Oral-History:Ralph Veatch

About Interviewee

Ralph W Veatch Jr. is president of Software Enterprises Inc., an engineering consulting firm. Dr. Veatch worked in the Research Department of Amoco Production Company for twenty-three years. Retiring in 1993 as supervisor of the Hydraulic Fracturing and Well Completions and Production Operations groups, he has authored or coauthored 25 technical papers and 12 books, and holds several patents. During his career he served on numerous advisory committees for the American Petroleum Institute, Completion Engineering Association, Gas Research Institute, Los Alamos National Laboratory, National Petroleum Council, and U.S. Department Of Energy.

Further Reading

Access additional oral histories from members and award recipients of the AIME Member Societies here: AIME Oral Histories

About the Interview

Ralph Veatch: An interview conducted by Fritz Kerr for the Society of Petroleum Engineers, October 1, 2013.

Interview SPEOH000110 at the Society of Petroleum Engineers History Archive.

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Interview

INTERVIEWEE: Ralph Veatch
INTERVIEWER: Fritz Kerr
OTHERS PRESENT: Amy Esdorn, Mark Flick
DATE: October 1, 2013
PLACE: New Orleans, Louisiana

KERR:

Ralph, why did you decide to work in the Petroleum Engineering Industry and how did you get involved to begin with?

VEATCH:

My decision for working in the petroleum industry was more situational than a conscious decision. It started that my dad was a professor of Mathematics, Head of the Mathematics Department at the University of Tulsa, and had been for some years. I graduated from high school in 1954 so going to college was to go to the University of Tulsa. The University of Tulsa had an extremely good Petroleum Engineering Department. It was one of the best departments in the school and that was an area that I thought might be a good area to go into. It turned out that it was a good area to go into because in the summer time petroleum engineering students got very good jobs working in the oil fields for major oil companies which could almost pay your entire tuition for the following year. That started me in to the oil business.

Prior to that my father and I had a kind of talked about a career, and I was 18 years old and at the peak of my knowledge. You’re always at the peak of your knowledge in the 18, 19, 20 year range and it’s downhill from there, but we’re kind of talking about what I was going to do as a profession and work so I said that what I want to do is I want to work in an area that I am doing things I like to do. My dad was pretty understanding and he said, “Well those kind of situations are somewhat few and far between. If you don’t want to be unhappy what you need to do is find out what you can do and do fairly well, do well enough to make a decent living at, and then learn to like to do it.”

That has served me well in my life but that’s how I got started in the industry and going through college, [I] worked in summer jobs, stayed in petroleum engineering, had some excellent professors at the University of Tulsa, found out I was very well trained to go in to that field and I liked it as I went through college. My graduation year I went on and got a Master’s Degree in Petroleum Engineering and then I went to work in the industry.

KERR:

Which discipline within the industry did you work and what drew you to that discipline?

VEATCH:

The discipline that I worked in the industry was--started out, as with many Petroleum Engineers--with major companies, and I went to work for company at that time called Amoco Production Company, a major company. You went to work as a Petroleum Engineer and you were generally assigned to some operating office in the field as doing engineering work there. You really didn’t have a whole lot of say in what you did. You were assigned to the work that was needed to be done.

In my case I started out in Monroe, Louisiana and worked in the--what was called the Mid-Continent division, which covered Louisiana, Arkansas, Alabama, Oklahoma, Kansas and whatever. At that time we went through a period--a training period--as a kind of training engineer. What we primarily did [was] everything that needed to be done from drilling a well to getting it completed, to getting it on production and to look at the reservoir engineering behavior and the production operations. So it wasn’t in a specific given area. It was more of a geographical region.

Then I worked for about seven years in the Producing Department and went up through various stages from Junior Engineer to Intermediate Engineer to Petroleum Engineer to Senior Petroleum Engineer, to Staff Engineer and then I got an opportunity to go to the research center of Amoco Research in Tulsa. During all that interval, I had moved from Monroe, Louisiana. After about a year, [I was] transferred to Jackson, Mississippi doing the same type of work, just different places, and worked there for about three years, and then transferred to Tyler, Texas. When I was in Tyler, Texas one day my boss came in and he said, “The Amoco Research Center has started a new program.” It was called Pan America at that time and I referred to as Amoco because that’s what it soon changed its name to, and was that way until I retired from there.

Anyway, he said, “They started a program and they’re going to bring engineers in from the producing department offices to the research center for short term tours of a year to two years so that they could maybe could get a better idea what goes on at the research center and then go back out to the producing department operations. Maybe have a better communication between the research center and the producing department.” He said to me would I like to consider having my name submitted to that program and I said yes, I think that might be an interesting thing. [A] couple of months later, he came back and said, “Well, you’ve been selected to go to the research center.” It was to be about six or eight months before I would be transferred to the research center, and so that was a kind of thing to look forward to. Well, my boss came to me and said, “The people at the research center might like for you to stay and you might like to stay. If that’s going to be possible situation,” he says, “and I think it is, because of the work you’ve done here at the office,” he said, “I think they’ll like you. I think they’ll want to keep you there.” He says, “If that happens, and you’re going to be there for the rest of your career, which you probably would, you need to get a PhD, and at your age you need to get your PhD now.”

