More than a dozen companies plan to drill up to 3,000 wells around here in the next 12 months.The Texas field, known as the Eagle Ford, is just one of about 20 new onshore oil fields that advocates say could collectively increase the nation’s oil output by 25 percent within a decade — without the dangers of drilling in the deep waters of the Gulf of Mexico or the delicate coastal areas off Alaska.
There is only one catch: the oil from the Eagle Ford and similar fields of tightly packed rock can be extracted only by using hydraulic fracturing, a method that uses a high-pressure mix of water, sand and hazardous chemicals to blast through the rocks to release the oil inside.
The technique, also called fracking, has been widely used in the last decade to unlock vast new fields of natural gas, but drillers only recently figured out how to release large quantities of oil, which flows less easily through rock than gas. As evidence mounts that fracking poses risks to water supplies, the federal government and regulators in various states are considering tighter regulations on it.
The oil industry says any environmental concerns are far outweighed by the economic benefits of pumping previously inaccessible oil from fields that could collectively hold two or three times as much oil as Prudhoe Bay, the Alaskan field that was the last great onshore discovery. The companies estimate that the boom will create more than two million new jobs, directly or indirectly, and bring tens of billions of dollars to the states where the fields are located, which include traditional oil sites like Texas and Oklahoma, industrial stalwarts like Ohio and Michigan and even farm states like Kansas.
“It’s the one thing we have seen in our adult lives that could take us away from imported oil,” said Aubrey McClendon, chief executive of Chesapeake Energy, one of the most aggressive drillers. “What if we have found three of the world’s biggest oil fields in the last three years right here in the U.S.? How transformative could that be for the U.S. economy?” . . .
Based on the industry’s plans, shale and other “tight rock” fields that now produce about half a million barrels of oil a day will produce up to three million barrels daily by 2020, according to IHS CERA, an energy research firm. Oil companies are investing an estimated $25 billion this year to drill 5,000 new oil wells in tight rock fields, according to Raoul LeBlanc, a senior director at PFC Energy, a consulting firm.
This is very big and it’s coming on very fast,” said Daniel Yergin, the chairman of IHS CERA. “This is like adding another Venezuela or Kuwait by 2020, except these tight oil fields are in the United States.”
In the most developed shale field, the Bakken field in North Dakota, production has leaped to 400,000 barrels a day today from a trickle four years ago. Experts say it could produce as much as a million barrels a day by the end of the decade.
The Eagle Ford, where the first well was drilled only three years ago, is already producing more than 100,000 barrels a day and could reach 420,000 by 2015, almost as much as Ecuador, according to Bentek Energy, a consultancy.. . .
What makes the new fields more remarkable is that they were thought to be virtually valueless only five years ago. “Everyone said the oil molecules are too large to flow in commercial quantities through these low-quality rocks,” said Mark G. Papa, chief executive of EOG Resources.. . .
The new drilling makes economic sense as long as oil prices remain above $60 a barrel, according to oil companies. At current oil prices of about $100 a barrel, shale wells can typically turn a profit within eight months — three times faster than many traditional wells.
But water remains a key issue. In addition to possible contamination of surface and underground water from fracking fluids, the sheer volume of water required poses challenges, especially in South Texas, which faces a severe drought and rapidly diminishing water levels in the local aquifer.
At the rate wells are being drilled, “there’s definitely going to be a problem,” said Bay Laxson, a local water official.
Be it noted that the projections in the article regarding oil are contradicted by the projections in the article regarding water. The problem illustrates Stephen Solomon's point that the "unconventional and renewable domestic alternatives" being developed to ensure energy security are "several orders of magnitude more water intensive than the conventional sources they are supplanting."Dave Thompson, regional production superintendent for the oil company SM Energy said the industry knew that water issues were “an Achilles heel.” He said his company was building a system to reuse water in the field.
Update, June13, 2011: Bloomberg has a story ("Drought Threatens Texas Oil Boom") emphasizing the severe water restrictions in Texas brought on by the drought, and notes that the Eagle Ford play is especially voracious in its water needs:
The Eagle Ford’s peculiar geology means it takes three to four times as much water to fracture as the Barnett Shale near Fort Worth, said [Robert] Mace, of the state water board. Fracking a single Eagle Ford well requires as much as 13 million gallons of water, enough to supply the cooking, washing and drinking needs of 40 adults for an entire year, he said.
“This is not the drilling your grandparents knew in west Texas,” said Sharon Wilson, an organizer for Earthworks’ Oil and Gas Accountability Project, which lobbies for tougher government regulation of oil drillers. “It’s a heavy industrial activity with massive amounts of water and chemicals.”
About 94 percent of Texas was in a state of severe, extreme or exceptional drought as of June 7, according to the U.S. Drought Monitor compiled by the U.S. Agriculture Department and the National Drought Mitigation Center. The October-through-May period was the state’s driest since record-keeping began in 1895, said Texas State Climatologist John Nielsen-Gammon.
Municipal water departments, farmers, ranchers and oil drillers near Laredo are relying on water from two reservoirs and underground aquifers filled by last summer’s tropical storm season, said Yarrito, whose job title is Rio Grande Watermaster.
Unless storms bring more rain soon, “we’ll be in trouble,” said Sonny Hinojosa, general manager of Hidalgo Irrigation District No. 2 in San Juan, Texas. The drought has decimated crops, with about 79 percent of the state’s winter wheat, 72 percent of its oats and 36 percent of its corn classified as poor or very poor as of June 6, according to the Agriculture Department in Washington.
The Edwards Aquifer Authority, which oversees underground water supplies around San Antonio and along the northern edge of the Eagle Ford Shale, on June 2 declared a Stage 2 emergency requiring a 30 percent cut in water usage. Other water districts have imposed similar restrictions.
Water consumption by Eagle Ford Shale drillers is forecast to explode during the next 25 years, Mace said. A study to be released later this summer by the Texas Water Development Board and the University of Texas’s Bureau of Economic Geology estimates fracking-water demand in the area will jump 10-fold by 2020, and double again by 2030, he said.