Economic assessment and review of waterless fracturing technologies in shale resource development: A case study

Abstract

Our database tracking of USA water usage per well indicates that traditionally shale operators have been using, on average 3 to 6 million gallons of water; even up to 8 million for the entire life cycle of the well based on its suitability for re-fracturing to stimulate their long and lateral horizontal wells. According to our data, sourcing, storage, transportation, treatment, and disposal of this large volume of water could account for up to 10% of overall drilling and completion costs. With increasingly stringent regulations governing the use of fresh water and growing challenges associated with storage and use of produced and flowback water in hydraulic fracturing, finding alternative sources of fracturing fluid is already a hot debate among both the scientific community and industry experts. On the other hand, waterless fracturing technology providers claim their technology can solve the concerns of water availability for shale development. This study reviews high-level technical issues and opportunities in this challenging and growing market and evaluates key economic drivers behind water management practices such as waterless fracturing technologies, based on a given shale gas play in the United States and experience gained in Canada. Water costs are analyzed under a variety of scenarios with and without the use of (fresh) water. The results are complemented by surveys from several oil and gas operators. Our economic analysis shows that fresh water usage offers the greatest economic return. In regions where water sourcing is a challenge, however, the short-term economic advantage of using non-fresh water-based fracturing outweighs the capital costs required by waterless fracturing methods. Until waterless methods are cost competitive, recycled water usage with low treatment offers a similar net present value (NPV) to that of sourcing freshwater via truck, for instance.

Keywords

shale gas / gas exploration / fracturing techology / fracturing fluid / waterless fracturing

References

Ahmed U., Meehan N. Unconventional Oil and Gas Resources: “Exploitation and Development”, Taylor Francis Group, Baker Hughes, 2016.

Ajayi B., Isaac Aso I., Jay Terry I. J. Jr., . Stimulation Design for Unconventional Reservoirs. Oilfield Review, 2013, 25(2): 34-46.

Akhmadullin I. Utilization of Co-Produced Water from Oil Production: Energy Generation Case, 2017.

Alderete I. D., Sosa-Massaro A., D’Hers S. A Fluid Structure Interaction Model for Hydraulic Fracture Simulation on VacaMuerta Argentina Shale Formation, 2017.

Ali M., Hascakir B. Water/Rock Interaction for Eagle Ford, Marcellus, Green River, and Barnett Shale Samples and Implications for Hydraulic-Fracturing-Fluid Engineering. SPE Journal, 2016, 22(1): 162-171.

Alpern J., Marone C., Elsworth D. Exploring the Physicochemical Processes that Govern Hydraulic Fracture through Laboratory Experiments, 2012.

Aniemena C., Oraki Kohshour I. A Fast Semi-Analytical Method for Refracturing Candidate Selection and Performance Estimation of Shale Wells, 2017.

Argonne National Laboratory Produced Water Volumes and Management Practices in the United States, 2009.

ARI EIA/ARI World Shale Gas and Shale Oil Resource Assessment, 2013.

Arshadi M., Zolfaghari A., Piri M., . The Effect of Deformation on Two-Phase Flow through Proppant-Packed Fractured Shale Samples: A Micro-Scale Experimental Investigation. Advances in Water Resources, 2017, 105: 108-131.

Barati R. Nano-Proppants for Fracture Conductivity. US Patent 20160355727 A1, 2016.

Barati R., Hutchins R. D., Friedel T., . Fracture Impact of Yield Stress and Fracture-Face Damage on Production with a Three-Phase 2D Model. SPE Production & Operations, 2009, 24(2): 336-345.

Barati R., Liang J. T. A Review of Fracturing Fluid Systems Used for Hydraulic Fracturing of Oil and Gas Wells. Journal of Applied Polymer Science, 2014, 131(16): 318-323.

Bennion D. B., Bietz R. F., Thomas F. B., . Reductions in the Productivity of Oil and Low Permeability Gas Reservoirs due to Aqueous Phase Trapping. Journal of Canadian Petroleum Technology, 1994, 33(9): 45-54.

Bennion D. B., Thomas F. B., Bietz R. F. Low Permeability Gas Reservoirs: Problems, Opportunities and Solutions for Drilling, Completion, Stimulation and Production, 1996.

Bertoncello A., Wallace J., Blyton C., . Imbibition and Water Blockage in Unconventional Reservoirs: Well-Management Implications during Flowback and Early Production. SPE Reservoir Evaluation & Engineering, 2014, 17(4): 497-506.

