76
known as “slickwater.” Mitchell developed hydraulic fracturing techniques that
introduced a small amount of shear into the shale, causing rough spots or “asperities” on the fracture walls to be offset slightly from one another to help prop the
fracture open. This allowed him to use less sand for proppant, saving money and
creating the “light sand frack” (Montgomery and Smith 2010).
Horizontal drilling and the staged, light sand slickwater frack began achieving
success in the Barnett Shale in the late 1990s (Montgomery et al. 2005). A Barnett
Shale gas drilling boom began in the Dallas-Fort Worth area, including quite a few
wells within the city limits of Fort Worth itself (Martineau 2007). A substantial
amount of drilling was done near the DFW airport, and many of these production
wells are visible from an aircraft window upon approach (Soeder and Borglum 2019).
Mitchell Energy was acquired by Devon Corporation in January 2002 for a cool
$3.1 billion dollars, and at the age of 84 George P. Mitchell finally walked away
from the Barnett Shale. He received a Lifetime Achievement Award from the Gas
Technology Institute on June 16, 2010 for his role in pioneering shale gas into an
economic resource, and for essentially creating the shale gas revolution. He died on
July 26, 2013.
The O&G industry does not keep secrets well, and word soon got out about
Mitchell’s success in the Barnett Shale. Southwestern Energy quietly acquired substantial acreage in northern Arkansas, and by 2004 gas production from the
Fayetteville Shale using Mitchell’s methods was booming. This was followed soon
afterward by development of the Haynesville, Bakken, Marcellus, Woodford,
Niobrara, Eagle Ford, Utica, and the stacked play in the Permian Basin. These ten
production plays of shale gas and tight oil represent the core of the fossil fuel revolution (Fig. 4.4). By 2013 the United States had become the largest hydrocarbon
producer in the world, finally putting an end to the energy crisis (Soeder and
Borglum 2019).
The economics of shale gas and tight oil depend on high commodity prices. The
cost of horizontal drilling and especially the staged, high-volume hydraulic fracturing (HVHF) operations required to produce hydrocarbons from these tight formations make the “break-even” price of oil and gas significantly higher than from
conventional well completions. Shortages of natural gas and petroleum drive prices
upward, creating favorable economics for HVHF treatments to produce hydrocarbons. Companies then rush in to take advantage of the boom, and the resulting glut
in production greatly increases the supply, causing prices to fall.
For reasons unknown, the energy industry always seems to be surprised and
unprepared when the bubble bursts, even though it is as predictable as a summer
thunderstorm. Many shale production companies have been left drowning in debt
from the collapse of prices brought on by their own over-production. This could be
understood if it was a one-time occurrence, but it seems to happen over and over
again on a regular basis.
4 The Energy Crisis and Unconventional Resources
known as “slickwater.” Mitchell developed hydraulic fracturing techniques that
introduced a small amount of shear into the shale, causing rough spots or “asperities” on the fracture walls to be offset slightly from one another to help prop the
fracture open. This allowed him to use less sand for proppant, saving money and
creating the “light sand frack” (Montgomery and Smith 2010).
Horizontal drilling and the staged, light sand slickwater frack began achieving
success in the Barnett Shale in the late 1990s (Montgomery et al. 2005). A Barnett
Shale gas drilling boom began in the Dallas-Fort Worth area, including quite a few
wells within the city limits of Fort Worth itself (Martineau 2007). A substantial
amount of drilling was done near the DFW airport, and many of these production
wells are visible from an aircraft window upon approach (Soeder and Borglum 2019).
Mitchell Energy was acquired by Devon Corporation in January 2002 for a cool
$3.1 billion dollars, and at the age of 84 George P. Mitchell finally walked away
from the Barnett Shale. He received a Lifetime Achievement Award from the Gas
Technology Institute on June 16, 2010 for his role in pioneering shale gas into an
economic resource, and for essentially creating the shale gas revolution. He died on
July 26, 2013.
The O&G industry does not keep secrets well, and word soon got out about
Mitchell’s success in the Barnett Shale. Southwestern Energy quietly acquired substantial acreage in northern Arkansas, and by 2004 gas production from the
Fayetteville Shale using Mitchell’s methods was booming. This was followed soon
afterward by development of the Haynesville, Bakken, Marcellus, Woodford,
Niobrara, Eagle Ford, Utica, and the stacked play in the Permian Basin. These ten
production plays of shale gas and tight oil represent the core of the fossil fuel revolution (Fig. 4.4). By 2013 the United States had become the largest hydrocarbon
producer in the world, finally putting an end to the energy crisis (Soeder and
Borglum 2019).
The economics of shale gas and tight oil depend on high commodity prices. The
cost of horizontal drilling and especially the staged, high-volume hydraulic fracturing (HVHF) operations required to produce hydrocarbons from these tight formations make the “break-even” price of oil and gas significantly higher than from
conventional well completions. Shortages of natural gas and petroleum drive prices
upward, creating favorable economics for HVHF treatments to produce hydrocarbons. Companies then rush in to take advantage of the boom, and the resulting glut
in production greatly increases the supply, causing prices to fall.
For reasons unknown, the energy industry always seems to be surprised and
unprepared when the bubble bursts, even though it is as predictable as a summer
thunderstorm. Many shale production companies have been left drowning in debt
from the collapse of prices brought on by their own over-production. This could be
understood if it was a one-time occurrence, but it seems to happen over and over
again on a regular basis.
4 The Energy Crisis and Unconventional Resources