Posted by Phil Turek on Jun 20, 2017
Our speaker Wednesday, June 14, was Phil Turek, one of our own Rotarians and Past President, who gave us “The Natural Gas Story”. Phil spent 22 years in the natural gas business and his areas of responsibility covered 12 states ranging from Wyoming to New York. He opened with a list of hydrocarbon compounds that many of us had heard before but were described by the number of carbon atoms in each molecule: octane (8) which is a component of gasoline, butane (4), propane (3) and methane (1) which is called “natural gas”. The methane molecule has one carbon and four hydrogen atoms.
There are three players in the industry: PRODUCERS who drill the wells and produce the gas, PIPELINES who gather up the gas from the wells and transport the gas across the country in large diameter pipelines at very high pressures, often over 1000 pounds per square inch, in pipes usually buried about three feet deep, (they also store gas in old gas formations, especially in the market areas to allow wells and long line pipelines to operate at steady rates), DISTRIBUTION companies which control the pressures and deliver the gas in ever smaller diameter pipes to individual users.

Natural gas is a very bulky fuel and is not practical to deliver in packages or trucks. It takes almost a conveyer belt which is to say pipes from the wellhead to your home.

The capacity of a natural gas pipe (or any pipe) depends on the diameter of the pipe. Putting a pipe in the ground that has twice the diameter of a smaller pipe usually costs about twice the cost but its capacity is FOUR times the capacity of the smaller pipe. Said another way, two small pipes in your street would cost the same as one pipe of twice the diameter of the smaller pipes but the larger pipe would carry twice as much as the smaller pipes combined. The result is that it is impractical for competing pipes in the same street. This leads to a “natural monopoly”. Our society has worked out the problem of allowing a monopoly to operate in our cities and across country in long pipelines by having state utility commissions regulate the distribution companies and the Federal Energy Regulatory Commission regulate the interstate gas pipelines.

If you go to the internet and look up “natural gas providers, Savanna, GA” and then click on “Approved Natural Gas Marketers – Georgia Public Service Commission” you will get a list of fourteen companies listed as “Marketers”. These companies do not produce, transport, store or distribute natural gas, they act as your “agent” to purchase gas from producers, arrange transportation, storage and distribution of the gas. Your distribution company in Savannah is Atlanta Gas Light. Their charges are shown as “AGL” on your gas bill.

There are new technologies used in drilling for natural gas that have dramatically reduced the cost. THREE DIMENSIONAL SEISMIC technologies allow drillers to get a 3D picture of the formation where they are interested in drilling. This is similar to a CAT scan which your doctor uses to get a 3D picture of the insides of your body. DIRECTIONAL DRILLING allows the driller to control the drill bit. The technology here is like and underground GPS that lets the driller know exactly where the drill bit is going. FRACKING is the term for pumping large volumes of very high pressure water into an underground formation to “fracture” the formation. Sand is added to prop open the cracks made to allow the gas to flow out.

“Fracked” wells are typically very deep, often over a mile deep into the earth. Before the high pressure water is introduced, there are two concentric pipes placed in the drill hole with cement between the inner and outer pipe. There is almost no chance for the high pressure injected water to enter the drinking water formations which are usually a few hundred feet or less. The problems arise when the injection stops and the gas pushes the water (with chemicals added) back to the surface. Early frack operators haven’t always done the best job of disposing of the water coming out of the well and there have been problems. Especially in Eastern Oklahoma, some operators have disposed of the water by injecting it into very deep formations in the earth. Later that water has led to shifts in underground plates and numerous small earth quakes. Better operators have found ways to reuse the water in other jobs.

The price of natural gas at the wellhead has varied wildly over the last 20 years. Prices were about $2.50 per thousand standard cubic feet in the year 2000. They jumped to over $10.50 about 10 years ago and now are back down to $2.50. For those of you who get involved with purchasing your own gas the prices above are usually for one million BTU’s so you need to divide by 10 to get to a “therm” which is a hundred thousand BTU’s. At these very low prices, much of our country’s electricity which was generated using coal and emitting 2.2 pounds of carbon dioxide for each kilowatt hour generated. Using natural gas (with its four hydrogen atoms) emits 1.2 pounds of carbon dioxide for each KWH. The switch has resulted in a major reduction in the “greenhouse gas” emissions of the USA. This is a side benefit of new natural gas drilling technology.
Below is a photo of Phil with Past President Doug Powelson.