Bizjournal Ohio Waterless Fracking Well’s Output Lagging, 2015.

Bonapace J. C. Water Management for Tight and Shale Reservoir: A Review of What has been Learned and What should be Considered for Development in Argentina, 2015.

Bullis K. Skipping the Water in Fracking, 2013.

Capper L. Exploring the Use of Water Treatment Systems for Immediate Water Reuse to Reduce Transportation, Storage and Disposal Costs–A U.S. Perspective and Market Update, 2015.

Casey M., Rajan S., Oraki Kohshour I., . An Economic Model for Field-Wide Shale Gas Development in Saudi Arabia, 2015

Ceres Hydraulic Fracturing Water Stress and Water Demand by the Numbers, 2014.

Charry L., Malpani R., Clark B. A Step Change in the Learning Curve for Refracturing in the Eagle Ford, 2016

Cheng Y. M. Impact of Water Dynamics in Fractures on the Performance of Hydraulically Fractured Wells in Gas-Shale Reservoirs. Journal of Canadian Petroleum Technology, 2012, 51(2): 143-151.

Cipolla C., Wallace J. Stimulated Reservoir Volume: A Misapplied Concept?, 2014.

Dunkel M. R. Sustainability Aspects of Water Infrastructure. Society of Petroleum Engineers, 2017.

Ehlig-Economides C. A., Economides M. J. Water as Proppant, 2011

Ehlig-Economides C., Economides M. J. Pressure Transient Analysis in an Elongated Linear Flow System. Society of Petroleum Engineers Journal, 1985, 25(6): 839-847.

EPA Draft Plan to Study the Potential Impacts of Hydraulic Fracturing on Drinking Water Resources, 2011.

Eshkalak M. O., Al-Shalabi E. W., Sanaei A., . Simulation Study on the CO₂-Driven Enhanced Gas Recovery with Sequestration versus the Re-Fracturing Treatment of Horizontal Wells in the U.S. Unconventional Shale Reservoirs. Journal of Natural Gas Science and Engineering, 2014, 21: 1015-1024.

Esmaili S., Kalantari D. A., Mohaghegh S. D. Forecasting, Sensitivity and Economic Analysis of Hydrocarbon Production from Shale Plays Using Artificial Intelligence & Data Mining, 2012

Fragachán F. E., Shahri M. P., Arnold D. M., . Enhancing Well Performance via In-Stage Diversion in Unconventional Wells: Physics and Case Studies, 2016.

Friehauf K. E., Sharma M. M. Fluid Selection for Energized Hydraulic Fractures. Journal of Petroleum Technology, 2010, 62(03): 42-44.

Ghahri P., Jamiolahmady M., Sohrabi M. A Thorough Investigation of Cleanup Efficiency of Hydraulic Fractured Wells Using Response Surface Method, 2011

Ghanbari E., Dehghanpour H. The Fate of Fracturing Water: A Field and Simulation Study. Fuel, 2016, 163: 282-294.

Gupta D. V. S., Leshchyshyn T. T. CO₂-Energized Hydrocarbon Fracturing Fluid: History and Field Application in Tight Gas Wells, 2005.

Haddad M., Sanaei A., Al-Shalabi E. W., . Major Obstacles in Production from Hydraulically Re-Fractured Shale Formations: Reservoir Pressure Depletion and Pore Blockage by the Fracturing Fluid, 2015.

Hargreaves S. Drought Strains U.S. Oil Production, 2012.

Harris P. C., Haynes R. J., Egger J. P. The Use of CO₂-Based Fracturing Fluids in the Red Fork Formation in the Anadarko Basin, Oklahoma. Journal of Petroleum Technology, 1984, 36(6): 1003-1008.

Holditch S. A. Factors Affecting Water Blocking and Gas Flow from Hydraulically Fractured Gas Wells. Journal of Petroleum Technology, 1979, 31(12): 1515-1524.

Ibrahim A. F., Nasr-El-Din H. A., Rabie A., . A New Friction-Reducing Agent for Slickwater Fracturing Treatments, 2016

Ishida T., Aoyagi K., Niwa T., . Acoustic Emission Monitoring of Hydraulic Fracturing Laboratory Experiment with Supercritical and Liquid CO₂. Geophysical Research Letters, 2012, 39 16 L16309

Jacobs T. Energized Fractures: Shale Revolution Revisits the Energized Fracture. Journal of Petroleum Technology, 2014, 66(6): 48-56.

