A Natural Gas Success Story

The Jonah Field and Pinedale Anticline

From high-altitude, windswept prairies in southwestern Wyoming, the span of the powerful Wind River and Wyoming Ranges can be seen in the distance. This is home to the Pinedale Anticline Project and the Jonah Field, located in Sublette County, Wyo.

In 2000, this was the site of one of the most productive gas fields in the continental United States. Gas reserves were estimated at up to 40 trillion cubic feet. That was enough to serve the nation’s entire natural gas demand for 22 months.

Uncooperative Tight Sandstones

California Oil Company, later named Chevron, first drilled on the Pinedale Anticline in 1939 using rotary tools – state-of-the-art drilling equipment at the time. Working only from the geological clues visible on the Earth’s surface, these early oilmen had correctly figured out where to drill. But after drilling 10,000 feet into the Earth, they found very little oil. They did, however, find plenty of natural gas.

Unfortunately, there was no market for the gas and the company plugged and abandoned the site.

El Paso Gas Company purchased the well and drilled a total of eight more in the area from 1954 to 1960, all producing limited gas, making the venture an economic failure.

But El Paso made plans to return to the Pinedale Anticline in a big way in 1969, to experiment with detonating nuclear devices to assist with natural gas extraction. This attempt – Project Wagon Wheel – was designed to study the effectiveness of nuclear power to mine natural gas. El Paso geologists knew there was plenty of gas below the anticline, but it was locked tightly in sandstone rock formations that resisted conventional drilling methods. Radioactivity, according to a company report, was not expected to be a problem.

When the citizens of Sublette County learned of the planned nuclear detonation, several of them formed the Wagon Wheel Information Committee to learn more about the project. The group soon committed to educating people and stopping the project. Eventually, they succeeded – determined citizens prevented big industry and the federal government from detonating nuclear devices in their county.

Meridian Oil Company was the next to drill for gas on the Pinedale Anticline, but this company had similar problems. Its results were hampered by traditional drilling methods, which did not work well in the Anticline’s tight sandstones. And there still was no good market for natural gas.

Meanwhile, new pollution-control laws were changing the business. The Clean Air Act of 1970 was amended in 1977 and again in 1990 to specify new strategies for cleaning up the air. Most of the nation’s electrical plants had been powered bycoal, which emits high levels of ash, sulfur dioxide and mercury. The new strategies led companies to look for cleaner energy, including natural gas.

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From high-altitude, windswept prairies in southwestern Wyoming, the span of the powerful Wind River and Wyoming Ranges can be seen in the distance. This is home to the Pinedale Anticline Project and the Jonah Field, located in Sublette County, Wyo.

In 2000, this was the site of one of the most productive gas fields in the continental United States. Gas reserves were estimated at up to 40 trillion cubic feet. That was enough to serve the nation’s entire natural gas demand for 22 months.

Uncooperative Tight Sandstones

California Oil Company, later named Chevron, first drilled on the Pinedale Anticline in 1939 using rotary tools – state-of-the-art drilling equipment at the time. Working only from the geological clues visible on the Earth’s surface, these early oilmen had correctly figured out where to drill. But after drilling 10,000 feet into the Earth, they found very little oil. They did, however, find plenty of natural gas.

Unfortunately, there was no market for the gas and the company plugged and abandoned the site.

El Paso Gas Company purchased the well and drilled a total of eight more in the area from 1954 to 1960, all producing limited gas, making the venture an economic failure.

But El Paso made plans to return to the Pinedale Anticline in a big way in 1969, to experiment with detonating nuclear devices to assist with natural gas extraction. This attempt – Project Wagon Wheel – was designed to study the effectiveness of nuclear power to mine natural gas. El Paso geologists knew there was plenty of gas below the anticline, but it was locked tightly in sandstone rock formations that resisted conventional drilling methods. Radioactivity, according to a company report, was not expected to be a problem.