[He] asked me if that was acceptable to me and I thought it over and said it was, so then I had to choose where to get a PhD, and to get accepted [into] a PhD program. It ended up that I was able to go to the University of Tulsa, which was having a PhD program in Petroleum Engineering. I was in that program for three years. That was a very interesting part of my life because I got in to a lot of areas of technology that I enjoyed, and I also found again that they trained me very well at the University of Tulsa to go in and work with colleagues of similar education in the industry.

I started back at Tulsa in 1967. I went to the research center in 1970, and from there I was offered a job in the drilling and well completions and production operations section which was not what I had gotten my PhD in, which happened to be reservoir modeling. However, the guy that was a supervisor of the drilling and production and completions, and production operations section really gave me an enticement to come and work in his section, which I did. That was a fortunate thing that I enjoyed that work there a lot. This fellow that I worked for was named Robert Fast. He was one of the inventors of [the] hydraulic fracturing process. Although I didn’t start out working in hydraulic fracturing, I eventually ended up in a specific area of hydraulic fracturing, and actually finished my career in that area. There’s a lot in between that goes on that got me into where I was, but it was mostly situational, and not that I had a whole lot of control other than just learning to like to do what I had to do and it was easy to learn to like to do it.

KERR:

Discuss your experience in the areas of hydraulic fracturing, well stimulation, and completion technologies.

VEATCH:

I also got into the well stimulation fracturing world in a more of a focused work because one day, my boss, [whose] name was Bob Huggins, called me into the office--and I wasn’t doing just fracturing work. I was doing a variety of things involved with well completion, production operation, well stimulation, perforating, fracturing and such. He calls me in and says, “The company has leased a large tract of property that runs through Colorado, Wyoming, and Utah from the Union Pacific Railroad. A lot of properties.” He said that the producing formations are extremely low permeability. They have permeability on the order of the sidewalk that we walk on, and they’re not having very good success with their fracturing treatments. They’re not paying out. And our reservoir people here at the research center had said to make those wells produce economically, you need to get a fracture that goes out at least 1,500 to 2,000 feet. He said, “Your job is to design a fracturing treatment which goes out at least 1,500 to 2,000 feet.”

At that time their fracturing jobs were running around 30,000 to 60,000 gallons of fracturing fluid with about two to five pounds per gallon, so I started trying to figure out what size of a fracturing treatment we needed to get out 1,500 feet from the wellbore, [to] penetrate from the wellbore. Studies indicated that it would take about 150,000 to 200,000 gallons instead of 30 to 50, and that was a big challenge at the time. This was in the late 1970’s. Also, that it would take a lot of propping agent to prop open a fracture of that size, so I put together a design with the tools that I had, the technical tools--whatever models we had available--and I did come up with a treatment design, a pumping schedule, a size, and it was somewhere around, I think, 200,000 gallons of fracturing fluid and about fourteen to fifteen box car loads of propping agent, which is sand.

So came the day of the fracturing treatment: I was there on location in Colorado where this first well was, and we did pump the job away successfully. That was a really kind of a big event. Wells started to produce fairly well, and we started in a program of what’s called massive hydraulic fracturing, where we kept on doing these additional fracturing treatments and they kept getting bigger and bigger. We’d done eight or nine of them, and so it came time to see what the results were. Well, when you put the results up against the 30,000 to 50,000 gallon treatments, the obvious thing was, that what was bigger was better, and bigger allowed them to take that acreage and develop it economically so that they could make money on that.

Well, [it] wasn’t maybe five or six months after that first well that the research department went through a total (along with the rest of the company) organizational restructuring, and so at the time, I--because of being successful in these fracturing treatments--was appointed to supervise a fracturing group which had three people in it, other than myself. I did serve and was involved with a number of industry committees, all of which I thought were very beneficial to the petroleum industry. These varied through the many SPE committees, sub committees, section officer, terms and a lot of cooperative work with the SPE headquarters office. Also with a number of non-petroleum engineering societ[ies], associated committees they were all involved with addressing issues that were important in well stimulation hydraulic fracturing area. At the time that this got started, we had, as I said, we had had some success with these massive hydraulic fracturing treatments up in Colorado, and this process of massive hydraulic fracturing low permeability formations kind of spread throughout the industry and grew and grew, much like the massive shale plays that we’re seeing happening today. Also, at the same time, the people that were in the group that I supervise grew to a large number and some extremely competent people who made a lot of contributions to the industry, working on fracturing technology.

