Colorado Gov. Bill Ritter is at odds with Congresswoman Diana DeGette and other Democrats in Congress over the need for federal legislation to regulate chemicals used in hydraulic fracturing, a process used to improve the recovery of oil and gas from wells.

Ritter, reasonably enough, thinks DeGette's proposed legislation could be an impediment to the development of our natural gas and is largely unnecessary because new state rules address fracking chemicals.

We're with the governor on this.

Several federal studies under both Republican and Democratic administrations found no link between fracking chemicals and contamination of drinking water. That's why it was excluded from the federal Safe Water Drinking Act in the first place.

Additionally, Colorado's new rules for oil and gas drilling, specifically require drillers to keep records of the fracking compounds and make them available for state inspection upon request. Those rules have only been in effect for a few months. They should be given a chance to work.

Furthermore, it makes sense, as Ritter said he told DeGette, to let each state develop the rules it believes best suits its needs rather than adopt one-size-fits-all federal regulations.

DeGette, unfortunately, seems committed to pushing her fracking legislation, regardless of what the governor and local government officials in Colorado want.

Ritter, of course, angered many people in the energy industry and their supporters for pushing the Legislature to adopt a bill requiring the Colorado Oil and Gas Conservation Commission to adopt new drilling rules, then staunchly defending those regulations when the industry fought them.

The governor has been more conciliatory toward the industry in recent months, backing a number of measures aimed at boosting consumption of natural gas in Colorado.

How all this will affect Ritter's political future as he seeks re-election next years is tough to predict.

But we're glad to see Ritter is willing to stand up to a senior member of his party in Colorado, and tell DeGette that her fracking bill is the wrong prescription for this state.

http://www.gjsentinel.com/hp/content/news/opinion/stories/2009/07/13/071309_fracking_editorial.html

Exxon sees natural gas potential with new drilling technique

09:17 AM CDT on Sunday, July 26, 2009

RIFLE, Colo. - Dozens of workers mill around a jumble of pipes and whirring equipment surrounding 10 natural gas wells operated by Exxon Mobil Corp.

Video

New technologies make natural gas drilling more efficient (DMN - Photography/Editing: Courtney Perry)

At this well site in the desert, 80 miles west of the Rocky Mountains tourism hive, the men load cranes, operate pumps and monitor little red lines on computer screens. The work must happen simultaneously, in a carefully orchestrated ballet, to keep the well costs low - and profit high enough - to be worth the effort of the country's largest oil company.

"We're about 15 minutes away from a new frac being born," Randy Tolman, Exxon's project coordinator for the Piceance Basin, shouts over the noise. He invented this faster method of fracturing, or "fracing," the underground layers of rock and sand to unlock natural gas.

Exxon aims to export the new process to the unconventional natural gas reserves it is accumulating around the world. Drilling for more natural gas could make Exxon a lot of money as Americans demand cleaner fuel because natural gas doesn't emit as much pollution or greenhouse gases as oil and coal when burned.

"It's the bridge fuel," said Amy Jaffe, associate director of Rice University's energy program, adding: "It's going to be a 20-year bridge."

Exxon forecasts that natural gas demand will rise 50 percent by 2030 and outstrip demand for coal.

"Clearly, we anticipate that natural gas will grow much faster than oil or coal. So we see a pretty healthy demand out there in the future for natural gas globally, but even here in North America," chief executive Rex Tillerson said during an analyst meeting earlier this year.

At the gas well site in the desert, Exxon has drilled 10 holes, five of which already produce natural gas. The company's rigs in the Piceance (pronounced PEE-awns) Basin don't have to be reassembled between wells. Instead, the drill can move horizontally and laterally to reposition. This speeds the process and cuts the cost of rig crews.

As with many so-called unconventional natural gas fields in the U.S. and around the world, simply drilling a well here won't produce much gas. Operators must fracture the underground rock or sand around the well to allow more gas to flow out.

"This is a very complex reservoir, one of the most complex I've worked on in my 33 years," said Jim Branch, project executive with Exxon Mobil Production Co.

In the 1980s, frac jobs could take months. Now a complicated frac typically takes a couple of weeks. Exxon's Tolman developed a method to fracture a Piceance Basin well in three days, and he thinks he can compress it to 24 hours.

The key is to conduct every activity simultaneously. Everybody thought that was impossible until Tolman persuaded his colleagues to experiment.

While working on a natural gas well in La Barge, Wyo., in the 1980s, Tolman noticed something strange. Natural gas was flowing out of the well without pushing out or damaging the wire that operators had dropped into the well.

Years later, while descending an elevator at Exxon's corporate building in Houston, Tolman had an idea. Why not use this phenomenon to perform simultaneous functions on a well? That's exactly what he is doing at the site in Colorado.

Plenty of other natural gas producers operate wells in the Piceance Basin, but Exxon controls the sweet spot on land owned by the Bureau of Land Management.

The company has been producing small amounts of natural gas in the basin since the 1950s, with interests on 300,000 acres, holding enough gas to heat 50 million homes for a decade.

Exxon began a significant expansion here in 2007, after scientists developed drilling and fracing methods that could make the operations profitable. Exxon now operates seven rigs in the Piceance Basin and produces 100 million cubic feet a day. Project executive Branch said the company could eventually increase to 1 billion cubic feet a day.

The current lull in natural gas prices won't deter him.

"We're taking a long-term view," Branch said, repeating Exxon's mantra. He won't say whether the operations are profitable, with natural gas future prices trading below $4 per thousand cubic feet. Last summer, prices rose above $13.