When the citizens of Sublette County learned of the planned nuclear detonation, several of them formed the Wagon Wheel Information Committee to learn more about the project. The group soon committed to educating people and stopping the project. Eventually, they succeeded – determined citizens prevented big industry and the federal government from detonating nuclear devices in their county.

Meridian Oil Company was the next to drill for gas on the Pinedale Anticline, but this company had similar problems. Its results were hampered by traditional drilling methods, which did not work well in the Anticline’s tight sandstones. And there still was no good market for natural gas.

Meanwhile, new pollution-control laws were changing the business. The Clean Air Act of 1970 was amended in 1977 and again in 1990 to specify new strategies for cleaning up the air. Most of the nation’s electrical plants had been powered bycoal, which emits high levels of ash, sulfur dioxide and mercury. The new strategies led companies to look for cleaner energy, including natural gas.

The Advent of Frac’ing

Recognizing the changing demand for energy, the men at a small company in Casper, Wyo., thought that natural gas would be a good investment. This was the McMurry Oil Company, started by W.M. “Neil” McMurry, with his son Neil “Mick” McMurry and JohnMartin as partners. With great foresight, they identified natural gas as a “clean fuel,” because, when burned, it emits nowhere near thetoxins produced by a fuel like coal. (Since then, the U.S. Environmental Protection Agency has noted that greenhouse gas emissions from the production and transportation side of the natural gas industry are cause for concern). At the same time, the price of natural gas was low, and gas leases were therefore inexpensive.

“There were a lot of opportunities in (natural gas) and no one else believed in it,” recalled Mick. John and Mick looked for natural gas prospects “that we could believe in and afford,” he added. “We looked up in Canada, Nebraska and Kansas – fortunately, none of those came together.”

Then they found something right in Wyoming. It was called the Jonah Prospect, next to the Pinedale Anticline.

In 1991, McMurry Oil Company purchased three wells in the Jonah Field from the Presidio Oil Company, which had shown unpromising early results. Along with the three wells, the McMurrys purchased mineral leases on 25,000 acres of federal land from the Bureau of Land Management in the Jonah area.

A new, efficient way to get natural gas out of Wyoming made the prospective investment more attractive to the company. The Kern River Pipeline was then under construction, with political support from WyomingGov. Mike Sullivan and financial support from the state legislature. Built by the Williams Companies, Inc. and Tenneco Gas Company in a ٥٠/٥٠ joint venture, the ٩٢٦-mile pipeline would extend from Opal, Wyo., about forty miles south of the Jonah Field, to the San Joaquin Valley near Bakersfield, Calif. It was operational by February 1992 with a capacity of 700 million cubic feet per day.

The abandoned Jonah wells were located approximately ten miles from the old Meridian Pipeline, built years before to serve a few other unproductive wells on the Pinedale Anticline. They had never been hooked up. The Meridian line connected to the processing plant at Opal, and thus would connect to the new Kern River system.

Wardell Federal No. 1, the first of the three gas wells that would end up in the McMurrys’ hands, was drilled in 1975 by Marvin Davis of Denver and his Davis Oil Company. That well produced too little gas to be economical. Ten years later, Canada’s Home Petroleum acquired Davis Oil and drilled two more wells a mile north of Davis’ well. Home’s first well, the Jonah No. 1-4, tested more than two million cubic feet of gas per day, but during the drilling process the formation was damaged, impairing gas flow. Home Petroleum drilled a second well in 1987. That well fell victim to falling natural gas prices and was completed in only one formation. During the industry downturn of the late 1980s, Home Petroleum sold the wells and their leases to Presidio.

Natural gas in the Jonah Field is “locked” in tight rock formations. Of course, to extract the gas, first the well is drilled, and then the formations must be broken down, creating channels for gas to flow. This is accomplished by fracturing a formation, when fluid and/or compressed gas is forced at high pressure down the well fracturing the gas-bearing rocks, creating cracks and fissures. These fissures become conduits for gas to flow out of the formation and up the steel pipe set in the well. To keep the formation from closing back on the fissures and resealing the rock, solid material is mixed in the “frac’ fluid” to prop the channels open. The most commonly used “proppant” is sand, or “frac’ sand.”

