The major challenge involved in shale gas development is obtaining economically viable production. This is because shale has extremely low matrix permeability, and the typical production curve of a shale gas well starts high, and then declines quickly before production stabilizes. In order to reach commercial production rates, shales need to be hydraulically fractured, or fracked, in order to allow access to the shale gas. However, once the technological challenges have been overcome, shale gas can be an extremely attractive option, due to the generally large scale of shale gas reservoirs, attractive finding costs and long production life.
One of the biggest technological hurdles standing in the way of shale gas development is the large volume of water required to fracture and drill a shale gas well. Besides the limited availability of water in Mexico’s shale gas rich northern region, this impact on the quality of drinking water poses problems. In the fracking process the water used is blended with the chemicals and sand, and any leak into the water table has the potential to be harmful to the environment, although many in the industry dispute this claim. Regardless, potential leakages should be very closely monitored, and after water has been used for fracking, it must be properly treated and disposed of.
Although the technology was first used in the 1940s, present day fracking was first applied in the late 1990s at the Barnett Shale in Texas. Being a relatively new technological process to the oil and gas industry, the acquisition of the required expertise can pose some challenges for companies attempting to exploit shale gas reserves for the first time.
First, geologists need to correctly assess the permeability and porosity of the rock and thickness of the targeted shale formation in order to select the best drilling sites. Once drilling begins, a vertical well is first drilled into the shale formation, followed by a horizontal well. Then, frack plugs are placed into the shaft so that the fracking process can begin. Once the liquid has been used to fracture the formations, it returns to the surface via the well bore for disposal, treatment or re-use, leaving sand in the new fractures which keeps them open and releases the trapped gas.
Another factor is the sheer number of wells that need to be drilled in order to bring shale gas production to commercially usable levels. Studies show that shale gas wells can be US$2.5 million more expensive than a normal onshore gas well, making the average cost of a shale gas well US$7.6 million. Another challenge is that, contrary to popular belief, shale gas does need to be treated once it comes out of the well, as it is not always sweet. Although not sour in the conventional sense, shale gas often contains several hundred parts per million of H2S, and a percentage of CO2, which means it needs to be treated before it can be utilized.