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The Next Boom Town !?!

Admittedly, I am not a fortune-teller, but I do honestly believe that Cline Shale has the potential to create a boom-town atmosphere in the Midland region. It may be easy for just about anyone to say such a thing of an oil play, however, the Cline Shale area truly holds something special.

It sits more than 9,000 feet under Cline Shale, which is, for the most part, along the eastern border of Texas’ Midland Basin. It stretches nearly 150 miles from the north end to the south, spanning around 70 miles wide in four counties.

Cline Shale Potential
With a number of wells showing significant promise in testing, the Cline Shale area has the potential to experience a drastic influx in drilling activity similar to that of oil plays in North Dakota and other parts of Texas. In fact, some believe the area could hold somewhere around 30 billion barrels of oil based on the nearly 10,000 sq. miles Cline Shale encompasses. What’s more, companies such as Laredo, Apache, Devon, Fire-wheel, and a number of others have already invested in Cline Shale with varying degrees of initial development. In fact, Laredo has over 140,000 prime Cline Shale acres. Apache has over half a million acres with six wells in the planning phase, and Devon has almost 390,000 acres in the area as well. As you can see, companies are buying up land and quickly planning the next phase of their operations, which lucky for us, will most certainly include the need for natural gas generators and engines.

Real Estate Boom
With potential for years to come in Cline Shale, it is expected that the area will turn into somewhat of a boom-town. I suspect this means a dramatic increase in real estate developments all over Reagan, Glasscock, Howard, and other outlying Texas counties.
This sounds familiar to the current housing situation in the North Dakota, where oil plays such as Bakken Shale have created a deficiency of housing, but wealth of jobs. In my opinion, the same could hold true for Cline Shale, although hopefully the local real estate developments will learn from the mistakes of other oil plays. In fact, many communities around the area are already concerned that the current housing developments will not be built in time for the boom, due in part to the fact that an increase in activity is currently underway. Real estate companies in the Cline Shale region have already been feeling the pressure to provide housing for people moving to the area for work, with one local realtor mentioning he gets frequent calls from people desperate for housing.

Business Boom

In addition to the housing boom in the Midland Basin and surrounding areas, I also suspect there will be a dramatic increase in commercial business. After all, where there are people and jobs there will need to be restaurants, along with grocery and retail stores. With the increase in drilling activity, it is almost certain that a wide range of new businesses will begin to sprout up in counties like Howard and Sterling. For our industry, it means the area will need more engines and generator sets.

Perhaps an even better determinate of the potential for community development in the Cline Shale play is longevity. In other words, the longer the area is consistently producing oil, the more established and developed the community can become. Development is key to the community, because as we have seen in the past, a major oil play that goes broke can quickly turn from a boom-town to a ghost town.

In Comparison
To better illustrate the potential Cline Shale has to increase housing and business development, I like to compare it to the current Bakken play. The United States Geological Survey reports that Bakken Shale will likely produce over four billion barrels of oil, which still yields in comparison to what is expected of Cline Shale. If the amount of oil produced in an area is any indication of the additional community development, then this leads me to believe that Cline Shale will likely need more real estate and business development than Bakken. What’s more, Cline Shale is projected to produce more barrels than the seemingly endless oil supply of Eagle Ford, which is estimated to produce up to 10 billion barrels.

Cline Shale is undoubtedly another boom-town in the making, which is an exciting time for a community, especially one so isolated. Like Bakken, and many other oil plays throughout the country, a lot still remains to be seen about its production, and the subsequent real estate and businesses that develop in the region. Personally, I always enjoy watching an oil play develop, because as someone that works with generators, I find the unpredictability exciting — oil plays adds a sense of intrigue to any related industry.

Provided by : http://theclineshale.com

Shale Flares Heat Up Natural Gas Production, But Not For Long

Tension between the Environmental Protection Agency (EPA) and the oil industry is decreasing as air emissions and flares from shale oil reserves come under regulation. While the EPA gives companies until January of 2015 to fully comply with the new regulations, gas and oil companies have to start changing their ways now to meet that target, especially regarding flares. The regulations are expected to cut emissions that harm air quality by 90 percent, per the Washington Post.

