember, the low-cost global cities build metros instead of building freeways, so subsidizing transit is substituting one subsidy for another. London (25 cents/km, 40 cents/mile) and Toronto (16 cents/km, 26 cents/mile, have expensive transit compared to competing world cities. In Calgary's case (I used to ride the trains there, and the city clearly used them to avoid building freeways), the city has a policy of subsidizing 50% of transit costs, so the the fares (8 cents/km, 13 cents/mile) would be half of the total cost (16 cents/km, 26 cents/mile).

    The bottom line is that the US has bet the farm on freeways, and in the long term it's a losing bet.

    Have you ever looked at the US National Transit Database? Operation costs range from $0.50 to $2.00 per pax mile. Add in capital cost it comes to $1.00 to $6.00 per pax mile.

    It would help to support your assertion if you provided the link to the files you allude to. So far, I see nothing that supports this point, but am willing to give you a chance to give a real citation.

    Ask the governor of Florida. Taxes should be used for social security, education, police, fire , military NOT TRANSPORTATION.

    I don't consider the Governor of Florida a transportation expert, far from, quite frankly. Your assertion about taxes not being used for transportation is odd considering taxes pay for highways and every other road. You certainly don't talk like a Democrat (and I'm an independent who has leaned a little left and a little right in the past), so no disrespect, but I don't believe you.

    Here is the conundrum - a politician who doesn't appeal "to the base instinct of comfort and BAU" doesn't remain a politician for long. He or she just becomes another voice in wilderness or on TOD unable to influence policy in any meaningful way.

    People will accept science when it promises them a bountiful future but not when it suggests constraints and sacrifice. Hence we dispute climate change and embrace fracking despite its obvious dangers. ( Just got through reading a book on malaria and DDT was embraced with the same enthusiasm as SG is today - the easy silver bullet to eliminate malaria world wide). The fossil fuel industry would not be able to con people unless people wanted to be conned. Consumption is the only meaningful activity in most peoples lives- it is what gives their lives meaning and substance. If you can't change that you can't change BAU.

    I am sure that there must have been folks on Easter Island who were warning about the path being taken. One can only hope that they made sure that they had the last canoe to get of the island.

    Tell me why I living in Idaho would care about or support a high speed rail boondoggle in California. Will ridership be any higher?

    You're far enough inland you probably don't care about coastal defense, or defense at all, for that matter, because it would take forever for any invading army to reach Idaho, and you'll likely be dead by then anyway, so why throw money away on defense?

    The ideologues also fight against higher CAFE standards, light rail, even bicycling as transportation.

    I assume the ire here is directed at evil "right-wing" ideologues. However, stopped-clock theory suggests that a saintly "left-wing" ideologue can be found to agree. Aha! Looky here!

    El socialismo puede llegar solo en bicicleta.
    —José Antonio Viera-Gallo, Assistant Secretary of Justice under Salvador Allende in Chile

    Chalk one up for stopped-clock theory. The contrapositive would be that socialism can be prevented by opposing bicycles. So there we have it: "left"-"right" agreement at long last, LOL...


    You write:

    'With all due respect what you just offered was a goal...not a plan. What part of "doable plan" is giving you a problem? LOL.'

    Social paradim shifts only become 'doable' only when the political will to change the status quo rises above a certain critical mass. You are quite right that such a critical mass neither exists at present nor seems immanent in the near future. However, if one has any hope of aiding in the creation of such a critical mass, then giving a free pass to HO's 'hopefulness' about the massive exploitation of new sources of fossil carbon hardly seems contributory.

    Of course we will mine the shale gas, shale oil, mountaintops. That is what we do. Is there any question?

    ROCKMAN perhaps the time is now, to get personal with our problems. (I have, albeit a long time ago).You are an engineer. You are a rock-hammer that sees rock-nails everywhere. (you know.) Perhaps it's time to find a new job? You might want to look at soils engineering in the up-and-coming permaculture industry? Maybe it's time for us, our country, to consider job-retraining as a goal? Just an idea?

    A - Not sure why I would want to change careers. Just turned 60 yo last Tuesday (while sitting in a logging unit evaluating our new little NG field). Thanks to the foolishness of the American public and the lack of leadership by our career politicians, I'm on my way to retiring as a millionare. I'm thinking about buying a house in Costa Rico...not retraining. Life would be much more sustainable there than in Houston. LOL. At least the boom in the oil patch will allow me something to leave my 12 yo daughter to help her deal with the public's continued refusal to accept that BAU is over. She's going to go to Texas A&M and become a horse vet. Fortunately I'm sure we're much further away from Peak Horse than Peak Oil.

    Don't forget her need for bicycle-mechanicking skills; not only is a bike a better alternative for dense cities than horses, much of the technology is transferrable to buggy and cart design and maintenance.

    Practical advice for the daughter: Check out Western Governors University, an online university founded by 19 Western governors. You can accumulate credit toward many universities thru it while sitting at home. She can accumulate credit in her teen years and be that much closer to attending vet school by the time she turns 18.

