by Russell Gold
After he demonstrated its usefulness and wrote up the results in a couple papers published by petroleum engineering groups, Cooke found a manufacturer. Within a few years, there were thousands of RDTs deployed all over the world. Then in 1988 the manufacturer fell on hard financial times and was acquired by Halliburton, a larger competitor. Halliburton decided to stop making the tool.
By that time, Cooke had moved on to other inventions. He developed and patented a ceramic bead that was stronger than sand and useful for fracking deep wells. This invention earned millions of dollars for Exxon. He also did important work on using vibrations to improve cement quality. In the 1980s he performed pioneering studies on how oil-well cement sets. Twenty years later, the American Petroleum Institute, the industry’s lobbying powerhouse and the final word on drilling and building wells, issued new guidelines on how to cement wells. The document praised Cooke’s work, calling it a “revelation” and “one of the industry’s most important publications for the advancement of cementing technology.”
He left Exxon after earning a law degree at night and began his second career as a patent attorney. He worked for Baker Botts, a white-shoe law firm, for a decade and then cofounded another energy-focused law firm. In 2011 he left behind the long hours of supervising dozens of lawyers and set up a small patent law practice in Conroe. He remains a wiry and energetic man. Despite two decades practicing law, he remains at heart a scientist. “It’s like your first girlfriend. You never quite get over her,” he said. “I was trained as a scientist. I was looking at the science of wells. What is the data regarding sealing of wells. All the data that I have says cement is not a reliable seal.” If the scientist in him realized there was a problem, it was more a sociological bent that got him wondering why this problem hadn’t been fixed—and why his radial differential temperature tool, or one similar to it, wasn’t a staple in the industry’s toolbox.
A few months after he awoke at night thinking about cement, Cooke made a decision. He would reintroduce his tool to the industry. The first step was to build a modern prototype of the tool, so that he could demonstrate how simple and effective it was. Surely, he thought, if he could show the industry that it could prove its wells were solidly built, their self-interest would take over. The gas industry faced mounting public relations headaches. If the backlash grew any stronger, Cooke figured, the industry’s new profit center could be stopped. It was a matter of self-preservation.
Cooke knew just the man for the job of building a newer, better RDT: the same man whose company had made the original in the 1980s.
Marvin, are you doing all right?” asks Cooke, extending his hand to Marvin Gearhart.
“I think so, but how do you tell?” Gearhart responds.
The men stand in the foyer of Gearhart Companies, in an industrial park south of Fort Worth. A cardboard cutout of John Wayne looks on. “He’s our security,” Gearhart jokes in a pronounced Texas drawl. Gearhart waves Cooke back into a conference room, and they sit down at a large wooden table.
Gearhart is every bit as much a legend as Cooke. Two years after the Society of Petroleum Engineers named Cooke as one of the pioneers of fracking, it honored Gearhart and four other pioneers in drilling wells. Between them, Gearhart and Cooke have about a century’s worth of experience in the oil field. I’ve tagged along for their meeting. I’m not convinced the RDT tool—or a modern version—is the answer to building better wells, or that these two octogenarians can pull it off, but I want to hear what Gearhart has to say. His life’s work has been building tools for the oil industry.
There’s an easy rapport between the two men and many similarities. Like Cooke, Gearhart had grown up in the oil fields. His father worked drilling wells in southeastern Kansas. Cooke and Gearhart were born two years apart and both recall hitchhiking to high school in the days before yellow school buses became common. Both went to work in the oil industry right out of school. Physically, they are different. Cooke is tall and so skinny that he regularly grabs his belt while standing to make sure his slacks aren’t slipping. He stands up straight and erect. Gearhart is shorter and stouter and peers from beneath large, white, bushy eyebrows. He hunches. Cooke spent most of his career working for large corporations and law firms; Gearhart was an entrepreneur. His first job after graduating from Kansas State University was working for a well-service company. His first assignment outside the office was to help Stanolind Oil on one of the world’s first frack jobs. He didn’t like working for someone else, so within a couple years, he borrowed some money and outfitted a truck with oil-field equipment, hired a couple employees, and created Gearhart Industries. Drilling came naturally to him. As a boy, he built a small rig to drill water wells for neighbors. “I got it in my blood,” he says.
