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00:00:00 Jordan Yates
This episode of the Energy Pipeline is sponsored by Caterpillar Oil and Gas. Since the 1930s, Caterpillar's manufactured engines for drilling, production, well service and gas compression. With more than 2100 dealer locations worldwide, caterpillar offers customers a dedicated support team to assist with their premier power solutions.
00:00:25 Speaker 2
The energy pipeline is your lifeline to all things oil and gas, to drill down deep into the issues impacting our industry. From the FRAC site to the future of sustainability, hear more about industry issues, tools, and resources to streamline and modernize the future of oil and gas. Welcome to the Energy Pipeline.
00:00:49 Jordan Yates
Hey everybody. Welcome back to another episode of the Energy Pipeline. It's me, your host, Jordan Yates. And today I'm joined by one of my co- hosts, Bill Jensen and our special guest, Elena Melchert. Elena is, oh my goodness, where do I even begin? She is the host of her own podcast, and she is a consultant in the oil and gas industry, but one of her very impressive accolades would be being the former director of upstream oil and gas research at the DOE. Yeah, the Department of Energy guys. Big deal here. So Elena, say hello,
00:01:32 Elena Melchert
Hello, hello. And thank you so much for inviting me to your show, Jordan.
00:01:36 Jordan Yates
Absolutely. Bill, say hi to everybody. I'm sure they missed you.
Good afternoon everyone. We're glad you're here. Thank you.
00:01:44 Jordan Yates
Elena. We just want to get it going and if my overview of your background was just scratching the surface, can you give us some insight on your professional background?
00:01:55 Elena Melchert
Well, I think you got it right. My undergraduate work is in soil science, so I understand the very top 18 inches, 24 inches of the earth. And then when I went to graduate school, petroleum engineering, I went to Cal Poly San Luis Obispo. That's where I met my husband. He got a job in Bakersfield. He graduated before I did, so he moved to Bakersfield. Obviously he went to work. And then when we got married, I moved to Bakersfield. So I had a couple of options in Bakersfield for how to use my soil science major. And so I weighed petroleum engineering, oil and gas, which Bakersfield is a prolific giant oil field country, if you will. And agriculture was the other option. So I chose oil and gas. I went to work for the Getty Mining Company, and then later the Getty Oil Company and got started in oil and gas, heavy oil stripper well production. And Getty sent me through graduate school at University of Southern California to major in petroleum engineering. So I became a petroleum engineer. I left Getty in 1985 and went to work for the US Department of Energy at Elk Hills Naval Petroleum Reserve, giant oil field in just outside of Bakersfield. And worked there in production and then in reservoir, boots in the field, boots in the field for Getty, boots in the field for Department of Energy. And then in 1987, I came, not 87, 1989, I came to the headquarters, Department of Energy headquarters in Washington, DC on a leadership program. Got an offer I couldn't refuse, and my husband was willing to move. So we moved to Bakersfield and we moved from Bakersfield to Washington DC and there I was a program manager for Elk Hills and for the Teapot Dome, which was shale oil as well as, it was oil shale as well as oil and gas in both those fields. And we've just stayed there ever since. We got pregnant almost as soon as we got there after trying for so, so many years. And so we put down roots. And so being from California, we only thought we'd be here a couple, three years, but we ended up staying here and we're still here now in Washington DC. And in Washington DC I've had the privilege of a wonderful career. I served seven presidents, as it turned out, over the course of my career at the Department of Energy. I worked for President Reagan all the way up through President Biden. And I retired from the Department of Energy in 2021 and then founded a small consultancy, oil and gas, called Energia, Energia Consulting. And I've got some wonderful clients. And no, I don't reveal my client list because what I do is I help companies that are interested, invest or develop proposals to aid in the energy transition. That is, the Department of Energy has over a trillion dollars with a T, to invest in energy transition research, all kinds of research. And anything subsurface is the area where I am a subject matter expert. And so I help companies shape their proposals so as to be competitive. And right now I am batting a thousand, right? Every proposal I've been part of has been selected. So I'm pretty excited about all of that. And basically that would include obviously oil and gas, but also geothermal and also carbon storage, and then also hydrogen storage in the subsurface, if that's an interest for companies, then obviously it is in the future. So as long as the Department of Energy is investing in research, and I'm a subject matter expert subsurface, as well as having served the Department of Energy and been on the side of having to choose, or getting to choose projects to build portfolio for the Department of Energy's investments. So I feel like I'm at the right place at the right time, and I'm having so much fun. And then the podcast, that's a lot of fun. I feel like there's a lot of people who really don't understand oil and gas, especially upstream, especially how complex it is, how sophisticated it is technologically, and how it's constantly moving forward. So when you asked me to talk with you today, I was very much looking forward to it because I could talk forever about this stuff. So you're going to have to reign me in.
