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Digging Deeper : Roughnecks at Elk Hills Drilling for Gas, Record

February 08, 1987|DONALD WOUTAT | Times Staff Writer

TAFT, Calif. — Holed up near here in a dusty old silver trailer jammed with scientific instruments, Stu Smith is compiling a foot-by-foot diary of a battle being waged against Mother Earth on behalf of the general citizenry.

For more than a year and a half, a 17-story-high drilling rig from Oklahoma manned by roughnecks from Montana and Wyoming has been churning in the direction of the center of the earth and spitting up pieces of history dating back 40 million years.

Micropaleontologist Smith is not looking for bones or arrowheads, but for fossils--"oil bugs"--and other evidence of hydrocarbons. This is a patient and costly search for oil and gas that is heading toward 25,000 feet, uncharted territory in these parts.

If the target depth is reached--and the drilling crew on Friday had reached the 19,422-foot mark--it will be the deepest and most expensive hole in all of California, where about 140,000 wells have been drilled since the turn of the century.

If the hole sets a California depth record, it will be a source of pride for people such as drilling supervisor Ken Schultz of the U.S. Department of Energy, who said: "Most drilling engineers never see anything below 10,000 feet."

But the prospect of a notation in the arcane record books of the Oil Patch is not the reason that this $26-million federal project grinds on, while other deep exploratory drilling has been brought to a halt by today's dismal petroleum economics.

Oblivious to plummeting oil prices and other news from the outside world, the diamond drill bits carving the hole known as 934-29R have kept spinning--on the longstanding hunch by geologists that a major new reservoir of natural gas underlies the huge, tired oil fields of the Elk Hills Naval Petroleum Reserve.

Recent rock samples have been "very encouraging," government geologist George McJannet said. And a sizable gas field on this federal property west of Bakersfield, site of the billion-barrel Elk Hills field, might well extend beneath the four nearby giant oil fields owned by private firms.

"The government has no better crystal ball than anyone else, but clearly we're optimistic," said Robert Porter, a spokesman in Washington for the Energy Department's fossil energy program. "A major find in this well has significance to the surrounding companies."

The current project is the last of three deep test wells originally proposed in the mid-1970s by government geologists. At the time, the 1973 Arab oil embargo had prompted Congress to order a resumption of drilling and production at the long-dormant Elk Hills reserve, site of one of the nation's biggest oil fields.

Begun in May, 1985, it is now the only exploratory well being drilled at Elk Hills.

Public Expense

To be sure, ol' 934-29R has not been hurt by the fact that it is being paid for by the taxpayers, not private industry. It is just the sort of big-ticket wildcat drilling venture that the industry has all but abandoned since the price of crude oil collapsed last year.

"The prices just aren't economical," says Donald Goodson, contract manager of the Elk Hills project for Parker Drilling Co. of Tulsa, Okla., which is digging the hole. Specialists in deep-well drilling, Parker has no comparable project under way, and 66 of its 81 rigs are idle altogether. Parker is retained by Bechtel Petroleum Operations, which runs Elk Hills for the government.

The Reagan Administration wants to sell the entire Elk Hills field to get the government out of the oil business, and the Energy Department's Porter jokes that the continuation of the deep-well venture at today's oil prices "may show that the government doesn't operate like a very good oil company." But he and others are quick to defend the continuing funding of the project, which began several months before oil prices collapsed.

"Given the investment to date and the cost entailed in shutting the hole down, we made the judgment that it made more cost-effective sense to go ahead and complete the well," Porter said.

Wears Out Equipment

In addition to hiring Parker's 174-foot-high rig, one of the world's largest, and a 22-man crew on a seven-day, 'round-the-clock basis, the government must cough up anywhere from $15,000 to $50,000 for each turbine-powered drilling bit. So far, the project has worn out 120 bits, some of which use diamonds mined from Zaire to cut through the rock.

About $16.5 million has been spent on the venture so far, and Schultz said drilling costs have dropped so much for lack of demand during the oil-price slump that the crew should reach 25,000 feet for considerably less than the budgeted $26 million.

At such extreme depths, moreover, the drillers are likely to find natural gas rather than oil--which promises slightly better economics today anyway. Schultz said that at current prices for natural gas and a "reasonable" flow of gas from the reservoir, such a well would pay for itself in four years.

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