THE FUTURE OF FRACKING - Hydrofracking: What Everyone Needs to Know - page 73

These revisions were made as information and technology changed, or previ-
ously unexplored formations, like Three Forks, gained attention. Moreover, the
definition of what constitutes a “technically recoverable” resource is shifting.
Geologists typically gather data on how much gas a well produces at the outset
of operations, and base their estimates on it. But those estimates can be too low or
too high. Some estimates have included gas in pockets that are so deep or small,
or in areas that are off-limits (i.e., critical watersheds or environmentally sensitive
zones), that they are unlikely to be drilled. Energy analysts have criticized EIA and
USGS estimates as overly optimistic. “If the country is going to embrace natural
gas as the fuel of the future, there needs to be a lot more transparency in how these
estimates are calculated and a more skeptical and informed discussion about the
economics of shale gas,” said Bill Powers, editor of the Powers Energy Investor . 2
A group affiliated with the Colorado School of Mines doubts that the oft-quoted
figure, that the United States has a “100 year supply” of natural gas, is realistic and
says the nation may only have 23 years' worth of gas that is economically viable
to recover. 3 And Gail Tverberg, an actuary who writes Our Finite World , a blog
about resources, is skeptical about the hype around shale reserves: “The idea that
the US is about to become a net oil exporter is simply a myth,” she writes. 4
According to a report in the Wall Street Journal , there is a growing consensus
that the United States will see steady growth in natural gas supplies until they plat-
eau sometime around 2040, after which they will slowly decline. 5 This conclu-
sion was reinforced in February 2013, when an exhaustive study underwritten by
the nonpartisan Alfred P. Sloan Foundation examined data from 15,000 wells in
the Barnett Shale, near Fort Worth, Texas, plus research on shale in Pennsylvania,
Louisiana, and Arkansas. 6 The study was among the first to examine both the geo-
logy and economics of hydrofracking, and it revealed that shale deposits can be
highly variable in size and potential, even within the same region.
The gas industry uses the term Ultimate Economic Recovery (UER) to describe
the economic performance of a well. Because no shale well has as yet undergone
a complete life cycle, UER estimates are based on computer models and educated
hunches. 7 While drillers are constantly on the hunt for new well sites, hydrofrack-
ing remains a risky business. The market can shift; productive wells can sit adja-
cent to unproductive wells; and some firms are contractually obliged to pump re-
sources whether their wells turn a profit or not.
In the relatively large 5,000-square-mile Barnett play, for instance, energy com-
panies have spent roughly $40 billion to lease and drill claims, yet critics such