Utica shale wells are very deep & expensive
Looking at the WVU Assessment of Technically Recoverable Gas in the Utica Shale
From an Article by David Hughes, Post Carbon Institute, July 21, 2015
Last week, members of the media breathlessly reported—based on a new study published by West Virginia University (WVU) entitled A Geologic Play Book for Utica Shale Appalachian Basin Exploration—that the Utica Shale could hold more recoverable gas than the Marcellus, the largest shale gas play in the country.
The “Play Book” provides an interesting roundup of geological data on the Utica and associated shale units. However the sensational claim that these units contain a mean resource of 782 tcf (trillion cubic feet) of “technically recoverable” gas, 1947% higher than the USGS estimate of 38.2 tcf made in 2012, has little credibility.
Of course, one can get any “technically recoverable” resource numbers one wants, depending on input assumptions. Critical assumptions for the gas estimate are:
- Area assigned to sweet spots and non-sweet spots.
- Drainage area of individual wells.
- Estimated Ultimate Recovery (EUR) of wells.
- Success ratio of wells.
Typically these are expressed as a range. In the case of the USGS assessment they are characterized as “minimum”, “mode”, “maximum” and “mean”, and in the WVU assessment variably, when they are stated, as “minimum, medium, maximum” and “minimum, mode, maximum”.
Given that “sweet spots” comprise 99% of WVU’s purported technically recoverable resources, only the sweet spot assumptions are reviewed below in a comparison between the USGS and WVU assessments.
Area assigned to sweet spots
Whereas the USGS assessment provides a quantitative estimate of prospective area, the WVU assessment provides only a map, with a much larger proportion of the total area assigned to “sweet spots” than the USGS.
Drainage area of individual wells
The USGS assessment provides estimates of well drainage area which allows the calculation of the number of wells required (a mean of about 4.3 wells per square mile). The WVU assessment provides no information on its assumptions.
Estimated Ultimate Recovery (EUR) of wells
For the oil part of the WVU assessment, WVU at least provides some cumulative recovery curves to back up its oil EUR calculations. For the gas assessment the WVU assessment provides nothing more than a map of cumulative recovery of wells drilled to date, none of which have recovered more than 5 bcf (billion cubic feet) and most of which have recovered considerably less than 2 bcf.
The WVU study then assumes every successful well will have a “medium” expectation of recovering 7 bcf over the entire area it calls a “sweet spot”, and a “maximum” expectation of 30 bcf (25 times the USGS “maximum” estimate). Although there are certainly a few very good wells, this is wildly optimistic and unfounded based on production data to date.
Success ratio of wells
Similarly the WVU assessment is optimistic on the success ratio of wells compared to the USGS, 95 percent compared to 85 percent.
Conclusions
The WVU assessment of technically recoverable resources in the Utica is incomplete as presented and wildly optimistic compared to the earlier USGS assessment and compared to likely well performance. Although the WVU report does provide a valuable roundup of pertinent geological data, its assessment of technically recoverable resources should not be viewed as credible.
Note: The USGS has indicated that after examining the WVU study, they stand by their own work.]
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Reaction to Utica Shale Study Mixed
From an Article by Jesse Wright, WV Public Broadcasting, July 16, 2015
A study released earlier this week about the potential of the Utica Shale formation was met with praise from the Consumer Energy Alliance. But the West Virginia Sierra Club doesn’t share that enthusiasm.
The Utica Shale Play Book Study says there may be 20 times as much recoverable gas and twice as much recoverable oil in the Utica Shale formation as was previously thought.
Brydon Ross was very excited to hear the news. “And it’s great news, it really is. It’s fantastic news, even if it’s 50 percent right,” he said. Ross is the vice president of state affairs with the Consumer Energy Alliance, a nonprofit group that bills itself as an advocate for energy consumers with ties to the energy industry.
“For companies and industries that are looking to invest in the Utica Shale area and all through Appalachia as well, I mean you’re talking about areas that really need the money and need the investment is right where a lot of this resource potential is, so we see this as nothing but positive,” he said.
The Utica Shale runs under parts of five states, including northern West Virginia and Kentucky, eastern Ohio, Pennsylvania and New York.
Some Sierra Club Concerns
Not everyone agrees that looking for more fossil fuels is the way to go. Jim Kotcon deals with energy issues for the West Virginia chapter of the Sierra Club. He says the emphasis on hydro-carbon extraction is misplaced.
“We cannot use all of the reserves we’ve already found without very serious adverse affects from climate change. And so if we’re going to control the increase in temperature from climate change, then finding more gas won’t help us,” Kotcon said.
Fracking Potential
The West Virginia Geological and Economic Survey in Morgantown was one of four state geological survey groups that contributed to the Utica Shale Play Book Study.
Michael Hohn is the Survey’s director. He said that eastern Ohio and western Pennsylvania could see new hydraulic fracturing well pads developed as a result of the new Utica Shale study. But because many fracking wells can be drilled on one pad and the fact that the Utica Shale formation lies below the Marcellus Shale in West Virginia, Hohn says companies can use existing well pads to tap into the Utica. “So, more wells in West Virginia, but the footprint will be similar to the Marcellus,” Hohn said.
But more fracking activity isn’t a good thing, according to Kotcon. He said the government isn’t doing a good enough job of regulating existing fracking operations. “As a result, many of the local communities, although they benefit financially, are seeing some very significant adverse effects,” Kotcon said. He said those effects include things like air and water pollution, increased truck traffic and the resulting damage to roads.
Ross disagrees. He said the fracking industry is being regulated properly. “You can have economic development, energy security without harming your environment. We think this study is nothing but good news for the people of the Utica Shale area as well, who frankly need the investment and need the jobs and the money,” Ross said.
Either way, it appears the energy industry is quickly moving toward natural gas. SNL Financial issued a report earlier this week that shows natural gas overtook coal as the top source of U.S. electric power generation for the first time ever in April.
See also: www.FrackCheckWV.net
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