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Fracking – the hydraulic fracturing of the deep earth and its cousin, horizontal drilling – is the new buzz word in energy today. It has been spread by journalists and correspondents and NGOs to the general public. What is this strange word's impact on our own lives?

A simple, four stage answer would include: 

  • jobs
  • energy
  • imports
  • environment


The past winter demonstrated two complex phenomena: weather is unpredictable and the Marcellus/Utica plays met increased natural gas demand for heating cleanly and effectively.

While the U.S. stockpile of natural gas dropped to a decade low, production and midstream delivery met the challenge of replacement and further production.

Utility demand for natural gas continues to grow. Transportation demand for commercial vehicles powered by methane increases. Manufacturing demand is just beginning to come on line as billions in new plants are in development.

If we can believe it, even public awareness is turning towards energy – positively. Pennsylvania leads the way in the Northeast in both tax revenues and regulatory oversight. Pittsburgh leads the new manufacturing revolution, as it has in the past. Gas replaces coal in power generation and manufacturing reliance. Ohio has doubled its natural gas and crude production in just one year. Marcellus production will grow by 87% for Consol in 2014.

Technology runs ahead of production. Well spacing reduction results in greater EUR. Laterals may run longer or shorter, depending upon the hydrocarbon and its concentration. Frac intervals are increasing in type and number as drillers get a better understanding of the geology of each basin. Pads have grown in size and number of wells. Frac stages are now running well beyond 150 on some pads.

Cabot has just completed the first 10 well pad, run entirely on bifuels. This reduces cost and environmental impact, replacing locally produced methane for diesel fuel. Engine efficiencies and run times increased substantially over pure diesel engines running the frac rigs and pumping stations. On site gas processing fractionated the NGLs from the methane, allowing the new engines to run at peak efficiency. The byproduct is a profit center for the drill site. The ten well pad ran entirely on bifuels at the planned 70% replacement rate. This reduced diesel use by 110,000 gallons and 16 tanker resupply runs, while increasing the safety factor for workers and the local environment.

It cut NOX emissions in half and eliminated carbon monoxide emissions entirely. Chemicals used during fracturing were all approved and screened for persistent organic pollutants as suggested by the UN globally Harmonized System for Chemicals. Cabot’s 170 stage 10 well pad was completed in 27 days. It is the greenest and cleanest frac site in North America today.

Stacked plays add enormously to productivity and to production. With three basins to work, a stacked play drills to and draws from each simultaneously. Well costs of $6-8M/well can be recovered in one year.

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Imagine the nation where all interested members of the energy community participate in the ongoing discussion of energy source and use.

Imagine every concerned citizen contributing to the problems, challenges and opportunities of exploration, drilling, completion, transshipment, storage, processing and use of all energy sources.

Imagine power transmission folks exploring grid challenges with pipeline experts.

Imagine conservationists and environmentalists in open and frank conversation with drillers and trainmen – seeking answers to intractable systems issues.

Imagine regulators and politicians in support of the wise application of the best standards for extracting, conveying and delivering energy to intelligent consumers.

Imagine consumers wisely shutting down their energy consumption, using electricity affordably and intelligently while conserving it.

Imagine the youth being educated about energy use, sources and impact without agenda or false science.

Imagine thousands of birds returning to the airways, thousands of prairie chickens roosting again – and thousands of new, efficient uses for energy.

Imagine by John LennonImagine nuclear, natural gas, petroleum, solar and local wind energy sources subject only to market forces for survival, without regulatory or tax interference.

Imagine a nation – a world – of intelligent energy choices made by smart citizens working together.

Wouldn’t John Lennon be proud?

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John Graves on Fracking

Yesterday I was interviewed by Charter’s California Edition.

The primary focus of the interview was on fracking, what it is, and how it will play out in California.

You can watch the interview here:

Listen in on this short interview of John Graves as he talks about what fracking is, how it impacts the environment, and the future of fracking in California.

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News on the fracking front this week.

The Prelude, World's Largest ShipThe energy industry is having a fling! The Prelude, the largest ship ever built, is a FLNG, or floating liquefied natural gas ship. This vessel will be able to drill for natural gas, liquefy it, and load it onto LNG tankers for worldwide delivery. The costs for a FLNG are 30% lower than building two entire facilities – and it is mobile. When the field is depleted, it moves on to the next one.

