Shale gas technology improving

It was in the shale of north-central Texas around the beginning of this decade that huge technological leaps ushered in a new era for North America’s natural gas industry.

CALGARY — It was in the shale of north-central Texas around the beginning of this decade that huge technological leaps ushered in a new era for North America’s natural gas industry.

The Barnett Shale was the testing ground for many of the techniques firms are using today to tap into bountiful, but tough-to-access, natural gas reservoirs throughout the continent.

Now producers are working on tailoring the technology to adjust to the particular nuances that come with other emerging areas, like the Horn River Basin in northeastern British Columbia or the Marcellus in Pennsylvania.

“We’re at a quantum change in terms of natural gas exploration and development within North America,” said Mike Dawson, executive director of the Canadian Society for Unconventional Gas.

“There’s an awful lot of gas out there now, available for companies to explore.”

The Barnett was a tough nut to crack.

Companies had been drilling in the massive formation, which encompasses 17 counties in Texas, since the early 1980s, but had limited success. It wasn’t until around 2002, that the region took off with the use of horizontal drilling technology.

Now the Barnett is likely the most prolific on-shore natural gas field in North America, containing an estimated 26 trillion cubic feet of natural gas.

Horizontal of wells start out the same way as a traditional vertical one, but a portion of its drilled along a horizontal plane.

“You’re accessing more of the rock that contains the gas,” Dawson said.

Another technology that has helped unlock unconventional gas plays is multi-stage fracturing, in which water, sand and chemicals are injected into the ground at high-pressure to essentially break the rock and free the gas.

The “multi-stage” element means gas can flow out along the whole length of the well bore, as opposed to from just one spot.

The technology has been improving continually over the years.

In the beginning about 10 to 15 per cent of the gas trapped in the Barnett could be recovered. Now as much as 40 per cent of the gas can be accessed in some places.

The big challenge continues to be costs, said Dawson.

“The economics of these plays are pretty skinny at the best of times. They really are low-margin plays that work because of the economies of scale,” he said.

“And so the companies have to try to figure out how they can squeeze that extra dollar out of the drilling costs.”

Calgary-based EnCana Corp. (TSX:ECA) is one of the continents biggest natural gas producers. It recently spun off its oil business into a new company called Cenovus so that it can focus exclusively on developing its mammoth unconventional natural gas reserves.

About three or four years ago, workers would have been “high-fiving” at the prospect of drilling a well that made $5- or $6 million, Eric Marsh, a vice-president with the company, told a natural gas conference last week.

“If you would have told me three years ago that shale wells would be making $20 million a day, I would have just shook my head. I just can’t hardly believe that, and that’s what we see almost every day.”

CORRECTION:

This story erroneously reported that EnCana Corp. (TSX:ECA) vice-president Eric Marsh said a natural gas well that used to make $5 or $6 million could now make $20 million. In fact, he was referring to how many millions of cubic feet of natural gas wells are able to produce a day.

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