Author Archives: Andrew Soto

On the final day of the conference, we were treated to a tour of gas production facilities in the Barnett Shale, compliments of Chesapeake Energy.  We didn’t need to go far, just over to the Dallas Fort Worth Airport.  That’s right, there’s a completed wellhead producing about 400 Mcf of natural gas right at the intersection of a couple of runways at DFW.  They had drilled down just shy of 8,000 feet, then horizontally out about 6,000 feet right under the runways.

The footprint now is fairly small.  In addition to the wellhead, there is a small building and tower for the SCADA and automatic shut-off control facilities, a few tanks for the water that comes back out of the well, and the interconnection for the gathering pipeline that takes the natural gas to the custody transfer station with Atmos.  The return water is quite salty. They dispose of it in a salt water disposal well they had drilled a few thousand feet down.

From there, we headed over to a site where they were actually drilling a well.  It was located in a commercial/light industrial section near the airport. They had erected 16 foot sound barriers, but the rig rises 145 feet into the air, clearly visible from the street.  The use the same drill pad to drill anywhere from 8-24 horizontal wells.  Once, they complete a lateral, they move the rig a few feet and drill a new well bore for a lateral a few degrees in another direction, like the spokes of a wheel.

It’s amazing how much can be produced from such a small footprint.

Editors note: We’re including some photos from the event with Andrew’s post. Enjoy and let us know if you were there in the comments below.

The most memorable line from the opening remarks for the World Shale Gas Conference & Exhibition came from our own Board Chairman, Bob Skaggs.  In his opening address, he said, “gas is good, and shale gas is very good.”  The message, both simple and concise, resonated among the delegates and sparked interest in getting the word out to energy policymakers around the globe – that natural gas can help solve our energy and environmental concerns.  A consistent refrain I hear among the delegates is why the U.S. government doesn’t do more to promote the use of natural gas  given its environmental attributes.  As a low-carbon, low-cost, ubiquitous fuel, natural gas is well-positioned to meet energy demand in ways that can help reduce current greenhouse gas emissions, not potentially or years from now, but today.

The abundance message is beginning to build momentum.  As Rick Smead, from Navigant, noted, the Society of Petroleum Engineers recently reported that there are over 16,000 Tcf of shale gas resources globally and that North America has more of it than anywhere else in the world, over 3,600 Tcf.  He also noted that while only about one-quarter of those resources are currently technically recoverable, advances in drilling and recovery methods will, over time, unlock more and more of that resource base.

So, why aren’t we using natural gas more – to heat more of our homes and businesses, as a low-carbon fuel to generate electricity, to integrate intermittent, renewable resources, and as a transportation fuel for fleet and person vehicles, for ships in port, for long-haul trucks, etc.?  One of the key take-aways from today’s sessions is that it’s time for the industry to focus on the demand side of the equation – to look at ways to increase demand for natural gas.  AGA is involved in a number of efforts to do just that.  And, we have a great message from our Chairman – “GAS IS GOOD.”

On Tuesday, the day before the conference official opened, I attended a master class on legal and regulatory issues in bringing shale gas to market.  Issues ranged from severance and property taxes on produced gas and gas held in storage, reporting requirements for fluids used in hydraulic fracturing, regulation and restrictions on water use in hydraulic fracturing, as well as the strategies and regulations in dealing with interstate pipelines to transport the produced gas.

Interestingly, it was the tax portion that touched off some of the most interesting discussion.

Who owns the gas?

Depending on where you are in the country, the mineral rights to produce natural gas found under the ground could be owned by the Federal government, the state government, or a private landowner, and in some cases a surface owner would not own the mineral rights for gas found under the property he or she holds.

I had an interesting conversation with a delegate from Poland who was surprised at the land ownership structure in the United States.  Apparently in Poland, land is held by private landowners, i.e., the government does not generally own land; however, the landowner essentially owns only the surface rights, and government does own the mineral rights.  The delegate was describing how difficult it is to build pipelines to bring produced gas to market.

With so many landowners to negotiate with and few tools such as eminent domain, I can only imagine the challenges in trying to get infrastructure built there.

Here in the United States, we should count our blessings.  While there are difficulties and challenges in working with various landowners, for the most part the climate for building natural gas infrastructure is favorable.

We have all benefited from the tens of thousands of wells, thousands of miles of pipelines, and hundreds of Bcf in storage capacity that have been built even in the last decade.  Our natural gas infrastructure provides a solid platform for meeting growing energy demand in an environmentally responsible manner.  It’s helpful to be reminded of that every once in a while.