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THE Fracking Thread pt 3

Discussions of conventional and alternative energy production technologies.

Re: THE Fracking Thread pt 3

Unread postby Tanada » Wed 10 May 2017, 07:38:09

690,000 Contiguous Acres in Alaska May Soon Be Open to Fracking
By Steve Horn

Hydraulic fracturing's horizontal drilling technique has enabled industry to tap otherwise difficult-to-access oil and gas in shale basins throughout the U.S. and increasingly throughout the world. And now fracking, as it's known, could soon arrive at a new frontier: Alaska.

As Bloomberg reported in March, Paul Basinski, a pioneer of fracking in Texas' prolific Eagle Ford Shale, has led the push to explore fracking's potential there, in what's been dubbed "Project Icewine." His company, Burgundy Xploration, is working on fracking in Alaska's North Slope territory alongside the Australia-based company 88 Energy (formerly Tangiers Petroleum).

"The land sits over three underground bands of shale, from 3,000 to 20,000 feet below ground, that are the source rocks for the huge conventional oilfields to the north," wrote Bloomberg. "The companies' first well, Icewine 1, confirmed the presence of petroleum in the shale and found a geology that should be conducive to fracking."

Why the name "Project Icewine"? "Everything we do is about wine," Basinski told Alaska Public Radio. "That's why it's called Icewine. Because it's cold up here, and I like German ice wine."

Geographical Terrain

A report by DJ Carmichael, an Australian stockbroker firm, notes that the Project Icewine oilfield is located in close proximity to the Trans-Alaska Pipeline System, which flows from northern to southern Alaska and is co-owned by BP, ConocoPhillips, ExxonMobil and Chevron.

Drone footage, taken in 2016 by a company owned by Alaska Sen. Lisa Murkowski's campaign manager, Steve Wackowski, shows a fracking test well being drilled for Icewine 1.

According to an Australian Securities Exchange filing, in April of this year, 88 Energy and Burgundy Xploration began pre-drilling procedures for Icewine 2, a second fracking test well. In the filing, which also noted receipt of a Permit to Drill from the Alaska Oil and Gas Conservation Commission, 88 Energy said it expects to begin "stimulation and production testing" in June or July.


When all is said and done, the two companies may soon have a plot of land 690,000 contiguous acres in size, according to the Securities Exchange filing. A May 3 Securities Exchange filing noted that 88 Energy is still on schedule for Icewine 2.

Tax Subsidies


In a February 2016 research note, the Australian investment company Patersons Securities Limited noted that the 88 Energy-Burgundy Xploration joint venture is the beneficiary of a tax subsidy system put in place by the Alaska Legislature.

"In an effort to encourage exploration activity in order to ultimately promote an increase in oil production in Alaska and maintain the financial viability of the [Trans-Alaska Pipeline System], the State Legislature passed the More Alaska Production Act in April 2013," reads the research note. "The Act effectively eliminated the progressive production tax on oil production and replaced it with a flat rate of 35 percent. In addition, companies like 88E operating above 68 degrees North latitude would qualify for a combined cash rebate on exploration of 85 percent for all qualified expenditure until 31 December 2015, reducing to 75 percent for the period ending 30 June 2016, and 35 percent thereafter."

The More Alaska Production Act was so controversial that it came up for a referendum during the 2014 election cycle. This effort to overturn the law was defeated 52.7 percent to 47.3 percent after industry power players such as ExxonMobil, ConocoPhillips, and BP spent roughly $13 million on an advertising blitz to fend off the ballot initiative.

In its 2013 annual report filed with the U.S. Securities and Exchange Commission, ConocoPhillips said the legislation has helped the company's corporate bottom line.

"Following the April 2013 enactment of revised oil tax legislation, MAPA [More Alaska Production Act], we have increased our exploration and development investments and activities on the North Slope by adding rigs and progressing new development opportunities," wrote the company. "We will continue to work with co-owners to identify additional opportunities to increase our investments in Alaska."

Oil and Money

Fracking is a capital-intensive procedure, made all the more so given northern Alaska's isolated geographical location and its Arctic drilling terrain.

Perhaps in a nod to this, the GOP-dominated Alaska Legislature attempted to offer $430 million worth of tax subsidies for the oil and gas industry in the fiscal year 2017 budget. That was vetoed by Alaska Gov. Bill Walker, an Independent, meaning the industry only got its statutory limit of $30 million in subsidies.