00:06:45 Jordan Yates
It will be my greatest honor to reign you in. So Bill and I have had this debate for a while about how do you spell fracking? I think it's C- K. Bill thinks it's just C. I know you an I heart, do you have an I heart fracking mug, something like that in your house?
00:07:05 Elena Melchert
00:07:05 Jordan Yates
I think you showed me before.
00:07:07 Elena Melchert
00:07:08 Jordan Yates
Clearly, you have the expertise to break this tie after you just gave us your history. What is it, Elena? How do you spell it?
00:07:15 Elena Melchert
Okay. And that's a pet peeve of mine. I'm going to warn you.
00:07:18 Jordan Yates
00:07:19 Elena Melchert
So hydraulic fracturing is what we're talking about, and there is no K in fracturing, so there's no K in fracing. But I will tell you something, as my daughter and son- in- law shared with me, there are other places in the English language where there is a K and it has nothing to do with oil and gas. So I am very careful not to include a K, and I warn everybody there is no K in fracturing, so there's no K in hydraulic and fracing.
00:07:53 Jordan Yates
Go ahead, Bill, tell me. I told you so
I believe I win.
00:07:54 Jordan Yates
Great. I'm glad we settled that. Now let's move on. Well, this is good to know because now when I publish the episode, I could spell it correctly because as you'll see in the notes for all my questions, it is I guess spelled incorrectly. So now that we've got that handled, I am going to get into the meat of the episode and ask you the question. Fracing with a C has been a controversial and often misunderstood term, and clearly a misspelled one as well. Could you provide a clear and unbiased explanation of what hydraulic fracturing aka fracing is at its core?
00:08:43 Elena Melchert
Right, right. Well, fracturing, hydraulic fracturing is a technique, a completion technique that's used in oil and gas upstream in order to deliver oil and gas from where it exists in the subsurface, in the reservoir to the surface. So it's hard to talk about hydraulic fracturing as a tool unless you understand what the challenge is, what is the tool trying to fix or help or mitigate? And so we have to talk a little bit about oil and gas production in general. And basically we've got sort of a generational difference in terms of a vintage of reservoirs in the past and in the future because the technologies that we have for commercial production of oil and gas through the technique that's been opened up through the technique of hydraulic fracturing in horizontal wells, that was technology that took a long time to come together. And to be fair, the Department of Energy was the first to invest big dollars in the notion of hydraulic fracturing. And then the Department of Energy was the first to invest big dollars in the, did I say horizontal drilling? Did I say H drilling?
