US E&P keeps boosting productivity at shale wells

Consol Energy, the largest holder of gas acreage in the Appalachia, continues to find ways to improve the productivity of its gas wells. (source: Al Greenwood)

Focus article by Al Greenwood

PITTSBURGH, Pennsylvania (ICIS)–Exploration and production (E&P) companies are still finding ways to improve the efficiency of their gas wells in Marcellus and Utica formations in the Appalachian region of the northeast US.

This part of the country is now responsible for a significant portion of the nation’s shale gas production, said Tim Dugan, chief operating officer of Consol Energy. He made his comments during an interview with ICIS.

Consol holds the largest acreage of Appalachian gas, with 1.4m acres (570,000 ha), Dugan said. Shale gas production is still relatively recent for the region, having started in the second half of the previous decade.

With that, Consol is still finding ways to increase the efficiency of its wells, Dugan said. In the past two to three years, the quality of its wells have increased by 30-50%, he said.

“We’re still getting better in the Marcellus, and we’re just learning the Utica,” Dugan said. “Everything has gotten better.”

Consol has also found ways to reduce well costs. E&P companies employ hydraulic fracturing – or fracking – to extract gas from shale formations. The process requires millions of gallons of water.

In fracking, additives are mixed with the water to improve its flow down the wellbore. In the past, the water needed to be fresh for the additives to work properly. New additives have since been developed, allowing E&P companies to re-use fracking water, saving the company money on shipping and disposal fees, Dugan said. Disposal fees themselves can cost $3-4/bbl.

Companies have also used waste water from mines, power plants and even beer breweries, he said.

Other gains have been just as meaningful, if not more difficult to measure. Because shale gas is relatively new, the Appalachian region was unaccustomed to the drilling rigs and other activity that comes with energy production.

For Consol, many of its wells are only hundreds of feet away from homes.

To make its gas wells less disruptive, Consol conducted noise surveys around its well sites before it sets up a rig, Dugan said. These surveys allow the company make drilling less noisy. In some cases, Consol has even built sound walls and installed sound blankets around the rig floor.

These kinds of steps can lower opposition to shale gas from communities concerned about noise and other disruptions caused by drilling.

Other steps that can make gas production more efficient could come from lessening the burden of regulations.

Pennsylvania State Senator Camera Bartolotta (Republican) said it could take companies in her state up to 180 days to get a permit for a well site. In Texas, she said the process can take one or two weeks.

Bartolotta, who is vice chair of environmental resources and energy, was speaking at an event held by INEOS, which is importing Marcellus ethane for two of its gas crackers in Europe.

For the chemical industry, gas production is important because it is an key source of ethane and other natural gas liquids (NGLs) the predominant feedstock for chemical companies.

Gas itself is both a source of power and a feedstock for methanol and ammonia.

By making wells more productive and less costly, E&P companies can help ensure that the chemical industry will have ample supplies of feedstock and energy in the future.