Jacobs T. Downturn Represents Stress Test for Unconventional Hydraulic Fracture Modeling. Journal of Petroleum Technology, 2016.

James S. Propriety Flow Back, Well Test and RTA Data for Case 2, 2008, Calgary: Caltex Energy Inc.

Kammath J., Laroche C. Laboratory-Based Evaluation of Gas Well Deliverability Loss Caused by Water Blocking. SPE Journal, 2003, 8(1): 71-80.

Kazemi M., Takbiri-Borujeni A. Effect of Adsorption in Flow of Gases in Organic Nanopores: A Molecular Dynamics Study, 2016.

Kennedy R., Luo L., Kuskra V. Ahmed U., Meehan M. Unconventional Basins and Plays—North America and Rest of the World. Unconventional Oil and Gas Resources: Exploitation and Development, 2016, Baker Hughes: Taylor Francis Group, CRC Press, 752.

Kennedy R., Oraki Kohshour I., Ahmed U. Ahmed U., Meehan M. Rejuvenation of Unconventional Resources. Unconventional Oil and Gas Resources: Exploitation and Development, 2016, Baker Hughes: Taylor Francis Group, CRC Press, 752.

Kong B., Wang S. H., Chen S. N. Minimize Formation Damage in Water-Sensitive Montney Formation with Energized Fracturing Fluid. SPE Reservoir Evaluation & Engineering, 2016, 20(3): 562-571.

Kostenuk N. H., Browne D. J. Improved Proppant Transport System for Slickwater Shale Fracturing, 2010

Leblanc D. P., Martel T., Graves D. G., . Application of Propane (LPG) Based Hydraulic Fracturing in the McCully Gas Field, New Brunswick, Canada, 2011

Li L. M., Al-Muntasheri G. A., Liang F. A Review of Crosslinked Fracturing Fluids Prepared with Produced Water. Petroleum, 2016, 2(4): 313-323.

Li X., Feng Z. J., Han G., . Breakdown Pressure and Fracture Surface Morphology of Hydraulic Fracturing in Shale with H₂O, CO₂ and N₂. Geomechanics and Geophysics for Geo-Energy and Geo-Resources, 2015, 2(2): 63-76.

Liang F., Sayed M., Al-Muntasheri G. A., . A Comprehensive Review on Proppant Technologies. Petroleum, 2016, 2(1): 26-39.

Linde Oil and Gas Reservoirs: Energized Solutions, 2014.

Loree D. N., Mesher S. T. Liquified Petroleum Gas Fracturing System, 2007.

Lu J. M., Nicot J. P., Mickler P. J., . Alteration of Bakken Reservoir Rock during CO₂-Based Fracturing—An Autoclave Reaction Experiment. Journal of Unconventional Oil and Gas Resources, 2016, 14: 72-85.

Makhanov K., Dehghanpour H., Kuru E. An Experimental Study of Spontaneous Imbibition in Horn River Shales, 2012

Martin T., Kotov S., Nelson S.G., . Ahmed U., Meehan M., . Stimulation of Unconventional Reservoirs. Unconventional Oil and Gas Resources: Exploitation and Development, 2016, Baker Hughes: Taylor Francis Group, CRC Press

Mauter M. S., Alvarez P. J. J., Burton A., . Regional Variation in Water-Related Impacts of Shale Gas Development and Implications for Emerging International Plays. Environmental Science & Technology, 2014, 48(15): 8298-8306.

Meehan D. N. A Comparison of North American and International Risks in Unconventional Resource Plays, 2014

Middleton R. S., Carey J. W., Currier R. P., . Shale Gas and Non-Aqueous Fracturing Fluids: Opportunities and Challenges for Supercritical CO₂. Applied Energy, 2015, 147: 500-509.

Miller C. K., Water G. A., Rylander E. I. Evaluation of Production Log Data from Horizontal Wells Drilled in Organic Shales, 2011

Mirzaei-Paiaman A., Dalvand K., Oraki Kohshour I., . A Study on the Key Influential Factors of a Gas Reservoir’s Potential for Aqueous Phase Trapping. Energy Sources, Part A: Recovery, Utilization, and Environmental Effects, 2012, 34(16): 1541-1549.