But these committees, one of them I think is really a very interesting saga and it is the role of the National Laboratories. Amoco had kind of gotten a reputation for being experienced in massive fracturing treatment, but our basic knowledge needed quite a bit of development. We were finding as we moved from Colorado into Wyoming, into Utah, down to East Texas and West Texas, in those areas, that you could not unplug the technology from one place and plug it in to the other place and have it work as well as you wanted it to. So we kind of moved from the attitude that “bigger is better,” which it proved to be until we got very, very big to “smarter is better”. We started working from that, and improved the economic returns from these massive fracturing treatments.

During this process there was a lot of interest across the nation, and the Department of Energy got involved and decided that they would support some research to enhance the knowledge base. This brings in the National Laboratories of Sandia National Labs and Los Alamos, primarily. There were other national labs that were involved, but Sandia and Los Alamos were taking the lead in this. One of the interesting things was that they had come to us (us being Amoco) because they had a prospective repository for nuclear waste in Nevada and this involved whether or not an underground explosion would create a hydraulic fracture that vented to the atmosphere. So they came to Amoco and said “Hey, we need some help here and we want to do some work on hydraulic fracturing.” Well this evolved into their effort, or direction for fracture stimulation of the tight gas formations, and they became involved in a big way.

And that had a major project called the “Multi Well Experience” in Rifle, Colorado where this was something that was really unusual because, prior to that, not many of the major oil companies would get involved with government activities. They did not want the government to have much interaction with their so-called financial situations and it was not encouraged to do this. So it was kind of a new thing, but it was not encouraged. But it wasn’t also totally discouraged and at least in the 1980’s there was not an absolute “No, we’re not getting involved with any government issues.” It was, “Well, okay, go ahead, but be careful” type of attitude.

What we found was the industry had access to a lot of really high powered technical people--scientists and engineers. Typically when you start to mutually discuss problems with them they would say “well, that’s easy to solve.” Then they would get into the details and they’d find out well, maybe it’s not as easy as it might seem at first, but eventually they would come around and make some really good contributions. Well, the industries--actually the laboratories--pushed this research on massive gas in Rifle, Colorado, and they formed this multi well experiment situation [where] government put a tremendous amount of money into a lot of experiments that a major company, by itself, wouldn’t be able to afford to do. But with the government in there, and other small contributions like personnel…. I was fortunate enough to be closely involved with that experiment in getting the designs and the experimental program, and helping out with that but the government laboratories did most of the work.

At that time, I had a very good group of people working in fracturing and they made some contributions to the fracturing world that have totally redirected some of the efforts that we do and have brought about a lot of knowledge. This was because of the back and forth, the mutual work, the information that was available from a lot of these government agencies that helped in the overall growth of our knowledge, based on understanding of the fracturing process. That was, to me, a really a significant time in the development of the massive hydraulic fracturing world and it’s continued. As time goes on, people continued expanding their efforts in this and the massive hydraulic fracturing took the industry. Again, if we’re seeing a repeat of the same type of behavior in the massive shale place where we start out trying a few things and seeing that they work well and soon it spreads across to be a major, major contribution to the energy of the country.

KERR:

During your time on the committees with Sandia, Los Alamos, et cetera, you’d indicated that there was some experimentation. Can you please describe that experimentation in a little more detail, and also describe the new knowledge that was attained because of that experimentation.

VEATCH:

The work that the National Laboratories did provided a very, very important enhancement to our understanding of what controlled these massive hydraulic fracturing treatments and gave us a basis for enhancing the economic returns of our fracturing treatment designs. One of the really important things that came out of it was we got a good picture of how the subsurface stress profiles could vary with different formations as you went down through an entire set of intervals of formations. Prior to that time, it was pretty much industry thinking that it was a uniform profile in some sense--more or less uniform from the surface. As depth increase[d], stresses would increase. What we found, with some really detailed, expensive and precise tests, was that you could go down through a series of formations and the stress would start increasing some. Then you might observe a change that it started to decrease. It might wiggle around as you go deeper and change from large to small to large to small, back and forth. This was kind of a new revelation to a lot of people in the industry because they kind of [had] been used to the idea that stress profiles were a little bit like temperature profiles which did not vary a lot, but just gradually increase with depth.

Well, this had a major impact on fracture treatment design because if you came to a situation where you knew what these stress profiles were, you could take advantage of how they would affect vertical fracture growth. Vertical fracture growth affected the quantity of fluid that it took to create a certain penetrating depth. That was a really major factor in increasing the knowledge base, which made us then say, “Well, it’s important to run surveys that determine what these stress profiles are,” and to then decide our treatments accordingly. This was not the only issue. We found out that fractures would go in directions that were dependent on what the directional stress as mutual directional stress orientation was. This made us look at this aspect in other areas outside the experimental sites that we were planning. That is just a few of the things that were discovered for this fracturing work.