    Mucho thanks FP. Great lead, She's going to need a lot of edges to gain entry. This looks very promising. I'm about to look into a 4H program that could be another edge.

    Hi, ROCKMAN, reading you remark about peak horse made my day!

    Thank you for that and for all of your posts I was reading since the Macondo spill. I learned a lot from them. My daughter is 11 and I still have 10 years to reach your level of professsional maturity (and your million), though I doubt I ever will...

    But in the spirit of TOD, a little embarrassment follows: In 1816, at least we in Germany had the "year without a summer" due to the haze from the Tambora explosion in Indonesia, leading to "peak oats" and then to "peak horse" (though these, of course were local peaks, due to the renewable character of both of these resources).

    Again in TOD sense, this lead to a boost of human genius: von Drais invented the "Laufmaschine", the prototype of today's bicycle: see the story e.g. here. So, stick to the advise of @chase, and let your daughter develop bike fixing skills at the same time.

    Keep on ...
    -- exk

    PS: for an investigation of the impact volcano eruptions on global solar irradiation, see the thesis of Sina Lohmann.

    Sitting here on top of the Marcellus Shale in Central NY, with most of the county leased around me - awaiting the drilling, noise, truck traffic, busted up roads, polluted surface and subsurface waters, itinerant workers, increased social problems, decimated inspector corps in the Department of Environmental Conservation, stealing my gas via compulsory integration, etc. etc., "Yeah, let's drill, baby, drill."

    What could possibly go wrong?

    Rev. Karl

    So mean you won't be getting a royalty check from the NG production? "compulsory integration" you mean forced unitizations?

    Hi RM - It's my understanding that I will get some $$ due to "compulsory integration" (that's what we call it here in NY when the majority of the land is leased) and the gas is flowing, but it's my understanding that any money I get will be AFTER expenses are deducted (and I know how THAT goes). And, of course, we don't get any of the money that the lessees get.

    We DO however, get the reduced value of our land since real estate near leased land is now effectively worth less (although my assessment does not reflect this reality).

    Finally, my neighbors trying to raise organic meats and vegetables (we are in the NYC foodshed) are facing disasters since organic buyers don't want ag products potentially contaminated with the things that seem to be by-products of drilling just across the border down in PA.

    The recovered fracking fluid evaporation ponds in a wet climate like here are just a disaster waiting to happen.

    What would make me happier would be to see the repeal of the Halliburton/Cheney Exemption from existing water quality regulations AND an increase in enforcement personnel in the Department of Environmental Conservation (not the bloodbath that is currently taking place).

    Finally, as others have written in the past, "Why not leave some hydrocarbons for our kids and grandkids?" I think they might appreciate such a consideration. But, as you have written, we won't do this. Makes me sad (and I don't even have any kids or want any - although I do have a few nieces and nephews).

    Rev. Karl

    Rev - Never heard that term before but I suspect it's same as forced pooling but different. I don't know the laws in your state but in Texas/La. a mineral owner can not be forced to lease. If you don't lease and your acreage is put into producing unit you don't get a get 100% of the revenue attributed to your acreage. If your acreahe makes up 20% of the unit then you own 20% of the entire well. Best I can offer is to suggest you get to a local O&G attorney.

    BTW: just my dumb opinion: if the land is dirt cheap and you have the bucks buy up as much as you can. Eventually folks will realize little or no damage has been done. I'm within 150 miles of me right now are many thousands of frac'd wells and there has been almost no documented cases of the fracs causing any problem. OTOH your regulators appear to be outright stupid by letting surface disposal of thse fluids to happen. The land being frac'd isn't in's the folks down stream (where there are no wells) who are at the highest risk IMHO.

    Thanks again RM.

    I think one difference between here and TX is that we don't have the regulatory infrastructure to deal with this industry. Many of the neighbors around us leased their land for as little as $25/acre (they definitely did not consult an attorney before doing so). They tactics used (hire a local landman to convince folks about a "standard" lease) definitely took advantage of our, shall we say, inexperience?

    In addition, NY State itself has also entered into lease agreements for public land so there is a definite conflict of interest in monitoring the drilling. As you may have heard, we are in fiscal distress (laying off lots of teachers and cops), so the temptation to allow drilling is likely to prove irresistible to the politicians.

    My hope is that the capital available to enable this process will disappear, and the EROEI will ultimately make us less than attractive here in my neighborhood. But, as has been written so often, "Hope is not a plan."

    Thanks again for the advice. We only have 11 acres so my wife and I are definitely small fish.

    All the best,

    rev karl

    I looked at the New York statutes, here is a link to the New York Department of Environmental Conservation Landowner Option Guide

    The basic concept is that NY is trying to protect your interests as well as those of the drilling company. In the absence of such a statute, the Law of Capture would apply. The company could just drill a well next door and suck the gas out from out under your property without paying you anything. In many states, they'd do exactly that.

    However, in NY, the government requires the company to have a spacing unit to produce gas, and to pay royalties to everyone in the spacing unit whether the landowners agree to it or not.

    What happens if I don't lease my oil and gas rights, but my acreage is assigned to a well?