Patrick Galvin, chief commercial officer for Great Bear Petroleum, formerly served as petroleum land manager for the Alaska Department of Natural Resources and commissioner for the Alaska Department of Revenue. When Walker vetoed the $430 million proposed subsidy, Galvin publicly criticized him.

"What seems to have developed in this particular moment is the governor having to kind of take hostages in order to get the legislature to act on what he wants them to act on with regard to a fiscal plan," Galvin told Alaska Public Radio. "It has an impact down the chain for all of the business that company wanted to do and they were expecting to get these payments and now they're basically stuck waiting to see when the state will ultimately pay its bill."

Galvin's company also drilled fracking test wells earlier in the decade but has yet to commercialize the technique. Great Bear previously estimated it could frack 200,000 barrels of crude per day by 2020 and 600,000 barrels per day by 2056, though it appears a long way from reaching those aspirations.

Another tax subsidy fight in Alaska is currently underway over the proposed Alaska House Bill 111, which passed 21-19 in the Democratic-controlled House and awaits a Republican-controlled Senate vote. The state bill—opposed by ConocoPhillips, BP, Great Bear Petroleum and the Alaska Oil and Gas Association—would essentially undo the tax subsidy in place under the More Alaska Production Act, while also forcing the oil and gas industry to pay more taxes to fill the state's coffers.

In the end, tapping Alaska's shale resources via fracking, not unlike the attempts to drill for its Arctic oil, may come down to a simple issue of money. Whether enough cash will flow to the 49th state to make fracking a commercial-scale endeavor remains to be seen.


http://www.ecowatch.com/fracking-alaska ... 39198.html
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Re: THE Fracking Thread pt 3

Unread postby rockdoc123 » Wed 10 May 2017, 09:54:27

Interesting...thanks Tanada.
I have to wonder how this can be economic. I remember struggling with the limited access issues into a large part of onshore Alaska years ago. There was basically 6 months of the year when you could work, ice roads were necessary and operations were very expensive. I realize this doesn't speak to the situation in all of onshore Alaska. But if conventional operations are inhibited by high costs and operational challenges you can imagine what unconventional operations would be faced with. In the winters this far north rigs are known to have to shut down because temperatures can temporarily drop below that safe to operate rotating equipment. Also it is tough enough in the winter to keep just the rig warm enough but when you are in the middle of a large frac operation you can have quite a large number of water vehicles, frac trucks etc on site, all of which would have to run continuously to avoid freezeup and water would have to be kept warm. All of this is of course doable but I suspect the costs will be prohibitive. But we said that years ago about other operations and innovation eventually proved us wrong. Should be interesting to keep an eye on progress.
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Re: THE Fracking Thread pt 3

Unread postby asg70 » Wed 10 May 2017, 12:35:19

I guess as global warming continues it will only soften up the permafrost and make it easier to frack.
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Re: THE Fracking Thread pt 3

Unread postby pstarr » Wed 10 May 2017, 14:50:32

asg70 wrote:I guess as global warming continues it will only soften up the permafrost and make it easier to frack.

That would make it more difficult.
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Re: THE Fracking Thread pt 3

Unread postby asg70 » Wed 10 May 2017, 15:29:19

pstarr wrote:That would make it more difficult.


In your book fracking is always impossible, so why bother throwing in your 2c?
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Re: THE Fracking Thread pt 3

Unread postby pstarr » Wed 10 May 2017, 15:32:47

asg70 wrote:
pstarr wrote:That would make it more difficult.


In your book fracking is always impossible, so why bother throwing in your 2c?

My 2c is worth a dollar of your arrogance and anger.

Permafrost is frozen. but permamud is impassable. Drilling and completion must occurs in the frozen months. Because drill rigs and fract trucks can't run on mud. Also the upper few feet of a well bore (frozen or otherwise) count for little in a 20,000 drill string that passes through strata of hard rock.

When are you going to ease up?
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Re: THE Fracking Thread pt 3

Unread postby Squilliam » Wed 10 May 2017, 22:05:12

I guess from the perspective of Alaska for oil they have two major choices:

1. Shut down existing oil production and lose revenues from that due to the pipeline no longer being viable. Then potentially lose all future revenue because of the cost to restart said pipeline due to the area it is in.

