Feds Approve Plan To Drill And Frack 5,000 New Oil Wells in The Powder River Basin Of Wyoming
Originally published on Forbes.com on January 14, 2021
DENVER POST VIA GETTY IMAGES
GILLETTE, WYOMING–antelope grazing near a gas compressor station.
Wyoming oil and gas boosters succeeded a few weeks ago in pushing through Bureau of Land Management approvals for a massive campaign in the Powder River Basin that could see the drilling and fracking of 5,000 new wells. The region is better known as being home to America’s biggest coal mines — now in severe decline. So it’s no surprise that state were eager to see a project approved before the anti-fracking Biden Administration could block it.
This is no kneejerk project. It was only after seven years of environmental analysis that the Bureau of Land Management (BLM) signed, in late December, a Record of Decision to approve the drilling on federal leases in Converse County in Wyoming.
The numbers are large: 5,000 wells, 1,500 well pads each large enough to accommodate up to 16 individual wells, plus new infrastructure entailing hundreds of miles of water and gas pipelines, electricity lines, and roads. The duration of the project is to be 10 years.
The BLM has a heavy hand in this because the minerals they manage (which include oil and gas) lie beneath 64% of the total area even though they only manage about 6% of the surface area.
There is great promise in this project. Many new jobs, significant new revenues to the state of Wyoming, and the general positives of oil and gas projects for the USA – cheaper energy for cars, trucks, homes and industry.
But there are legitimate risks that need to be explored including the extra greenhouse gas emissions. This two-part series explores the pros and cons of the huge 5,000 well development on public lands in Wyoming.
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First, let’s look under the hood. Where on earth is Converse County? And second, what’s down below these wells? What formations contain the oil and the gas? What technology will be used to get it out? What role will fracking play? The answers are given here.
The map in Figure 1 shows Converse County is part of the Powder River basin. Coalbed methane in the same basin was in its heyday in the early 2000s with over twenty-four thousand wells drilled, but the play busted when the price of natural gas crashed in 2009.
The cause of the crash was a new kid on the block – shale gas gushing in the Barnett shale (with wells drilled under Dallas-Fort Worth airport) and in the Marcellus shale in Pennsylvania (the queen of shale gas in the USA.) The shale gas revolution, which led to the US becoming self-sufficient in oil and gas for the first time since 1947, rode on the back of a new technology: a long horizontal well fracked many times along its length. This technology will also be the route to success in Converse County.
Figure 1. Oil wells in the Powder River basin in Wyoming. Converse County is marked at the bottom.
Powder River Basin.
The Powder River basin in Wyoming is a prospective shale-oil play. It has 5,000 feet of stacked pay — layers that contain oil and gas – which is an enormous thickness. In this one respect the resource is similar to the Permian basin which has about 2000 ft of stacked pay. These thickness numbers are much greater than most other oil and gas plays in the USA. Partly because of this, some big companies such as EOG and Devon jumped in to stake their claim before any of the play was developed.
The USGS evaluated the Converse County resource (Figure 1) and came up with 142 million barrels of recoverable oil. This is small-fry compared with the Delaware basin in Texas and New Mexico which at 46 billion barrels is the cherry of all shale oil plays in the US. For natural gas, the Converse resource is 2.1 trillion cubic feet compared with 281 trillion cubic feet in the Delaware. But let’s not forget that Converse is just one county.
The companies involved in the project are EOG Resources, Devon Energy DVN -2.6%, Occidental Petroleum Corp., Chesapeake Energy Corp. CHK +2.8% (coming out of bankruptcy court), and Northwoods Energy.
EOG, a carefully managed company, produced 20 million barrels of oil in 2019 and was the leading producer in Wyoming. Devon can be labeled as a company who have stamped success in the shale business – first in the Barnett shale, and now in the Delaware basin. Occidental are a forward-looking company that is starting to look like a carbon-management company with big plans to capture CO2 from the air and inject it underground to achieve net-zero oil production.
Even though the BLM has signed the Record of Decision, operators will have to apply for well permits that will be based on their own local site reviews.
The stacked play concept means you can produce oil from two or more layers at the same time, using the equipment on just one drilling pad. The operator group are anticipating up to 16 close-spaced wellheads on each large drilling pad, and this implies accessing to at least two and maybe several different layers.
In the Cretaceous group of strata, in the southern part of the basin, each of the following layers are potential targets for the new technology of long horizontal wells and multiple fracs (listed by increasing depth):
Wall Creek-Turner sandstones.
Frontier sandstones. Mowry shale.
The Niobrara is the source rock, meaning where the oil originally came from, and ranges in depth from 6000 – 10,000 ft.
The Wyoming State Geological Survey are in the middle of all this.The BLM’s environmental impact document listed 10 separate stacked play targets, including some from above that have been subdivided…. The Frontier, Muddy, Mowry, Niobrara, Parkman, Shannon, Sussex, Teapot, Tekla, and Turner formations.
“Although the Turner Sandstone and the equivalent Frontier (specifically, the Wall Creek Sandstone) are some of the more prolific reservoirs in the Powder River Basin, horizontal drilling practices and production from all of these unconventional tight sand and shale reservoirs are what boosted Wyoming’s 2019 oil production to levels not seen since 1991. Crude oil production from the Powder River Basin consistently increased by more than 20 percent year-to-year from 2017 through 2019,” according to Ranie Lynds of the Survey.
The new technology.
The shale-type technology has worked in so many fields in the US, it is hard to see it not being made to work by top US experts such as EOG, Devon and Occidental. In essence a horizontal well up to two miles long is drilled into a single layer, and then fracked by as many as 40 separate operations.
Each fracking operation consists of pumping high pressure water down a well with sufficient pressure to crack up the shale or sandstone or whatever kind of tight rock it is. Sand is threaded into the water to keep the fractures open after the pumping operation is complete so the oil or gas molecules can flow along the fractures to the well.
In essence, the fracking operations have created a reservoir of cracks around a horizontal well in a place where native permeability is close to zero. If you make your own reservoir, and it contains enough oil and gas under sufficient pressure, you will have a successful well.
In my next piece I’ll dive deeper into the pros and cons of drilling in the Powder River Basin.