00:09:58 Jordan Yates
00:09:59 Elena Melchert
Okay. So then hydraulic fracturing, understanding the nature of fractures in reservoirs, how they're formed, where they go, whether they look like, and then how to create them. But it was the industry in the early 2000s, like 2005, 2006, seven, eight, where the industry put those two fabulous techniques together. And we have what we have the ability to produce oil and gas from reservoirs that don't easily give up the oil and gas. Now, why don't they give it up easily? Well, that's where I'm talking about, there's two kinds of reservoirs. There's unconventional reservoirs and conventional reservoirs. The conventional reservoirs are the ones that we are talking about historically. And the example I use for that when I'm talking with people is if you think about beach sand, you go to the beach, you dig a hole, and you can't get very far, especially if you're close to the water. Can't get very far before the water starts to seep in from the bottom, it starts to fill up your hole and you bail it and fills it up, fills it up, and you get tired and you walk away because you can't get very far. So that's sort of what we've got in terms of the reservoir quality from conventional oil and gas. You drill a well and the fluids just come into the well because of the pressure differential, the difference between the pressure at the surface and the pressure in the reservoir. Now, what's the pressure in the reservoir? The pressure in the reservoir is if you were to go swimming in the deep end of the pool and you feel that pressure on your ears, that's the reservoir pressure we're talking about. It's the weight of the fluid, not the rock, the rate of the fluid above the point from the production where the holes are in the wells to bring in the production. So all you have to do basically for conventional reservoirs is sort of find a place where there's oil and gas, and there's lots of techniques for doing that. You drill your well, you make holes in the well so that the production can come in and you can control it, both the rate of production and the, well the rate of production, and then the oil and gas will come up to the top. And when you don't have enough pressure anymore, for example, if you were in the shallow end of the pool, and it wouldn't be much fluid above, that little molecule of reservoir of oil and gas that's at the bottom, when that happens, when you don't have enough pressure, natural pressure, for reservoir pressure for the production to come to the surface, then that's when we put in pumping units and the pumping units sort of relieve the weight of the fluid in the well so it helps maintain that pressure differential. So it's all about the quality of the reservoir and the ability of the fluids to move through the reservoir under a change in pressure, a differential in pressure. That's conventional reservoirs. When you get to unconventional reservoirs, it's different in the sense that you do not have the same quality of the reservoir, whereby the oil can freely move, or the gas, can freely move from where it is to the wellbore. Why is that? Because unlike the beach sand, there are not connected pore spaces in the unconventional reservoirs. Those shales are much tighter and the particles are held together more tightly, and so the oil just sort of gets stuck, if you will, and the gas just sort of gets stuck for where it is. So to give a visual on that one, what I tell people is think about a pane of glass or a block of ice. It almost seems like it's completely solid. Now, in the case of oil and gas and shales, there are pores and they're filled with oil, and the oil can be gathered if you will. However, the pressure differential in the reservoir versus the pressure of the surface, that differential we talked about, is not strong enough reservoir, to move the oil in the reservoir from where it is to the wellbore. So what you have to do is try to help create some channels, some places, some little pathways for the oil to move more freely. And so the visual in that pane of glass or that block of ice is that if you can crack it, if you can punch it somehow and create fractures, then those are the channels. And that's what we do in hydraulic fracturing. We create so much pressure from the surface down into the reservoir. Now we're going opposite, right? We're going down into the reservoir, pressure at the surface, and it's really an exciting operation to watch a hydraulic fracturing operation because there's lots of trucks, and actually the new technology is, there's not that much noise. But in the olden days, there used to be a lot of noise, it was really exciting. Anyway, so in the surface, we take those, we pump against the reservoir and create a lot of pressure. The pressure goes, that fluid, it's hydraulic fracturing, so we take water, water with sand in it and some chemicals to allow, there are surfactants in other chemicals that allow the water to be a little thicker, a little more effective in carrying that pressure load down into the reservoir. And pump, pump, pump, pump until the pressure in the surface is greater than the pressure in the reservoir, and there's nowhere for it to go so the rock cracks. And that's basically what it is. And if you ever look at a shattered windshield or something, that's what you would like to have. Unfortunately, we don't have that kind of control over the reservoir to get a lot of fractures everywhere where we want to in the matrix of the rock so that there's lots of channels and a lot of places for the oil and gas to come forward and track into the well, but we're working on it. I mean, those are the new technologies and hydraulic fracturing that they're trying to pursue. So basically that's what the challenge is. And some of the myths are that you could create so much pressure on the subsurface and those cracks, those fractures could come all the way to the surface where the drinkable water is, and that's just not going to happen because there's just so much pressure that's required, and for every moment of rock that is fractured there dissipates some of the energy, and so you just really can't get that high. I wish we could, not to the service obviously, but where we had enough control so that we could control every direction and every nuance of hydraulic fracturing as a grows sort of like tree branches, if you'll. Sorry, did I get too far into the weeds on that one?
