EF Shale to be here past 2040

Juan A. Navejar Jr.

SAN ANTONIO - The Eagle has landed and will be grounded for decades to come. That is the billion dollar black gold found in the Eagle Ford Shale located just north of Alice according to ConocoPhillips representatives.
“We are looking at decades and decades of production based on current figures for this unconventional oil and gas exploration,” Greg Levelle, Unconventional Reservoirs Technical Manager ConocoPhillips said during the Eagle Ford Shale Consortium held in San Antonio. “Because of the current technological find, we are looking well into 2040 and 2050 with this exploration.”
Texas has become the largest energy producer in the United States both in oil and natural gas adding $144 billion in labor income and billions of dollars in royalty payments with 3,000 identified drilling locations. Texas ranks third compared to the OPEC nations that include Saudi Arabia. Texas is producing 10 million barrels per day. In 2009, Texas was producing 1.1 MMBO, in 2012, 2.2 MMBO were produced.
Shale exploration lifespan can be categorized in stages with years 0-2 as the entry point; years 2-3 as exploration; years 3-10 as development and years 10-50 of operation and production.
“What we’ve done throughout the stages is to cut down on trucking and manpower through the use of pipelines,” Levelle said. “In 2013, 98 percent was trucked. In 2014, we will only truck 56 percent as pipelines come about.”
With the unconventional reservoirs comes the usage of water in hydraulic fracturing. Effective September 1, 2013, the Texas Legislature adopted rules governing the State Water Implementation Fund for Texas (SWIFT) pursuant to House Bill 4 according to Texas Water Development Board Chairman Carlos Rubinstein. Texas voters approved the measure in a 73 percent vote.
HB 4 established two priority systems for projects. First, each regional water planning group must prioritize projects within that region, considering the following criteria:

The decade in which the project will be needed;
Feasibility of the project, including availability of water rights and hydrologic and scientific practicability;
Viability of the project, including if it is a comprehensive solution with a measurable outcome;
Sustainability of the project, taking full project life into account; and
Cost-effectiveness of the project, including unit cost of water to be supplied by the project.

“This gives $2 billion for funding of fracturing,” Chairman Rubenstein said. “This will help in the viability, sustainability and retain ability of our resources.”
By doing this, fracturing consumes 135,000 acre feet of water and will drop to 40,000 acre feet by 2040.
“Compared to 18 million acre feet used by the entire state of Texas, fracturing is using 1 percent of the state of Texas water,” Rubinstein said.
Even with the success of the Shale, challenges in the rural areas see underdeveloped roads and an inexperienced manpower being at a shortage. However, the Texas legislature took the lead during the last session to assist in the state’s most successful find through House Bill 5 (HB5) and the revamping of the education system.
HB5 allows students the flexibility to pursue a curriculum more tailored to their interests and abilities. Business leaders see this as a way to funnel students — particularly those who were not university-bound — into the workforce more quickly.
Alice Independent School District has partnered with Coastal Bend College and the Craft Training Center to engage those students who better fit the mold of our current economic success.
“We understand that not all students are meant for college and want to help them better their chances at a successful career whether it be in the oil field and or medical field,” Alice ISD Superintendent Dr. Grace Everett said during a Rotary presentation. “We have students who will go to college and those who will enter the workforce after high school. These students can now choose their track and can possible earn credit toward a certificate during their high school years.”
Lewis Energy Director of Human Resource Operations Michael Garcia applauds the state legislature for this bill.
