With the first cuppa low octane coffee of the morning, we need to roll up the sleeves and discuss “petrology” for a couple of minutes. Petrology formally is the study of small-scale rock properties, but since it’s close to the word “petroleum” and since petrology does matter, it’s time to “rock out on Friday” in order to understand Peak Oil, which is coming down the road.
There are a number of additional reasons while I’ll be “waxing on” about the oil and gas biz, not the least of which is the arrival here on the ranch of a seismic rig which will be punching in something like a dozen shallow bores to the 60-foot level, and in each of these, about a 2-pound charge will be set off.
Yes…the oil industry is coming to disturb our peace and quiet. Seismic isn’t too bad, though. Their operations will be daylight hours, so we’re early in the process. On the other hand, since we know there are layers of oil and gas, starting about 7,600 feet and down, I have a pretty good idea that this is just the start of a “dance” with drilling in these parts. So much for our peace and quiet
Just a month ago, a couple of new wells “came in” and they’re less than half a mile from our property, south of us on a county road. And we have well drills that are closer to us than that, including a well that lost circulation (a drilling term I hope not to discuss) back in 1993.
The oil vultures circling our place just want to see what we’re sitting on…for now. Ask me in 120 days, though.
Oil and gas extraction by conventional means doesn’t concern me as much as hydraulic fracturing because that brings with it a host of problems, not the least of which (as people in Quakelahoma are finding out) a major increase in seismic activity.
If you remember yesterday’s column, a reader (DJ) was asking “…would you ask Oilman2 what the localized problems with Disposal of FRACKING WASTEWATER could be?”
Well, bubba, today we gonna show yah some down-home schoolin on fracking, courtesy of Oilman2:
First, fracking and oilfield waste saltwater are routinely injected into “disposal wells”. These are STATE regulated – no definitive fed guidelines. In Texas, the only guideline is proximity to existing drinking water wells – little else. Here is a good article regarding this:
http://carnegieendowment.org/2014/03/11/texas-s-oil-and-water-tightrope/h35xRemember, this is Texas, and other states often have fewer regulations regarding wastewater disposal wells, particularly those with minimal oil drilling operations. This is why VA, KY, PA and other states are having issues – the O&G companies get ahead of and stay ahead of regulations that were written without regard for heavy drilling operations, much less fracking operations.
FACTS
1) Oil and gas bearing rocks require a geologic trap to retain oil or gas – otherwise it (oil & gas) migrates to surface (like ‘bubbling crude’ in Beverly Hillbillies intro).
2) This trap requires an impermeable caprock, which is usually shale.
3) Likewise, a valid disposal well should be in a dry trap and have an impermeable caprock to retain the waste. This is rarely mandated specifically enough to insure it is true, and no states police the details of disposal wells sufficiently.
4) There are no VOLUMETRIC LIMITS written in most state regulations, which means the disposal wells can routinely be over-filled, allowing wastewater to migrate into permeable zones which can contaminate overlying rocks. Remember, oil and gas rise to surface due to lighter density than water.
5) Wastewater disposal wells have already been directly linked to localized earthquakes. The wastewater lubricates faults and induces slipping of stressed fracture planes – like oiling the San Andreas. Great to prevent future big earthquakes but induces small ones in formerly stable areas.
6) O&G companies do not care one whit about landowners or their waste consequences – they try to get in, drill and be gone as quickly as possible. Their legal war chests and lobbying powers are far beyond any one state or person, and they will routinely bribe their way through even the most steadfast grassroots groups and eco-organizations.
So – you get an overall picture here. For the southeast – they don’t drill in the Carolinas, but they can enrich individual landowners immensely by shipping their waste to another state where regulations are looser. Their big cash for this waste rapidly turns greedy heads. With no or minimal O&G resources, much of the SE USA has minimal laws with respect to O&G wastewater.
