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Super Fracking Goes Deeper to Pump Up Natural Gas Production

As regulators and environmentalists study whether hydraulic fracturing can damage the environment, industry scientists are studying ways to create longer, deeper cracks in the earth to release more oil and natural gas.

Energy companies are focused on boosting production and lowering costs associated with so-called fracking, a technique that uses high-pressure injections of water, sand and chemicals to break apart petroleum-saturated rock. The more thoroughly the rock is cracked, the more oil and gas will flow from each well.

The world’s largest oilfield service providers are leading the search for new technologies, with some companies focused on splintering the rock into a web of tiny fissures, and others seeking to create larger crevices in the richest zones.

“I want to crack the rock across as much of the reservoir as I can,” said David Pursell, a former fracking engineer who’s now an analyst at Tudor Pickering Holt & Co. in Houston. “That’s the Holy Grail.”

More aggressive fracking may heighten concerns about the risks associated with shale development, said Kirk Sherr, president of Regester Larkin Energy North America, an industry consultant.

“If critics already think fracking is bad, theoretically, super fracking would be super bad,” Sherr said.

Photographer: Julia Schmalz/Bloomberg

Energy companies are focused on boosting production and lowering costs associated with so-called fracking, a technique that uses high-pressure injections of water, sand and chemicals to break apart petroleum-saturated rock. Close

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Photographer: Julia Schmalz/Bloomberg

Energy companies are focused on boosting production and lowering costs associated with so-called fracking, a technique that uses high-pressure injections of water, sand and chemicals to break apart petroleum-saturated rock.

Wider ‘HiWays’

The U.S. Environmental Protection Agency is studying whether fracking can contaminate water resources. The technique also has raised concerns about excessive water consumption because of the millions of gallons needed to frack each well.

Baker Hughes Inc. (BHI) has set its sights on “super cracks,” a method of blasting deeper into dense rock to create wider channels in order to funnel more oil and gas. The aim for the technology, branded “DirectConnect,” is to concentrate fracking power to target oil or gas buried deeper in the formation. The new product is being field tested by select customers, Rustom Mody, vice president of technology at Baker Hughes, said in a telephone interview.

Schlumberger Ltd. (SLB) has developed its own version of a super crack after six years of research. Called HiWay, it injects material to prop open wider pathways for the oil and gas to flow. The number of companies using HiWay in North America has grown from two a year ago to more than 20, the company said in October. Initial production at a well in the Barnett Shale was “significantly higher” with the technology, Chief Executive Officer Paal Kibsgaard told investors Aug. 30 at a Gleneagles, Scotland, energy conference.

No Seismic Impacts

Local officials in Texas, Oklahoma, Arkansas and Ohio are concerned about outbreaks of small earthquakes that have been occurring in areas where drilling has been accelerating. Seismologists have concluded it’s not the fracking causing the quakes. Rather, they found evidence it’s the injection underground of waste water from the wells that may change subterranean pressures in the rock, triggering tremors.

Jon Olson, an associate professor at the University of Texas in Austin who studies fracking, said he’s not aware of it causing any sizable earthquakes in the U.S.

Wider or deeper fractures won’t create bigger environmental problems, David Burnett, director of technology at Texas A&M University’s Energy Institute, said in an interview.

“The fracturing process is not causing the problems that are perceived by the public,” Burnett said. “No change in fracturing technology would change that.”

Concern in ‘Unknowns’

Most of the concern lies in the unknowns about the effects of fracking, Sherr said.

“How do you test a frack fluid that in and of itself is changing per well, per application, in terms of the various chemicals and other components,” he said. “This is a ferociously competitive business,” raising the possibility that some technology from smaller service providers “might not have been fully thought-through or tested prior to application in the field.”

New fracking techniques may not be any riskier than existing methods, said Amy Mall, senior policy analyst at the National Resources Defense Council.

“Just like any other type of fracking, we need a lot more independent scientific data and research to understand the risks and how best to prevent them,” she said in a telephone interview.

Schlumberger has said its HiWay technology provides environmental benefits by reducing water and sand use and the corresponding number of trucks delivering the materials.

More Finesse

Fracking, which has been around commercially since the 1950’s, hadn’t advanced much beyond “brute force and ignorance,” former Schlumberger Chief Executive Officer Andrew Gould said when the company acquired Smith International in February 2010. That’s now starting to change, he told investors on an Oct. 21 conference call.

The ability to tap into vast new oil and gas resources in shale formations is driving a wave of innovation to hone the technique and provide companies with a competitive advantage.

Halliburton Co. (HAL) is developing a plan it calls “frack of the future” that offers better technology to reduce the need for materials and labor for each well in addition to speeding up and increasing production, the company says.

To speed up the fracking process and reduce costs, Baker Hughes has developed disintegrating frack balls. Wells are fracked in stages, and companies drop down plastic balls to plug the well bore at various stages and isolate different zones for fracking. It can take several days to get a rig out to the site and fish out conventional frack balls used over the course of 20 or 30 stages in a typical well before production can begin.

Alka-Seltzer-like

Baker Hughes’s invention disintegrates, turning the balls into powder “like an Alka-Seltzer” tablet after about half a day, Mody said.

Halliburton’s contribution is called RapidFrac, a series of sliding sleeves that open throughout the horizontal well bore to isolate zones for fracking. Sliding sleeves are different from the other main type of fracking technique, which sends an explosive charge down the well bore to blast a hole in the casing. In both techniques, fracking fluid is then injected at high pressure through the hole, cracking the rock.

Sliding sleeves, which all three service companies offer, can cut costs in the Bakken from as much as $2.5 million per well to $750,000, according to a Sept. 19 investor note from JPMorgan Chase & Co. The Bakken is a geological formation that stretches from Alberta to the Northern U.S. Great Plains.

“We aren’t quite ready to call it a game changer considering its applications are limited to only a handful of basins,” according to the note written by a team led by analyst J. David Anderson. “But it clearly is one more tool that separates the big three service companies from everyone else.”

To contact the reporter on this story: David Wethe in Houston at dwethe@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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