- April 26, 2012
- Posted by: Art Berman
- Category: The Petroleum Truth Report
Dave Parkinson has written a good article in The Globe and Mail about me called “Meet the man the shale gas industry hates.”
I could say a lot about some of the comments by industry people in the article, but I will focus on Devon Energy spokesman Chip Minty’s statement that, “We kind of look at Arthur Berman as a dinosaur. With every day that goes by and these shale production numbers come in, the validity of Arthur Berman’s claims becomes more questionable.”
First of all, Chip, let’s talk about grammar and proper English. “We kind of look” sounds like teenager speak. Do you have an opinion about me and my work or kind of an opinion?
What Chip Minty is really saying is that he dismisses the decades of industry experience that underlie the many technical articles that I and my colleagues have published on shale gas reserves and economics. If he had a technical rebuttal to our work, he would have presented it but his best shot is to say that I am a dinosaur. Touche, Chip. That really gets to the heart of the problem!
His company and the industry have recklessly over-produced large volumes of natural gas at a price that is not commercial for anyone. The headlines about Chesapeake Energy and its problems over the past week show that shale gas investments are not profitable.
I am used to the personal attacks by shale gas defenders. If they had anything to say about the real issues of lack of profit and shareholder equity, they would.
Who is the dinosaur in this debate?
3 Comments
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Mr. Berman:
I have been folliwng you on Shale as for a while. As a physics student I agree with most of your views.
The step decline of shale gas is most intriggering to me. What is your phycics model of such step decline? It contradict with other natural resource production, like oil or conventional well. In teh conventional case you start with high production and virtually no decline. Decline only begin to kick in as the resource begins to deplete, and decline rate accelerate until it reaches a peak yearly decline rate and remain there till the complete depletion.
Shale gas seem to be the conplete opposite, starts with a step decline and then the decline de-cellerate. This seem to suggest that the decline is NOT related to resource depletion, but related to the LOSS of effectiveness of an artificially introduced effect: the fracking.
I am wondering how effective fracking can be, from basic physics principle. What’s the typical amount of water injected for fracking? Assuming 5M gallons of injection, the water could occupy a sphere of radius of 16.5 meter. Assuming the water occupy just 1% of the volume of the rocks, it may penetrate as far as 4.65 times further, or 76.5 meters away from the well bore.
Some claim the fracking can reach as far as 2000 feet away from the well bore. I find that incredible. For 5M gallons of water injection to reach that far, it means water is queezed so much that it only occuoy 20 pars per million of the space, but yet some how this little bit of water is enough to crack the rocks!
Please comment!
Mark,
Most unconventional reservoirs produce more than half of reserves in the first year and perhaps 70-80% of reserves in the first 3 years. This is because most production and storage is in fractures instead of in pore space with conventional rocks.
Fracking is quite effective at increasing rates and reserves in the short term. It is unclear that fracking has a long-term effect on commercial production. While it is true that individual fractures can extend quite far from the well bore, if these are not well connected with other fractures, the result is not necessarily beneficial except in the short term.
I think that a lot of the debate about fracking is a red herring based on lack of understanding. Fracking is an industrial-scale process and accidents happen. I am more concerned with above-ground issues with fracking than below-ground issues.
Art
Art, it occurs to me that Minty’s comment makes as much sense as the Pickens Plan. No one wants to face the uncomfortable fact that liquid petroleum provides 90% of our transport fuel and NGLs are not a 1:1 substitute for conventional crude. Magical thinking about NG financially or chemically does not reverse the problem of peak oil.
We’re currently engaged as geoscience consultants in the (long delayed, now rushed) Central GOM lease sale. Bids, prospects, and implicit drilling costs are plumb crazy. No one has any real confidence that it’s worthwhile to explore 30,000 ft subsea, with or without “partners” or rigorous geoscience. They’d rather not face facts. Strictly a question of grabbing a block or two, instead of letting it go unchallenged to one of the majors.
HY credit is powering the frenzy.