The technology required to build such a ship have been 15 years in development, according to Shell. It has the capacity to produce more than 5M metric tons of gas and condensate with a 25-year life expectancy. She is 1,600’ long with a 243’ beam. She is designed to withstand Category 5 cyclones and hurricanes. The anchor chain links are so huge you can stand inside the loop of one!

The vessel can be used offshore in Columbia, Israel, Malaysia, West Africa, and the Gulf. 16 vessels are schedule for completion by 2020. The engineering challenges surrounding loading an LNG tanker from such a ship are developing, with the guidance of global regulators.

The substitution of natural gas for diesel in fracking operations across the nation continue. Gas Substitution systems reduce CO2 emissions while increasing profitability: a win for the environment and for capital.

Substituting natural gas for coal in power generation has led to some amazing results for the environment, as detailed here and in the book. Now, we realize another natural savings: water. University of Texas auditors have found that life cycle water use from fracking operations are 30% less than from coal operations, as measured from initiation of production to power generation.

So, water use is reduced by fracking. You won’t hear that from any other site!

The above video features the launch ofThe Prelude, the world’s largest ship, which is taller than the Empire State Building and weighs over 600,000 tons. It is a floating city that will harvest natural gas from the ocean’s depths off, liquify 3.9 million tons each year, and then offload it to smaller ships for worldwide delivery. Set to begin actual drilling in 2017, it will stay at its new home 300 miles from the coast of Australia for 25 years.

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IRS buildingThe esteemed Ms. Lerner, recently of the IRS, has pleaded the fifth (or drowned in a fifth) in her own defense of oversight actions against certain political action groups. Recently released emails from her personal computer indicate that her entire set of actions against these groups was based upon suggestions made to her by Democracy 21 and the Campaign Legal Center, groups from the opposing side. The groups urged her to consider a rule that would change the requirements for 501c4 groups.

These suggestions are precisely what she then urged upon the Cincinnati office, according to the local agent assigned to the case, a Mr. Joseph Herr. Thanks so much for the clarification. We though you might have thought this one up yourself, Mr. Herr.

Or at least that’s the riff from the quartermaster in DC, a Mr. BO…

Oddly enough, these actions are a perfect mirror of the events that occurred at DOI (Department of Interior) while they were rewriting the rules on the Endangered Species Act and Eagle Protection Act. This rewrite happened during 2009-13. The concern was that climate change would destroy as much as half the bird population of the planet, along with a few humans. Raptors such as bald and golden eagles as well as millions of passerines (song birds) were dying at wind farms. This was illegal. The wee tykes would have to fend for themselves, but the Big Birds were the problem. Seems we wrote two laws that prevented their death by human intervention.

What was the Fish and Wildlife Service (the Service, or FWS) to do? Why turn to the wind industry for an answer! Which they did and which industry promptly responded. Buried in a FOIA (Freedom of Information Act) release of 914 pages are the letters from the AWEA (American Wind Energy Association) suggesting a variety of responses to the problem of avian mortality from wind farms. Each and every one of those responses is included in the Service’s ultimate rule. Which rule was released to the unwary public at 4 p.m. on a cold DC Friday afternoon. NO questions allowed, no formal hearings. This is simply a few rule changes. Nothing to worry about. Keep moving along.

The changes? Oh, you would have to ask: Takes are permitted by the wind industry (only by said industry) for 30 years. No reporting is required. No permits are required. No intervention is necessary. No mitigation funding needed.

Takes = kills. The wind industry can kill all the birds it needs to — so that we can survive the onslaught of climate change.

Each story is reminiscent of the other. Each involves a vested party setting new rules by which it has significant advantage over others. Each federal agency complies, in obedience.

We have met the enemy and he is US!

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The Green ThingStrange goings on at the IPCC, the InterGovermental Panel on Climate Change and good news!

No climate refugees.

No increase in global cyclonic frequency over the past century.

No species extinctions.

The rate of warming between 1998 and 2012 has been “smaller than the rate calculated since 1951.”

The “innate behavior of the climate system imposes limits on the ability to predict its evolution.”

