This year’s Summer NAPE E&P Forum, sponsored by IHS, focused on North American natural gas. To the point that the title of the morning session was, “Will America take its foot off the gas?”

A variety of speakers took the podium to give the assemblage their takes on the current state of natural gas development, from Joel Noyes of the Independent Petroleum Association of America to William Weidner, managing director of Rodman Energy Group. But from a technology perspective, perhaps the most “contrarian” view came from Bill Coates, president, Schlumberger Oilfield Services North America.

Coates approached the booming shale gas industry in the US from an unusual viewpoint. Typically these plays, beginning with the Barnett Shale in North Texas and now extending into other areas such as the Fayetteville, Haynesville, and Marcellus shales, have been lauded as the poster children of the North American gas industry because they demonstrate how the careful application of the right technology and best practices can turn a dud into a barnburner. Coates even showed the standard slide comparing the learning curve in the Barnett – a 30-year study in frustration followed by “eureka!” – to the Fayetteville, which reached Barnett-sized production rates in a fraction of the time.

But the costs associated with these leaps in production are burgeoning. And, in Coates’ view, the rate of technology innovation is actually slowing. Gas shale plays benefit from multiple horizontal frac stages, but in his view there is a tendency to simply throw more and more frac technology at the problem without spending a few extra thousand dollars up front to see how best to apply the technology.

“Bigger is better,” he said, “but not more technically savvy.”

He used an iPod as an example. Those of us who grew up in the latter decades of the 20th century remember the stereo revolution, where a stereo wasn’t really a stereo unless the speakers were huge. Today’s iPods pack more fidelity into a box about the size of a credit card than the tower speakers of old.

Yet compare a frac job of five years ago to a frac job today, particularly in a shale play, and it’s just gotten bigger.

“It’s just a bigger hammer,” Coates said.

It’s also very inefficient. He suggested that once the initial “science project” wells are drilled into any new shale play to figure out the nuances, most operators then morph into a “manufacturing” mode, rarely taking any kind of sophisticated downhole measurements that might help them reduce penetration rate (ROP), identify sweet spots, and maximize production.

Without bringing this additional sophistication to shale operations, frac prices will only go up, and with them water issues and increased government scrutiny.

Technology can help. Coates suggested looking into rotary steerable solutions that could cut ROP by orders of magnitude, not just a few percentage points; measurements that can help place the lateral exactly in the sweet spot, not just the general vicinity; and a new outlook on the use of water in fracs that ultimately recycles the water and doesn’t require tapping vast local resources from lakes and streams.

Additionally, very little production information seems to come from these laterals. Companies such as Schlumberger have downhole sensing systems, including fiber-optics, that can take distributed temperature measurements to get a constant production history and determine where the fracs are most effective. These systems can also sense vibration, indicating which frac stages are producing the most.

Ultimately, he said, the combination of these measurements can eliminate unnecessary fractures and save money.

“This is all neat technology,” he said, “and it’s not difficult to do.”