Monday, October 7, 2013

Prodigy CEO, Shawn Bartholomae Keeps Eye on Barnett Shale

Shawn Bartholomae
Prodigy Oil and Gas Company of Irving, Texas physically sits right adjacent to the Barnett Shale field. In its early years the field was thought to have the largest reserves of any natural gas field in the United States. In 2007 it was first suggested to be in the twenty trillion cubic feet range. That is a tremendous field but recent studies (university of Texas computer model) have doubled this number. One of the big reasons for the revised numbers is the increasing ability and sophistication of the fracking techniques.

The field did not change nor did the estimates of how big the field is change considerably. What did change was the extraction techniques and thus the amount of oil and gas we can expect to extract from the same fields.

This Shale quite typically comes in at a high rate of production and then tapers off fairly quick. This characteristic raises questions of whether the shale gas production can keep up with demand. This question becomes more critical as the demand for gas takes off.

One major aspect that is pushing for more and more natural gas production is the developing and even exploding market for LNG. The turnaround in the LNG market is phenomenal. Events overseas and continental N. America are pushing demand higher and higher. Nuclear plant closings in Japan and even in Mexico are helping to drive the demand for LNG growth.

With all of the demand for LNG, predicting what the market will do for this commodity is tricky business. There are many factors to consider any one of which could throw one’s calculations off. 

The EPA could call for stringent demands to limit emissions of mercury and other toxics. U.S. capacity of these emissions in 2011 was running at 317 GW (GIGA watts). Enforcing these restrictions could shut roughly a third of this electricity off from the market. Plus there is the added factor that new construction of coal plants could be paralyzed.

Also uncertain is how the political winds may shift to promote other forms of energy such as solar and wind.

The drilling find that brought us the wide spread use of fracking technology is still producing strongly. Computer models under study from the University of Texas are telling us that we could still expect to be extracting the 45 trillion cubic of gas  from the Barnett Shale up  through  the year 2050.

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