Sometimes you have to love the big corporation, not often, but sometimes there are breakthroughs. ExxonMobil’s Randy Tolman, the company’s project coordinator for the Piceance Basin has invented a new method of fracturing, or “fracing,” the underground layers of rock and sand to unlock natural gas. ExxonMobil aims to export the new process to the unconventional natural gas reserves it is accumulating around the world. Drilling for more natural gas should make Exxon a lot of money as Americans demand cleaner fuel because natural gas doesn’t emit as much pollution or greenhouse gases as oil and coal when burned. Internally ExxonMobil is said to forecast that natural gas demand will rise 50 percent by 2030 and outstrip demand for coal. They may well be right.
Exxon Mobil chief executive Rex Tillerson said during an analyst meeting earlier this year, “Clearly, we anticipate that natural gas will grow much faster than oil or coal. So we see a pretty healthy demand out there in the future for natural gas globally, but even here in North America.” Agreed, the natural gas is there, and Exxon is busily figuring out ways to cut those costs, which is the point of today’s post.
In the 1980s, frac jobs could take months. Currently a complicated well frac typically takes a couple of weeks. Backed up by ExxonMobil, Tolman developed a method to fracture a Piceance Basin well in only three days, and he thinks he can compress it to 24 hours. The key is to conduct every activity simultaneously.
Tolman persuaded his colleagues to experiment in the face of everyone thinking that such an undertaking was impossible.
In the 1980s, Tolman noticed something strange while working on a natural gas well in La Barge, Wyoming. Natural gas was flowing out of the well without pushing out or damaging the sensing and control wire that operators had dropped into the well. Years later, while descending an elevator at ExxonMobil’s corporate building in Houston, Tolman had an idea. Why not use this phenomenon to perform simultaneous functions on a well? So that’s exactly what he is doing in Colorado’s Piceance Basin.
At the Piceance Basin well sites workers position the wire in the well. The carrier water is valved to flow and the pressure is built up. The frac specialists then prepare to shoot electronic pulses from the wire. They watch colorful computer screens to monitor pressure created by pumping a mixture of water the sand and chemicals into the well. When the pressure is just right, they shoot a frac gun to punch out a hole through the well pipe into the rock. That’s when the rush of pressure splits open rock fissures and the sand flows out to fill the fissures with special chemical compounds to clean and preserve the work. When the fracture is compete, they flow rubber balls into the pipe well to plug the newly shot frac holes, and immediately repeat the process.
All the while specialists are watching those monitors connected to the wire. Knowing when to shoot, how long to flow water sand and chemicals and just when to stop and flow in the rubber balls to stop the action comes from the experience that makes this kind of thing work.
Tolman’s team will fire the frac gun as much as seven times a day or more. While one gun is shooting the first well, they will load the second gun for well No. 2, back and forth, so that the men and the equipment are constantly working. But there is lots more going on. Men bring and move the materials, operate pumps and monitor little red lines on computer screens. The work jobs must happen simultaneously, in a carefully orchestrated ballet, to keep the well costs low — and profit high enough — to be worth the effort of the country’s largest oil company.
ExxonMobil has drilled 10 holes in the Piceance (pronounced PEE-awns) Basin, five of which already produce natural gas. The company’s rigs don’t have to be reassembled between wells. Instead, the drill can move horizontally and laterally to reposition. This speeds the process and cuts the cost of rig crews.
ExxonMobil controls the sweet spot on the Piceance Basin land owned by the Bureau of Land Management. Plenty of other natural gas producers operate wells there, too. And ExxonMobil has Halliburton employees working on a contract so the know-how is sure to spread, an old oil patch tradition of sharing what works.
It matters, as natural gas is the go to fuel for any transition of the energy and fuel market. It will take years to recreate an energy system in the U.S. no matter what the politicians and media followers want you to believe. With innovations adopted by ExxonMobil and shared more of the new drilling technologies the U.S. has plenty of natural gas. According to the Energy Information Association, proven U.S. natural gas reserves in 2007, the most recently available data, have risen by one-third to 237,726 billion cubic feet just since 2002, as the new techniques were becoming popular.
Last summer natural gas prices rose above $13 per thousand cubic feet while today natural gas future prices trade well below $4 per thousand cubic feet a much bigger drop than crude oil.
ExxonMobil began a significant Piceance Basin expansion in 2007, after scientists developed better drilling and fracing methods that could make the operations profitable. Exxon now operates seven rigs in the Piceance Basin and produces 100 million cubic feet a day. Project executives have said the company could eventually increase to 1 billion cubic feet a day. With interests on 300,000 Piceance acres, Exxon Mobil is holding enough gas to heat 50 million homes for a decade.
Many, “experts” reporters and others will say there is an energy shortage usually in the form of something like peak oil. But when you look a little deeper its clear that innovation, creativity and an open corporate culture to some experimentation can have a big result. It may seem an ExxonMobil benefit, but all those new reserves mean that consumers can count on supply at reasonable prices for a very long time to come.