Chief executive Tillerson said he's not specifically aiming to become more of a natural gas company than an oil company. Right now, Exxon's production is split about evenly between the two, and the company's strategy is to simply pursue the best projects each year.

"We don't have a deliberate strategy to change the oil-gas mix," Tillerson said during a news conference after the company's annual meeting earlier this year.

Analysts say a shift is evident and necessary.

Exxon's total natural gas sales have declined four out of the past five years, dropping 1.5 percent in 2008 to 10,812 million cubic feet per day. Production dropped 3 percent last year, although the company produced more natural gas than it discovered.

"By the time Exxon shifts, it will take three to five years before you see anything that's noticeable," said Oppenheimer & Co. analyst Fadel Gheit. "There is no instant gratification in anything they do."

The company has announced adding a number of unconventional resources to its books during the last few years, including fields in Germany, Eastern Europe, Canada and the Marcellus shale in the Northeast U.S.

"The future of unconventional shale gas, there's a pretty bright future," Tillerson said after the annual meeting. He said he's considering other fields as well, where Exxon can use its strategy of getting in cheaply, holding the resources for a long time and applying fresh technology.

Many of Exxon's new fields are shales, similar to the Barnett Shale in North Texas, where Exxon had a joint venture but sold out. The Piceance Basin isn't shale but sand. The company hasn't tried the new technology on shale reserves, and officials won't say where, exactly, they will try the process next.

"We haven't done it yet" on shales, Tolman said. "But I think there's a great opportunity."

At the desert well site, workers wearing fireproof jumpsuits and hard hats in the summer heat have positioned the wire in the well. The frac water is flowing, and the pressure is building.

The frac specialists inside a (mercifully) air-conditioned trailer - some of them Halliburton employees working on a contract for Exxon - prepare to shoot electronic pulses from the wire.

The men watch colorful computer screens to monitor pressure created by pumping a mixture of sand, water and chemicals into the well. When the pressure is just right, they shoot the frac gun, then drop rubber balls into the well to plug the frac holes, and immediately repeat the process.

"Nineteen hundred until ball drop," says Ron Campbell, an Exxon workover superintendent manning one of the computers in the trailer. He's talking to the outdoor crews over a radio while staring at screens that monitor well pressure and tension on the wire lines.

Five other workers inside the trailer check computer monitors and scour instruction booklets. Scattered around the desk are bottles of water and Gatorade, a hard hat, a calculator and a half-eaten bag of Uncle Bob's Party Mix.

The red line on one of the screens rises. Over the radio, somebody says: "Shot is fired."

The red line wiggles as the rubber balls reach their holes and pressure inside the well builds.

"The frac is being a little bit fussy," Tolman says.

The men will fire the frac gun seven times today. While one gun is shooting the first well, they will load the second gun for well No. 2, back and forth, so that the men and the equipment are constantly working.

The natural gas will go through a treatment facility for cleaning, then into the U.S. pipeline system, bound for home cooktops, power plants and chemical facilities across the nation.

Most energy experts agree that demand for natural gas will surely rise if a bill to cut greenhouse gas emissions becomes law. The bill passed the House and awaits consideration by the Senate.

Renewable fuel sources can serve only a sliver of U.S. demand. Until more wind farms and solar arrays can be installed, Americans would have to rely on natural gas to comply with the new regulations. Natural gas emits less of the greenhouse gases thought to cause climate change than coal.

And, thanks to new drilling technologies, the U.S. has plenty of natural gas to meet the rules. According to the Energy Information Association, proved U.S. natural gas reserves in 2007, the most recent data, have risen by one-third to 237,726 billion cubic feet since 2002, just as the new techniques were becoming popular.

In fact, most experts agree that new technology, such as the Exxon process, offers the only hope of immediately meeting the greenhouse gas emissions goals outlined in the bill.

http://www.dallasnews.com/sharedcontent/dws/bus/y!finance/exxon/stories/DN-exxon_26bus.ART.State.Edition1.3cf4b5d.html

Hydro fracturing fears ring untrue

The public is being misled again regarding the potential environmental impacts of increased natural gas exploration in New York, this time by a July 27 letter, "Scrutiny Needed for Hydrofracking."

Drilling and hydraulic fracturing are two distinct processes. Both have been performed safely in New York for decades. The impacts of hydraulic fracturing are already being scrutinized by the state Department of Environmental Conservation as it prepares an environmental impact statement on the process.

State experts are scrutinizing the chemicals used to determine if there are real or potential threats to our environment. They apply similar scrutiny to other businesses that use chemicals and large volumes of water, such as agriculture, golf courses, paper mills, electricity generators, etc.

The fluid used in hydraulic fracturing is released deep underground where, due to many safeguards, there is little chance of it contacting fresh water supplies. This has been demonstrated throughout the country in more than a million wells that have been hydro fractured without incident. The fluid that returns to the surface is collected, hauled away and treated. There are facilities in New York that are, or will soon be, able to treat it.

In addition, the fluid will not be stored in pits at the drill sites for long periods of time, and it will not "likely leech into the ground," as the letter suggests. The DEC doesn't allow it, and the oil and gas industry would never allow it. Suggesting either process will release acid or radiation into the environment or impact the ozone is just plain wrong.

To my knowledge there is not a single case where hydraulic fracturing has been credibly connected to water contamination in New York. My hope is that New Yorkers will remain engaged in the debate and base their opinions on the facts, data and science of credible sources.

Brad Gill

Executive director
Independent Oil & Gas Association of New York