“Our biggest challenge we face in the shale is lack of experienced personnel. Our workforce for the shale is currently in elementary and middle schools,” Garcia said. “Not everyone will go to college, so we need to develop our workforce and the only way is to excite the kids about it now. Education is a great opportunity at this time.”
San Antonio Mayor Julian Castro says the opportunity Texas is phenomenal.
“This is the opportunity South Texas needs. The educational opportunities are in the right trajectory to transform our country. The Eagle Ford Shale is the opportunity of a lifetime to alter where the state is headed for a long time. We are making South Texas the key player in our nation’s economy,” Mayor Castro said.
The outlook of Texas crude oil looks to be here for quite a while. However for Alice and Jim Wells County, their outlook will be even greater as Liquefied Natural Gas (LNG) is the prominent commodity underneath the ground. The city of Corpus Christi will play a vital role when it comes to the production of LNG with its new Liquefication Facility.
Corpus Christi Liquefaction, LLC (Corpus Christi Liquefaction), a subsidiary of Cheniere Energy, is developing a LNG export terminal at one of Cheniere’s existing sites that was previously permitted for a regasification terminal. The proposed liquefaction project is being designed for three trains capable of producing in aggregate up to 13.5 million tonnes per annum (mtpa).
The Corpus Christi site is located on the La Quinta Channel on the northeast side of Corpus Christi Bay in San Patricio County, Texas, on over 1,000 acres owned or controlled by Cheniere and is approximately 15 nautical miles from the coast. The Corpus Christi Liquefaction Project is expected to be constructed in phases, with each LNG train commencing operations approximately six to nine months after the previous train.
Matt Barr with Cheniere Energy said ground breaking will begin in 2015 for the new site.
“We expect to be fully operational by 2019 and will pump some $730 million in the South Texas economy annually,” Barr said.
The Port of Corpus Christi looks to be a game player as their role changes from importer of gas to and exporter of the high dollar commodity said Frank Brogan, Managing Director, Port of Corpus Christi.
“The Port of Corpus Christi has become the fifth largest U.S. port in tonnage due to the Eagle Ford Shale. For the first time in 50 years, the port has become an exporter and now changing the demands for American based ships,” Brogan said. “As petro becomes more prevalent, we have to change our docks to accommodate for vapor recovery which in the long run will be worthwhile.”
The Eagle Ford Shale while being the most successful exploration in the United States will soon have a challenger from the south in Mexico as shale exploration will soon begin to the southern country.
Dr. Guillermo Dominguez, PhD, Commissioner National Hydrocarbon Commission, Mexican Federal Government expects Mexico to be an equal player in shale exploration.
“The Mexican government has taken a positive role by amending the Mexican Constitution in order to allow private companies to participate in our oil industry,” Dr. Dominguez said. “Our constitution has never been changed for this before but our transitory articles now outline these main aspects that will allow us to be a player in the oil industry.”
Five Shale regions have been identified just south of the Texas border with the Burgas Shale having the greatest potential. But much like the Eagle Ford Shale’s infancy state, Mexico will face greater challenges in these rural areas with an inexperienced workforce, lack of housing and amenities.
Entrepreneurs like Manuel Manzanilla Velasquez said partnering with the right Texas people will be critical to a successful exploration.
“We have a great opportunity to partner with the businesses of the U.S. and much like the explorations of the north (Texas), we know our challenges and can learn from what Texas has done to get done correctly,” Velasquez said. “We have five years and see this happen and we know the challenges are great but the changes in our constitution can make it can happen.”
The Eagle Ford Consortium was held in San Antonio with Alice Mayor Larry Martinez, Alice Jim Wells County Economic Development President Ralph Gomez and Chamber Executive Director Juan Navejar attending the two-day conference.