    Effective August 2, 2005, an applicant for a permit to drill an oil or gas well in New York State must include, in the permit application, a map showing the area that will be assigned to the well. This area, called a spacing unit, may include some or all of your acreage even if you haven't signed an oil and gas lease.

    You have various options but the default one is below.

    Integration as a Royalty Owner

    Costs - If you elect this option, you are not liable for any charges or fees associated with well operation. A dry hole costs you nothing. This is the default option if you do not make a selection.

    Compensation - If the well produces, the well operator will begin paying you a royalty shortly after production starts. The royalty will be no less than one-eighth of the revenue received by the well operator for the share of production attributable to your acreage. An integration order is not a "forced lease" and will not award you a signing bonus.

    So, you pay nothing and get 12.5% of the revenue from the gas produced by your 11 acres. However, you don't get the $25/acre signing bonus your neighbors got. $275 just slipped through your fingers. If you had been a really sharp dealer you might have been able to negotiate a $1000/acre bonus and a 16% royalty.

    But in a previous message you said:

    but it's my understanding that any money I get will be AFTER expenses are deducted (and I know how THAT goes). And, of course, we don't get any of the money that the lessees get.

    No. You understand incorrectly. You get a 12.5% royalty on your share of the gross revenues of the well (assuming it's not dry) and you will not have costs deducted. You might want to have lawyer in mind in case that doesn't happen. The State of NY insists it will.

    I have a certificate in Canadian petroleum land and contract law, and the concepts are similar. It all goes back to goode olde Anglo Saxon England, since the US adopted English Common Law as of 1776. Canada didn't slip away until 1867, but things didn't change all that much.

    Thank you RMG. I really appreciate your taking the time to fill in the holes in my knowledge.

    I still hold out hope that my backyard won't be the most attractive drilling site and that access to capital limits how much drilling eventually occurs here.

    We moved to this location because we wanted peace and quiet (and put up a PV system and solar thermal hot water system and heat with locally produced firewood and are working on growing more of our food). Trying to powerdown to, as I said earlier, save some nice rich fossil fuels for those coming after us (and we have no kids - by choice).

    But, I know we are weirdo-hippies.

    Thanks again for the legal advice, but there are forces way bigger than us in play here so I do take some solace in that I have already lived longer than most humans in the history of the world, had an interesting life, so I can't really complain overall.

    Peace and I am grateful for the knowledge and freely shared wisdom from this forum,

    rev karl

    They can't actually drill on your property since they don't have a lease, just a forced pooling order. It's not the same thing as a lease and doesn't give them the right to enter your land or disturb it in any way. If they do, you can sue them for trespass and/or forcibly put them off the property. Just don't shoot them, that escalates the issue to a higher legal level.

    They can, however, drill under your land from a neighbor's property as long as they don't cause any disturbance on your property. Just hope that they have to drill in from some property far away from yours.

    OTOH, I have known some people to be quite negative about oil and gas wells until the first royalty cheques started arriving, after which they started to seem a lot better. That oil well pumping away next to the barn began to look downright beautiful, particularly in a poor crop year.

    Here in Alberta many lease negations ended with the landman saying as he went out the door, "By the way, if you want to make some extra money operating a few of our wells, just drop by the field office." Since many of the farmers made far more money operating wells part time than farming full time, they became very positive about the whole oil and gas industry. Where you are, there are more people, and less oil and gas, so it probably won't affect opinions as much.

    Good luck Rev. It won't eliminate your worries but hopefully you'll get some of that sweet "mail box money" every month.

    But here's some advice I've given before: don't focus on the drilling rigs and noisey frac trucks. They can cause problems but that's truly rare. The folks you want to watch like a hawk are the ones driving those tanker trucks. Many folks mistake them for gasoline delivery trucks. You keep an eye out for "mdnight hauls" as we call them in Texas. A disposal company (typically not the company drilling the wells) can make a fortune by pulling up to a bridge at 2 AM and dumping their load into the creek. Legal fluid disposal is very expensive. The oil companies will pay full price with the disposal companies pocketing the difference.

    Thanks once again RM. You are one of my most trusted posters here and I really appreciate your willingness to share what you know - last summer your Macondo information was invaluable.

    We have already had problems with this here in NE PA and CNY. Trucks from PA have been caught doing this and even our local sewage treatment plant had a "trial" effort to dispose of fracking fluid. The rumor I heard was that the fluid upset the balance of the critters in the plant so it was stopped, but I am not sure that many treatment plant operators have the skill and/or training to do this, nor were the plants designed to handle this sort of material. Most of our infrastructure here in the NE was designed and built years ago and can barely handle the loads we dump (ha) into them now - never mind these new sorts of cocktails.


    rev karl

    Rev - I know this sound simplisticly stupid but how do we make sure nasty fluids are disposed of properly in Texas? If you produce it you have to show certified documentation that you did so. If you have it hauled away the disposal companies have to provide certified (i.e. sworn) documentation. Folks will always try to cut corners, But when it comes to signing a sworn statement that can lead to jail time for perjury you can imagine how many folks suddenly come to Jesus. LOL.

