Start Date/Time: Monday, May 16, 2011, 7:00 PM
Ending Date/Time: Monday, May 16, 2011, 8:00 PM
Location: Kane 220
This event is open to the public, however seating is limited, and those interested are encouraged to arrive early.
Speaker: Arthur E. Berman
Labyrinth Consulting Services, Inc.
Sugar Land, TX 77479
The widespread belief that shale gas plays will provide a cheap and abundant supply of natural gas while operators make a sizeable profit must be questioned based on results to date. Shale gas, like tight-sandstone gas, coal-bed methane and oil sands, is at the bottom of the resource pyramid and, therefore, while resource volumes are large, costs are high and recovery efficiency is low.
Based on several decades of experience with other low-permeability reservoirs, the expectation that shale gas plays will realize significantly higher profit margins seems unlikely and empirical results to date from longer-lived shale plays supports this observation.
Evaluation of the Barnett, Fayetteville and Haynesville shale plays suggests that company claims of reserves are over-stated by as much as 100 percent. This is largely because low decline-rate hyperbolic models are not supported by empirical production history data. Relatively long-lived production histories in the Barnett and Fayetteville shale plays suggest weakly hyperbolic decline matches with b-exponents that generally average less than 0.5 and rarely exceed 0.75.
Operator claims of profitability at less than $5.00 per thousand cubic feet of gas, therefore, must be questioned. These forecasts are based largely on point-forward economics and are at odds with costs reported to the Securities and Exchange Commission in 10-K filings. In fact, less than 10 percent of Barnett Shale wells have recovered break-even costs after eight years of horizontal drilling and modern fracture stimulation.
Arthur E. Berman is a geological consultant with thirty-two years of experience in petroleum exploration and production. He currently is consulting for several E&P companies and capital groups in the energy sector.
He is a Director of ASPO USA (Association for the Study of Peak Oil & Gas USA). He is on the editorial board of The Oil Drum and a frequent contributor, and an associate editor of the AAPG (American Association of Petroleum Geologists) Bulletin. He was past Editor of the Houston Geological Society Bulletin (2004-2005) and past Vice-President of the Society (2008-2009).
He has published 100 articles on geology, technology, and the petroleum industry during the past 5 years. Publication topics include petroleum exploration, oil and gas price trends and cycles, petroleum play evaluation, sequence stratigraphy, coastal subsidence, earthquakes, tsunamis, and petroleum geopolitics. He has published 10 articles on shale gas plays including the Barnett, Haynesville and Fayetteville shales.
He has made 50 presentations to energy sector boards of directors and executive committees, financial analyst conferences, oil & gas association meetings, and engineering and geological society meetings over the past year. He is a guest lecturer at the Rice University Jesse H. Jones Graduate School of Management.
He has an M.S. (Geology) from the Colorado School of Mines and a B.A. (History) from Amherst College.
Information: UW Program on Climate Change, 206-543-6521 or email@example.com
Location and Directions
Kane Hall is located on the north side of Red Square on the UW Seattle campus. Link to campus map showing location. Paid parking is available in the Central Plaza Garage below Kane Hall.
Driving Directions: From I-5, take the NE 45th Street exit (#169). Turn east onto NE 45th Street. Continue east about one quarter mile to 15th Avenue NE and turn right. Head south on 15th Avenue three blocks to NE 41st Street. Turn left at Gate #1 into the Central Plaza Garage. Stop at the gatehouse inside the garage for directions and a parking permit.
Transit Information: There are more than 60 bus routes from all over King and Snohomish counties serving the University District. For more information on taking a bus to the UW, visit the King County's Trip Planner site.