As a result of some of the information that was uncovered in the multi well experiment of the Department of Energy another experimental project, which Steve Holditch may have discussed, was the stage field experiments of the Gas Research Institute, which were done down in Texas and it was the same thing. It was a considerable sum of money, covering some extensive research that enhanced the knowledge based of how fractures grow, what causes them to grow, what tells you which way they might go and what their configuration is.

I was called on giving--after we’d gotten a lot of experience under our belt--I was on a Society of Petroleum Engineers Distinguished Lecture tour, giving a talk about massive hydraulic fracturing that was fairly early on [in] the stage of massive fracturing. I made a statement which has followed me through for a long time and still follows me. Today there’s still some basis for it, and the statement was (at the time) that hydraulic fracturing had been developed and patented in the late 1940’s. Between the late 1940’s and the early 1980’s, the industry had spent a tremendous amount of money on research in all the aspects of hydraulic fracturing; from the rock mechanics to the fracturing fluids to the propping agents to the pumping equipment, and after we had spent all that time, effort, and money we were at the stage that we knew everything about hydraulic fracture propagation except how far they went vertically, how far they penetrated laterally, how wide they were, what they look like, which way they grew. But except for those things, we knew everything about hydraulic fracturing. I have been credited with that statement many, many times. As time went on, and to this current day, there’s still quite a bit of that, that’s true, but it’s a lot less now than it was back when I first made that statement. But that was a kind of an interesting thing.

Another committee that I worked on that was a real interesting committee and a lot of fun, but a lot of work, was a National Petroleum Council Committee to try to discern the resource potential for gas in the low permeability type formations. This was a committee that was formed by probably about--consisted of about fifty companies. There were several of us from Amoco Research that were on that committee. One in the area of Geology, and I was in the area of reserves. The committee was headed by a guy named Ovid Baker from Mobil. He was the chairman of their finance department.

I was fortunate enough to be able to head up the engineering aspects of the well stimulation and fracturing aspect of the committee. It was about a two year effort in which our goal was to try to assess the potential of the low permeability gas resource through the year 2010. This was in like 1980 when we started this work. This brought a lot of the industry into the tight gas picture. It was kind of interesting. This is a two year project, and we ended up getting two books about that thick [indicates with his fingers] on the whole resource for the US. And as it turned out, we estimated that the price of gas would be about five to ten dollars an Mcf [unit of measurement of gas equaling one thousand cubic feet] by the 2010 area. Fortunately enough, we kind of hit the target fairly closely. Considering it was 25 years out. That was enjoyable and interesting aspect of my career.

[I] served on API [American Petroleum Institute] committees which had to do with procedures and practices, and this is a lot of people from the research area, were involved in those. I got involved in the Completion Engineering Association. [It] was early on in getting groups together to address certain specific aspects that companies were interested in. And [I] was, early on, one of the officers of the Completion Engineering Association. Basically, what came out of that were what are called the Industry Consortiums. And this is where people gather and they say, “We have a problem,” and other people are there, and they say “Okay, let me work on that problem, but it’ll cost you this much.” What has come out of it were these consortiums that address specific areas that companies are interested in and learning about and they paid memberships and then the researchers or whoever do the work and the members of that particular consortium get the results, and a lot of areas of fracturing are included in those. This is also kind of spread across the Drilling Engineering Association, et cetera, and the Production Operations Association. So it kind of got a thing going throughout other disciplines of the industry. That was kind of an interesting thing to get things going there.

I think one of my highlights on the National Petroleum Council Tour was when we finished our big final report and the fellow that was the head of the committee, Ovid Baker, and about three or four of us had to go to Washington for about a week at a time for about three weeks to finish drafting the report. So we get to the last bit of the drafting and the National Petroleum Council had set up a big celebration banquet to celebrate the completion of the great report. And the whole week that we were there finishing our editing stuff, the big buzz was that there were going to be two senators at the meeting, and that was a big deal, see? Okay.

We finished the report, and by then there’s a dozen of us in Washington going to this big banquet to celebrate the completion of the report. So we arrived and here’s this huge dining hall with all these round tables of about 8 or 10 people each. They don’t sit the committee together. We each go to a separate table where we don’t know anyone else on these things. So here I was at this table with these guys and the whole conversation was one-upsmanship. “I like Mozart.” “I think Beethoven is better.” The theater, the literature, it was all one-upsmanship in that area, and then it was one-upsmanship in who I worked for, who people worked for. I work for Senator So-and-so. Well, I’m at So-and-so’s office. Pretty soon, I got a little bit irritated with the whole conversation, so I turned to this guy next to me and say, “Hey do any of you guys around here ever hang spoons?” And this guy turned to me and said “I have no idea of what you’re talking about.” I said, “You don’t know how to hang a spoon?” “No, I have no idea.” “Did you graduate from college?” “Well. I got a set of pedigrees that were really something.” And I said, “You know with all those degrees, you need to learn how to hang a spoon and here’s how you do it.” So I picked up this spoon--by then this guy had the knife turned in already, and he was a little bit wondering how this was going on--so I pick up this spoon and I hang it off my nose. I’m sitting there looking intelligent with a spoon hanging down from my nose, and I thought these guys were going to crawl under the table. Here was this bumpkin from Oklahoma who was doing this thing that was really strange when it so happened, about two tables away, one of the senators happened to see that. He picked up a spoon and he put it on his nose, and he hung it. When that happened, spoon hanging spread throughout the entire banquet hall. There were guys up walking around with spoons hanging on their nose. It was a great ice breaker, but those guys at my table still kind of kept an eye on me. And that, to me, was one of the best uses of spoon hanging technology.