    Hey Rock--long time no talk--it's "eyepaddle, the former mudlogger/MWD hand" checking back in.

    I just want to amplify your response a little bit: the documenttion you are referring to is called a hazardous waste manifest, which is the DOT's shipping document required to move regulated waste (which is defined in a statute called the Resource Recovery and Conservation Act (RCRA)). Anybody who produces a regulated waste is required to be licensed, and they are required to ship the waste via a licensed hauler--en route to a licensed Treatment, Storage or Disposal Facility, aka TSDF. Each stop along the way is required to retain a copy of the manifest, and to send a copy of the manifest either to their state's environmental agency of the federal EPA if the state doesn't have it's own agency.

    This is pretty much akin to a "Chain of Custody" form, and the agencies responsible to track them verify that all steps are followed. And you are correct, RCRA violations do occasionally result in jail time, and some pretty stiff fines.

    I suppose I should mention that after I escaped the oil field I drifted into hazardous waste management and have worked as a transporter/disposer, and now as the waste manager for a generator.

    I'd say that the main result of this system isn't that it assures automatic compliance, but that it makes establishing criminal wrongdoing much easier when you find somebody doing a "midnight haul" and demand their paperwork. Hell, people get lit up pretty hard for following the rules, but then being sloppy with their paperwork and not keeping all the appropriate copies.

    eyepaddle - Excellent details. I hope our Yankee cousins read it all. Like you say, such measure won't stop some folks from breaking the law (just like speed limit signs don't slow everyone down). But knowing they can't hide the details gets folks to tow the line for the most part. As I've said before no subcontractor is going to risk his business lying for an operator.

    Thank you both for continuing this thread. I certainly appreciate it. It is good to know that we should not HAVE to re-invent the wheel for policies to track the waste products. But, as I have written above, with the decimation of the public watchdogs here in NY (lots of DEC enforcement layoffs and virtually no new hires), I am worried. But, this is a political problem. Hopefully we will see potential transgressions as a possible revenue source for a cash-strapped agency. But, our watchdog agencies for Wall Street haven't been doing so well at this, so I am a doomer on this too.

    As an aside, back in the 90's, I too was in the chemical and waste game too. I worked at the Univ. of VA and picked up and delivered chemical and radioactive, um, "packages" from across campus and yes, they were pretty particular about audit trails for most everything. But, after a year and a half, I grew tired of the fumes and "rays" so I became an earth science teacher. But, that's another story.

    Thanks again and I do hope that this all works out ok. But, my faith in human ability to do the right thing is kinda weak. The financial incentives to cut corners is definitely there, but, as you RM point out, doing things right IS a possibility - especially if the Boss might go to jail. This is where our vigilance over Wall Street has failed so miserably, I guess.

    Best hopes,

    rev karl

    Rev – BTW my B.S was in Earth Science. I appreciate the problems with your regulators. Our landowners in Texas represent a very strong lobby. Politicians here who ignore them do so at their own peril. OTOH a citizen can do a good bit of enforcement if they have the bucks to pay the analysis/lawyers. Many of our landowners have made a small fortune suing violators. A side benefit: in Texas operators are much more afraid of such efforts then the TRRC. Trust me: I kiss landowner butt on a regular basis…just good business. LOL

    Kalimanku was right. The real business of TOD is to find new ways to spin the economy faster and make money in the process. Stick some open pails under the leaks that drip out as our life blood--water--is polluted to the point of finality.

    I - TOD makes money? Hey! Where's my check!

    It was mailed by Doomer Express, and the horse ate it...

    Pual - For a dead horse he eats like a I guess.

    Amazing: TOD is a shill for the oil patch. I've always had my suspicions...especially with that Leanan character

    Amazing, yes - and if you look him in the mouth, that makes you a denier and a neighsayer...

    The real business of TOD is to find new ways to spin the economy faster and make money in the process.

    Umm. You're kidding right? No one on TOD has ever made a penny off this site. The writers are predominantly engineers and natural scientists who are supply side focused so its natural they will look to technology and innovation to solve our problems. But one post/author does not imply unanimity among TODers.

    New ways to spin the economy faster. Funny.

    nate - And exactly how much did Chevron pay you to make that statement?

    And if you deny it that will only serve as proof that it's true.

    A supply focus infers a growth-orientation; how do we get more, can we get enough, who's got some? These questions lead to answers that lead to growth, which makes the economy spin faster. If the problem is BAU, then there are no answers (or adaptation) in a focus on supply.

    i have to disagree.
    its ambitious enough, for a website to contribute to credibly demonstrating that supply is going to a be serious problem, so decisionmakers take many BAU options off the table.

    would you have the engineers and oil experts who make up the bulk of writers here change their stripes to be ecologists/social planners?

    I can envision what you'd like TOD to morph into- its just not possible. If you'll recall, Ive struggled with such dualisms for a long time.

    Finally I should point out that many of us here are highly focused on demand related work outside of TOD.

    Back on topic.

