Innovations in Microseismic Technology

00:00:00 Peter Duncan
This episode of the Energy Pipeline is sponsored by Caterpillar Oil and gas. Since the 1930s, Caterpillar has manufactured engines for drilling, production, well service and gas compression. With more than 2100 dealer locations worldwide, Caterpillar offers customers a dedicated support team to assist with their premier power solutions. Welcome to the Energy Pipeline Podcast with your host, Russell Stewart. Tune in each week to learn more about industry issues, tools and resources to streamline and modernize the future of the industry. Whether you work in oil and gas or bring a unique perspective, this podcast is your knowledge transfer hub. Welcome to the Energy Pipeline. 

00:00:55 Russell Stewart
Hey everybody. As always, thanks for listening. I'm especially especially excited about today's podcast because once again I have a premier guest on. And again, I don't mind, don't mind tooting my own horn about that. You know my old saying about he who too does not his own horn may never hear his own horn too did. So we toot our horn around here and we're happy to toot the horn of our guests who come on the show today. My guest is Peter Duncan, and It's Peter Duncan, Ph.D. and he's the founder and CEO of Microseismic Incorporated. That's what we're going to talk about today. In case some of you have never heard of that, but you will have heard about a lot of things that Peter has been a part of over the course of his career. As I said, he holds a PhD in geophysics from the University of Toronto and his early career was an exploration geophysicist with Shale Canada and then digicon Geophysical in Calgary. And then I guess that's how you got to Houston, huh? 

00:02:04 Peter Duncan
D Transferred. 

00:02:05 Russell Stewart
Okay. And in 1992, he was one of three founders of 3DX Technologies, which was a publicly traded independent oil and gas exploration company. But here's the deal and I'm going to try to run through these just as fast as I can, but he's been president of the Society of Exploration Geophysicists, which is seg. He's been the president of Geophysical Society of Houston, which is gsh. He's an SEGAAPG Distinguished Lecturer, speaking on the subject of passive seismic at 45 venues around the world. 2010, he received the Enterprise Champion Award from the Houston Business Journal. 2011 World Oil Innovative Thinker Award. 2013 EY National Energy Entrepreneur of the Year. 2014 received the Virgil Kaufman Gold Medal from Segment in 2024, the Cecil Green Enterprise Award Society of Exploration Geophysicist. And he's an honorary member of all these Associations, including the European association of Geoscientists and Engineers. 

00:03:11 Peter Duncan
Yeah, I'm tired, too. 

00:03:13 Russell Stewart
Peter, thanks for coming on the show. 

00:03:15 Peter Duncan
My pleasure, Russell. 

00:03:17 Russell Stewart
Peter, you and I talked a little bit off air before we started recording this. There are so many things that, that I want to talk about. You actually were on the HSE podcast a couple of years ago, and we talked about sinkholes, and if we have time, we may come back and talk about that. We're going to for sure talk about it off air, and then we'll see whether or not it gets broadcasted or not, you know, but there was one particular reason I wanted to have you back on the show, and that was because of a recent press release that you guys issued. And. And we're going to talk about that, but the company's microseismic. But you also have another company called Frac rx, right? 

00:04:02 Peter Duncan
It's really a brand. 

00:04:03 Russell Stewart
A brand, okay. 

00:04:04 Peter Duncan
It's a brand of. Of one of our offerings. We have. We operate within four verticals, if you like. Once upon a time, our only business was doing micro sizing, monitoring of fracs, and helping engineers make better fracs. Hence that vertical that we called fracr. Prescription for a Better Frac. But over the years, other opportunities have presented themselves to brand ourselves and practice in different areas. So we have Frac rx, we have Karstalert, which is that sinkhole monitoring system that we talked about earlier. We've got a practice in the range of monitoring the sequestration of carbon. We call that CO2 secure. And that's what the press release was about. And then we're moving into the field of enhanced geothermal systems as well. And we call that micro thermal. So they're not different companies. They're just brands under which we practice. 

00:05:02 Russell Stewart
Okay, well, the reason I brought up the Frac rx and we're recording here in the headquarters of microseismic here in Houston, Texas. In fact, we're in Peter's office right now. And when you come into the offices, and they have very nice. Very nice office complex here, but it says microseismic. And infracrx is also listed as the brand that Peter just said. And, Peter, before we get into to the carbon capture and sequestration subject, you know, this is an HSE podcast, so the E stands for environmental. And, you know, fracking has become the F word, if you please, among environmental issues. So I wanted to talk to you a little, little bit about that because we've made some pretty good advancements in that, haven't We. 