Vulnerability is rarely due to a single cause.”

Such honesty is welcome. Unfortunately, it is matched with the new economics of income inequality and redistribution demands. Climate resilient development pathways are dictated by inequality and marginalization.

Appears to me that the wealthier we are, the more we can afford to care about the environment. Wealth ensures safe development and income enhancement. The markets are far better at allocating capital than any government. Care for a few shares in Solyndra?

Students across the nation and the world will be the last to hear this, certainly. While they study environmental science and can’t get a job, the few who have degrees in engineering and petroleum geology are getting starting offers at $87,000+. Nice work for a 22-year-old. Too bad about the professors harping on about the end of the world…

Well, at least the IPCC has the courage to admit that CO2 concentrations are not the canary in the coal mine that the hair shirts have feared.

There is hope once again for mankind!

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FracFocus.orgAs You Sow, a shareholder activist group has announced an agreement with ExxonMobil to release more pertinent data on the firm’s hydraulic fracturing. XOM joins several other firms in attempting to provide more information to an informed public on fracking: EQT, XTO, Noble, EnCana & Anadarko are among the most recent firms to provide more detailed information.

Job well done. The author has been suggesting just such openness since publication of the book last January. Websites sponsored by industry and state regulators already release info on many thousands of wells across America:

The largest non-naval vessels ever built will soon take to the sea to drill for natural gas, liquefy it, and load it onto gas tankers. As we said in the book, Fracking, the Prelude is being built in Korea. She is 1,600’ long and 243’ wide and able to produce 3.5M metric tons of gas each year. FLNGs, floating natural gas vessels, allow for quicker and less costly development of an offshore shelf. The first ship will work the coast of Colombia next year, producing more than 500K metric tons of gas annually.

An article in today’s Wall Street Journal demonstrates the jobs creation juggernaut that fracking represents here in the U.S. 250,000+ jobs have been created just since 2010. The average income for a frack worker today is $107,200 a year. Not bad for essentially unskilled labor. The presence of frack sites also contributes significant economic growth to each region in which it works.

Of course, these leads to income inequality for states such as New York and California that ban fracking or make it extremely difficult. Meanwhile, North Dakota leads the nation in employment and unemployment: highest employment and lowest unemployment. compare this to California or New York.

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Mad Magazine’s Alfred E. Neuman was famous for this simple saying. Many of us were raised on this perfidy, this outrageous disregard for authority. The editor of Mad was reputed to have a life-sized King Kong head out his New York office window, a reminder of how the mighty have fallen.

Yesterday, that great ape deserved to be headed to the EPA. In their latest hissy fit, they are now worried about methane gas emissions from fracked wells. These wells release 23% of the total annual U.S. methane emissions, which represent just 9% of total GGEs, greenhouse gas emissions, according to the EPA. The new rule will apply to the .9% of natural gas wells on public land.

Thus, your government at work is writing a rule affecting one hundredth of two percent of the methane emissions in the U.S. (.23 x .09 x .009 = .001863).

Truly fascinating. So many have sacrificed so much for such foolishness…

In the real world of energy exploration, development and distribution, the bi-monthly publication Shale Play Water Management has as its byline: “Responsible solutions for North America’s oil and gas industry.” How refreshing. This issue discusses in some detail:

Regulations and responsibility

Turnkey approaches to synergy and reduced costs

Dynamic modeling for water management

New recycling plants in the Niobrara

Frac water recycling solution case study

Applied science trumps social ‘science’ and political ‘science.’

You may have noted this past Saturday was Turn Off Your Electricity for an Hour in Support of Earth Day (or Night).

North Korea at night

You are welcome to join the image above (the dark side of Korea).

Imagine for just a moment what an hour without electricity would be like. Turn off everything you depend upon that has a wire to the wall. If you are on life support equipment, please ignore this directive!

How do you feel in the dark? Think now about all that electricity offers you. The simplicities and complexities of life. Your car, computer, cell phone, refrigerator, oven, lights – everything you use without even thinking.

Welcome to the Eco paradise – North Korea. You have met the new global standard for ecologic – brainwashed into submission, starving, living in caves, eating rats for nourishment.

Now go hug a fracker!

