Utica 2020: The shale oil and gas growth looks promising in Ohio

NEW PHILADELPHIA, Ohio — The Utica shale is no longer a secret and the future is bright for the oil and gas industry through 2020.

Officials, citizens, researchers and business owners from over 30 counties in Ohio and across five states gathered Jan. 31 at the Tuscarawas campus of Kent State University to learn what the Utica shale will look like in 2020.

Technology is changing

Dr. Robert Chase, a professor in the petroleum engineering program at Marietta College, said more technology is needed to develop the Utica in 2020 and beyond. He also said it will be important to understand the magnitude of the resource.

“Ohio will become an energy exporter and enjoy a period of unparalleled growth,” said Chase.

Lateral options

By 2020, Chase thinks we will have a better understanding of the optimum spacing and the length of laterals. He said it will take more experimentation and simulation before producers can figure out what those exact lengths should be.

Chase expects the standard for laterals will be between 5,000 and 7,000 feet by 2020, and said we’ll see a decrease in well spacing, as well.

Drilling rigs

He also predicts more advances in the drilling technology by 2020.

Chase said rigs will become more compact and robotic, and he expects there will be fewer personnel required on the drilling rig floor.

He also looks for more automated well control. A computer will be able to sense a problem and shut down everything faster than when a human is in control.

Chase expects the time spent drilling, as well as the drilling costs, will be reduced by 2020.

Well pads

He also said the current trend of increasing the number of wells per pad will continue. There will be more wells drilled per pad, with the potential for multiple laterals from the same vertical wellbore.

He gave the example of a Monroe County well site that was drilled by Magnum Hunter that includes wells into both the Marcellus and Utica shale.

He expects 750-1,000 wells to be drilled per year by 2020.

Hydraulic fracturing

Advancements in hydraulic fracturing, like green hydraulic fracturing or frack fluids, will become the standard by 2020, Chase said. In addition, all spent frack fluids will be recycled.

The expert also looks for frack treatments to involve more stages along the laterals. He said tests are finding that wells that undergo more stages have better results.

Chase went on to say it takes between 4-5 million gallons of water to frack each well. He expects that increase between 6-7 million galls of water as the number of frack stages increase.

Midstream

Scott Hallam, Access Midstream Partners, said there are lots of good signs about what the Utica shale means to Ohio.

His company puts in compressor stations, processing stations, fractionating sites and pipelines.

Hallam said his company will have 305 miles of pipeline in the Utica.

Although the natural gas liquids (NGLs) being produced in the Utica shale is a benefit to producers, there is a downside.

“It is a blessing for NGL’s, but wreaks havoc on pipeline systems,” said Hallam.

He said his company must continuously clean the pipelines because the NGLs pile up in the pipes because of the constantly changing pressures and temperatures in the pipes.

Regulations

Sean Logan, president of Sean Logan and Associates, said the regulatory climate has changed since 2010 and he expects those changes to continue.

“Ohio oil and gas program is constantly improving and that’s a good thing,” said Logan.

Some of the regulations he expects to change will include a uniform way for well pads to be constructed. This law change will include having an engineer design the site prior to permitting.

Other regulation changes will impact impoundments onsite for fresh water and waste water.

Drillers will also be required to have an electronic record of how fracking waste is handled.

Is it a guarantee?

Christopher Guith, of the Institute for 21st Century Energy and the U.S. Chamber of Commerce, cautioned the crowd that there is no guarantee about what the shale will bring and said he isn’t convinced Ohio won’t screw it up.

He said that over-regulation and proposed changes in the tax law could slow the progress, and that it is up to citizens to make sure that the shale boom continues.

He said there are plenty of shale plays, in other U.S. and global locations, and if overtaxed or over-regulated, the driller’s bottom line is at stake and they could leave to drill elsewhere.

Guith said it is important that the United States find manufacturing markets for the gas being produced so that there is a market that will keep drillers in the state.