00:06:03 Peter Duncan
Absolutely. And I'll tell you a little story about that, Russell, because you told me you like story. I do. Back when we were up and coming, back in the early days, probably around 2010 in the fracking world, you may remember a guy named Josh Fox in a movie that he put out called Gasland, right? 

00:06:26 Russell Stewart
Oh, yeah. 

00:06:27 Peter Duncan
That kind of was the focal point. Focal point of the environmental challenges against fracking. And so I. I always kind of found some of the things that were said in that movie and by some of his cohort as being contradictory to what I saw. When we would monitor and image the fracs, our business was to use acoustic waves, like an ultrasound, to listen to the. The frac as it. As it was executed and create an image of exactly where the frac was going. And our point was to help the engineers do it more efficiently, to pump the right amount of fluid down, to make sure that it stayed within zone and that it never went anywhere near the potable water table or created any earthquakes or any of the things that Josh and his guys would talk about. So I decided, since there's a contradiction and maybe there's a point of view that I ought to understand that we would run a little open public conference here in town, and I had an ex president of Shell and a senior person from Chevron sign up to be speakers, and I got people from the Audubon Society and from the Nature Conservancy, and we were going to have an open forum and debate. I love to debate. And I. 

00:07:55 Russell Stewart
Now, tell me again what year this was. 

00:07:57 Peter Duncan
Oh, it's probably around 2009 or 10. I forget. Exactly. 

00:08:01 Russell Stewart
Yeah. 

00:08:01 Peter Duncan
It was the same year that that movie Haynesville, that talked about the gas business in the Haynesville came out. And we actually had a screening of the Haynesville movie as part of this, with the director and producer of the movie here to answer questions. We did all of this, and I thought, you know, I really want to have Josh Fox come and present his point of view. So I called him up, he answered the phone, I got him on. I said, josh, this is Peter Duncan. I work down here at a company called Microseismic. And I. I described to him what we were, what I wanted to do and why, just as I have to you. And he said, now just a second, Dr. Duncan, you've just told me that you can image fracts and know where they're going and where they're breaking the rock and where the fluids are being contained. I said, yeah, we do it every day. He said, my people told me that that was not possible. I don't want to talk to you. He hung up and he wouldn't answer the phone again. And he never came to our conference because all of a sudden he realized that if you like, we could fact check what he was saying and show that it was, what, fake news. Although that wasn't a term back then. 

00:09:19 Russell Stewart
Right, right. 

00:09:20 Peter Duncan
And he decided, I don't need to participate in that debate. And of course, we know that that eventually faded because time after time, people began to realize that there were engineering controls on what was going on, just as there are engineering controls with induced seismicity from injection of waste fluids or from fracs. That there is, is understood and that we can react to what we see and intervene to create or to mitigate any environmental hazard. And it's really well understood. And the only time, I mean, I'm not going to say that people don't make mistakes, and I'm not going to say that sometimes we encounter a situation that we weren't expecting. But I can tell you, when we do the data we collect and the data the engineers collect in terms of pressures in the wells and whatever, it allows us to mitigate those hazards very quickly. 

00:10:23 Russell Stewart
I just. Let's see, you're a PhD, so you use the word mitigate. I was going to say we fixed them. 

00:10:28 Peter Duncan
We fix them. You got it. 

00:10:31 Russell Stewart
That's exactly right. So did you do your forum? 

00:10:33 Peter Duncan
We did the forum and it was really well attended. We had the screening of the movie. We had some environmentalists, Audubon Society, Nature Conservancy. There was the Environmental Defense Fund. They came and they spoke and we had a really interesting exchange of ideas. I thought it was very useful. 

00:10:54 Russell Stewart
That's exactly what we need more of in this industry. And you talked about the concept of, you said fact checking, and that was before the term fake news was. But I, I don't know why we do such a poor job of fact checking and, and getting our, our message out. And I just appreciate you taking initiatives like that. I, I hope you've maybe got some more in mind. 

00:11:21 Peter Duncan
Well, you know, that's not a, that's not much of an issue anymore. And that was an issue that, that hit close to home. And I, I felt we could do whatever we could do, we should do around that time. I actually spent a fair amount of our company's money traveling up to Washington and talking to people in Congress and things like that, trying to get the message out that we're on this, that we're not sticking our head in the Sand. But that issue kind of went away. I think the issue of induced seismicity is probably one where we could be spending some more time and I think we will get the opportunity to do that now. What about water? Water, wow. Water. Water is a hugely, well, hugely undervalued commodity. 