2. Encourage as best they can an increase in production to keep that pipeline viable and lower the overall cost per barrel shipped.
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Re: THE Fracking Thread pt 3

Unread postby ROCKMAN » Wed 10 May 2017, 23:11:27

"I guess as global warming continues it will only soften up the permafrost and make it easier to frack."

Actually ops are easier when the drill site ground is frozen. When the permafrost thaws it can be a serious mud problem in some areas. Granted getting around can be a bitch but that's a different problem. In N Dakota during the spring thaw many drill sites have to be rocked or covered with 10' wooden pallets and usually double that under the drill rig to keep it stable.
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Re: THE Fracking Thread pt 3

Unread postby pstarr » Thu 11 May 2017, 01:02:27

ROCKMAN wrote:"I guess as global warming continues it will only soften up the permafrost and make it easier to frack."

Actually ops are easier when the drill site ground is frozen. When the permafrost thaws it can be a serious mud problem in some areas. Granted getting around can be a bitch but that's a different problem. In N Dakota during the spring thaw many drill sites have to be rocked or covered with 10' wooden pallets and usually double that under the drill rig to keep it stable.

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Re: THE Fracking Thread pt 3

Unread postby rockdoc123 » Thu 11 May 2017, 08:52:23

Actually ops are easier when the drill site ground is frozen. When the permafrost thaws it can be a serious mud problem in some areas. Granted getting around can be a bitch but that's a different problem. In N Dakota during the spring thaw many drill sites have to be rocked or covered with 10' wooden pallets and usually double that under the drill rig to keep it stable.


the ability to get into many areas in Alaska after spring thaw is not just a logistical issue it is also a regulatory one..the State (and the Fed on Federal lands) limits access into these areas for oil and gas activity until freeze up. It isn't the same everywhere of course but certainly for a large part of the North slope.

the limited access can be a huge issue. I know of a company that drilled 3 wells on the North slope but ran out of time to evaluate them and had to pull the rigs out prior to spring breakup. That required rebuilding a very long ice road and remobilizing service rigs to the site to further test the wells and then abandon them. This almost doubled the cost of the original AFE for the wells. Not a nice surprise if you aren't a company aware of the operating issues in some parts of Alaska.
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Re: THE Fracking Thread pt 3

Unread postby rockdoc123 » Thu 11 May 2017, 09:22:19

an interesting tidbit I found by doing a bit of background research on Project Icewine and 88 Energy is that the area in question spans a large east - west lateral distance with the Dalton haul road and the Trans Alaskan pipeline running north-south through the middle of the acreage. That allowed 88 energy to breeze through all of the various approvals for drilling and also facilitated getting the wells done. Vertical wells apparently can be drilled in one month from spud to TD. So as long as 88 Energy stays very close to the haul road (apparently their first well pad is right beside it) they are in good shape to continue drilling. What remains to be seen is whether the Dalton haul road is capable of handling the number of heavyweight frac trucks which will be required for an unconventional operation (havng driven that road many years ago I would suggest it isn't), whether the reserves accessible from pads close to the road are large enough to be economic and whether the Alaskan regulatory bodies will approve a site large enough to accomodate large fracs.
Here is a map cutout from the DNR website that shows the location of the icewine project (Accumulate Energy is the operating arm for 88 Energy and partner). Image

note all the thermokarst ponds in the area....speaks to how difficult access will be away from any main road
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Re: THE Fracking Thread pt 3

Unread postby ROCKMAN » Thu 11 May 2017, 10:07:06

Just some more details on Doc's comment about access. Geologists draw maps and put a circle where they want to drill. And then operations adds an overlay map of the surface conditions and shows the geologist where he won't get to drill. Especially true in the seaplanes of S Louisiana: you only drill where you can move a barge rig in. The Rockman has generated 3 different good looking prospects that didn't get drilled because we could not float a rig close enough.

And just like up north timing can be critical. In the Gulf Coast you avoid drilling in shallow water during hurricane season if it's possible. Floating rigs can usually handle such bad weather. But a rig sitting on the on the bottom in 30' of water can be completely destroyed by the same storm.