No, no. Elena, a question. You mentioned that the fracturing process goes out into the shale and creates that fissure or pathway for the oil. How big are the spots where the oil or gas is contained? Can you give an estimate of a size? And I know it probably varies from spot to spot or area to area, formation to formation, but is there something that you compare it with so that somebody can look at it much like that glass of water or a thimble or a gallon bucket?
00:17:33 Elena Melchert
Yeah, so we're talking miles, hundreds of miles, thousands of miles. When we look at, now, I'm not a geologist, so I apologize to the geologists who are listening. But basically there's an endowment of oil and gas in the subsurface in reservoirs around the world, and based on the permeability of the rock, the ability of the rock to allow the fluids to flow, then the oil and gas can accumulate in certain places, and it's just an endowment. And you can look on maps and see what all the reservoirs are. Some reservoirs are easier to develop and some are less easy to develop because of that permeability. And maybe sometimes the porosity isn't there, so there's just not enough oil and gas for it to be commercial. So when we talk about hydraulic fracturing, it's kind of expensive and the length of the, well... Well, I guess I didn't tell you about the horizontal piece portion of hydraulic fracturing. So historically, we've used hydraulic fracturing for lots of reasons without the horizontal, just in vertical wells. For example, in California, it's a very common practice to fracture or to inject fluids and create fractures in wells for zonal control, for being able to either clear the perforations or to add a little more permeability right by the well bore, because fine particles can come up against the perforations and sort of create little boxes. So it's a long standing practice, there's nothing there. But when you are drilling a vertical well in an unconventional reservoir and you're drilling a vertical well, but then you have to make it go horizontal. So you have to have a curve in that trajectory of the wellbore. And so you make that, and there's lots of tools and techniques for making that curve. It's not sharp, 90 degree, it eventually is 90 degree, but basically it just sort of starts to move to the horizontal based on the controls at the surface and how we're drilling it. So these horizontal wells can actually go for miles, and if there's enough subsurface rock and oil in order to support that operation. For example, in the northeastern United States, we have the Marcellus Shale, and that's natural gas. And it's comparable to the endowment of countries that they would have oil and gas. Marcellus alone, it's massive, massive. And the ability to drill a horizontal well and then drill it for miles, then you perforate it, and then basically you produce it. Now, you're not producing the whole wellbore all at once, you are hydraulic fracturing in stages. You'll start at the toe, which is the end of it. If you think of a horizontal well like a foot, and you go to the toe and you perforate that first and in different stages, and there's only so much you can perforate at once because otherwise you wouldn't have sort of that control. So you can perforate. And then there's density of perforation, and where you place the horizontal well in the vertical column of where you have oil and gas deposits, that's another feature. There is so much going on in hydraulic fracturing and in oil and gas production itself, sometimes I'm just amazed that we can actually get the oil and gas out of the ground. But hydraulic fracturing is especially exciting because there are a lot of moving parts and there's so much science associated with them, and so it's very, very exciting. That was a good question. Did I answer the question?
Yes, you did. Thank you very much.
00:21:29 Jordan Yates
So Elena, I had this idea in my head that if we took away the punch of the word fracing and replaced it with a solid definition, it would sound less scary. The more we go through it, I'm not sure if it sounds less scary. It definitely sounds more interesting. But if somebody were not in the oil and gas industry and not inclined to be excited about this, and they have the miscon, not misconceptions, but the ideas in their head that perhaps it's causing earthquakes or it's causing, like you said, seeping into the drinking water, is there a way that you could paraphrase what fracing is to make it sound a little less scary? Because I think you made it sound fun. You made it sound scientific, exciting, but it still sounds a little overwhelming. We're drilling into the ground, we're pumping water in. Is there a comparison of this is safer than how we used to do it, or some sort of way to where this method sounds like the less scary approach? Does that make sense?