    I - I suppose that depends on your background. Being in the oil patch for 36 years and knowing quit well our inability to meet demands down the road infers just the opposite: an absolute inability for growth long least from oil/NG. Based on your statement I gather you're just coming from the consumer side of the fence. You certainly an oddity in these parts where almost everyone on TOD ackowledges that BAU is over.

    But welcome anyway...all are welcome on TOD.

    LOL. According to some,

    ...TOD is doom central...
    Apr 8, 2011 at 6:39 PM

    I suppose there's no pleasing everyone, is there?

    I know that this is still an industry in its infancy, but are there any estimates that are publically available in regasrds to the EROI for major producing fields?

    Ram - Are you speaking about the shale gas plays? Me and the rest of the oil patch have been calculating the economic value (i.e. EROI) of the various unconventional plays, including shale gas, for over 40 years. Not exactly in its "infancy". What is relatively new (still 15 years old) is the application of horizontal well bores. As far as frac technology that really has changed much in the last 30 years.

    OK, so designating it as a new industry is perhaps misleading, I meant it in Economic terms, because let's face it, shale gas has only started playing a relevant role about half a decade ago. I'm glad that people have been calculating EROI's for these resources, I just wish there was more public information on what the results of these calculations are.

    Ram - You have valid points but the trivia is a killer. LOL. The oldest major NG producing trend in the US is the New Albany Shale (KY), a pure SG play. It's production was fueling street lights in the late 1800's. During the first half of the 1900's the conventional oil/NG plays began to dominate the mix.

    Actually I mislead you for the sake of brevity. The oil patch never has, nor ever will IMHO, use EROI's directly to determine investments. If for no other reason it's neaarly impossible to calculate given all the assumptions needed. But that really matter. We look at $'s in vs. $'s out. Granted there is linkage between our economics and EROI but an EROI, if it could be determined, still wouldn't be a metric we would use. But it would certainly be of interest to the academicly inclined.

    BTW the new (really more improved than new) technologies utilized in current SG development has been beneficial but not critical for SG development. Like all resource development in the oil patch, it's driven by pricing. Consider the hot Eagle Ford Shale being drilled up like crazy for its oil production. I completed my first EF well over 30 years ago. It's oil has been know for decades before that. It's $70+ oil that has driven this and other conventional plays that's the driver.

    Thanks for your views. Its obvious that EROI would have to be positive if money is to be made, otherwise the cost of energy invested in producing the resource would likely make the project unprofitable. The reason I am wondering about this is because I expect shale gas to gradually replace conventional as the main source of NG in the US economy. if the EROI is much lower however than conventional, the NG economy that some envision (T. Boone), may not be as realistic as some NG optimistists hope.

    Conventional offshore gas is a significant resource and cheap, active play in Australia, Oman, Iran, Gulf of Mexico, and Brazil. Billion-dollar investment in US shale gas by Exxon, Total, Reliance, BHP, Sinopec, and Norse was foolish except to acquire horizontal drilling and fracking technology that could be deployed elsewhere in the world, or as "window dressing" reserves replacement. Most US shale gas operators have suspended development drilling and are now drilling only to hold acreage.

    I've heard on the French news last week that all shale gas projects are suspended pending further study about the impact on drinking water. There is a strong opposition in Quebec also.

    Confirmed -- -- though apparently there are no active SG projects in France anyway. OTOH there's a WSJ piece on the same French government report, which pitches it as "French Report Backs Shale Gas, Oil Production" ( ) 2012 is Presidential election year...

    Sam - I mentioned it before to my Yankee cousins: send your regulators to Austin for a few weeks. The folks at the Texas Rrail Road Commision can show them how to keep the companies honest It really isn't that hard to do.


    Are there any links that one can access to illustrate 'how to keep the companies honest'?

    I've included links from here to an NC blog Word Up as a result of the host's and others interests as Fracking is coming to NC.

    I see the TRRC site has Public Awareness and Involvement page, so will take a look there.

    RBM – This may sound simplistic but it’s really easy: have very detailed and restrictive regs that are rigorously enforced. It may be hard to believe since Texas is in the heart of the oil patch but this is exactly what the TRRC does. Trust me…there is no love lost between the two sides. BTW every TRRC reg is available online to eveyone for free. All my Yankee cousins need to do is download then and write them into their regs. But then comes the hard part: enforcement. But much of that cost is covered by the fees the companies pay. As I said: it really isn't that difficult to do it right. I can't tell you how shocked I was to learn that it was legal for companies to dump frac fluids into municipal water plants in PA. I'm not kidding: get caught doing that in Texas/La and you will do a little prison time. BTW: it's THE Texas Rangers who are the law enforcement arm of the TRRC. I always liked that romantic aspect of the's just so "Texas". LOL

    One aspect that’s particularly helpful for the TRRC is all the various certified tests required during oil patch activity. Most folks don’t realize that the vast majority of the field personnel are not employees of the company. They are subcontractors and they sign off on the procedures. They have everything to lose and nothing to gain by falsifying tests. These folks don’t want to lose their livelihood. Screw with the TRRC and that’s happens.

