When Robert Lestz was a research engineer at Chevron in the 1990s, he began searching for a way to extract deeply buried gas and oil deposits without using the vast quantities of chemically enhanced water needed for hydraulic fracturing. The industry's increasing reliance on such large amounts of water seemed unsustainable, both economically and ecologically.
At first, Lestz experimented with nitrogen and liquid carbon dioxide. But he wasn't satisfied.
Then one night at home, while he was on the phone with a co-worker, his wife asked him to turn off the gas grill. "I said 'I got it.' My wife thought I was talking to her, but I was talking into the phone."
Lestz eventually developed a fracking process that substitutes propane, or liquid petroleum gas (LPG), for water. Chevron wasn't interested in LPG fracking, Lestz said. But in 2006, a business friend in Canada took the idea and started GasFrac, where Lestz is now the chief technology officer. Based in Calgary, Alberta, GasFrac is apparently the only company that offers LPG fracking.
LPG's proponents say it is less environmentally intrusive than hydraulic fracking and that it also can be more profitable in the long run because it reduces infrastructure and waste. (Here's a story from InsideClimate News and the Albany Times-Union with more details about propane fracking.)
But persuading an established and profitable industry to accept a new technology has been difficult, Lestz told InsideClimate News in a wide-ranging interview.
The company recently got a $100 million loan that will help ease some of its growing pains, and it has hired Zeke Zeringue, a former president of Halliburton Energy Services Group, to replace its retiring founder and CEO.
On Tuesday night, GasFrac was honored by the industry with the first annual World Shale Gas technological innovator award.
"Although the award was originally to reflect the greatest breakthrough of the last 12 months, the committee felt that the potential impacts of LPG fracturing are so far reaching (economically, environmentally, and a chance for the industry to present themselves in a new light to the public/government) and that the technology is still new enough to warrant being hailed as the greatest breakthrough at the event this year," said the letter notifying Lestz of the award.
Why did you want to frack with a fluid other than water in the first place? Were you driven by environmental concerns? Were you looking for a better way to drill?
"It was initially driven by a recognition that the techniques we were using to fracture wells were under-preforming, and that there had to be a better answer. We also recognized that these massive water fracks would work in the short term, but that it was questionable whether that would be sustainable.
"But the primary driver was well performance. So we started with a clean slate, and looked at fluids based on their performance, safety and sustainability. With sustainability, I look at economics and the environment going hand and hand."
What kind of impact do you think LPG fracking will have on the drilling industry?
"Obviously I'm biased coming from GasFrac, but I think it's going to have a substantial game-changing impact on the industry. This can deliver greater returns or, in farming terms, greater yields from the land with less impact. Today this is a new technology. Over time this will become standard practice, in my vision.
"Today we're the only company doing LPG, so the infrastructure for it is relatively poor. Equipment is needed, people need to be trained and the overall literacy of the oil and gas industry needs special attention and investment.
"I liken it to the cell phone and the bag phone. The bag phone that we used to use was maybe five pounds. Today, we're not only carrying a miniature phone in our pockets, but it's also a computer with access to the Internet. So there will be improvements to the technology over time, in terms of how it's applied. But the core, fundamental breakthrough—that genesis has been brought by GasFrac at this point."
The drilling industry is heavily invested in water-based fracking infrastructure. How tough has it been to introduce an entirely different technology?
"With our challenges of getting it into the market, the quote I always give is: 'Good is the enemy of great.' Many companies are getting good results today, so when presented with a disruptive technology that can bring them great results or much-improved results, they're skeptical to take the risk, because they're already making good economic returns on their money.
"But there's a handful of people out there who have reached out to say: 'Can we do better? Good is not the enemy of great for us.'
"What we've tried to do is match the growth of GasFrac to the growth of those companies. Once those first adopters have successful results, then there's always the second tier adopters that want to try to catch up to their competitors. It's a "not me first" syndrome; once somebody else has proved it, everybody else wants to jump on the bandwagon. Currently in the U.S., we're completely sold out with our equipment. Typically, there's about a two-month backlog of work.