By the time the men first met in the 1970s, Gearhart Industries was a major oil-field service company. At its height, it controlled about 16 percent of the global wire-line business, manufacturing various tools that were lowered into wells by a cord. These tools did everything from testing rock pressures to evaluating cement. Gearhart Industries’ wire-line trucks—mobile units with everything needed to probe and test a well—were in demand worldwide. The company grew quickly, especially after the 1973 OPEC oil embargo encouraged more drilling in the United States. In 1974 Gearhart Industries made $27 million in revenue. Within a decade, the company recorded $344 million in revenue.
Then came the 1980s oil price collapse. Large portions of the industry went on life support. Gearhart went from cutting deals with General Electric to laying off employees and scrounging up work. Gearhart Industries’ stock price fell. Predators began to circle. Smith International, a competitor in the oil-field service industry, started buying up Gearhart shares on the way to a hostile takeover. To ward off Smith, Gearhart purchased a smaller company that used sound waves to search for oil. When business didn’t pick up, the debt used to buy the company became unmanageable. Hobbled and nearing bankruptcy, Gearhart agreed to be purchased by Halliburton in 1988 for $277 million and the assumption of its debt. Gearhart started over, building up another company that made drilling bits. He sold this company in 2005 and started Gearhart Companies, his third company.
Cooke and Gearhart spend a few minutes catching up, and then talk turns to building a new version of the radial differential temperature tool with modern electronics. “I wanted to bring you one of the old tools,” Cooke says, so Gearhart’s engineers can take it apart and work on a new prototype. He thought he had one in a storage space above his garage at home, but he had looked, as had his grandson, and it couldn’t be found amid the family Christmas decorations. He was planning to send up a granddaughter, he says, because women can find anything. The next few months also failed to turn up anything. Finally, after his meeting with Gearhart, he located one in Bakersfield, California. He called the owner of the company there, Well Analysis Corporation, looking for someone able to manufacture the tool. The owner said he remembered the tool and had one in his shed out back. A few days later, an eight-foot-tall box arrived in Texas. The tool had broken after years of use, and Well Analysis had cannibalized some parts from it to repair other tools. But the key instrument, the rotating sensor, was still there.
Cooke asks Gearhart why the tool disappeared from production. “Halliburton bought you, and the tool disappeared,” says Cooke. Gearhart nods in agreement. “What I’ve always wondered about is why no one else picked it up,” Cooke remarks.
“It probably wasn’t profitable enough. Companies like to push tools that are more profitable,” says Gearhart.
Cooke came to the meeting with two grandsons. One, dressed in shorts and sneakers, is as quiet and unobtrusive during the meeting as a six-and-a-half-foot man can be. “My driver,” Cooke explains. The other grandson is the one who instigated the YouTube video and told a contact at the energy investment bank about it. Brian Smiley, a business school graduate in his twenties, quit his job at the Boston Consulting Group to help his grandfather’s quest. Together they st
arted a business, the Well Integrity Technology Company, to put the tool back on the market.
Smiley pipes up to steer the conversation back to cement evaluation tools. One of his roles at the new company is market research, something he did as a consultant. He raises the question again of why the tool had disappeared from the market. If he can understand what happened, he figures, this will help him understand how to position it now. Perhaps, he suggests, bad cementing “wasn’t a problem that companies wanted to know about?” Smiley tells me later that he wonders if there would be resistance to the tool because it is too good at finding problems in the well—problems that need to be fixed.
“Industry is not asking for this tool,” says Cooke. Gearhart mumbles his agreement. Cooke continues: “That’s our basic problem. If we run a tool that finds a channel, we have to do something. There’s an obligation to do something about it.” And doing something—trying to squeeze in more cement to fill in holes—can get expensive.