    As an aside most of the oil patch has little patience for rule breakers for a number of reasons. For one thing when a company violates safety regs we get hurt/die… not some suit sitting in an office in d/t Houston. As far as pollution a great many of us live in the country. My 12 yo daughter drinks well water every day. I’ve personal helped two illegal dumpers get caught. I also help bust a phony oil field investment fraud operation. Oil field hands are no different than the rest of the population: good ones/bad ones, honest one/scum bags, sinners/saints.

    HI RM - Just saw this post this morning. I think this is why so many of us are very, very nervous about what is happening here in the NE. We don't have the experience you had with the enforcement powers and legitimacy of the TRCC. The SG companies have come in here and taken advantage of our inexperience and our government (locally the Department of Environmental Conservation) is, IMHO, ill-equipped to handle this. Dual mandate - protect and exploit natural resources.

    The money involved does not help with coming up with a legitimate regulatory system.

    Thanks again.

    rev karl

    Rev - You're welcome. Also, in Texas, in the "bad ole days", such matters were much worse than what you're seeing. But that eventually led to adjustments pushed by our landowners. Companies were never going to clean up there act voluntarially. Unfortunately it sounds like your regulators are going to have to learn the hard way also.

    I can't tell you how shocked I was to learn that it was legal for companies to dump frac fluids into municipal water plants in PA.

    I wasn't. As a matter of fact a couple of years ago when tech talks first addressed shale gas drilling in the Marcellus it seems you mentioned that the inexperience of the regulators in the north east might lead to just such occurrences. Or maybe I said it, but someone did. Agencies strapped for funds due to the poor regional economy and the conflict of interest brought about by drilling/production tax/fee/royalty revenues funding the states' regulatory efforts were also part of the conversation if memory serves...and fortunately it still usually does even after the huge bang my noggin took from a fall (at work) last fall.

    By the way I started cross country skiing regularly enough to manage finishing a 50k race each season when I turned 60 (only a couple years back). I strongly recommend some similar pursuit suitable to your clime. I actually got in a bit better than 20k yesterday and the trails should be good enough to manage that a couple more times this season--more fun with a bit of slush on the trails than when they are sandpaper slow at 30 below ?- ) You want to stay in decent enough shape to enjoy that million for a while I'm guessing. Of course if your daughter is planning to be a equine vet you just might have a couple horses around--knew some darned wirey old riders back when I lived in Montana. Those critters will keep you in shape for a good long time...if they don't cripple you first.

    Luke - Might sound like picking on them but over the years I've heard Yankee regulatos have been too easy on all industrial polluters. Matbe the oil patch inherited a bad situation. New Jersey seems to be the butt of many jokes along those lines. Maybe those stories have been over hyped...maybe not.

    Congrats on your outdoor efforts. Yep...I'll probably be stuck with 4-legged transport for good. Juat turned 60 yo last week. Age isn't so much a problem as two bad knees (too many years running up and down rigs maybe. LOL.) Thank goodness I spend most of my time in front of a computer these days even at the drill site. I do get a few stares when I hobble around the rig on my crutches. Occasonally I need a hand to help yank me up into a logging truck. Besides bad knees I was diagnosed with MS a couple of years ago. Like I said...thank goodness for computers. Now I off for a 6 hour ride to a drill site outside Baton Rouge. Luckily I do some of my best work sitting down. LOL

    Sorry to hear about the MS diagnosis--one of those ugly things that may be waiting in the wings we all hope never to meet. Yeah knees are an issue (a lifetime of construction, logging and commercial fishing might have contributed some along with one very poor downhill ski run that shortstopped my novice attempts at that sport)--been wearing neoprene wraps on the lower half of those joints for work and skiing for near two decades now. Mind you my cross country skiing is pretty slow, the fastest young bucks doing the 50k finished in less than half my time--heck the fastest woman (40+ year old) came in almost an hour and a half ahead of me.

    Are you doing a any driving with your horses? I never learned the art but it looked like a kick. Kept the critters for eleven years but we just have one aging black and tan 'round hound' around the house these days.

    Enjoy the springtime drives--been up here so long can't imagine much other than a white landscape in April.

    Sorry bout the angle on the dog but that's our place this April 9 after a typical winter. We'd just cleared and piled the snow from the porch roof. If you feel a need to chill come the hot season feel free to come on up. It gets right green by the end of May and won't get dark till early August after that.

    Luke - Just time for a sort comment. RE: your snow pic - growing up in S La snow still seems magical to me. OTOH my experiences were vacation based...not living/working in it thru out a long winter.

    This may sound simplistic but it’s really easy: have very detailed and restrictive regs that are rigorously enforced. It may be hard to believe since Texas is in the heart of the oil patch but this is exactly what the TRRC does. Trust me…there is no love lost between the two sides. BTW every TRRC reg is available online to eveyone for free. All my Yankee cousins need to do is download then and write them into their regs

    In Canada, the senior regulatory authority (i.e. the oldest, most experienced one) is the Alberta Energy Resources Conservation Board, and what you suggest basically is happened - the other provinces and even the federal government copied the Alberta ERCB regulations and wrote them into their regs. Designing a government regulatory system for them was basically a copy-and-paste exercise.