The good news about that N Slope well it might have had a viable recon target size that covered dozens of miles...maybe even 50+ miles. Then, as Doc says, you pick you location based more on the logistics then on the geology. But once you prove the economics of the project you might be able to justify those more expensive locations.
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Re: THE Fracking Thread pt 3

Unread postby radon1 » Thu 17 Aug 2017, 09:40:26

http://oilprice.com/Energy/Crude-Oil/Ru ... cking.html

Russia Claims To Have Invented Alternative To Fracking

Russian scientists and local oil field services companies claim to have created a technology for thermochemical gas fracturing that could be an alternative to hydraulic fracturing and could increase oil production by between 1.7 and 6 times, Russia’s news agency RIA Novosti reports, citing the University of Tyumen’s press service.
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Re: THE Fracking Thread pt 3

Unread postby pstarr » Thu 17 Aug 2017, 10:46:17

"The other upside in the technology, the Russians claim, is that the main component in the chemical reactions is ammonium nitrate, which is often used as fertilizer."

Also occasionally used to blow up buildings. Is that property somehow useful in a wet rock strata?
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Re: THE Fracking Thread pt 3

Unread postby ROCKMAN » Thu 17 Aug 2017, 15:41:05

The Russians didn't just invent sh*t. A quick search found a govt sponsored report on TDGF (Thermodynamically Drive. Gas-dynamic Fracturing) from 2005. The final technical report was publishedf 7 years go. Didn't bother wasting time looking any further back in time.

And basically it's not so much fracturing as it is a thermal EOR method to increase oil flow by heating up the rock.
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Re: THE Fracking Thread pt 3

Unread postby pstarr » Thu 17 Aug 2017, 15:54:58

ROCKMAN wrote:The Russians didn't just invent sh*t. A quick search found a govt sponsored report on TDGF (Thermodynamically Drive. Gas-dynamic Fracturing) from 2005. The final technical report was publishedf 7 years go. Didn't bother wasting time looking any further back in time.

And basically it's not so much fracturing as it is a thermal EOR method to increase oil flow by heating up the rock.

I was also thinking that, like SAGD or THAI?
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Re: THE Fracking Thread pt 3

Unread postby rockdoc123 » Thu 17 Aug 2017, 20:28:13

I was also thinking that, like SAGD or THAI?


Not the same. SAGD involves injecting steam in injector wells and allowing gravity to drain the superheated oil into producing wells. THAI is more like the fire floods we experimented with back in the seventies. Steam is injected into a horizontal well and once the reservoir temperature reaches a certain level oxygen is injected which results in combustion. The problem with both technologies has been predictability of flow and in the case of THAI (much like the fire floods run in the seventies) reservoir damage. The TDGF idea is completely different. It is proposed to be used in semi-depleted conventional reservoirs that might be damaged and hence recovery is less than expected. Rather than doing a conventional water/surfactant frack in a given well what they propose is doing the pressure frack with chemicals that essentially create a heated frack. This not only is supposed to improve permeability but also oil mobility. Whether or not it can change wettability in the reservoir is unknown and that is a big question. There is no combustion that happens (as far as I can tell from the paper I read) so a great portion of the fluids should be recovered and recycled. All that being said the effect of this method will only reach not much more than 100 metres from a well bore under existing mega-frack technology. So the overall increased recovery may not be that great. That being said experimentation in areas like this are what drives innovation in the industry and eventually improved recovery.
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Re: THE Fracking Thread pt 3

Unread postby radon1 » Fri 18 Aug 2017, 10:55:37

ROCKMAN wrote:The Russians didn't just invent sh*t.


They didn't say they discovered anything. They said they built a technology that they tested and it produced certain results. It is probably based on some soviet time research anyway.
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Re: THE Fracking Thread pt 3

Unread postby ROCKMAN » Fri 18 Aug 2017, 12:52:42

Radon - Perhaps English is your second language. LOL. From your link: "Russian scientists and local oil field services companies claim to have created a technology for thermochemical gas fracturing that could be an alternative to hydraulic fracturing..."

FYI: created = invented. Copying someone else's homework is not doing your home work. LOL.
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Re: THE Fracking Thread pt 3

Unread postby radon1 » Sat 19 Aug 2017, 02:59:00

ROCKMAN wrote:Radon - Perhaps English is your second language. LOL. From your link: "Russian scientists and local oil field services companies claim to have created a technology for thermochemical gas fracturing that could be an alternative to hydraulic fracturing..."

FYI: created = invented. Copying someone else's homework is not doing your home work. LOL.


My first language is the language of the original text and I can tell you that in the context, created=/=invented. In the context, created = developed. Whether they copy-pasted anything I have no idea. If they did and the results were so promising, then why wasn't this technology promoted previously by whoever developed it in the first place?
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