00:12:15 Russell Stewart
Yeah. Especially where they're doing so much of it in West Texas. 

00:12:18 Peter Duncan
Yeah. And I think there was back in the day when we were in these early days, one of the talks about fracking was its water use. And there was all sorts of interesting conversations about are we using too much water, are we putting it into the fracking, are we using the water that should be used as opposed to the potable water and that sort of thing. I think the big focus today, I don't see it as much on water use in say fracking as I do in water pipe leaks. The city of Houston has said they lose 32 billion gallons a year. That's enough water to feed to water the entire city of Fort Worth for a year. And we lose it to leaks in our pipes. Austin said they lose about three times Ladybird Lake every year. Leaks. This is water they treat, they pay for and then it disappears, goes away, never gets build. And it's true all around. And so you can imagine that if cities, if governments can prevent the leaks, that reduces their need to find new water supply. It reduces the need to drill new wells. I just was reading today about cities in the States sinking much like Mexico City has because of the withdrawal of water from the aquifers beneath it. You know, city of the Mexico city has dropped 10 or 15ft because of the water extraction. And this, this is a well known effect. And if we can stop those leaks and find ways to stop those leaks, we can do something about extracting water or finding new water sources and save us all a lot of money and heartache. So in fact there's a, there's a, a new vertical that we're starting and I know that's not the subject here, but no go. There's a new vertical that we're starting that where we're going to and we're testing it in June where we're using dark fiber, that is fiber that's already installed in the ground by AT&T or Verizon or Zale fiber that's in the ground being used for data transmission or telephones that's sitting there and they always put big bundles down. So they've got bundles or they've got strands that aren't being used. And we're actually going to be renting time on a fiber that is sitting along a 60 inch water pipe in the city of Houston. And we're going to attach a digital interrogator that is an acoustic device that sends a laser light down and detects sound along the length of that fiber. It detects very small sounds and it pinpoints exactly where they are. And we're going to be listening for leaks along that pipe and then we can tell the city of Houston where they need to dig because they're losing water there. And we can hear leaks that are on the order of less than a liter in an hour. 

00:15:29 Russell Stewart
Oh, wow. 

00:15:29 Peter Duncan
Very small leaks. And the fiber is already there, so it's very cost effective. 

00:15:35 Russell Stewart
That's exciting news. 

00:15:37 Peter Duncan
Well come back in six months and I'll tell you whether it was. 

00:15:40 Russell Stewart
All right, all right, we'll definitely do that. One other thing on fracking, then we're going to move on to what I was supposed to be talking about to begin with. You said there's a, a new old technology that's coming back into fracking that has to do with geothermal. 

00:16:03 Peter Duncan
Oh, okay, okay, okay, sure. So what I, what I'd indicated, or what I said was that some of the fracking technologies that have been developed over the last, oh, 30, 40 years and, and improved in, since say 2005 through 2015, that technology is now being applied to enhanced geothermal. So and it's really come around full circle, which is where I find it really fascinating. So what is enhanced geothermal? The biggest nuclear reactor on Earth is actually in the Earth, in the earth in the center. And it generates a lot of heat, more heat, more energy than we, mankind could ever use in our day to day life. But it's kind of covered over with some crusty stuff called the crust of the Earth. But there was years ago, otherwise it. 

00:17:08 Russell Stewart
Would burn us up. Right. 

00:17:09 Peter Duncan
Otherwise we'd be unremaeble. So we have used the heat from the Earth around in Iceland where they have hot waters, and at the geyser site over in California where this heat comes close to the surface and we can collect some of that heat and turn it into electricity. But it's a small amount of energy that we're harvesting. The vision has always been to drill down maybe 10, 15,000ft to get down where the rocks are not 150 degrees centigrade, but maybe at 500 degrees centigrade, get down where there's really serious heat, to pump fluid in, capture that heat and bring it back up to the surface and turn turbines and Generate electricity. And this was a huge initiative put on by the US government and governments around the world that started in the late 60s. And this was a great idea. Everybody said, this is huge and will really solve our problems. You'll remember the oil embargo in 73. Well, we're going to solve problems of that. 

00:18:11 Russell Stewart
I remember the gas lines buy gas every other day based upon whether you had an odd or even number license plate. 

