East Texas and Northwest Louisiana residents might not realize it, but they have been sitting amid a revolution in the energy industry the past four years.

Steven Holditch, chairman of Texas A&M’s Harold Vance Department of Petroleum Engineering, told people attending the Second Annual East Texas Conference of the Texas Independent Producers and Royalty Owners this past week that the unconventional extraction of energy from deep geological formations such as the Haynesville Shale is on the forefront of using the latest in technology.

“The Haynesville, Eagle Ford and Barnett shales represent the first step in developing these types of reservoirs around the world,” Holditch said.

The Haynesville Shale formation lies 10,000 feet and deeper below the surface of the region and has resulted in new drilling activity that has resulted in millions of dollars in royalty payments, the reallocation of drilling resources to the region and the addition of hundreds of jobs, he said.

Holditch said while the convergence of several technologies only came together in recent years to make this expensive form of exploration and production possible, the groundwork for the techniques being used go back to the early 1970s.

“A lot of people have been working on this for many years. It just all came together in the past few years,” Holditch said. The technology he refers to includes horizontal drilling, hydraulic fracturing of shale rock, three-dimensional seismic imaging and more.

“This technology has changed the landscape” of energy exploration, he said. “What has been going on in these unconventional fields is going to be repeated around the world.”

For young people entering the job market, that could mean job security and upward mobility for at least a good part of the span of a career, Holditch said.

“The amount of reserves keep going up as new technology is developed and new fields are discovered,” he said. “Energy is still a growing business. We’re still a good field to get into.”
Holditch said demand for energy is expected to grow as the world’s population is expected to swell from about 8 billion people to 9 billion in coming decades.

“The world population will need more oil, gas and coal,” he said. “The three are expected to make up at least 75 percent of the world’s energy mix for years to come.”

Those factors are resulting in a growing need for geologists and geophysicists, Holditch said.
“These shales are very complicated. It takes geologists and geophysicists to determine how they were deposited so we can understand the geology to find the sweet spots,” he said.

Holditch said those sweet spots are areas where energy companies can hit the most productive resources and get the biggest return on their investment.

“The implications are that we’re going to have to drill more wells,” he said. “There’s no shortage of oil and gas reserves — 20, 30 and 40 years from now there will be Haynsville Shales all over the world. We’re not going to run out of hydrocarbons.”

Eric Potter, program director for energy research at the University of Texas’ Bureau of Economic Geology, said while natural gas has largely been the focus of horizontal drilling, hydraulic fracturing and other new advances in energy production in East Texas that may be changing.

He told producers and royalty owners this past week that because of economic factors such as the low price for natural gas and the rising price for a barrel of oil, rigs and other equipment are going to be re-deployed from gas wells and back to oil wells.

“The average well in the East Texas (oil) Field produces about three barrels a day,” Potter said.

Potter said many of the same techniques being used to get untapped sources of natural gas from beneath the earth’s surface can apply to oil exploration, too.

Chris Bresch, with Longview-based R. Lacy Services, said there had been more than 2,000 natural gas wells in the deep well shale formation on both sides of the Texas-Louisiana state line that the Haynesville Shale transcends. He said about half those wells were drilled in 2010.

As of February, Panola County was the fifth-largest natural gas producing county in Texas, according to the Texas Railroad Commission.

Bresch said the bulk of the drilling activity on the Texas side of the Haynesville Shale play is now going on south of Longview in the counties of Shelby, Sabine, San Augustine and Nacogdoches.

“I expect the Haynesville will likely dominate the shale gas market over the next year — producing some stunning results,” he said.

Haynesville Shale production has overtaken the Barnett Shale in Texas as the largest-producing natural gas shale find in the United States.

The U.S. Energy Information Administration said this spring that the Haynesville area, which experts say could have up to 39 trillion cubic feet of natural gas, overtook Barnett’s volumes by mid-February.