The same motivation that sends trucking companies hustling to spiff up their big rigs at the sound of Marcellus drillers riding into town also applies to chemical makers in western Pennsylvania.
Some are repackaging their staple products for oilfield use, while others are developing new chemicals for better, greener fracking.
Success, as with all things shale, depends on how much you know about the process, who you know in the field and how much more gas you can promise to bring to the surface.
Frac-fluid design is more an art than a science today, said Dave Grottenthaler, general manager of Kroff Well Services, a company that’s ballooned as part of the fracking boom.
Kroff Inc., the parent company of eight divisions including Well Services, has been around for 25 years cleaning up industrial wastewater. In 2003, it began designing frack fluids in a small laboratory in Ambridge, where a $500,000 machine mimics formation pressure and temperature, as a frac-fluid sample hits a small piece of shale — a miniaturized model of how this process would occur underground.
What started out being just a sliver of its business now brings in more than 55 percent of the company’s revenue.
Grottenthaler says the key is replacing long-held beliefs about what works underground with lots and lots of data. One of the most critical tools at his disposal is the flowback water pumped out of the well after the frac job is done. For every well where it’s possible to do so, Kroff does a sequential flowback analysis, taking measurements after, say, 500 barrels have returned, then 1,000, and so forth. The samples are taken at the well site and sent off to Ambridge for same-day testing.
“The dirtier your flowback, the happier I am,” Grottenthaler said. “You get to see the whole story of what that well is going to do.”
The process is invaluable, he insists. Often, what’s learned after the first frac betters the gas flow from subsequent ones by 2 percent to 15 percent.
Kroff is a player in a fast-growing sector. In December, Ohio-based market research firm The Freedonia Group estimated the market for oilfield chemicals will continue to grow by about 9 percent per year until 2016, ending up around $28 billion.
Still, trying new products is risky, said Sean Reeger, engineering manager at Nabors Industries Ltd., a Bermuda-based company that uses Kroff’s frac-fluid chemicals and is one the country’s largest onshore drillers. It entered the Pittsburgh market — and the fracking business — in 2010 when it acquired Superior Well Services in Indiana, Pa.
Pumping an experimental component down a $5 million well can be a tough sell. So when a new company pitches him a promising chemical, he can sometimes persuade a smaller gas company to try it at a lower price so Nabors can see how it performs in the field.
While some producers specify exactly what they’d like their frac cocktail to entail, most give generic instructions such as friction reducer or scale inhibitor, which prevents mineral buildup from accumulating in the well. It’s up to Nabors to go to its suppliers and pick out the specific chemicals for the job.
The selection criteria are “availability and price,” he said. Typically, what would compel Reeger to stray from his usual bag of tricks is the promise of greener ingredients and better gas flow. Biocides, which are used to kill bacteria living in water, are perhaps the hardest chemicals to make green, he said, so that would make a compelling pitch, given good lab tests.
Another local chemical company banking on just that need is Lanxess, where Bert Bankovic, strategic initiatives manager for the Germany-based chemical maker, has been working exclusively on the oil and gas market out of the firm’s American headquarters in Pittsburgh.
Last year, Lanxess acquired VeriChem, a Pittsburgh-based biocide maker, and began testing one of its existing products in the oilfield. Bankovic said Veriguard Plus, manufactured on Neville Island, is showing good results.
For the past three years, Lanxess has been able to market some of its existing chemicals, such as a biodegradable scale and corrosion inhibitor designed for municipal wastewater treatment applications, to the oil and gas industry. It’s also financing research and development of new products specifically for shale development. The company is in the early stage of developing a time-release scale inhibitor.
“The difficulty in entering the market is it is very high risk (for producers) to experiment with new chemicals,” Bankovic said.
Often, companies stick with what works, which is different from operator to operator.
PacWest Consulting Partners, a consulting firm that analyzed FracFocus shale chemical disclosures over an 18-month period, emphasized the “significant variation in hydraulic fracturing technology choice across operators, even within the same county.”
Some companies rely on several well-service firms and chemical suppliers and vary their frac-fluid design widely. Others, such as EQT Corp., keep it consistent. Since late 2010, EQT has used only Halliburton for its fracking jobs. It has designed a fairly streamlined frac formula using up to 14 ingredients, and that’s been effective for wells in Greene and Tioga counties, said Jim Hemlick, vice president of fluid design.
The process went like this, according to Hemlick: Five years ago, when EQT began fracking the Marcellus, it threw in the maximum concentrations of chemicals that it thought were necessary for good production. Over time, it has scaled back on some of their use as it became confident that pulling back wouldn’t compromise well performance.
One significant reduction is a 90 percent cut in its reliance on biocide. EQT now uses Halliburton’s CleanStream service, which is a truck-mounted unit that exposes the water to ultraviolet light to mutate bacterial DNA before that water is pumped downhole.