Evolutionary and Revolutionary Changes

Jane Van Ryan
Posted October 15, 2009

"In the past three decades, the petroleum business has transformed itself into a high-technology industry... In some cases, these improvements have been evolutionary, while in others, they have been revolutionary."- Doug Morris, API, before the New York State Assembly Standing Committee on Environmental Conservation, Oct. 15, 2009.

At today's hearing in Albany, NY, API's Doug Morris testified about the re-engineered oil and natural gas industry and its ability to produce natural gas from the Marcellus Shale formation safely and efficiently. He cited numerous examples of new technologies and approaches to drilling that are reaping benefits for American consumers. He said:

• The industry is able to drill with great precision using steerable drill bits to hit production targets that are less than six feet across.
• A new record for horizontal drilling was set two years ago when a well from an onshore location tapped into an offshore field seven miles away.
• Technology has opened up new energy resources for development, including the Bakken formation in North Dakota and the Marcellus Shale formation which stretches from New York to West Virginia.
• Due to the combination of horizontal drilling and the proven technology of hydraulic fracturing, onshore natural gas production has increased by more than 20 percent over the past three years, an accomplishment that most energy experts considered impossible a few years ago.

Doug told the legislators that the development of shale gas resources in New York will provide significant benefits which include lower energy costs for New Yorkers, new jobs, a new source of income for landowners and an increase in state revenues from taxes and royalties.

He also noted that hydraulic fracturing--a technique used to stimulate wells--is safe and reliable. He added that the New York State Department of Environmental Conservation has stated there is "no record of any documented instance of groundwater contamination caused by hydraulic fracturing for gas well development in New York, despite the use of this technology in thousands of wells across the state during the past 50 or more years."

It's estimated that between 60 to 80 percent of all U.S. wells drilling in the next years will require fracturing. This is certainly true of the wells that could be drilled in the Marcellus Shale.