Gearhart suggests that running the tool down a well to look for leaks is “like buying insurance.” This idea perks up Cooke. “The analogy I’ve thought of is it’s like a vaccine,” he says in an animated voice. The radial differential temperature log can find problems with wells before bigger problems crop up. “Not a large number of wells get this problem,” he continues. “This is about the health of this industry. It’s like giving the wells a vaccine, so problems are much less likely to occur.”
Gearhart nods. But he is not willing to commit to working with Cooke on manufacturing a modern version of the tool. His current business makes a specialized tool. He’s out of the general oil-field manufacturing business. And he makes clear to Cooke that while he is willing to help brainstorm, there will be no second go-around for the Cooke-Gearhart collaboration. He suggests that maybe a neighbor in the industrial park can help out. He picks up the phone and calls Dave Clark. A few minutes later, Clark arrives. He’s in his fifties, with a salt-and-pepper mustache and reading glasses perched on his head. He works for Probe, which designs and manufactures specialized oil-field tools. Clark remembered the RDT. “At the time, it looked like it was a real good tool,” he says.
Clark offers some off-the-cuff suggestions about how to make a new, modernized version of the tool. The electronics are smaller and better today, he says. Cooke grows excited and talks about all the different ways the tool could be useful. Clark leans back, his legs crossed and brow furrowed. Drilling is moving so quickly, he says. Companies want to drill a well and complete it as quickly as possible to get the oil and gas—and the money flowing. You’re asking them to slow down and run tests that aren’t required, he says, tests that could lead to delays. That’s not how companies think, he says. “Here’s how they operate: ‘At this point, we don’t care. If there’s a problem, we’ll fix it later.’ It’s like, ‘Worry about that later on. I’ve got to get production going right now.’ These guys are running their legs off.”
Gearhart steers the conversation in another direction. “My hobby is magic. We need a little entertainment,” he says, pulling out a deck of playing cards. On the back is a picture of John Wayne. Gearhart shuffles them and hands them to me. Following his instructions, I create four piles and then take cards from each pile, distributing them to other piles. When I’m done, he tells me to turn over the top cards from each pile. I turn over four aces. Gearhart beams.
In the months that followed the meeting, as Cooke and Smiley continued work on bringing back the cement-leak detection tool, I researched how drillers approach well integrity and cement evaluation in shale wells. It’s not a subject discussed widely within the industry. But I found a wealth of information about how a company had struggled with a leaky Marcellus Shale well drilled a year after the Deepwater Horizon blowout.
Flatirons Development drilled the well in May 2011 in Jefferson County, Pennsylvania. At first there were no problems. The well extended down for 6,700 feet and then for another mile horizontally through the shale. Flatirons, a privately held Denver company, wasn’t trying to build an inexpensive well. It used three pipes, one set inside the other, following what is considered best industry practice. After each pipe was put in place, cement was pumped down through the pipe and back up the exterior, or the annulus, and given ample time to set and harden.
After drilling the well, the rig was moved to another location, and Flatirons workers left the site while a nearby impoundment was filled with water to frack the well. Frank Uhl, a retiree and board member of the local water company, went by the newly cleared pad and noticed a steady stream of gas bubbling up in a water-filled cavity around the well, like the fizzy surface of an open bottle of Coca-Cola. Gas was leaking up around the casing, stealing through what was supposed to be impermeable cement. Uhl thought of the underground aquifer that supplied water to a couple thousand people in the area. If the community lost its water, the nearest alternative was a hundred miles away.
Tensions between the Brockway Borough Municipal Authority and Flatirons soured soon after the company showed up in the Western Pennsylvania town. They didn’t get much better when Flatirons, in February 2011, drilled into the aquifer and caused a nearby water well to go dry for a little more than a day. The water utility, after signing a legal agreement to allow Flatirons to drill on its property, went to court to stop the drilling, ending up with a brokered peace and various concessions from Flatirons. Locals were still unhappy with the Marcellus well. They felt bullied by the company. Someone expressed frustration by using some Flatirons heavy equipment left at the well site as target practice, the company said later.
