Spears talks of drilling, fracking innovation at Friends of Finance
BY ROD WALTON World Staff Writer
Wednesday, October 24, 2012
10/24/12 at 2:16 AM
Busts inspired innovation better than booms when it came to oil and gas producers finally figuring out how to make chocolate and peanut butter work together for good, energy industry insider Richard Spears told the Friends of Finance crowd Tuesday at the University of Tulsa.
Let him explain.
The chocolate was horizontal drilling and the peanut butter was hydraulic fracturing, Spears pointed out. Neither innovation was new, but he compared them to the Reese's Cup candy as the perfect combination that pushed American oil and gas production to new highs in recent years.
"About 50 years ago, someone developed the greatest candy in the history of the earth; somebody had a little free time," said Spears, managing director of oil field research firm Spears and Associates.
"During booms, we work just as hard as we can and yet don't take time to think about what we've done," he added. "Technologies get adopted not in periods of growth but periods of slowdown."
The American drilling industry has been doing multi-stage fracking jobs - forcing water, sand and chemical slurries into hard rock formations at high pressures - for at least 60 years. Horizontal wells - which can draw from 1,000-foot-wide reservoirs, instead of 20 feet deep, also were being dug decades ago.
The combination began working together when Mitchell Energy tried it in the Barnett Shale natural gas plays barely more than a decade ago. Other companies began using it to produce oil only since 2009 and 2010.
"Oil production in this country began to grow in 2010," Spears said. "We'd spent the last 30 years watching oil production decline."
Spears and Associates has an inside look at industry trends, serving some 500 clients including most of the nation's biggest drilling and production firms. Richard Spears' father, Robert, started his company out of his garage in 1965.
"We're able to see things happen as they develop," Richard Spears said of his company's connections to the upstream industry. "We're able to see things develop just a little before everyone else does."
Spears warned, however, that outside forces such as the environmental lobby are controlling how the fracking story is being told. He noted that some 2 million fracking jobs have been done in the U.S. with relatively minor water use and no hard evidence of damage.
One audience member asked if the nation's current drought would force a battle over water usage between the fracking and agricultural industries. Spears turned the question around to argue that production of ethanol - a corn-based fuel blending with gasoline due to government mandates - was causing more damage than hydraulic fracturing.
"It's an egregious abuse of water to burn food for fuel," he said of ethanol. "We're taking food out of the mouths of children" in various nations.
"That, to me, is an absolute crime," Spears added. "It's happened both in Republican and Democratic administrations."
The TU Friends of Finance speaker series will resume Dec. 6 with SemGroup Corp. CEO Norm Szydlowski.
Original Print Headline: Spears talks drilling, fracking at TU visit
Rod Walton 918-581-8457
rod.walton@tulsaworld.com
Associated Images:
Richard Spears, managing director of oil field research firm Spears and Associates, said some 2 million fracking jobs have been done in the U.S. with relatively minor water use and no hard evidence of damage. TOM GILBERT / Tulsa World
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