Sidney Green Enhanced Production, Inc. & Univ. of Utah Research Professor

October 5, 2016

Midwest Energy Policy Conference

© All rights reserved Enhanced Production, Inc.

Natural Gas “Fracking” to Consumption “The Case for Game-Changing Changes

for Hydraulic Fracturing”

What does this mean?

“the ability to spring back into shape” -- elasticity

“the capacity to recover quickly from difficulties” -- toughness

Energy Resilience?

How do we know if we have Resilience?

What price do we pay for it?

The Conference Theme is “Resiliency”

“Everything you know about Peak Oil is wrong.” --------------

NY Times, Jan 2012

“We can now produce new found riches in natural gas while simultaneously

building a bridge to a low-carbon energy economy.” -----

Wall Street Journal, 2014

“Speed of innovation is very much faster in last ten years…….” -----

Tom Freidman & Bill Gates, NY Times Article, 2013

“Common sense is often the least common of the senses.” ---------

Neville Cook, UC Berkeley, 1993

“We will run out of air before we run out of oil.” --------------

Sid Green, Light-Hearted Comment, 1988 (before Climate Change discussion)

“We just drill a hole and the oil comes out.” ------------------

Frank Jungers comment to Sid Green, 1984

Some Famous Quotes

Background

Big Changes in the Last ~Decade

1. Deep Horizon Oil Spill

2. Japan Earthquake

3. “Arab Spring” impact on oil

production

4. Huge economic impacts of shale

gas/oil moving North America

toward oil/gas supply

independence

5. Shale Gas/Oil Production has gone

from a Hero to Somewhat of a

Villain

6.

US Drill Rig Count

1

2

3

Results to Date

Worldwide Oil Production “Breakevens”

Connection Between Oil

and Other Energy Sources

Hydraulic Fracturing

or

“Fracking”

Introduction—Hydraulic Fracturing

Introduction—Drilling the Well

Introduction—Hydraulic Fracturing the Well

Introduction—Completed Well

Improvements in Drilling & Fracturing Efficiency

2007 to 2015

Around 70% or more of

production in oil [or gas]

comes from 30% of the wells

drilled.

Production

Variability in

Every Play

The Case for Changes 10 microns

10 inches

The Case for Game-Changing Changes

First, hydraulic fracturing is absolutely essential for the Nation and for

the world, but it continues a “brute force” approach.

Second, hydraulic fracturing in the US and to some extent worldwide

has become a focal point regarding its environmental effects in

connection with the large ramp-up of gas and oil production for

unconventional formations such as the "shales".

Third, hydraulic fracturing has improved some over the past decade,

but mostly gains have been made in efficiency leading to cost

reductions.

Fourth, to date advancements have been made mostly by trial and

error, but understanding the science likely could offer big

improvements.

1. Recovery factor of gas/oil from the shales is low, really low

2. Because improvements have been strongly driven by cost reduction

interests, only very limited increases in recovery have occurred

3. Pad drilling, factory operations are moving forward and offer big changes

including reduced environmental impact, but have not impacted recovery

4. Industry now accepts in theory heterogeneity of the shales, but only limited

acceptance of the role of discontinuities (or as sometimes referred to as

“planes of weakness”), with relatively little understanding of the role on

fluid mobility

5. Services companies market conditions tend to drive the continued “brute

force” fracking concept

6. Insufficient understanding of the formation rock leads to surprises,

particularly in fracturing efficiency

Background Leading to my Conclusion

Environmental Issues

Sanish Bakken

Field

Environmentally

There are

Issues

1947

Today

The very large scale of the

operations.

The Biggest Issue

There are different interests involved

with different economic and

environmental impacts, and not all

share equally in the reward and not all

share equally in the sacrifice.

A Fact

In Closing

Source: BP, IEA, EIA, Barkleys, Morgan Stanley, Schlumberger

The Future

Questions

When speaking of energy, we often hear words

used like “clean”, “sustainable”, “innovative”,

“renewable” energy; that’s good, but I argue we

need “abundant” and “cheap” energy that is as

clean as possible and sustainable at least for the

foreseeable future