And besides, it’s “just saltwater and a little bit of oil, and we will pump it down 3000 feet”. They find plenty of landowners eager to make $50,000 a month letting them pump their wastewater into an injection well. They sometimes suggest or even provide financing to drill disposal wells for these landowners.Depth doesn’t matter – caprocks and trapping mechanisms do, as does reservoir capacity and fracture gradient. But again, there are no “Disposal Well Police” in the entire country. Most of the regulations simply require submission of volumes pumped into each well and when. There is no person in charge of examining WHAT geologic trap or lack of they are pumping waste into. There may be scads of regs about disallowing shallow aquifer contamination, with super duper casing and cementing requirements. But that is useless if the reservoir is overfilled with wastewater below.
It’s ugly business, especially with the margin squeeze O&G companies are in with fracking. The wells are 3X as expensive as before, but oil prices are still low at $100/BBL. Unconventional oil (fracked) runs $70-80/BBL to get and deliver. Little margin after expenses so they make up in massive volume.
It won’t affect the offshore fault line – these are localized (50 mile radius) quakes directly caused by wastewater lubrication of existing stresses on faults. Dry they are stable – grease them and they slip until finding new stability threshold.
If you live in karst topography (limestone area) like FL, then you have less shale so fewer caprock (shale) zones. You also have more sinkholes and underground rivers, etc. Disposal wells in karst regions are almost guaranteed to leak.
Did I mention the Niagara Aquifer is karst topography? And the edge of it abuts the Marcellus Shale in PA?
That’s your lesson for the week, and have a nice day…
So here’s Ures truly this morning, working on his response to the seismic crew that wants to come set off charges in the ever-thirsty quest for oil and gas.
I’m being cooperative with the seismic crew, since they’re just looking. And it will be likely 90-days, or so, from the time they set off their charges until we find out if there’s a good formation under us.
In the meantime, I’ve sent them a “keep out zone” map of our property (the hatched circle) and suggested where they could set charges to do their work. (triangles) That sweeping curvy thing is our ravine for the creek headwaters. Oh, and the blue things are water lines.
And yes, everything we’ve communicated has been CC’d my local lawyer who has experience in this kind of thing – negotiating with the seismic folks.
I’ve been looking for a bright spot in my relationship with the seismic people. One of my questions to them was “Has anyone ever asked you about leaving a bore hole open in order for a surface owner to shove some copper tubing down-hole for geothermal heat sinking? “
Unfortunately, here’s the answer:
“As for as leaving holes open we have this question all the time. By law we can not leave any hole open. It would be a liability for our company to do so and it is not allowed. “
I’ll keep you posted on this as we roll along. I have already informed the survey people of my planes to put a couple of mobile homes on the lower end of the property (1C) and how that would likely produce $500 –$700 a month in free cash flow which I look forward to as a retirement “supplement.”
I’ve gone so far as to list our airplane for sale, go to www.barnstormers.com and search “A23-19” and you’ll find it: It’s listed at $28,000 but I’d take $27,000. When it sells, that funds the mobile homes/future cash flow. With inflation in the pipeline at some point, buying an asset like an airplane may make sense….but back to point:
For those old enough to remember the TV show “Beverly Hillbillies” that’s all fiction. The surface estate (landowner) is subservient to the mineral (underground property rights) owner in Texas, and because of the oil boom here early last century, the mineral rights have been stripped off long ago. The meaner version of Dallas is closer to it.
So if the seismic finds anything promising, it will come down to a matter of negotiating with the oil company that’s looking at the area, a “mini-national” which are the kind of companies that might not even exist were it not for all the “free money” sloshing around in the system. So I’d like to thank Ben Bernanke and Janet Yellen for providing all the “free money” that is driving so many well drilling projects presently.
Yes, I’ll be taking pictures and I’ll keep you posted as we meander through this process. And if you know any really good hot-shot oil and gas attorneys with a great track record of “going for the gold” on behalf of the surface rights owner, you might send me their contact info.
