Sunday, June 21, 2009

Natural Gas Plentiful in Barnett Shale

Chesapeake Energy Chairman and CEO Aubrey McClendon said Friday that the Barnett Shale has surpassed the venerable San Juan Basin as the biggest natural gas producer in the United States.

He also said the Barnett, which has speckled North Texas with roughly 10,000 natural gas wells, "will be producing at least 50 years" and "probably" for a century.

McClendon made the comments in a speech to the Rotary Club of Fort Worth and in a brief telephone interview with the Star-Telegram.

He said Chesapeake officials estimate Barnett production at 5.5 billion cubic feet a day but acknowledged that no one knows precisely. The San Juan is in the Four Corners region of the Southwest, with production concentrated in northwestern New Mexico and Colorado.

Gene Powell, publisher of the Barnett Shale Newsletter, has estimated Barnett production at 4.9 billion cubic feet per day, but that was as of Jan. 1. Barnett drilling activity has been centered most heavily in Tarrant and Johnson counties but also extends into Hood, Palo Pinto, Parker, Somervell, Denton, Jack, Montague and Wise counties.

Not what it was

Steve Grape, an official with the Dallas office of the U.S. Department of Energy, said the Barnett and San Juan are "probably running neck and neck nowadays" in gas production. The San Juan led the nation in production in 2007, Energy Department figures show, but no comparison of production for specific fields has been released for 2008.

There is still substantial drilling in the Barnett, with 74 rigs active Friday, according to RigData. But that’s only slightly more than one-third the peak rig count of 214 for the Barnett, a gas-rich geological zone about 6,500 to 8,500 feet below the surface. Drilling has declined sharply as a result of a steep decline in natural gas prices in the wake of a severe recession that has weakened energy demand.

Texas Railroad Commission spokeswoman Stacie Fowler said that 10,539 wells had been drilled in the Barnett through March and that there are 9,732 producing wells.

Reaping benefits

McClendon, who has come under fire recently for the $112.5 million compensation package he received in 2008, told Rotarians that Fort Worth and North Texas are "fortunate to overlay one of the largest energy deposits" in the nation, with residents to reap benefits for many decades to come from lease bonuses, royalties and jobs.

Since entering the Barnett, in 2004, Chesapeake has made 225,000 lease agreements in the area, McClendon said. The company, which is based in Oklahoma City and has a large regional office in Fort Worth, directly employs 700 people in the area; 5,000 others have worked with Chesapeake as contractors in activities such as leasing and drilling, he said.

McClendon urged that the U.S. embrace natural gas as a transportation fuel to reduce reliance on foreign oil and coal. He said he drives a "dual-fuel" Chevrolet Tahoe that can run on gasoline or compressed natural gas. The natural gas has cost him only 95 cents a gallon for the past two months, he said.

He acknowledged, however, that America lacks the kind of well-developed infrastructure for refueling natural gas-powered vehicles that has been available for gasoline-powered vehicles for many decades.
JACK Z. SMITH, 817-390-7724


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