Whether unconventional resources are in Poland, France, China or the U.S., the technology to develop those resources is highly sought after in today’s market.

A packed house that turned out for the inaugural energy forum by Boyar Miller, a Houston law firm, was probably not expecting a pop quiz.

That’s exactly what happened as one of the featured speakers turned professorial and presented a true-or-false exam that was meant to measure the room’s unconventional resources IQ. Stephen Ingram, senior technology manager, Halliburton, rolled out six fundamental questions at the March 22 event in Houston.

“If anyone gets all of these questions correct, then you can come talk to me about fracing,” he quipped.

Ingram’s questions, answers and explanations follow:

Question No. 1: All unconventional wells require hydraulic fracturing. Answer: True.

“Every single one of these wells must be hydraulically fractured to become economically and commercially viable. It’s a fact of the physics of the reservoirs themselves, and that can’t be changed. The individuals who would seek to regulate, limit, offset or prohibit the use of hydraulic fracturing as a science and a technology -- if successful -- would see this in the next three years: a 45% decrease in natural gas production and a 17% decrease in oil production in the United States.”

Question No. 2: Unconventional resources are being developed in environmentally responsible ways? Answer: True.

“There have been zero documented cases in which hydraulic fracturing has influenced a water table. There have been a little more than 44,000 wells hydraulically fractured in the United States, and not one documented case where a hydraulically fractured well bore has influenced the water table. We are working thousands of feet below aquifers that are used for residential and agricultural [water supply]. Our surface footprint is also very small. In the western half of the United States, where a lot of oil and gas comes from public lands, we operate in almost one-tenth of one percent of those public lands.”

Still, Ingram said, that does not make the ride any less bumpy for the industry.

“We have a major perception issue in the public forum. We are also an industry that is not faultless in any way, shape or form. We have caused massive surface contamination and spills when equipment has failed and when processes were not followed,” he said. “There’s also a major issue around fracturing chemicals, and it’s very much a hot-button issue. But less than one percent of fracturing fluids are chemicals themselves. The rest of it is water and sand.”

Referring to a projected slide that included the image of a large jar filled with a clear substance, Ingram said, “The fluid system that I’m showing you is the first available commercial system used for hydraulic fracturing in which every single aspect of it was sourced from your refrigerator. The materials come from your ice cream and beer. They are completely benign. They meet all aspects of Food and Drug Administration regulations. We actually pumped this last week into the Eagle Ford shale. It comes with an increased cost to the operators, but the industry is moving in the direction of [becoming more benign].”   

Question No. 3: Drilling unconventional wells is using up all of our fresh water. Answer: False.

“The hydraulic fracturing industry uses in one day what New York City uses in 12 hours. In one day, we use the same amount of water that irrigates less than one percent of the entire U.S. corn crop. It amounts to about 20 percent of golf-course watering for one day.

“Now let’s talk about alternative energies and their consumption of water: For shale gas development, for every million BTUs produced we use 2.3 gallons of water. For coal, it’s five gallons of water. For nuclear, it’s 11 gallons of water. For biofuels, it’s 2,500 gallons of water that’s used to create 1 million BTUs of natural gas.”

Question No. 4: Unconventional resources are a major part of the global energy solution. Answer: True.

“Ten years ago, this was false. Today, it is absolutely a true statement. Fifty-three percent of U.S. gas production comes from unconventionals. For shale gas, it was one percent 10 years ago. Today, it’s 17 percent. Reservoirs such as the Bakken and the Eagle Ford, which are still in their infancy, represent seven percent of U.S. crude oil production. And it will dramatically increase during the next five years.”

Question No. 5: All unconventional resources are different. Answer: True.

“I’ll give you three examples of why this statement is true,” Ingram said, factoring in issues such as regulatory barriers, variances in geology and infrastructure problems.

“No. 1 is the Paris Basin. Some of the best geology is underneath Paris, France. The political environment inside France may prohibit the development of unconventional resources, but it is probably the world’s best shale gas play.

“The second is the Floyd shale that is located in Mississippi. The market and the technology are there to make this feasible. But the problem is that the geology is just kind of OK. So Mississippi is going to miss out, and that’s a function of geology.

“The third is natural gas liquids in areas like the Marcellus shale. There are a lot of natural gas liquids that could really help out that play. The problem isn’t the geology, because the geology is there. The technology is there. The problem is that there is insufficient infrastructure to take those liquids to market, and that represents a barrier to its development. That barrier will be overcome in time given a free and open marketplace.”

And then, there was the trick question.

Question No. 6: Are all unconventional resources alike? Answer: True.

“The answer seems very opposite to [Question No. 5]. Same statement -- one’s false and one’s true. And you may think I’m crazy. But we’re not talking about the technology aspect. If you go to a hydraulic fracturing location today -- whether it’s the Eagle Ford, Bakken or Poland -- they look the same.”

Referring to what he calls an “intellectual storehouse,” Ingram said that this “accumulation of experience, knowledge, trial and error, and successes and failures” has led to “scientific breakthroughs that have been gained over decades of performing hydraulic fractures.”

His reasoning continued: “A tremendous amount of private equity capital is coming into this market. Look at who has bought into U.S. shale plays -- Statoil, Petrobras, Total, Reliance, Petronas, CNOOC -- the list goes on and on. They’re here to make money and tap into this intellectual storehouse, and they want to take that information home with them. And why? Because all unconventional resources are alike.”

Contact the author, Mike Madere, at mmadere@hartenergy.com.