KERR:

What were some of the important technological milestones in your discipline?

VEATCH:

Okay, within my discipline and during my career, there have been a large number of what I would say are important technological milestones and developments that pertained to well simulation, particularly to hydraulic fracturing. As I said earlier, I made a statement--or reiterated a statement--that I made early on is that we knew everything about hydraulic fractures except how high they went vertically, how deep they penetrated, how wide they were, what their shapes were, and which way they went and what they looked like. And I think, during my career, there was an awful lot of enhancement of the knowledge, or knowledge base, that pertain to fracture propagation geometry that pertained to obtaining fracture--better fracture conductivity, which enhanced the production rates, the propping agents that we use today. There’s been a large number of new products that have come on the market to enhance the total results from hydraulic fracture. Fluid! Hydraulic fracturing fluids have been developed. And understandings of the basic issues that you need to know to make money by hydraulic fracturing. This has now expanded into the area of developing gas from the massive shales and it’s the same issue as it was when I was working in the tight gas formations. We’re just repeating the growth of understanding and technology that applies to massive shales. We’re not there yet, but we’re making enough headway that people are starting to improve their results, their successes, economically, in the shales.

I worked for Amoco. I started 1960, ‘67 I went back to school. In 1970 I went to the research department. I worked there until 1993 and retired from Amoco, and started doing consulting work, primarily in well stimulation and hydraulic fracturing, so I was not involved with a major company when the massive shale plays got started, but there weren’t many companies that were involved in these massive shale plays when I left Amoco, and this is a kind of an interesting phenomenon. There was one fellow, I wish I could recall his name right now, I can’t recall, George someone [George Mitchell] in Colorado, and this man persisted in trying to develop massive shales with large fracturing treatments. He finally started getting some successes and, as with everything else in the well stimulation world, if you got something that works really well or starts to work really well, someplace somebody’s going to try it somewhere else and pretty soon is going to spread like it has spread from the last ten or fifteen years to totally across the North American continent. Which has resulted in a tremendous increase in our resource base for gas energy, and oil also. I feel like I was fortunate to be in the window of time and to be a part of it.

I, myself, was a pretty minor part in any of this. The people that really accomplished it were the people that actually did the technology work, themselves, and developed their own specific contributions that in total combined to help us sustain and improve our energy resources. I think SPE is a very big contributor to this and I think that without an organization like SPE, where there was the communication across the industry, that we wouldn’t be where we are today. In not only the area that I was interested in, which was well stimulation, but in all areas, because I think that practices for people to hold things to their private areas that are potential money makers, SPE is an entity that encourages the dissemination and distribution of common technology.

Now it’s kind of like saying, well we’ve got freedom, freedom to discuss our successes and our failures. We tend to discuss our successes a lot more than we discuss our failures, but that’s okay because discussing your successes brings other people into developing ideas, developing creativity, and carrying on with things that address problems that once solved, enhance the potential gas and oil for our next ship. SPE has another aspect of it and, that is the camaraderie of the membership. The important thing to me is I come to the meetings, and I see people that I’ve known for a long time, that I respect, and hold a lot of feeling for just because of our association with the society and there’s a lot to that. It’s not something you can quantify, but it certainly is something that you can appreciate after you seen the result. The problem is it takes a long time to see the results or for me to become aware of… My goodness, it’s been a few years, but look, here we are again and I go to these meetings. I meet these people. They’re all great people. They’re good friends, people I care about, people I have a lot of respect for, and people who have made some real contributions to the industry, and SPE is an entity that really helps to keep this interaction going.

KERR:

What were some of the technological challenges that you’ve faced during your career?

VEATCH:

Well, as to technological challenges, it seems that a petroleum engineer’s life is a life of challenges, of new problems, and new situation. That’s the way it was with my situation as a petroleum engineer working at production department and particularly as a research engineer and a research supervisor for Amoco Research that I worked for. And this is primarily because we didn’t get involved in things unless they were problems, and we responded to our producing department to their problems and their needs. I don’t know how you--if I try to give you a list of what types of problems, it would take forever, but the problem that I first mentioned about here the company had leased all of this property--thousands and thousands of acres of property across three or four states—they didn’t know what to do with it. And so they said, “You guys at research, solve this problem.”