McMurry Oil Company recognized that the only way to successfully draw the gas through the well-bores was to develop new drilling and fracturing technology that would allow free flow of the gas through the formation. The company sought advice from the best consultants in the gas industry. Petroleum engineer James Shaw greatly assisted in developing a whole new system – and it worked.

It had been the hope of the McMurry Oil Company and its partners that the wells would produce one million cubic feet per day. To everyone’s great surprise and pleasure, the three wells produced two million. McMurry Oil Company reported its first production of gas in the Jonah Field to the Wyoming Oil and Gas Commission in September 1992.

The success of its first Jonah Field wells encouraged the company to keep drilling in the area. Over the next few years the company picked up additional BLM gas lease sales. To cover the additional costs of more drilling, the small company took on partners.

Imaging and Pipeline Upgrades

Next, McMurry Oil Company moved north to the Pinedale Anticline when it acquired an interest in partnership with Meridian Oil Company. The partnership’s first well, the New Fork Federal No. 11-8 was sunk to 11,587 feet. Unfortunately, it was not economically viable. MOC moved back to the Jonah Field and did not return to the Pinedale Anticline until late 1995. In the meantime, Meridian sold its interest to Ultra Petroleum.

In 1996, drilling expanded significantly when Snyder and Amoco Corporation moved into the Jonah Field. They brought 3-D seismic survey equipment, which was instrumental in delineating the field’s key boundaries. The 3-D surveys allowed Amoco and Snyder to drill wells within 500 feet of faults and to know exactly where they were going in the formation. The new data helped pinpoint the areas of highest production.

“That’s what made Jonah successful,” said Mick McMurry.

Initially hampering production, however, were limited pipelines, as well as a scarcity of compression facilities, which increase the pressure of gas in pipelines and enable the gas to flow properly. Four-inch pipelines were soon replaced with eight-inch surface pipelines. Then in 1996, a 12-inch gas line was constructed with a capacity of 100 million cubic feet per day. The following year, a 23-mile, 16-inch pipeline was added to connect Williams Field Services, Questar (after 2011, QEP in this area), Western Gas Resources and FMC pipelines from the Jonah Field to processing facilities at Opal, Granger, and Black Fork, Wyoming. This line increased the daily transportation capacity to 175 million cubic feet.

On Sept. 1, 1999, the Jonah Gas Gathering Company, a Wyoming partnership operated and partially owned by McMurry Oil Company, opened a new 50.5-mile, 20-inch pipeline. The new line would transport the majority of the gas from the Jonah Field to Opal, where it connected with the Williams Field Services gas processing facility. From Opal, the gas was marketed into three different pipelines: Kern River, Northwest and Colorado Interstate Gas. Completion of the Jonah Gas Gathering pipeline increased gathering capacity on the Jonah Field from 175 to 320 million cubic feet per day.

The increased pipeline capacity enabled drilling in the Jonah Field and the Pinedale Anticline to grow at a remarkable pace. In December 1997, the BLM reported 58 wells in place. By December 1999, there were more than 150 wells in both fields. By July 2001, the well count reached 300.

Infill Drilling and Ongoing Production

This rapid expansion was permitted by the BLM. In April 1998, the agency formally allowed full-field development. The operators believed at this time they would need 497 wells to fully extract natural gas from the Jonah Field, though the report noted that between 300 and 350 wells was “most probably” the number.

By late 1998, it was clear both estimates were low. The companies began what’s called infill drilling: drilling new wells among producing wells in a developed field, to yield more gas faster. Infill drilling would nearly triple the number of well pads that had been considered adequate by operators and the BLM in 1998. By December 2000, the well count had jumped from 497 to 1,347. The total projected lifetime of the field had accordingly dropped to 25 years, half of the original estimate.

