Marathon Oil intends to earn trust, respect

Oct. 11, 2011 at 5:11 a.m.

The continued development and application of advanced technologies has led to significant improvements in the way we find and produce oil and natural gas, and this, in turn, has enabled us to chart a realistic path for achieving greater energy security for the United States.

Right here in South Texas, these innovations in technology have led to the Eagle Ford Shale's emergence as the most significant new opportunity for unconventional oil and natural gas in the United States.

Across the nation, other new oil and gas resource developments - in North Dakota, Oklahoma, Wyoming and elsewhere - have given the oil and gas industry the opportunity to create tens of thousands of new, good-paying jobs while generating hundreds of millions of dollars in revenue for local, state and national treasuries.

However, nothing has had an impact on our industry's progress like advances in a well-stimulation process known as hydraulic fracturing, or "fracking."

The process involves pumping fluid - about 99.5 percent water and sand and 0.5 percent chemical additives - under controlled conditions deep within a well, creating fractures in the impermeable rock-deep underground so the oil and gas previously trapped in that formation can be economically produced. Safe, cost-effective refinements in hydraulic fracturing, horizontal drilling and other innovations now enable us to free oil and gas locked in tight shale formations that previously were inaccessible.

To illustrate this point, production in the Eagle Ford has risen from approximately 1,000 barrels of oil equivalent per day in 2008 to approximately 77,000 BOED last year. Marathon Oil is completing a $3.5 billion investment in this play, and we estimate our net production from the Eagle Ford will be approximately 100,000 BOED by 2016. This is a top priority for us, and we anticipate adding some 300 Marathon employees to support our Eagle Ford activities, in addition to approximately 2,000 indirect jobs necessary to support our anticipated drilling operations in the Eagle Ford.

In 2010, activity tied to the Eagle Ford Shale supported an estimated 12,600 full-time jobs in the area - both direct and spin-off employment - and generated approximately $50 million in local government revenue, according to a study conducted by the University of Texas at San Antonio Institute for Economic Development. And those numbers are forecast to increase significantly in the coming years as oil-and-gas activity increases.

It's clear there are tremendous opportunities, but challenges exist too. As an industry, our progress is tied directly to our ability to assure local communities we can deliver energy and economic security simultaneously, and that we'll continue to do so in a safe and environmentally responsible manner.

Fracking may be poised to turn shale gas and oil into a global resource, but its rapid growth also has generated a lot of attention in a media environment where information - and misinformation - travels fast and where mistakes are on display in an instant.

We must embrace these challenges and view them as a way to tell our story and educate people in the process. And it's critical that we work in partnership, not in conflict, with regulatory bodies that may share some of the public's concern with hydraulic fracturing.

As an example, we think it's important for the public to know the composition of fluids used in the fracking process, so Marathon Oil has joined other operators in voluntarily disclosing these components at, a joint project of the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission.

As Marathon Oil continues to increase its presence in South Texas, we'll conduct open houses and other outreach activities so our neighbors can learn more about our operations and get answers to their questions. It's important for everyone to understand that groundwater sources are protected by barriers of steel casing and cement when we drill a well, and that the majority of hydraulic fracturing activity typically takes place more than a mile below those water supplies. We also plan to use non-potable water for our fracking operations where possible, and to recycle that water as much as feasible.

At Marathon Oil, we view ourselves as guests in those communities where we live and work, and South Texas is no different. Wherever we operate, we're committed to earning the trust and respect of our neighbors by doing all we can to minimize the disruptions to our communities and, along the way, to making them safer, cleaner and better places to live.

Our neighbors expect this of us, and we expect it of ourselves.

David E. Roberts Jr. is executive vice president and chief operating officer of Marathon Oil Corporation.



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