Well it seems like my experience with Amoco has just been a repeat and repeat and repeat of the same type of things of we’ve got a prob- and these are challenges and new problems about going from we don’t know what we’re doing to kind of working around, “Well we’ve got an idea now because we have a little more information, and we worked out the processes for getting this information to the point where we feel like we’ve kind of got things under control. So, it would really be hard for me to pinpoint one single major challenge because my experience have been I’ve had a whole series of major challenges and that’s kind of made life interesting. Just to go through, and to be fortunate enough to have the people that I’ve worked for, people that I’ve worked with, people who reported to me, to have them of the caliber to be able to address some of these big problems of finding out what we didn’t know, what we needed to know, how to go about finding out what we needed to know, and addressing those needs. This is back to where I say SPE was a big part of those solutions and addressing those challenges because of the network of being able to communicate with people across the industry who were facing the same challenges as we were in our companies.

KERR:

Was there a particular technological challenge or two other than operational challenges but technical challenges that you’ve face that you might highlight for us?

VEATCH:

Most of the challenges that I’ve faced, working for the producing department, were operational challenges of how you do something or where do you get equipment that properly does what you want it to do, how you get people to do what they should be doing. When I got into the research area, it was a little bit of the same, but more of the “What is the technology needed to take care of the various problems that we faced?” From a research standpoint where I work, it was, I would say, more technical, some operational but more technical.

KERR:

Were there any technical challenges that you like to share with us, some of the specific technological challenge?

VEATCH:

Specific technological challenges I have been through, faced, so many of those in the area of well stimulation and hydraulic fracturing, but they’re all interconnected and basically is how do you get or how do you create a fracture, hydraulic fracture, how do you create the penetration and achieve the fracture conductivity for that fracture and a particular type of formation that has a particular permeability, how do you go about doing that at the optimum range of what you spend versus what you get back. You get back the maximum for what you spend.

That’s what the entire industry faces in whatever discipline they are, it’s an optimization of when you’re trying to get a well to produce something more than it would produce naturally, how much money do you spend, and what’s the limit of expenditure before your returns start diminishing. That, sometimes, is one of the biggest problems.

And sometimes a bigger problem is the apathy of people not to address that, but just to take something that works. Whether it makes the most money or not is not as big of issue as whether it works because in fracturing, you don’t want things not to work. You want to go like you’re supposed to go. And it gets back to the old saw that sometimes it’s difficult to remember that your objective is to drain the swamp when you’re up to your ears in alligators.

If I was to say, if I was to be able to specify a given challenge, I would say getting people to economically optimize or develop things that would economically optimize the monetary returns for what they do. That’s a big challenge. It’s not specifically a technical challenge, but it is getting people to use the technology that’s available to do that.

KERR:

Tell us again, one of these technological challenges, as you say, that you’ve made progress on.

VEATCH:

I mentioned that one of the things that we had learned about hydraulic fracturing, we’d learn everything there was except how high they grow vertically, how deep they penetrate, how high they are, their geometry, which way they go, and what their configurations are. That scenario where we have made a tremendous amount of progress and when I say we, I talk about industry, and all of my comments really pertain to industry as opposed to me, personally.

In the area of fracture propagation geometry, there has been an extreme, I think, advancement in our understanding of what this is by the virtue of the development of fracture mapping processes that will give people an inference of how deep fractures go, what they’re shaped like, which directions they go, and some degree of their magnitude. That didn’t exist in the 1970s. It started with a lot of work. We’ve supported work and we conducted work in that area. A lot of that was in the multi well experiments that I mentioned earlier, and I think if there’s anything that we have--I can’t say that we’ve made a tremendous amount of progress in--it is in the basic perception of what is happening during a hydraulic fracture treatment. We don’t have it to the point that we feel [it] is the ultimate understanding or ability to measure this, but our progress at this point has been very, very, very large.

I don’t know that I know of another area or I can think of another area at this time where we’ve made as much progress over the time frame as we have in fracture mapping processes. Doesn’t say we’ve solved the problem. There’s still a tremendous amount of discussion about the reliability and accuracy of these processes, but they have certainly added to our ability to follow what happens when someone creates a fracture in a horizontal wellbore, and what’s going on during that process.

KERR:

Can you describe for us what you consider to be the most important contributions that you have made in the industry during your career and why?

VEATCH:

Address the issue of contributions that I have made, personally. It is really a difficult thing to address, and the reason is if [I] was to think, “What have I done in all of this?” it’s really hard to attribute anything specific to me, specifically. I don’t feel people are an island. I feel that people contribute because of their association with others who are addressing a common problem, and whatever is achieved is sometimes due to an individual, but no one could achieve those things without help from other people or some kind of assistance from other people and so I’m really hesitant to…

KERR:

Why don’t you go into something that you and your team, maybe when you were a team leader or something of that nature that you and your team contributed to the industry?

