Drilling and Fracking
Natural Gas Production from Unconventional Plays
Fracking (hydraulic fracturing) is a key part in the process of drilling and preparing many natural gas wells for production. Fracking was first used in 1908 and, since that time, over one million gas wells have been fracked in the United States.
Natural gas is a combination of hydrocarbons, overwhelmingly methane (CH4) with lesser amounts of other hydrocarbon gases, and meaningful to trace amounts of non-hydrocarbon gases 1 . Natural gas is produced from “conventional” and “unconventional”2 gas plays.
The explosive growth in the production of unconventional natural gas, primarily in the United States, over the past decade or so is directly related to the refinement of two technologies: horizontal directional drilling and hydraulic fracturing. These technologies have allowed the development of three unconventional natural gas sources: shales, coal seams and tight sands.
The reason for drilling and fracking a horizontal well is to expose as much of the production well as possible to the target shale, coal or sand horizon. In the vast majority of cases the units are near flat, so horizontal drilling is required. To maximise the flow of gas out of the target unit it is fractured to capture gas from as far away as 300 metres from the well and also to increase the flow rate.
There are two stages in drilling and preparing a drill hole or well for unconventional natural gas production from shales, coal seams and tight sands. First…
In brief, the drill hole (well) is commenced vertically and drilled to a depth below the deepest fresh water aquifer. The drill string is then tripped (pulled up to surface). Surface casing (steel tube) is run to the bottom of the hole and then injected with cement. The cement forms a tight seal between the outside of the casing and the surrounding rock. This protects the aquifers from any potential pollution and provides a pressure seal for the well.
Vertical drilling then continues until the hole reaches the kick-off, the point at which the hole will commence its turn to the horizontal. This is the target horizon, such as a coal seam or shale bed that hosts natural gas. In the case of shales, the vertical part of the hole could be one or two thousand metres below the surface casing.
The drill string is then fitted with a directional down hole drilling motor and measuring instruments to drill the horizontal part of the drill hole, known as the “lateral”. The lateral is drilled entirely within the target horizon.
Once complete the drill string is tripped again and an a second string of casing is run from the surface, inside the surface casing to the end of the drill hole and again cemented. This inner casing is cemented for the entire length of the hole.
This is an expensive business and requires arcane skill from the driller. Drill rigs are massive and can cost up to USD15 million each for deep drilling to depths of 3,000 metres or more. Each hole can cost up to USD3-4 million to complete to production.
Perforating and Fracking
At this stage the drill rig is either dismantled and moved to its next site, or idled while fracking is completed, before drilling another hole in an array on the same site. The additional holes are drilled to access more of the target horizon.
The first stage in fracking is perforation of the lateral casing. One or more tubes with a series of explosive charges are run down to the end of the lateral (the horizontal part of the drill hole) and detonated. This opens up small holes through the casing and cement into the target horizon. The integrity of both sets casing in the vertical part of the well is not affected by perforating the lateral.
The second stage is fracking. In essence this is the pumping of large quantities of very high pressure water (up to 10,000 psi), along with sand and chemicals, into the lateral. This is forced through the perforations and causes fractures in the surrounding rock. The sand is used to prop, or keep the fractures open, once fraccing is complete. These fractures then become the “pathways” by which natural gas reaches the lateral and ultimately the well head and thence the consumer.
Fracking is done in several stages with each stage having a different composition. Wells are also fractured again when the gas flow wanes.
The fractures extend up to 100 metres from the lateral in coal seams and up to 300 metres in shale. In the United States fracking is not recommended within 600 metres of sensitive units such as aquifers.
Drilling and fracturing the average horizontal shale gas well in the United States requires around 15 million litres of water. This seems a lot but is only about 7 litres per million British Thermal Unit 3 , which is substantially less than required to produce the same amount of energy from coal.
While some of the fracking water remains underground, up to 80% is returned to the surface. Although some of this water can be re-used in drilling future wells on an array at the same site or at a nearby site, most needs to be disposed of. This is a significant issue as the water contains associated gases and fracking chemicals that can be polluting. In addition, drilling such deep holes requires a substantial volume of drilling mud, which must also be disposed of, typically by pond evaporation and disposal of dry solids at landfill sites.
Water and sand make up about 99% of the fracking fluid, with the balance being chemicals. There are potentially a hundred or more chemicals that can be used in fracking. The chemical suite is usually specific to a particular drill hole, depending upon the geological characteristics of the target unit, depth, etc.
Chemicals used in fracking include acid to initiate fractures, biocides to eliminate bacteria, gelling agents to carry and keep sand in fractures, breakers to prevent gel breakdown, clay stabilisers, corrosion inhibitors, cross linkers to maintain fluid viscosity, friction reducers, iron control agents, pH adjustment agents, non-emulsifier agents, scale inhibitors and surfactants to increase viscosity.
Most chemicals used in fracking are not harmful. Many are also found in the home or used in the food industry and other manufacturing processes.
Fracking technology has the potential to completely change the world’s balance of supply and demand for energy. It has already led to low gas prices in the United States (probably too low but this will come into equilibrium) and developments for the export of liquefied natural gas. China is now looking to develop its shale gas fields, possibly with the help of American technology, as are a number of other countries. The highly politicised issue of the development of shale gas fields will be explored in detail in forthcoming commentary.
This commentary is a primer, if you will, for subsequent commentary on coal seam gas and shale gas. It is necessary to understand all aspects of fracking to better understand the potential risks to investment in this game changing sector of the energy market.
The other hydrocarbon gases are ethane (C2H6), propane (C3H8) and butane (C4H10). The non-hydrocarbon gases are carbon dioxide, oxygen, nitrogen, hydrogen sulphide, and the halogens (argon, helium, neon, xenon).
Conventional natural gas deposits are those that are easily and economically exploited. Unconventional natural gas is that which is more expensive and/or requires advanced technology to extract. Thus, over time what was once unconventional can become conventional.
Measurement of natural gas is complicated and characterised by very large numbers. The basic measurement is volume, either metric or imperial: 1.0 cubic foot = 0.2831cubic metres. The next measurement is energy, either British Thermal Units or megajoules: 1 megajoule = 948 Btu’s. Finally converting volume (or weight) to energy requires knowing the energy content of the gas. In Australia, natural gas is typically around 40 megajoules per cubic metre.