Barnett Shale in Texas: Example of Unconventional Energy Play

by Robert Francis  on Monday, Aug. 27, 2007 12:00 am  

The economic impact in North Texas has been enormous. Dr. Ray Perryman, president and CEO of The Perryman Group, an economic research and analysis firm based in Waco, Texas, released a 140-page report in May on the Barnett Shale. According to the study, gas production in the Barnett Shale underlying Fort Worth and in the surrounding counties accounts for $5.2 billion in annual economic output and more than 55,000 permanent jobs.

Fort Worth in the Middle

All this activity has not gone unnoticed by area residents, particularly since the fast-growing city of Fort Worth sits smack dab in the middle of the play. It is not uncommon for drilling rigs to appear almost overnight in a neighborhood. As a result, several cities have adopted regulations on drilling within city limits.

Fort Worth's buffer between residences and gas wells was 300 feet, but following a natural gas well accident in a nearby city that killed a local contractor, the city's Gas Well Drilling Task Force increased that distance to 600 feet in May 2006.

Not everyone thought that was enough, but several cities have followed Fort Worth's lead.

While some energy companies have steered clear of urban drilling, one area company is making it its niche. Dale Resources LLC of Dallas, founded by Larry Dale, focuses on tapping into the Barnett Shale in city limits with minimal disruption to the city and its residents.

"Where a company drilling in a rural section can get a 250-acre tract with one signed lease, we may have to have more than 600 signed leases to accomplish the same thing," said David Buchanan, director of community affairs at Dale. "It's a much more complicated process."

Also complicating drilling in the Barnett Shale is the huge amount of water necessary for the fracing process. A frac for a horizontal well uses between 80,000 and 100,000 barrels of water, according to the Texas Railroad Commission, the state agency that regulates the oil and gas industry. This need for water, coupled with a drought that lasted throughout 2006, focused criticism on energy companies operating in the play.

Several Barnett Shale energy companies have formed a group to tackle the growing issue of water use in the biggest gas-drilling play in Texas, and the Texas Railroad Commission has also sponsored research on the issue.

(A version of this article previously appeared in the Fort Worth Business Press. To learn more about the Barnett Shale Play, visit www.fwbusinesspress.com.)

 

 

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