Why Flaring Happens

A byproduct of increased production to meet the increased demand for NG, flares allow dangerous gases to burn off. These occur when there is a lack of storage space for produced gas. The flares allow equipment to keep up with the flow of gas, and get released through pressurized valves in the equipment. Not only does flaring release methane and other gases into the air, it wastes energy to the tune of $100 billion of unused gas a year, according to Reuters.  The shale reserves fueled unprecedented expansion of America’s gas production, but the infrastructure that allows gas to be captured and stored before flaring hasn’t grown as fast. The result: Industry waste, energy lost, missed growth opportunities, and environmental concern. The World Bank estimates that gas emitted in flares is roughly equal to the annual energy consumption of France, about 360 tons of CO2, again per Reuters.

Green Solutions

Complying with EPA regulations is good for public opinion and for profits, as the wasted fuel can be used — thereby saving costs at gas production sites — or sold. How can companies cut down on flaring to get on the right side of the EPA regulation? For example, plants could turn the gas flares into power, cutting down on energy consumption and fuel waste. Ways to comply include:

  • Installing pollution-control equipment: Many of the newer wells are already capped with pollution-controlling equipment to cap flares. Existing gas production sites can be retrofitted with these measures to cut flares. So-called green completions are mandatory after 2015 and voluntary beforehand.
  • Implementing Technologies to Reuse the Gas: Escaped gas can be piped back into the ground and used to push more gas toward the surface, increasing production, per GE. Escaped gas can also be stored and used as fuel with compressor technologies. GE is now doing this in Qatar.
  • Decreasing Isolation: Flares often occur when captured gas cannot be put into the pipeline. Extending pipelines gives remote sites storage access and prevents flares.

Are you inspired by the cost savings of reusing produced gas? What’s your plan to green for 2015?

-Mark

Shale Energy and the Development of the Modern Economy

In a June 2009 Energy Information Administration study, nearly two-thirds of American oil was imported from overseas. Alaska contributed just 11 percent of domestic oil, with various oil fields in the continental U.S. supplying the rest. Just three years later in 2012, the U.S. is producing 38% of its own oil domestically, and taking measures to reduce dependence on gas and oil.

What’s the major difference between 2009 and 2012? Shale oil and gas. Okay, shale oil isn’t exactly new: In the 19th century, shale oil plants were built. However, crude oil is easier to extract, so as more crude oil deposits were found–and extracted–shale oil plants shut down. With the cost and scarcity of oil, America and other countries have gotten back into shale oil and gas. And America holds vast shale oil reserves–nearly as much as the world’s existing oil reserves, according to the Government Accountability Office.

Shale natural gas reserves have drastically cut the price of natural gas in America, making it incredibly cheap. These natural gas and oil reserves have the potential to transform America from a country weak in energy into an energy-rich nation. The explosion in natural gas led General Motors to develop two trucks that run on ng, improving fuel efficiency and cutting oil dependency. And long-haul trucks that fuel up with gas instead of oil save substantially at the pump. While LNG pumps might not be at every truck stop from California to Maine, they will be soon.

Proponents say America can step up oil exports, effectively turning the energy boom into cold cash that just may help the economy recover, create jobs, and foster innovation. Financial giant Citigroup estimated that shale oil could grow the U.S. GDP by 0.5 percent a year for the near future. This growth could make energy investment the type of expense that gives back substantially.

Not everyone is gung-ho on shale oil and gas, however. Critics claim the boom is slowing down–and with it, the potential for economic growth. A Credit Suisse report noted that we can expect those rapid-fire increases in shale production to slow. Sure, shale oil and gas production will still be substantial, but the boom-level growth of recent years might just be a flash in the pan. Meanwhile, states struggle to regulate shale oil and gas production, fuel taxes, and other issues; many areas also deal with protests from residents who don’t want fuel extraction in their backyard. This type of bureaucracy has the potential to slow the pace of innovation.

What’s your take on the promise of shale oil and gas? Has it peaked or is the real boom just beginning?

-Mark