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Yes, it’s true. Hydraulic fracturing of the deep shale gas beneath our feet actually reduces water consumption. According to a new study from UT-Austin, 12/13, Texas saved 32 billion gallons of water by using fracked natural gas in place of coal for electricity generation. During the 2011 drought – when there were 100 straight days of 100+ degree heat – power generation by combined cycle gas fired power plants saved 32 billion gallons of water. How? They replaced coal with natural gas. Gas has 30% of the cooling demand of coal in power generation.

Go tell it on the mountain. Fracking saves water — while reducing CO2 emissions. Good luck with convincing the eco-folks of this simple fact!

Drilling, Hole, HeadframeThe advances in the field keep on keepin’ on.

The first inflection point was the conversion from vertical to horizontal drilling in 2009.

The second was the switch from gas to oil drilling in the U.S. during 2011.

The third is going on as we speak: zipper pad drilling. Pad drilling is using the same drill site for multiple bores. Zipper is doing so in parallel laterals in stair step manner. This allows for increased flow over a longer time period. Better EURs and longer draw downs of the reservoir. Taming the 800# gorilla in every E&P room – the infernal withdrawal rate.

Since 2012, pad drilling has increased to 92% of all drilling in the Fayetteville basin, 80% in the Bakken and Eagle Ford, with the older Permian reluctantly adopting at 20%. The number of wells per pad has increased to 6.6 in the Marcellus and 4.3 in the Eagle Ford. Understand: these technologies are themselves only a few years old. Five years ago they were unheard of; today they are commonplace. Best in class wells are siting 20+ wells per pad. This is occurring in an industry that had done one pad, one well for 100+ years.

Technology developments are being applied at break neck speed across the shale fields of America. The following are state of the art field applications:

improved fluids

proppant mixes to each well site

laterals designed to each pad

longer laterals

more stages

This technology application in the field is plateauing during 2014. The most advanced tech today involves stacked laterals. This is the ultimate in pad multiples. The well strings are being sent down to different stacks on the same vertical line. Imagine an elevator that stops at several floors. These hydrocarbon elevators will soon stop at each formation and send out multiple arrays to advantage the drawn down from every one.

Incredible technology application.

Meanwhile, our friends in the NGO camp and the federal government continue to worry about “what if the ground water is contaminated?!”

What if the sky is falling…?

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Do your children play monster under the bed? Do they scare themselves into shouts of silly fear about imagined creatures under the bed?

The ecoleft reminds us that children’s fears can continue into adult life. Here are a few bedbugs:

Fracking damages local water. Despite statements from a wide range of sources – including the EPA – that fracking poses no danger to local watersheds, the stories abound of gas in the water.

Earthquakes are caused by fracking. They are not caused by fracking. Injection wells can be a cause of micro quakes and have done so in Oklahoma and Ohio. This is entirely different.

Carcinogens in fracking chemicals kill. Chemical usage in fracking is nominal, controlled, and diluted. Storage, use, and disposal is controlled.

Fracking is causing global climate change. True. The climate may change as CO2 emissions continue to drop from the second largest emitter in the world – the U.S. – down 500M tons now.

We need to be reminded of the significant benefits of fracking:

More jobs, tax revenues

Fewer crude imports and greenhouse gas emissions

New opportunities in manufacturing: $5B/yr in capital development and 68,000 new jobs each year for a decade – at least.

Dow, Exxon, Phillips, Sasol and others will spend $125B+ for petrochemical plants making plastics, resins, and metals to be processed into a wide variety of consumer products.

More jobs will result for construction, processing, engineering, design and plant workers.

If you have family members returning from Afghanistan or Iraq who seek work, consider

If you have family members graduating from college, know that environmental science, engineering of all kinds, and math degrees are commanding six figure salaries.

Louisiana Terminal

Exports of LNG will begin next November from the Cheniere plant in Louisiana:

If the DOE were to move in a timely manner, the two dozen applicants for more export terminals would be able to proceed. Only four have been approved for construction. 18 await.

Meanwhile, oil flows from the Bakken, the Eagle Ford, and the Permian basins at ever increasing rates. Pipelines continue to be added. Processing plants are being built.

Frack on, America.

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