VEATCH:

Well, I had a premiere team of research people, and I handled some people who were very well technically trained and qualified. They were extremely bright, creative, innovative, and these people, also working with people from the producing department, and working with technologists that did the laboratory testing and the conducting of experiments. With all of that synergy, these people, they would come up with an idea and they would carry through with this.

One of the things that’s become an industry standard is the shut-in pressure decline analysis for fluid loss in a formation. Another one is the net pressure versus time behavior that allows you to get an inference of fracture propagation geometry. These are things that came out new. These are things that the industry picked up on, and these are things that have caused the revolutions in different thinking. The people that worked for me, like I say, they are the ones that did it. But they developed understandings of fluid behavior, rheology that we had not had before in the industry and in fracture computer reservoir or computer hydraulic fracturing simulators, developments of those.

These were people that worked in my group and I may have made some contributions by saying, “I want you to work on this and here are some problems” and focusing them on the problems. That’s about all I can say that I personally did in this. And giving them the “Here’s what we need” type thing and “here’s what we need to know” and “here are the integral aspects of what’s important” and maybe being able to evaluate what they might have come up with and say, “Well, this may be a better idea than this, and let’s focus on that.” A very major factor in design of hydraulic fracturing treatments is fluid loss of the fracturing fluid to the formation and how to control fluid loss to the formation because if fluids going out of the fracture into the formation, it’s not creating fluid volume, which is what you need for fracture propagation. Well, one of the things that the fracturing group and one or two individuals specifically came up with was a method for measuring or gaining an inference of the potential fluid loss that will occur during a fracturing treatment and this was called the shut-in pressure decline analysis approach. What this did, was this took the industry from using pinpoint laboratory core data of fluid loss tests in the laboratory to an individual well covering the entire vertical extent of a particular well. You got a broad picture of fluid loss behavior and with that, it improved your design. It gave you a basis for designing fluids which would mitigate that behavior.

Another thing was what is the general propagation behavior of a fracture? And that is, during injection as a fracture propagates, is it being confined so that you get a lot of propagation per unit injection because it’s not going vertically or that it is whether or not it’s doing that or whether it’s going vertically and thus not penetrating that gives you the production operation. Some of the folks in the group came up with the process called the Nolte Smith Net Pressure Versus Time Behavior.

And what they found out, or what they proposed, was that the pressure behavior--during a certain pressure behavior defined a certain fracture propagation behavior and it correlated whether your fracture was being confined vertically, whether it was growing vertically, whether it has stopped growing and was ballooning. The things that these people came up with have spread as being now standard industry practice in trying to understand what fracture propagation is during the time injection. And all this stuff is now the service company fracturing-side computers, and has become a standard part of fracture treatment design.

But I think, really, our understanding with fracture behavior and fracture models and what they can do to help you, if they’re used properly, has been a real benefit to the industry. Fracture propagation behavior as studied with computer models is somewhat a bit of a questionable thing because we have many different models and many different types and which one is right is always the question. Well it’s more, which model fits the propagation behavior of the fracture and the formation as the way it will occur, which model is built to fit that? It is more of the issue as to which model is right because if you apply a model which has a certain type of fracture growth algorithms in it to a fracture that doesn’t, if you apply that model to try to predict fracture behavior of a fracture that doesn’t adhere to those algorithms then you get mispredictions.

The industry’s development of those models and having ones which maybe every model applies to this situation but maybe only a few models apply to this situation. And we’ve had a lot of model developments and there’s still a lot controversy about the use of models. My take on fracture models is that essentially the model tells you what you’ve told the model to tell you and I don’t get much disagreement among my colleagues on that statement and it’s pretty true.

KERR:

What do you consider to be the greatest challenges facing the industry as we move into the future?

VEATCH:

The greatest challenges that I see in the area that I work in in the future in the industry is that we be able to create hydraulic fractures which will basically drain the massive shales. We have systems of doing that where you have horizontal wells that have possibly transverse fractures or parallel fractures and right now we’ve learned a lot but we’re still at the stage where you pay your money and you take your chances and this has been the history of fracturing.

From the beginning in the conventional permeability formations, we started with you pay your money and you take your chances. As time goes on and the industry learns about how to better do this, it improves. We move to the tight gas formations, same thing. A low knowledge base with experience and the focusing of people who knew how to solve problems who were intelligent, focusing on that issue until we gain a better understanding and knowledge base and it proves our success.

We’ve got the same thing with the massive shales. We’re in an embryo stage, not quite as embryo as we were five or six years ago, but still there. And, as we go on, I feel confident that the industry repeating what is has in the past, will continue to address this. I feel that the same thing applies to every aspect of the petroleum industry. We get new processes. We get new things and we develop them through a period until we understand them and it solves a problem, and it helps improve our energy resources. It’s not just fracturing, it has to do in drilling, it has to do in reservoir enhancement performance and in offshore operations and the entire gamut. The industry continually goes through--we face new things, we address the problems, and we start working on solutions and eventually, we improve the economic returns and the technical competence in addressing those problems. So my experience particularly mostly being in hydraulic fracturing, I think, is mirrored across the other technical disciplines of the petroleum industry.

