America’s oil and gas boom was brought on by hydraulic fracturing, commonly called “fracking” and horizontal drilling. These methods of drilling, developed in Texas, unleashed historic amounts of fossil fuels in previously inaccessible shale formations across the country.
But recent research from the University of Texas suggests that many wells using these techniques will see a sharp drop in production after some years of use.
Tad Patzek is chair of the Department of Petroleum and Geosystems Engineering at UT Austin. He was part of the study published in the Proceedings of the National Academies of Sciences, and he sat down with StateImpact Texas to talk about it.
STATEIMPACT: The formula that you have indicates that there will be a steep decline in some of these wells, and obviously that has potentially major implications for the economy. What do you mean when you say you’re predicting some declines?
PATZEK: Well, it’s not me that’s predicting the declines, the declines are real. So these wells can produce at low rates for probably 25, 30 years. But in order for us to get the very high rates we need to run our economy, we need to drill more and more of them. So the question is, can we drill enough of these initially high-producing wells to offset the declines of the older wells?
For the time being, we have been winning this game by drilling massive numbers of wells, but with time it will be more and more difficult. So the production, after a while, will decline ultimately. And we as a country have to understand that this is inevitably going to happen.
STATEIMPACT: There’s a massive amount of excitement in the oil and gas sector around fracking. Do you feel like the industry is taking note of this type of research? Are there wells out there that drillers expect to keep producing to current levels that very well may not?
PATZEK: It’s difficult for me to speak for the industry. It’s a very large industry, with all kinds of people working for it. I would say that most people I talk with are very acutely aware of the problems of maintaining high rate of constant production. But the U.S. public has to realize that this is done at a very high cost.
The industry is spending literally hundreds of billions of dollars on drilling and infrastructure, and it also interferes now more and more with daily lives of people. Drilling is coming to your neighborhood, and most people abhor the thought of having somebody drilling a well in their neighborhood. And hence all of the problems in Pennsylvania and upstate New York and elsewhere.
STATEIMPACT: Because at the dawn at this era of hydraulic fracturing, we heard a lot of predictions about this close to inexhaustible resource. But the formula we’re talking about today seems to underscore that it is not inexhaustible, and that it in fact may decline steeply after a given amount of time. Does a formula like this throw some of these predictions into question?
PATZEK: Yes, it does. But I think that you just raised a far more important point. The destinction between resource and production. See, we don’t care about resource, the resource can be infinite. But if we cannot produce it at a high enough rate it doesn’t matter to us. So, if I were dripping oil from a reserve well for a thousand years one bucket a day, it would not be of great utility to me.
STATEIMPACT: And at what cost? We could have as much energy as you could imagine, but if its too expensive to extract, then…
PATZEK: And when you say its too expensive, it’s not only too expensive in terms of money, but its also too expensive in terms of energy injected, so to speak, or used to recover energy.
Still, natural gas in the US is a very positive net energy gain. It produces dozens of times more energy than you put into the system, but the cost is substantial. I just calculated roughly what is the cost of drilling all these horizontal wells in Texas, Oklahoma, Pennsylvania, Louisiana and Arkansas. That’s about $240 billion over the last five years.
STATEIMPACT: There’s a lot of talk about exporting natural gas now, and if we begin to see the declines you’re describing, where you need to drill more and more in order to maintain your production, that would complicate plans to export, right?
PATZEK: Who am I to say? I am generally against exporting natural gas. I think that natural gas is an absolute treasure that our country has, and this treasure gives us a chance of revitalizing our economy. And in fact bringing up life standards of people quite substantially. So that’s a very serious question that we need to ask ourselves: Do we need to make a profit today? And we can, and it will happen. Or do we slow down in making profit? Now, did I say a heresy? But it would maintain wealth for much longer.
In a world in which energy is expensive, access to a reliable source of energy may make the difference between a successful economy or a very unsuccessful economy.