As I write this, Hart Energy’s DUG East conference in Pittsburgh has just ended. More than 3,000 people gathered for two days to visit with exhibitors and get the latest updates on news from the Marcellus and Utica shales.
The largely Republican group was still reeling from the Nov. 6 news that President Barack Obama had been elected for a second term. Karl Rove, senior advisor and deputy chief of staff during most of former President George W. Bush’s administration, gave a keynote talk excoriating Obama’s agenda as it pertains to the energy industry. Operators spoke about the constantly shifting regulatory landscape and their fears that the federal government would seek to take a more active hand.
And low gas prices in North America didn’t exactly put a rosy glow on the occasion.
Still, some of the operators who spoke during the conference seemed genuinely positive about the future. This optimism stems from the fact that the industry always manages to figure out how to work its way through any roadblocks that stand in its way.
Steve Schlotterbeck, senior vice president and president of E&P for EQT, said that the application of horizontal and air drilling in the Huron shale in Kentucky had improved recovery rates from 8% to as much as 40%. “No one would have expected that 10 years ago,” he said. “I don’t know how we’re going to go from 40% recovery to 70% recovery, but it’s a huge prize. I’m very optimistic that, over time, we’ll be able to do that.”
Dewey Gerdom Jr., CEO of PDC Mountaineer, was even more effusive. Even though low gas prices caused his company to stop drilling earlier this year, he is very bullish on the future. “The industry never stops trying to learn,” Gerdom said. “I think the next step will be that some of the lower-quality areas in the shales will be unlocked. That will be a step change. “It will be a new gel or completion technique or something. But we’ll find a way to operate in a low-cost environment. The industry will find a way to make it work.” As you read this issue of E&P, I think you’ll be tempted to agree.
This past year has seen many important technical breakthroughs, and 2013 promises to continue apace. Let’s enjoy the ride.