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Oil and Gas Roundup — August 30

August 30, 2013
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

Texas company forgoes water in hydraulic fracturing

The use of one precious fluid — water — to recover another — oil — chafes in dry country. Rivers and groundwater are receding in Texas for lack of rain and over-pumping just when the demand for water in new oil and gas fields is growing.

Now one exploration and production company in San Antonio is fracturing its wells mostly without water, using gas liquids instead, in a practice that’s beginning to spread.

BlackBrush Oil & Gas LP is using a butane-rich mix for fracking after being confounded by many of the same obstacles other energy companies face in buying, moving and disposing of large amounts of water.

“Ranchers don’t want to give up their water,” said Jasen Walshak, production manager at BlackBrush.

The term gas liquids refers here to three fluids — propane, butane and pentane — that occur together with natural gas. They’re extracted from natural gas and sold, mostly as fuels.

Switching to gas liquids also seems to reduce controversy for BlackBrush.

“People don’t see water transfer lines all over the place,” Walshak said, referring to the yards and miles of pipe that move water from rural wells to oilfield tanks and rig trucks.

In the U.S., oil and gas fracturing is done almost entirely with water-based fluids. Fewer than 5 percent of jobs were done with other fluids in 2012, said Mukul Sharma, a professor of petroleum engineering at the University of Texas Center for Petroleum and Geosystems Engineering.

Read more:

'Acidizing' could rival hydraulic fracturing in oil exploration

Hydraulic fracturing hasn't unleashed an oil production boom in California, at least not yet.

Could acid?

Companies trying to pry oil from a vast shale formation beneath Central California have been pumping powerful acids underground to dissolve the rock and free the petroleum within.

And there are hints that the process, known as "acidizing” a well, may work better than hydraulic fracturing in California's Monterey Shale, estimated to hold 15.4 billion barrels of oil.

“There's a lot of discussion around the Monterey Shale that it doesn't require fracking, that acidizing will be enough to open up the rock,” said Chris Faulkner, chief executive officer of Breitling Oil and Gas. “I think it could be a way to unlock the Monterey. And people need to understand that this is a huge resource that could mean a lot of jobs.”

For all its potential, acidizing in California remains a bit of a mystery. State regulators don't keep tabs on how often oil companies use the process. Nor have they studied its potential risks in depth.

Most oil companies will say little in public about acidizing. They don't want to reveal too much information to their competitors, each of which has its own methods and chemical formula. They also don't want to draw the attention of the state's powerful environmental lobby.

Read more:

CNBC’s Cramer makes the case for hydraulic fracturing

The environment is harmed in some fashion every time energy is produced, but we need to get our energy from somewhere, Jim Cramer said Tuesday.

“It's a fact of life,” he said. “You can't get energy without doing some damage.”

The “Mad Money” host was reacting to the story in the Wall Street Journal on the dangers of fracking, which claims fracking is causing tremors in the Eagle Ford Shale.

Cramer said he isn't advocating a “drill baby drill" mentality, but instead is being a realist.

Importing oil and gas from other countries also has consequences. For example, he noted, Middle East countries have ideological differences with the U.S. and oil money has, at times, been used to finance terrorism.

“Energy independence allows us to have far more freedom of action to defend ourselves,” Cramer said. “It also improves our trade balance. It creates a huge number of jobs,” Cramer said.

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Texas seismicity “not dangerous,” not due to hydraulic fracturing

A new research paper from the University of Texas at Austin examined seismicity in the Eagle Ford of South Texas and — contrary to what you may have read — the authors concluded unequivocally that it was not due to hydraulic fracturing. 

As lead author Cliff Frohlich put it, “Although there is a considerable amount of hydraulic fracturing activity in the Eagle Ford, we don’t see a strong signal associated with that and earthquakes.”

The authors emphasized that the seismicity appeared to be more closely linked to oil and fluid extraction, as opposed to injection (i.e. “fracking” and/or wastewater disposal).

The researchers also importantly emphasized that the seismic events should not trigger anything approaching red alert levels of fear. Again, according to author Cliff Frohlich, “I don’t think people should be hugely concerned because of the huge amount of production and injection we’ve had in Texas. If it were a big problem, Texas would be famous for all its earthquakes.”

He added that “this is a phenomenon that we need to understand, but it’s not appropriate to say it’s vastly dangerous.”

Of note, San Antonio Express-News reported that there were no injuries or significant damage, and most of the tremors in South Texas have been “too small to feel.”

Read more:

Turning Eagle Ford well water into drinking water

There’s a lot of talk of treating and reusing water in the oil field.

Now Purestream Services says it has won a contract from a gas producer in the Eagle Ford Shale region to treat wastewater at a centralized facility near Gonzales.

The facility was built to accommodate water from shale wells — both the water that returns up a well after hydraulic fracturing and the water that comes out of the shale rock itself.

Treating wastewater near the well sites lowers the cost and limits the traffic and environmental impact of trucking water to disposal wells that may be far away in other counties, the company said.

“Oil and gas producers are looking for cost-effective water treatment processes that reduce the long distances required to haul water for disposal,” said Purestream CEO Neil Richardson in a press release.

Purestream, which is based in Salt Lake City, uses two technologies.
The induced-gas flotation technology “clarifies water by removing hydrocarbons and total suspended solids to below 10 (parts per million).”

The AVARA Vapor Recompression System “removes chlorides and total dissolved solids from the wastewater to below 300 (parts per million).
The treated water can be discharged and is “cleaner than U.S. drinking water quality standards.”


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