Friday at the WoWW
Our occasional snoops into the World of Woo-Woo have another report to share with you: This one from our ex-broadcasting (and biker) guru out in Arizona:
George,
Howdy!
Love the Woo Woo reports, and the skeptical attitude with which you look at them. Here’s one from just a few minutes ago that I wanted to send while it’s fresh in mind.
My wife calls from the family room that she needs help with the TV. I shake my head, not understanding why this beautiful, intelligent woman can’t seem to grasp the basic concept of changing input to the set, but mostly I’m ticked that I decided to move my office into the downstairs bedroom that had been my kid’s playroom, giving him the much larger, vaulted ceiling room that had been my man-cave. I’m closer at hand this way, but I digress.
I see that she’s succeeded in switching the input back to the Dish, but the remote is unresponsive. I say “batteries are probably dead,” and take it back into my office to change them out. I pop off the back, take out all the batteries (3) and grab 3 from the drawer to replace them. Inserting them, I see that the remote requires FOUR AAA batteries, not THREE. I look everywhere, but can’t find a fourth battery.
My question is this: How did it work last night? My wife wouldn’t know where the battery compartment was, or probably even that it NEEDED batteries. My kid SWEARS he didn’t remove one of the batteries, and I know I didn’t. I believe him, since he’s 12 and not quite good enough to put one past me like that. He’s getting close, but not yet. He hasn’t watched anything on that TV for weeks, since he’s got a much better 52 inch in the aforementioned game room, so I’m sure he hasn’t touched the remote for a long time.
I tried to make it work with only 3 batteries, but no go.
I guess I’ll just wait for the missing battery to pop back into this dimension. “
Detective Ure to the rescue: You mentioned “this beautiful, intelligent woman” and that’s my first thought. You see, this kind of woman is just as smart (or smarter) than the smarmy biker that emerges from the man-cave. Reasonable suspicion: She’s playing with you OR she forgot to put the fourth battery in when she was playing with the remote and you didn’t inspect the unit closely when you brought it downstairs.
So find out if there’s a spare battery floating around upstairs somewhere and get back to us…
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I had a bump with the Woo myself, yesterday. A while back, I’d bought a pair of khaki pants and since I do so much sitting (OK, and eating, too…) I always get pants with the discrete “old man” expando-sides. It’s hidden under the belt when worn, although even the belt isn’t visible, since the last time I tucked in a shirttail was back in 2002.
Long story short: Had to run to town Thursday to get tires on the old farm truck and care to guess what?
The expando-band was gone!
Damnedest thing I’ve seen in a while. Right label was on the pants, but I took them down from the hangar to put them on and the band was gone!
I am not cheap, but when I buy anything I’m incredibly meticulous and these pants used to have the expando-waistband.
Now they don’t.
Now, perhaps Universe is signaling me that I need to “serious up” on the weight loss front, but this is re-fugging-dic-u-lous.
Cue the Twilight Zone theme…
Urban Lifestyle Notes
Speaking of marketing: Hair goo outfit Sebastian Professional has just named products “Reset” and “Reboot.” For hair?
Niching everything in the world, latest hip thing to have is a high end camera bag. Being practical, it’s either the bag, or what goes in it, on our budget.
Spain’s new first lady, queen Letizia is making quite the fashion-splashin in the fashion circs with a new look everyone’s gaga at…except Zeus the cat, and me.
Only slightly more practical is wearing a denim shirt as a belt…which makes little to no sense when you think about it. But what to I know…heck, wearing “colors” bandanas never made sense to me, either. Nor tattoos, but we don’t need to go there. Cupid’s Quiver? Now that made some sense….
Wearable electronics? BlackBerry has rolled out “Passport” which is a “phablet” which I’ll have to add to my smellchecker.
There, I think I’ve offended just about everyone this week, a job well done. In case I missed anyone, drop by Monday and I’ll try to pick up the ones I missed.
Till then, write when you break-even…Peoplenomics tomorrow focuses on long-term survival power sources….
George george@ure.net