    The Alberta ERCB seemed to be aware of it, and their forms even had a space for "Province" on them, so the oil companies could change the code from "AB" for Alberta to "SK" for Saskatchewan, "BC" for British Columbia, or "NT" for the Northwest Territories, and hand them in to the appropriate government.

    This made it a lot simpler when I was designing software to print the government reports for Canada. The forms were all more or less the same - there were just a few special routines to handle special cases for other provinces, but there was a lot of consistency in overall reporting. The exceptions didn't always make a lot of sense but since there were few of them we could deal with them.

    The US was quite different to design software for - there were dozens of different governments to report to, and they all wanted different forms. There was no rational reason for most of the different requirements, and in many cases it was apparent that the governments didn't really know what they wanted. The American Petroleum Institute offered a lot of advice on what the petroleum companies wanted to do, but very little on how the government should control the petroleum companies.

    I was on a plane coming back from Peru one time, and the person next to me was a woman from the Alberta ERCB coming back from a couple of months in Peru. She had been helping the Peruvian government set up a regulatory system for its oil industry. The Peruvian government needed advice, the Alberta ERCB was happy to help, and she enjoyed her visit to Peru.

    But there is a globally sufficient supply of natural gas more conventionally obtainable, and increasingly available as LNG at perhaps $4 a kcf delivered into the United States, that it is difficult to see the short-term viability of the industry.

    LNG at $4? I doubt it. LNG at $6? Possibly. LNG at $8? More likely over the long term.

    Let's use gigajoules (GJ) since "kcf" is rather nonstandard. GJs are SI metric, and about the same size.

    Shale gas is economic at $6/GJ, so I think that the US will probably be able to keep itself supplied with gas into the medium-term future. In the global context, since the Japanese and Chinese seem to be willing to pay $12/GJ for NGLs, I think there is enough available in the rest of the world for them, too.

    $8/GJ works out to about the same as oil at $48/bbl. Since the price of oil on the international (Brent) market is currently $124/bbl, I think the economics are highly favorable for LNG. It's less than 40% of the cost of oil for the same energy value.

    Since oil on the US market (WTI) is currently $110/bbl, I think shale gas at $6 would be similarly economic in the US. It's only about 33% of the cost of oil.

    Just a few comments:
    - RMG is right about LNG costs. I calculated >$5.00 way back in 2004. Then there are the issues of available shipping capacity, and regasification capacity. LNG might get to 10% of our supply some day, but not near term and not at prices below $6.00/kcf.
    - Some horizontal drilling capacity is already being diverted from NG to Oil because of the much higher return per Btu for oil at present relative prices, thus adding to the problem of adding rigs and trained crews at a rapid rate.
    - As the easily recoverable plays get worked out (the Barnett is in a highly populated area, with almost no hills and plenty of road capacity), to less accessable areas like rural and mountainess rural Pa, the recovery cost will only go up. Consider more like $8.00/kcf to develop a lot of the shale gas.
    - The optimists are already talking about shipping LNG from the USA to Japan. Don't hold your breath.
    - Conventional gas supply in the USA is probably already in decline. The decline started in 2003, followed by a huge increase in drilling through 2007, without any corresponding increase in supply (just offsetting declines?), and then a huge drop in vertical rigs since 2008 (no good prospects left to drill?), so we will need all the shale gas we can get just to run in place.
    - Shale gas production boomed early on, because all of the wells were new and in their high production phase. What happens when new wells are a much smaller % of total producing wells? Production growth will slow very rapidly, and may become negative, unless we can add rigs at a phenomenol rate, and if we can add rigs fast enough, can we access enough water for the frac'ing?
    - there are a bunch of issues not addressed yet.

    I'm lost in the numbers due to the medieval units system you Yanks cling to, but the UK is currently finding it very profitable to buy LNG from God knows where and re-export it through pipelines to the rest of Europe due to a little local difficulty in North Africa.

    2p/KWh is expensive. We are exporting 59 million cubic metres a day at that price - in the low demand season.

    I saw an analysis of future gas supply last year, which indicated that natural gas would be cheaper than wind power as long as the price was less than 50p/therm, which they viewed as the upper end of the expected price range. For the last 9 months the average price has been 60p/therm.

    I have no idea what the potential for shale gas is in the UK. However, we will drill very last molecule of it.

    "We are exporting 59 million cubic metres a day " and I'll bet our storage is again running low this next winter.

    To be honest we do appear to be on target for storage to be refilled in time for next winter. We have recently expanded our LNG import facilities considerably. As long as we can export it for a profit, we can afford to buy the LNG at the world market price. The problem will come when global demand for LNG pushes the price above what the UK economy can sustain. I suspect we have already passed that point for oil...

    I'm lost in the numbers due to the medieval units system you Yanks cling to

    I'm Canadian and GJ's are SI metric. In Canada, natural gas at the retail level is sold by heat content rather than by volume. Producers often strip the higher value components off and sell them separately, which changes the heating value of the natural gas.