KERR:

What are some of your favorite memories working in the industry?

VEATCH:

The membership in the SPE, which involves--you’re communicating and associating with other members of SPE--has really brought about a lot of favorite memories, and these become favorites from one time to another.

KERR:

Go into some specifics for us.

VEATCH:

There are times, some of them that you really can’t repeat because of the appropriateness, but there is one that I recall with the Midcontinent Section back in the early days of the Midcontinent Section, even prior to my deep involvement. The Midcontinent Section’s officers decided that they would have a membership drive and they were going to have a picnic barbecue in the backyard of one of the officers. Now these officers who were executives in major oil companies and engineering upper level echelon of management, and they have some pretty nice grounds for having a big picnic. This was during Prohibition in Oklahoma, so these people brought in many, many, many cartons of Kansas liquor that they had in their garage for the big party. They’ve put out a lot of invitations and they had the big barbecue and lots of people came to the barbecue. The next morning all the liquor was gone and the Midcontinent Section has tripled their membership. This is kind of typical of a lot of things that you get with association in the society.

KERR:

What has made working in the petroleum engineering industry meaningful for you?

VEATCH:

The things that have made the petroleum engineering industry meaningful to me is that during my experience as both a production engineer, research scientist, a research engineer, and a research supervisor is the broad spectrum of technical disciplines that we were involved with in the many things that we addressed. In some industries, you get down and you focus on one particular discipline, such as possibly electrical engineering so to speak.

In petroleum engineering you cover the gamut. You’ve got to cover Geology, you’ve got to cover Geophysics, you’ve got to cover well logging and well evaluation, you’ve got to cover reservoir engineering, and you’ve got to cover production operations and stimulation, and you’ve got to deal with the environment. And all of these, in some sense, bring you to having to involve many disciplines of science, radioactivity, electricity, physics, chemistry, chemical engineering, thermodynamics, and these make a very interesting stew that may or may not prevail in other engineering disciplines. But I think that in my experience as a petroleum engineer is that you’ve got to cover the waterfront and you’ve got to do it in a well back-grounded way. To me, that’s made petroleum engineering a fun thing to do. So back to my dad, I did find a job working in something I like. Because I did learn to like it, but it was easy to learn.

KERR:

How has being a member of SPE affected your work and your career?

VEATCH:

When you think about how SPE is involved in your work and your career, there is just no question that without SPE, this industry wouldn’t be where it is because it offers the communication networking that people really need to get others to make some kind of contributions to problems that they’re trying to solve, the contribution to the solutions to problems. People write papers and from that you get some idea of how to solve a problem. You also have the meetings where people interact, this way or that way. Well, I think if people were left to their own resources with no other help from the outside, it would take them a tremendous amount of time to solve some of the problems that they have to solve. Through SPE and the networking, the associations, and the communications--this brings about a synergy that I think accelerates the application of technology and the addressing of the solution to problems that exist.

KERR:

Ralph, tell us a little bit about Software Enterprise Inc. or SEI and what you do.

VEATCH:

SEI, or Software Enterprises Incorporated, grew out of a situation again of when I was working on my Ph.D. I had developed a research effort to look at reservoir history matching and I had developed an approach that my major professor was thinking would be a marketable situation and marketable process. When I finished my degree (my Ph.D. at the University of Tulsa), we formed the company and we took the computer model that I developed for my dissertation and we started a company of which he had half of the stock, I had half of the stock.

Well, I had a job to go back to Amoco which I felt was a lot more potentially lucrative to my survival than trying to go on with marketing this model but he-- my major professor--was also associated with the consulting outfit, and they were going to take this thing and run with it. Well, I couldn’t be actively involved in the marketing this while I was working for Amoco. It was a conflict of interest, so they took off with it. Eventually, my major professor and other people, they got in some kind of situation to where I didn’t want to have the model that I developed tied up by the associates that my major professor had connected with. So I said to him, “Look, let’s split up the model. You take and do with it whatever you want, and I’ll take it and do with it whatever I want.” We made that arrangement.

So we went off, and each had our own piece of it. Well, I was working for Amoco, [so] I put it in moth balls. When I retired from Amoco, I just had a thing to pull out of moth balls there which was basically that model. But by that time, I was established in well stimulation and hydraulic fracturing and that’s what I like to do and that’s where the business was. I started doing consulting work, and I did that for jobs as they came in, and I also started teaching at industry school in hydraulic fracturing. This would be week-long schools at various places throughout the US and Canada and whatever. So, I just carried on, and consulted in well stimulation and hydraulic fracturing and other aspects (I wasn’t just limited to hydraulic fracturing). And I was teaching in industry schools and I have done that for most of the time since I retired from Amoco. And that’s been a really rewarding thing. And I’ve maintained my association with SPE, which is a very rewarding thing to do.