Hydraulic fracturing, or fraking, involves the propagation of fractures in a rock layer caused by the presence of a pressurised fluid, often to release petroleum, natural gas or coal seam gas.
Many such rock layers are in the form of shales and the US has the largest known deposits of oil shale in the world. According to the US Bureau of Land Management, the country holds an estimated 2500 gigabarrels of potentially recoverable oil, enough to meet US demand for oil at current rates for 110 years. Consequently the US leads the world in shale activity. One of its key sites is the Eagle Ford Shale (EFS) located in South Texas. The formation produces from various depths between 4000 and 14000 feet and is a booming shale play.
As IOGE went to press, the rig count at EFS stood at 275 with December 2011 setting up to be the most active drilling month in Eagle Ford's history. One company very active at EFS is Copano Energy. Commenting on the company's latest results, president and ceo Bruce Northcutt said, "We are making significant progress on our Eagle Ford Shale strategy as we complete and integrate the bulk of our 2011 projects, several of which have begun accepting volumes on a limited basis. We continue to see strong producer activity in the Eagle Ford Shale and when these projects are placed into full-service, they will have an immediate and positive impact on our distributable cash flow and distribution coverage."[Page Break]
Copano Energy's margins are growing as the company expands its footprint in the Eagle Ford Shale. Higher NGL prices along with increased throughput are the primary drivers for the increase.
Copano Energy is one of the most active midstream companies in the Eagle Ford Shale. The company operates assets and owns a 50 per cent interest in an Eagle Ford Gathering joint venture with Kinder Morgan. In total, the company has plans to invest more than US$500million in more than 1billion ft3/d of pipeline and processing capacity.
Development also continues apace at the Marcellus Shale in Pennsylvania.
At current rates, the Marcellus Shale formation could become the leading supplier of natural gas in the USs within a decade, according to a new report entitled: "The Pennsylvania Marcellus Natural Gas Industry: Status, Economic Impact, and Future Potential." Taken in tandem with projections released earlier in 2011 by the US Department of Energy, the report shows that the Pennsylvania Marcellus could produce approximately a quarter of America's natural gas by 2020.[Page Break]
Conducted by researchers at Pennsylvania State University and commissioned by the Marcellus Shale Coalition (MSC), the new study analyses production data and industry investments, as well as the overall economic impact natural gas development from the Marcellus Shale is having on Pennsylvania. The MSC is made up of representatives from companies active on the Marcellus shale, including Chesapeake Energy, Talisman Energy, Range Resources, MarkWest Energy Partners, Consol Energy, Chief Oil & Gas, EXCO Resources, Pennsylvania General Energy and XTO Energy.
"Just a few years ago, Pennsylvania relied heavily on other states for natural gas to fuel our economy. That dependence is no longer, though, as Pennsylvania is now a net natural gas exporting state," said Kathryn Klaber, president and executive director of the MSC. "And soon, the natural gas produced in Pennsylvania can help meet a quarter of our nation's demands. This is a truly remarkable milestone; one made possible by the dedicated efforts of the men and women who work each day to responsibly develop the Marcellus' clean-burning natural gas resources."
The study projects that Pennsylvania's Marcellus Shale has the potential to produce 17.5billion ft3/d of natural gas per day (6.4trillion ft3 annually) - representing nearly one-quarter of US annual natural gas production in 2020. This development could support more than 156000 jobs and generate US$12.8 billion in economic activity in Pennsylvania alone. By 2020, Marcellus development could support 256420 jobs and generate US$20billion in added value to Pennsylvania's economy.