Navigant Research, 2016. [2017-9-04]. http://www.navigantresearch.com/

Nuyens D., Heinz W., Hiller D. H. License to Operate: Nontechnical Risks and Shale Gas Development in Europe, 2012.

Olivas J. A., Nebiolo M. M., Garcia S. J. R., . Accelerating the Learning Curve: Adapting Global Expertise to Coiled-Tubing Operations in Argentina Shale Development, 2013.

Oraki Kohshour I., Leshchyshyn T., Munro J., . Examination of Water Management Challenges and Solutions in Shale Resource Development––Could Waterless Fracturing Technologies Work?, 2016

Pathak M., Panja P., Huang H., . Enhanced Recovery in Shales: Molecular Investigation of CO₂ Energized Fluid for Re-Fracturing Shale Formations, 2016.

Penny G. S., Dobkins T. A., Pursley J. T. Field Study of Completion Fluids to Enhance Gas Production in the Barnett Shale, 2006

Rassenfoss S. Seeking Lower-Cost Ways to Deal with Fracturing Water. Journal of Petroleum Technology, 2013, 65(11): 48-57.

Reynolds M., Bachman R., Buendia J. The Full Montney—A Critical Review of Well Performance by Production Analysis of Over 2 000 Montney Multi-Stage Fractured Horizontal Gas Wells, 2015.

Reynolds M., Moscoso K., Buendia J., . Tight Cardium Multistage-Fractured Horizontal-Oil-Well-Performance Study Focusing on the Effectiveness of Various Fracture-Fluid Systems. Journal of Canadian Petroleum Technology, 2014, 54(5): 298-309.

Ribeiro L. H., Sharma M. M. A New 3D Compositional Model for Hydraulic Fracturing with Energized Fluids. SPE Production & Operations, 2013, 28(3): 259-267.

Ribeiro L. H., Sharma M. M. Fluid Selection for Energized Fracture Treatments, 2013

Rigzone Fracking Goes Waterless: Gas Fracking Could Silence Critics, 2013.

Shanley K. W., Robert M. C., John W. R. Factors Controlling Prolific Gas Production from Low-Permeability Sandstone Reservoirs: Implications for Resource Assessment, Prospect Development, and Risk Analysis. AAPG Bulletin, 2004, 88(8): 1083-1122.

Sharma M., Agrawal S. Impact of Liquid Loading in Hydraulic Fractures on Well Productivity, 2013

Smith C. F. Gas Well Fracturing Using Gelled Non-Aqueous Fluids, 1973

Swami V. F., Javadpour F., Settari A. A Numerical Model for Multi-Mechanism Flow in Shale Gas Reservoirs with Application to Laboratory Scale Testing, 2013

Taylor R. S., Lestz R. S., Wilson L., . Liquid Petroleum Gas Fracturing Fluids for Unconventional Gas Reservoirs, 2006

Tiner R. L., Stahl E. J., Malone W. T. Developments in Fluids to Reduce Potential Damage from Fracturing Treatments, 1974.

Tovar F. D., Eide O., Graue A., . Experimental Investigation of Enhanced Recovery in Unconventional Liquid Reservoirs using CO₂: A Look Ahead to the Future of Unconventional EOR, 2014.

Tudor E. H., Nevison G. W., Allen S., . 100% Gelled LPG Fracturing Process: An Alternative to Conventional Water-Based Fracturing Techniques, 2009.

US Drought Monitoring Map, 2016. [2017-09-04]. http://droughtmonitor.unl.edu/

Vincent M. Restimulation of Unconventional Reservoirs: When are Refracs Beneficial?. Journal of Canadian Petroleum Technology, 2010, 50(5): 36-52.

Wamock W. E., Harris P. C., King D. S. Successful Field Applications of CO₂-Foam Fracturing Fluids in the Arkansas-Louisiana-Texas Region. Journal of Petroleum Technology, 1985, 37(1): 80-88.

Wang Q., Guo B., Gao D. Is Formation Damage an Issue in Shale Gas Development?, 2012

Whalen T. The Challenges of Reusing Produced Water. Journal of Petroleum Technology, 2012, 64(11): 18-20.

Zanganeh B., Ahmadi M., Obadareh A. Proper Inclusion of Hydraulic Fracture and Unpropped Zone Conductivity and Fracturing Fluid Flowback in Single Shale Oil Well Simulation, 2014

Zhang K., Liu Q., Wang M., . Investigation of CO₂ Enhanced Gas Recovery in Shale Plays, 2016.