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.