00:22:33 Elena Melchert
Yeah, I do understand. I do understand what you're saying. And I guess that there's no substitute for education, and so anything you don't know if you don't understand, you're going to be afraid of. So you have to try to learn stuff, you have to try to understand stuff and those kinds of things. Otherwise, the world can be very scary as it's so sophisticated. I mean, with all the technology we have in all arenas and all directions, on all topics, all aspects of our lives, there's just a lot of technology and we don't know all of it. And of course it could be very scary. But I guess what is the comforting, what might be comforting for people is that there is so much control, there's so much understanding, there are so many measurements. Let's back off of the understanding. There are so many measurements that we can take, so that we can understand and track what's happening. We do something and we can measure the response really fast. And so it's having this control of the subsurface. We'd like to have more, but there's only so much that the technology can do in terms of creating an impact on the rock. And then after that, we can't create more impact because we just don't know how to do it. But we can measure every and everything. With respect to earthquakes, it's really hard for hydraulic fracturing to create an earthquake. I mean, it just doesn't happen because it's a matter of scale. So what we're doing when we're drilling wells a thousand feet, 5, 000 feet, 20,000 feet, we're just at the very surface of the earth, if you will. And earthquakes come from very deep in the earth, miles and miles and miles deep into the earth. So we are not at the same scale that the earth is and just natural processes. So it's just not going to happen. It's just like saying California is going to fall off into the ocean. Geologically, it's not possible. It's not going to happen. That doesn't mean people don't think about it, don't ask about it, but they don't know. And once they know, then they realize, oh, it's never going to, I mean, that's impossible to happen. So is it impossible for hydraulic fracturing to create earthquakes? I think it is. I mean, earthquakes that people can feel. Now, there are earthquakes. I mean, they're called earthquakes. It's called micro seismic activity. Any seismic activity. Earthquake is a seismic activity, but the scale is really much greater than we can possibly... We just don't have that much energy power. We just don't have that much power to be able to affect the earth at that depth. Now, not hydraulic fracturing, but other processes can cause seismic activities such as the injection of water or any fluid deep into the earth, deep into the earth, where different layers of rock can then slide against each other, and then anytime something moves, there's a seismic activity. And so that's an earthquake. And so for a few years, we were injecting a lot of wastewater produced wastewater. So every time you produce oil and gas, you produce water, they all come together. That's just part of the pressure regime that's going on in the earth in reservoirs. And so you always produce oil, gas, and water. Now, there's some reservoirs that have no gas, and there's some reservoirs that have no oil, they just have the gas and like that, but mostly it's oil and gas and water, and including an unconventional reservoirs as well. So you've got all this water, so what do you do with it? It's a waste. And so inject it into waste water disposal wells that are controlled by EPA and the like. But if you inject too much too fast in certain geologic settings, it can cause the rock, one kind of rock to slide against another kind of rock. And we studied that. We understand that, and I don't think we have a lot of earthquakes anymore associated with the injection of wastewater, but certainly not with hydraulic fracturing.
00:26:56 Jordan Yates
It's so interesting to think about the R& D of such a complex technology to where you really don't know until you try it. And sometimes you do have to go through the like, hey, we're going to inject all this wastewater and see what happens. And luckily, I know it's done in controlled ways, which is nice, and you record the data and you learn from it. So I love some good methodical learning. But as we're getting close to the end of our time, I wanted to ask you a question kind of about your time at the DOE or just in general, some things that you've seen where there's been good community outreach and education on topics of oil and gas like fracking, because like you said, education is where we need to start if we want to be less afraid of something. So what have you seen or been a part of that has done a good job educating about oil and gas?
