Opportunities and Freight Transportation Needs from Marcellus and Utica in Ohio

Transcription

1 Opportunities and Freight Transportation Needs from Marcellus and Utica in Ohio Ohio Conference on Freight Toledo, Ohio September 20, 2011

2 Founded in 1990 to provide professional services for port, multi modal and economic development projects Recent experience with ODOT in MOV area including Utica and Marcellus research Transportation needs Economic impacts

3 General Outline Déjà vu - Oil and Gas in Ohio Major Energy Sources and Uses Natural Resources Marcellus and Utica Typical Exploration, Drilling, Production Materials Required

4 From presentation by Jerry James, Artex Oil

5 From presentation by Jerry James, Artex Oil

6 From presentation by Jerry James, Artex Oil

7

8 From presentation by Jerry James, Artex Oil

9 From presentation by Jerry James, Artex Oil

10 Major Energy Sources and Uses in the U.S.

11 Major Users of Energy in the US The major users are residential and commercial buildings, industry, transportation, and electric power generation.

12 Major Sources of Energy in the US The major energy sources in the US are petroleum (oil), natural gas, coal, nuclear, and renewable energy.

13 Natural Gas Consumption In 2010, the United States consumed 24 Tcf of natural gas in seven end uses: Electric power generation 7.4 Tcf (31%) Industrial 6.6 Tcf (27%) Residential 5.0 Tcf (21%) Commercial 3.2 Tcf (13%) Lease and plant fuel 1.3 Tcf ( 5%) Pipeline and distribution 632 Bcf ( 3%) Vehicle fuel 32.8 Bcf (<1%)

14 US Natural Gas Resources geology.com Tcf of proven dry natural gas; of wet gas reserves 2,543 Tcf of potential natural gas resources 862 Tcf of potential natural gas resources from shale Consumption: 24 Tcf per year 2,543 / 24 = 106 years supply of natural gas

15 Source: Dr. Bob Chase, Marietta College

16 Natural Gas Prices Dollars per Thousand Cubic Feet

17 Shale, Shale, the Gas is Here!

18 Shale Plays in the US Lower 48 States

19 Marcellus & Utica Shale Plays The Marcellus Shale is a carbon-rich sedimentary rock that lies 5,000 to 9,000 feet below the Appalachian Mountains from the Finger Lakes of New York across to eastern Ohio and into West Virginia. The Utica Shale is a rock unit located a few thousand feet below the Marcellus Shale.

20

21 Fracking Hydraulic fracturing, commonly referred to as fracking, allows natural gas producers to safely recover natural gas from deep shale formations. Today, through the use of hydraulic fracturing, combined with sophisticated horizontal drilling, extraordinary amounts of deep shale natural gas from across the United States are being safely produced. Hydraulic fracturing has been used by the natural gas and oil industry since the 1940s and has become a key element of natural gas development worldwide.

22 Marcellus Drilling Rig Marcellus-shale.us

23 Well Site During Active Drilling

24 Well Site During Production Phase Solar Energy Used to Power Glycol Injections to Prevent Freezing

25 2 x Cost with 3-5 x Benefits Hydraulic Fracking Frac Sand is pumped into a natural gas well during the fracturing operation. Combined with water, the sand remains in the fracture when pressure is removed, keeping the fracture propped open and allowing a good means by which the hydrocarbons can flow to the wellbore 25

26 Fracking

27 Over 1.3 million Fracking Wells in the US since 1948 EPA Administrator Confirms: No fracking water contamination At a U.S. House Oversight Committee hearing on May 24, 2011, EPA administrator, Lisa Jackson, admitted the environmental risk of hydraulic fracturing is practically nonexistent. I m not aware of any proven case where the fracking process itself has affected water, although there are investigations ongoing, she said.

28 Illustration of Hydraulic Fracturing (Fracking)

29

30

31 Frack fluid is 99.5 percent water and sand. Silica sand from Ottawa

32 Frack Fluid The other.5% contains chemicals that are used in everyday products such as cosmetics and swimming pool cleaners.

33 The Other.5 Percent Acid: Hydrochloric acid or muriatic acid. Helps dissolve minerals and initiate cracks in rock. Antibacterial agent: Glutaraldehyde. Eliminates bacteria in the water that produces corrosive by-products Iron control: Citric acid. Prevents precipitation of metal oxides. Breaker: Ammonium persulfate. Allows a delayed breakdown of frack gel Corrosion inhibitor: n,n-dimethyl formamide. Prevents corrosion of pipe Crosslinker: Borate salts. Maintains fluid viscosity Surfactant: Isopropanol. Increases viscosity of the frack fluid Friction reducer: Petroleum distillate. Minimizes friction Gel guar gum: Hydroxyethyl cellulose. Helps suspend the sand in water Clay stabilizer: Potassium chloride. Brine carrier fluid ph adjusting agent: Sodium or potassium carbonate. Scale inhibitor: Ethylene glycol. Reduces scale deposits in pipe.

34 How much water, sand and pipe is needed? Water - Approximately 5.6 million gallons per well (same as used every 8 minutes in New York City every day but the well is a one-time use) Sand Approximately 3 million pounds Pipe Approximately 320,000 pounds

35 How Much Does a Marcellus Well Produce? Horizontal wells with hydraulic fracturing produce more gas than traditional vertical wells. Some wells have produced over 8 million cubic feet per day during early production. According to Dr. Terry Engelder, PSU geologist, the range of production of Marcellus wells has extended up to million cubic feet per day. After a few months to a year, production is considerably lower but can extend several decades. The Marcellus might contain more than 500 Tcf of natural gas, with perhaps 10% of that gas (50 Tcf) recoverable. That would be enough to supply the entire US for 2 years and have a wellhead value of about 1 trillion dollars.

36 Well Site During Active Drilling

37 Well Site During Production Phase Solar Energy Used to Power Glycol Injections to Prevent Freezing

38 Number of Marcellus Wells Drilled in Pennsylvania ,045 wells (to 8/1/11) ,395 wells wells wells wells

39 Transportation Requirements Drilling Equipment Fracking Materials Water Sand Chemicals Pipe Raw Product Refined Product