In June 2000, Alberta Energy Company bought McMurry Oil Company and became a major stakeholder in the Jonah Field with a 35-percent interest. In 2002, Alberta Energy changed its name to EnCana, and become North America’s top independent natural gas producer.

In November 2001, McMurry Energy, created after the MOC sold its Jonah interest, sold its Pinedale Anticline holdings to Shell, formally known as the Royal Dutch/Shell Group’s Energy and Production Company. This was the international company’s first foray into Rocky Mountain natural gas in nearly two decades. Other major companies soon followed.

After 2000, drilling in the Jonah Field and Pinedale Anticline continued, spurred by high natural gas prices. In March 2003, the BLM reported that operators had requested permission for an infill drilling program that would add up to 1,250 new wells to replace their earlier request for 850 new pads. Surface well spacing would decrease to 16 acres, or 40 pads per square mile. The BLM raised its estimate of surface disturbance for wells and associated infrastructure by more than 40 percent, from 2,927 acres to 4,225 acres.

TheCasper Star-Tribune newspaper reported in August 2003 that a total of 3,100 wells might ultimately be drilled in the Jonah Field – 1,300 more than had been requested in the March 2003 infill proposal. The recession in 2008 brought a drop in natural gas prices, resulting in a sudden reduction in drilling in the Jonah Field and the Pinedale Anticline. Drilling and production never stopped, but as of early 2011, was continuing at a slower pace. Drilling is likely to pick up again when the price of natural gas returns to a more profitable level.

Historical and Environmental Impacts

The Jonah Field rediscovery and successful extraction of natural gas initiated by McMurry Oil Company is heralded as one of the most significant natural gas developments in continental North America in the second half of the 20th century. Jonah represents a turning point because of the enormous amount of production opened up by the new technologies. McMurry Oil Company’s technical advances in the early 1990s, coupled with higher gas prices and a quick boom in pipeline capacity, allowed it and other companies to lucratively produce gas from a previously inaccessible source. This success led to McMurry Oil Company’s expansion of the nearby Pinedale Anticline field a few years later.

In the small Sublette County communities, impacts were not always welcomed. The boom strained housing, schools, and such services as law enforcement and health care. Concerns were raised, too, about the industry’s impact on wildlife, particularly sage grouse, pygmy rabbits, pronghorn antelope and mule deer. Local citizens were concerned about the increased water and air pollution connected with the development. Longtime residents noticed a decline in year-round air quality starting in 2000. The situation became dire in 2008 when the Wyoming Department of Environmental Quality began issuing “ozone alerts.” Ground-level ozone results from chemical reactions between oxides of nitrogen and volatile organic compounds in the presence of sunlight. Ozone levels get too high when too many engines, from all sources, are pumping dangerous emissions into the atmosphere that are then “cooked” by the sun, often when there is a snow cover to intensify the sunlight. High ozone levels can be particularly dangerous to people with compromised immune systems and respiratory problems. Air quality monitoring is now required, with ongoing steps to alleviate the potentially dangerous situation, though ozone alerts continue.

At the same time, positive impacts from the successful drilling in the Jonah Field and Pinedale Anticline were immediate and far-reaching. Millions of tax dollars have been collected as a result of the natural gas production in Sublette County, which have been used for improved infrastructure and community resources. Thousands of jobs were created for local residents and for those willing to relocate to the area. Industry operators work with the Wyoming Game and Fish Department to implement innovative technologies and operational practices that lessen the effect of natural gas operations on the environment. Pipelines, for example, are being built to carry out the condensate now carried by large, dust-raising semi-trucks. The BLM and Wyoming Game and Fish monitor the area and face continued challenges.

Since 2010, additional natural gas fields in Wyoming and throughout the West have been located and development plans are under way. Citizens from Sublette County have been invited to these areas to discuss ways those communities can learn from Pinedale. These could be valuable lessons.