    One gigajoule is approximately:

    • 950,000 BTU
    • 9.5 therms
    • 950 cubic feet of natural gas
    • 27 cubic metres of natural gas
    • 0.165 barrels of oil
    • 0.026 cubic metres of oil
    • 278 kilowatt hours of electricity

    The British therm is not the same size as the American therm, and there are several different sizes for the BTU, which is why we Canadians use gigajoules. The heat content of both natural gas and oil is variable, so conversions to volume units depend on composition.

    60 pence per therm translates into 570 pence per GJ which converts into over $9 per GJ, which is over twice the current price in the US and Canada.

    Peyto Energy in Western Alberta claims to be one of the lowest cost producers of shale gas in NA. They report an ability to make a profit even when NG us selling for under $3 per GJ.They have an amazing track record !!!

    Thanks for the reference. Just glancing through the slides from their Haywood presentation in Feb 2011 there is a slide (number 31) which shows their drilling cost at $5 million for a horizontal well (as opposed to $1.7 million for vertical) and with production from their high horizontal producers falling from 7 million cf/day to 1 million cf/day in a year. That is, as I mentioned for the Haynesville above, about 85% drop in production in the first year. The presentation then goes on to give similar figures for other fields. And incidentally it points out that drilling costs are only about half total costs for those wells. (Completion being the next significant cost).

    I'm reminded of the recommendations from a few years ago to buy Pacific Ethanol.

    What are the opinions on the technology of using liquid propane gel as the fracing liquid instead of water based? Claims to have an increase in production.

    Very interesting. Thanks for this reference.
    Looks like it needs pretty heavy duty infrastructure, but eliminating water disposal is a huge plus. Very rapid first year decline, but apparently 20% increase in lifetime recovery. Probably a winner.

    Shale Gas?, you gotta be Fracking kidding, who needs the contamination and earthquakes.

    Heading out,
    I can't say that I am a fan of hydro-fracturing, but I appreciate your informative post.

    Oil, Gas Companies Injected Chemicals into Ground, Report Shows

    "Fourteen oil and gas companies used 780 million gallons of hydraulic-fracturing products from 2005 and 2009, including toxic substances like benzene and lead, to extract gas from shale rock, according to a report by Democrats in the U.S. Congress."


    Dispatch - And ever gallon of those nasties produced in Texas and La. have been injected into deep salt water reservoirs where they can never hurt anyone. My Yankee cousins need to wise up and get their regulators to institute the type of tough laws we have in Texas. If politicians in a big oil dominated state can do it then their folks folks should be able to.

    There is a spectacular amount of misinformation being propagated by the MSM of what happens during well fracturing. I guess it's just the usual problem of the talking heads (both media and politicians) babbling on about things they know nothing about. Quoting totally irrelevant numbers seems to be popular.

    As Rockman says, we disposed of all the nasties by injecting them into deep formations where they will never find their way back to the surface. It's not as if there aren't a lot of nasties down there already.

    Benzene and lead? There's already a lot of benzene and lead in deep water formations. What's more, refineries used to put those chemicals into gasoline. That's why an oil company will never sell an old refinery site - they spilled a lot of it on the ground. It would have been much better to inject it into a deep formation.

    Shale gas and Greenhouses Gases

    Looks like a MAJOR flaw to me.

    More here

    It's useful to go back and look at how accurate the EIA has been with their prior projections. Roger Blanchard just did an analysis of the EIA projections regarding oil production in the North Sea:
    A look back at North Sea oil production projections

    Why did the US DOE/EIA do such a poor job at projecting future Norwegian and U.K. oil production?

    It’s obvious that it did not base its projections on actual field production data. It appears that its objective was to be optimistic rather than realistic.

    By the late 1990s it was clear that most of the large (+50,000 b/d) oil fields in both Norway and the U.K. that had been in production for more than 4 years were in decline with decline rates of typically 10%/year or higher. There were also a limited number of large fields scheduled to come on-line after 1999 in both countries that could negate the rapid decline of the older fields. It should have been obvious that the peak production years wouldn’t occur as late as, and that the decline rates would be higher than, the US DOE/EIA was projecting.

    The poor performance of the US DOE/EIA in Norway and the U.K. suggests that its projections for other regions, as well as globally, should be viewed with a high degree of skepticism.

    Why did the US DOE/EIA do such a poor job at projecting future Norwegian and U.K. oil production?

    I was wondering the same thing a few years ago when I was reading reports from the US DOE/EIA predicting a huge increase in natural gas imports from Canada. At the same time, I was reading reports from the Canadian energy agencies stating that Canadian natural gas production had already peaked, and predicting it was about to go into a slow decline in the immediate future. The Canadian Association of Petroleum Producers said the same thing.

    Now, the Canadian gas companies and Canadian governments have all the geological and production data from all the Canadian wells, and they know what wells are planned to be drilled, so one would think they would have a pretty good idea where things were going in the near future. I wondered, does the US EIA even talk to anybody from Canada when predicting Canadian production?

    Apparently not. I think they just assume that if some foreign country's production has increased up until now, it will continue to increase at the same rate into the foreseeable future.