EF Shale to be here past 2040 Juan A. Navejar Jr. SAN ANTONIO - The Eagle has landed and will be grounded for decades to come. That is the billion dollar black gold found in the Eagle Ford Shale located just north of Alice according to ConocoPhillips representatives. “We are looking at decades and decades of production based on current figures for this unconventional oil and gas exploration,” Greg Levelle, Unconventional Reservoirs Technical Manager ConocoPhillips said during the Eagle Ford Shale Consortium held in San Antonio. “Because of the current technological find, we are looking well into 2040 and 2050 with this exploration.” Texas has become the largest energy producer in the United States both in oil and natural gas adding $144 billion in labor income and billions of dollars in royalty payments with 3,000 identified drilling locations. Texas ranks third compared to the OPEC nations that include Saudi Arabia. Texas is producing 10 million barrels per day. In 2009, Texas was producing 1.1 MMBO, in 2012, 2.2 MMBO were produced. Shale exploration lifespan can be categorized in stages with years 0-2 as the entry point; years 2-3 as exploration; years 3-10 as development and years 10-50 of operation and production. “What we’ve done throughout the stages is to cut down on trucking and manpower through the use of pipelines,” Levelle said. “In 2013, 98 percent was trucked. In 2014, we will only truck 56 percent as pipelines come about.” With the unconventional reservoirs comes the usage of water in hydraulic fracturing. Effective September 1, 2013, the Texas Legislature adopted rules governing the State Water Implementation Fund for Texas (SWIFT) pursuant to House Bill 4 according to Texas Water Development Board Chairman Carlos Rubinstein. Texas voters approved the measure in a 73 percent vote. HB 4 established two priority systems for projects. First, each regional water planning group must prioritize projects within that region, considering the following criteria: The decade in which the project will be needed; Feasibility of the project, including availability of water rights and hydrologic and scientific practicability; Viability of the project, including if it is a comprehensive solution with a measurable outcome; Sustainability of the project, taking full project life into account; and Cost-effectiveness of the project, including unit cost of water to be supplied by the project. “This gives $2 billion for funding of fracturing,” Chairman Rubenstein said. “This will help in the viability, sustainability and retain ability of our resources.” By doing this, fracturing consumes 135,000 acre feet of water and will drop to 40,000 acre feet by 2040. “Compared to 18 million acre feet used by the entire state of Texas, fracturing is using 1 percent of the state of Texas water,” Rubinstein said. Even with the success of the Shale, challenges in the rural areas see underdeveloped roads and an inexperienced manpower being at a shortage. However, the Texas legislature took the lead during the last session to assist in the state’s most successful find through House Bill 5 (HB5) and the revamping of the education system. HB5 allows students the flexibility to pursue a curriculum more tailored to their interests and abilities. Business leaders see this as a way to funnel students — particularly those who were not university-bound — into the workforce more quickly. Alice Independent School District has partnered with Coastal Bend College and the Craft Training Center to engage those students who better fit the mold of our current economic success. “We understand that not all students are meant for college and want to help them better their chances at a successful career whether it be in the oil field and or medical field,” Alice ISD Superintendent Dr. Grace Everett said during a Rotary presentation. “We have students who will go to college and those who will enter the workforce after high school. These students can now choose their track and can possible earn credit toward a certificate during their high school years.” Lewis Energy Director of Human Resource Operations Michael Garcia applauds the state legislature for this bill. “Our biggest challenge we face in the shale is lack of experienced personnel. Our workforce for the shale is currently in elementary and middle schools,” Garcia said. “Not everyone will go to college, so we need to develop our workforce and the only way is to excite the kids about it now. Education is a great opportunity at this time.” San Antonio Mayor Julian Castro says the opportunity Texas is phenomenal. “This is the opportunity South Texas needs. The educational opportunities are in the right trajectory to transform our country. The Eagle Ford Shale is the opportunity of a lifetime to alter where the state is headed for a long time. We are making South Texas the key player in our nation’s economy,” Mayor Castro said. The outlook of Texas crude oil looks to be here for quite a while. However for Alice and Jim Wells County, their outlook will be even greater as Liquefied Natural Gas (LNG) is the prominent commodity underneath the ground. The city of Corpus Christi will play a vital role when it comes to the production of LNG with its new Liquefication Facility. Corpus Christi Liquefaction, LLC (Corpus Christi Liquefaction), a subsidiary of Cheniere Energy, is developing a LNG export terminal at one of Cheniere’s existing sites that was previously permitted for a regasification terminal. The proposed liquefaction project is being designed for three trains capable of producing in aggregate up to 13.5 million tonnes per annum (mtpa). The Corpus Christi site is located on the La Quinta Channel on the northeast side of Corpus Christi Bay in San Patricio County, Texas, on over 1,000 acres owned or controlled by Cheniere and is approximately 15 nautical miles from the coast. The Corpus Christi Liquefaction Project is expected to be constructed in phases, with each LNG train commencing operations approximately six to nine months after the previous train. Matt Barr with Cheniere Energy said ground breaking will begin in 2015 for the new site. “We expect to be fully operational by 2019 and will pump some $730 million in the South Texas economy annually,” Barr said. The Port of Corpus Christi looks to be a game player as their role changes from importer of gas to and exporter of the high dollar commodity said Frank Brogan, Managing Director, Port of Corpus Christi. “The Port of Corpus Christi has become the fifth largest U.S. port in tonnage due to the Eagle Ford Shale. For the first time in 50 years, the port has become an exporter and now changing the demands for American based ships,” Brogan said. “As petro becomes more prevalent, we have to change our docks to accommodate for vapor recovery which in the long run will be worthwhile.” The Eagle Ford Shale while being the most successful exploration in the United States will soon have a challenger from the south in Mexico as shale exploration will soon begin to the southern country. Dr. Guillermo Dominguez, PhD, Commissioner National Hydrocarbon Commission, Mexican Federal Government expects Mexico to be an equal player in shale exploration. “The Mexican government has taken a positive role by amending the Mexican Constitution in order to allow private companies to participate in our oil industry,” Dr. Dominguez said. “Our constitution has never been changed for this before but our transitory articles now outline these main aspects that will allow us to be a player in the oil industry.” Five Shale regions have been identified just south of the Texas border with the Burgas Shale having the greatest potential. But much like the Eagle Ford Shale’s infancy state, Mexico will face greater challenges in these rural areas with an inexperienced workforce, lack of housing and amenities. Entrepreneurs like Manuel Manzanilla Velasquez said partnering with the right Texas people will be critical to a successful exploration. “We have a great opportunity to partner with the businesses of the U.S. and much like the explorations of the north (Texas), we know our challenges and can learn from what Texas has done to get done correctly,” Velasquez said. “We have five years and see this happen and we know the challenges are great but the changes in our constitution can make it can happen.” The Eagle Ford Consortium was held in San Antonio with Alice Mayor Larry Martinez, Alice Jim Wells County Economic Development President Ralph Gomez and Chamber Executive Director Juan Navejar attending the two-day conference.
2014 Alice Business Today - May 2014