It was a cool late-spring day as Uhl fumbled for his cell phone and called the water company offices to report what he saw. The news was relayed to Pennsylvania’s oil and gas regulators. A state inspector arrived the next morning. When he got there, Flatirons was already back at the site, vacuuming up the water in the cavity. The inspector pressed Flatirons for a rapid solution. Due to the “possible exposure of the fresh water aquifer to methane contamination, it was necessary to quickly determine the condition of the cement behind the 51/2 casing,” Flatirons engineers wrote later.
Over the next couple months, Flatirons voluntarily did something unusual. It spent liberally to figure out what had gone wrong with the well—and left behind a valuable, detailed record. Flatirons hired the Schlumberger oil-field service company to run an ultrasonic image log, a tool that uses sound pulses well above the range of the human ear to find gaps between the pipes and cement. The test results were not encouraging. At points, the “cement was so spotty and unbonded,” there could be multiple places where gas was flowing into the man-made annulus, according to Flatirons. “We saw gas-filled channels in the cement, but you can’t really tell how large they are,” Jeff Jones, a managing director at Flatirons, told me in an interview. Like blowing air through a straw into a thick milkshake, the gas had likely entered into the cement slurry before it hardened and created long channels that extended for hundreds or maybe thousands of feet. Flatirons collected a gas sample at the surface and sent it off for analysis, looking for isotopic fingerprints to determine if it had come from the Marcellus or from a shallower zone. The analysis showed it was coming from gassy sands only a couple thousand feet deep.
Flatirons then ran a noise log. Developed by Exxon in the 1970s at the same time that Cooke developed the RDT, a noise log is essentially a powerful microphone that listens to the well. It is so sensitive that it can hear a leak and help determine if the leak is a liquid, gas, or both. Flatirons worried that a lot of gas was moving up the well, possibly into the aquifer, and not making it to the surface. “The noise log is one of those things that you’d kind of rather not know, but we decided we needed to know,” explained Jones. “If there was any way we were possibly moving gas into the aquifer, we needed to do something.” But since the leaks were small, the gas couldn’t be heard. “Most of the tools aren’t set up to find a small quantity of gas,” he explained.
The company also sent
a sample of the cement to an independent lab for testing. The results weren’t good. To ensure that cement works as advertised, the industry has established quality guidelines. One requirement is no more than twenty teaspoons of fluid be lost into the rocks from a set amount of cement in thirty minutes. If too much liquid escapes into the rock, the cement can become too dense to pump and won’t go where it is needed. In the laboratory testing, the cement failed spectacularly. It lost over a hundred teaspoons. Flatirons determined that the cement had grown too chunky to spread evenly and provide a good barrier. Instead of a solid seal, it had left behind channels. But there was some good news. As these tests were run, the volume of gas leaking to the surface decreased, and testing the water aquifer didn’t turn up any evidence of contamination.
Flatirons’s investigation left me unsettled. The company used ultrasonic logs, noise logs, and even gamma ray logs to pinpoint the leak, but had failed to figure out where the gas was entering the wellbore. These tests cost nearly $200,000, according to Flatirons, and weeks of detailed work. If Flatirons had found a leak, it could have used perforating guns to blast small holes in the pipe and squeeze in more cement. Later that summer, in a presentation to the state, Flatirons argued against this remedy. It might seal the leaks, or maybe not, but it could also make it harder to frack the well. And it would cut into its profits. The well might have to be scrapped. The state decided that since the leak appeared to be going away on its own, Flatirons wouldn’t have to try to fix the well.
Flatirons isn’t the only company in the Marcellus to have problems with leaking gas. “Many other operators in Pennsylvania have been confronted with these problems,” Flatirons engineers said in a paper they wrote about the well. The state convened a group of regulators and companies to study the problem. One issue the group has taken up is what is an acceptable level of leakage. The Flatirons well was leaking 270 cubic feet daily. The average US home uses 200 cubic feet daily. Flatirons pointed out state regulations for underground storage caverns that store gas for peak wintertime usage were allowed to leak up to 5,000 cubic feet a day of gas without any repercussions. The working group decided this was a good starting point. Leaks happen. Fixing them is hard.