00:27:51 Elena Melchert
Yeah, yeah. Well, I was at the Department of Energy for almost 36 years, over 35 years. And so I saw a lot of the evolution of the understanding of energy. For example, when I first got to the Department of Energy in 1989, there was a, I want to say a program, a new program, arena, whereby the department, the Secretary of Energy was concerned about the energy literacy of the nation. And it would be hard to explain some of this complex technology and have people understand where their tax dollars are going, if the science literacy of the country was low. So, that program instituted the science bowl. I don't know if everybody knows about the science bowl, but I mean, it's something I lived with for very long time. It's a very exciting program whereby students form teams in their schools. There's middle school science bowl, and then there's high school science bowl. And schools all over the country form teams, and they compete at higher and higher levels, separate tracks obviously. And then in May of every year here in Washington DC the winning teams are brought together for one final competition, one winner from each state, and they just have these competitions until they get to the last team that wins. Kind of like the spelling bee, the National Spelling bee. Well, this is the National Science Bowl and all kinds of questions about science and especially energy including oil and gas. So that is kind of the most exciting thing that I've seen in that having that science literacy, that energy literacy, including oil and gas, really helps and really allows young people, and of course their families and everybody they talk to, understand the complexities of energy, of our lifestyle, of balancing policy with technology. And so if we've ever been in a point in time where young people understand the complexities of energy, it would be now because the Science Bowl is like, I don't know, 30 years old. I mean, it's been a longstanding program. Now you have to like science in order to be interested in the Science Bowl and you have, people would be willing to listen to you talk about something that you're excited about, especially if it's science. But that's been the most exciting thing that I've seen. Then there was a time when hydraulic fracturing first became popular and people didn't understand it, and there were all kinds of protests. And so then it was really unfortunate because instead of talking, there was shouting, there wasn't actual communication. So I think that that has gotten better. Lots and lots of organizations have put out lots of really good materials, including the Department of Energy on exactly what is hydraulic fracturing. It's hard to talk about something that we can't see, so it's hard to talk about it on a podcast, but there are a lot of great visuals and videos and cartoons because again, when you're working in even just a thousand foot oil and gas well or hydraulically fracturing, even at shallow depths like that, you still can't see it. So actually having cartoons and movies, so all the great graphics that we now have and advanced technologies, advanced visualization of subsurface phenomenon, that is a great learning tool and understanding. And you just really have to see things spatially oriented. So you could see, oh gosh, oil wells are really deep, earthquakes are much deeper, and our drinking water is pretty shallow, right? Because it's expensive to go and get water from very deep depths. So anyway, those are the kinds of things that I've been most impressed with over time.
00:32:19 Jordan Yates
This sounds super cool. Bill, how do you feel about all that?
It's impressive to hear you talk and the things that have been done to help educate, to bring people along, to drag them into the 21st, into the 22nd century, to make them not, or make them less afraid of what's going on. The analogy of seeing it work, and yes, the frac site has gotten much quieter. Less equipment on site, less people on site, but the bringing that to the forefront to make people not scared or nervous about what's going on on their property or their neighbor's property is something that we all have to work hard at and do a better job of bringing along, the Science Bowl, stem projects for the kids growing up today so that they will be involved in the future so that we can have it come along as just so many different things that can be done. And we, as the stewards of today, need to make people aware and remove that fear as you said. The analogy that when frac jobs going well, it's like watching grass grow or paint dry.
00:33:36 Elena Melchert
But when things happen, it's amazing how quick things can go wrong and what happens to it all. I'm impressed. You've helped share some things today, Elena, that have made us all more knowledgeable and helped to peel back the layers of the onion to make it to being less nervous around the equipment and the project and the projects and how energy, the oil and gas that we look at today, I'm looking around the room where I'm sitting, how much oil and gas has helped us to get where we are today.
00:34:13 Elena Melchert
Absolutely. Absolutely. I'm a strong proponent of doing whatever we can to end energy poverty, because if you can't read at night, if you can't study at night, if you can't learn at night, then how are you ever going to be able to advance? And so energy allows us, oil and gas allows us to be able to have that energy that we need at night in order to move forward. So yes, and I wish all the best for people all over the world, energy for all. Absolutely.
00:34:47 Jordan Yates
I love it. Elena, thank you so much for coming on today and enlightening and educating us on the very exciting topic of fracing. Bill, thank you for joining with us because I know you are just as passionate about this subject as Elena and I are. So guys, I hope you learn something and I hope you had a little bit of fun listening. That's all we got for today. So as always, I'm your host, Jordan Yates, and I'll see you next time. Bye- bye.
00:35:16 Speaker 2
Come back next week for another episode of the Energy Pipeline, a production of the Oil and Gas Global Network. To learn more, go to oggn. com.