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Wednesday, June 18, 2014

Sandy, baby

Will the natgas industry be branded a fool (apologies - I couldn't resist) for using ever more polluting, dangerous, and impactful truck-intensive development practices?

Or will it use its enormous intellectual capital to achieve breakthroughs in safety, environmental impact, and public health protection? 

Those questions are raised by this article in the Pittsburgh's Post-Gazette's excellent Power Source section.  It reports on the "dramatic" increase in the use of sand in hydraulic fracturing to boost productivity in the Marcellus play.

“You’re seeing wells pumped now with seven, nine, 11 billion pounds of sand,” says the article.  That's surely a typo or an error by the individual quoted.  The "b" in billion is likely meant to have an "m" as in million - as the article goes on to say 3 paragraphs later that "the Marcellus will require more than 13 billion pounds of frack sand this year, up from 9.6 billion pounds last year. In 2015, that’s expected to increase to nearly 15.8 billion pounds." 

So, it's likely that Marcellus wells require upwards of 10 million pounds of sand per frack job.

That's a lot of sand.  

Two takeaways from this article.

First, the growing use of sand involves a growing number of truck trips per well. That bodes ill for local traffic safetylocal air qualitylocal governments and taxpayers - and for the industry.  As the article points out, "there's not enough trucks out there" to meet the sand demand.

Second, the industry continues to be resourceful in getting more gas out of every well. Indeed, according to the US Energy Information Administration, a Marcellus Shale well completed by a rig in April 2014 can be expected to yield over 6 Mcfg per day more than a well completed by that rig in that formation in 2007. That's a testament to not only the profit motive but some really smart folks in the industry. Which gives me hope that - if properly regulated and incented - the industry can dramatically reduce it's environmental and public health risks and impacts.   

The business case for sustainable unconventional natural gas development is growing by the day. States must develop nex-gen regulations that use business drivers to better regulate the practice and drive continuous improvement.

Will they? 

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