00:18:19 Peter Duncan
So we're going to solve those with this geothermal stuff. And they mounted a bunch of experiments and they all failed. They mounted a bunch of projects and we could never drill cheaply enough to pay out the wells with the amount of heat we could recover because the fluid flow rates weren't good enough to make those projects economic. And they all failed. There were 12 or 15 of them around the world, Australia, France, the U.S. they all failed. But during that time, the, as they fracked, created the heat exchangers at depth, they needed to know what was going on. So they hit on this technology called microseismic technology. And they used the academics, applied the microseismic technology, such as it was at the time, to try to learn how they were fracking the rock or how the geothermal projects were working or not working. So then along comes that those projects went away in a long time comes the shales. And when they start fracking into the shales, they're using that technology that had been founded, that had been developed during geothermal work. They're using that technology to inform how they're fracking the shales. And there's a lot more money in the shale business. And the engineers started concentrating, started reading the images we were creating in the microsizing business and learning how to drill more efficiently, frack more efficiently, how to harvest fluids from these impermeable rocks that are the shales. Well, when the business changed in 2015 or 16, that there were a number of engineers who'd been working in the shale business who are now looking for something new to do. And the idea of, well, maybe we can use some of this new, improved fracking and drilling technology and apply it to that older problem of geothermal. So it's come full circle, come full circle. Geothermal encouraged the development of microseismic imaging that helped the shale business develop the way to do better wells. And now we're using that technology on enhanced geothermal projects. And there's a tremendous project, there's a government lab called Forge up in Utah that's been applying some of that on a sort of an Academic or research research business funded by the doe. But there's a new commercial venture up there that is, has been founded by some ex oil and gas engineers called Fervo. 

00:20:52 Russell Stewart
I heard about that. Yes. 

00:20:54 Peter Duncan
And they have a project right off to the side of Forge. And they've shown that they can reduce their drilling, their own drilling times by using feedback from microseismic. And some of the technology that's been developed over the last 20 years in the, in the shale business, they've brought their drilling time down by a factor of three. So that's a factor of three in cost. They've increased their flow back to the surface over these old failed projects by a factor of two to three. So now we have what appears to be an economic opportunity and they're, they're going to bring a new plant online up there by 2028. They're saying that'll generate 400 megawatts of electricity. That's enough to power a small city and it'll be viable economically. And if they really do prove this in the next couple of years, that whole business of enhanced geothermal is going to get reawoken. And it's been saved by the shale business, oddly enough. 

00:22:01 Russell Stewart
Well, as I always say, the oil and gas industry is not the problem with the environment. It's going to be the solution to the environment. Okay, so Kylie, I could talk about this with you all day and there's some other things I'd like to talk about and even get back on our sinkhole discussion that we had a couple of years ago. But let's get to why we're actually supposed to be here today. So this press release, Microseismics proprietary, what we call it. CO secure. 

00:22:38 Peter Duncan
CO2 secure. 

00:22:39 Russell Stewart
CO2 secure. Okay. 

00:22:41 Peter Duncan
CO2 secure for carbon dioxide secure. 

00:22:44 Russell Stewart
Okay. And there was a quote in this press release from you which says, true climate champions don't just store carbon, they secure it. This project represents a major leap forward in commercializing the monitoring technologies needed to safely scale carbon storage and meet global Net zero goals. So. So let's talk about that real quick. 

00:23:07 Peter Duncan
You bet. So it's almost a parallel, and I hope it doesn't continue to be a parallel, but it's almost a parallel with this enhanced geothermal stuff from the 60s and 70s that the new initiative that's been funded by the DOE and the government's governments around the world has been. Well, let's clean up some of the CO2 we're putting into the atmosphere. And there are different ways to do it. Plant trees or whatever. But some cases, excuse me, in some cases it makes sense to try to capture the CO2 and inject it in saline reservoirs at depth, not in the potable water table, but below the potable water table, to inject it and leave it there for all time. So that kind of idea struck a chord and the governments around the world set out to say, with a project that was largely government funded, to say by 2050, we want to be putting away about 6 billion tons of CO2. Putting away, I mean, pumping it into the ground, storing for all time taking it out of the atmosphere. And that's about 15% of the CO2 that we're putting into the atmosphere. It's about 36 billion tons a year. We're going to take 6 billion tons a year and put it into the ground. And that would have a measured and marked effect on the way the greenhouse gases are causing global warming. Okay, when you put it in the ground, you want to know where it's going and that it stays. 

00:24:43 Russell Stewart
And it stays there. 

00:24:44 Peter Duncan
And it stays there. Well, we've already talked about how Microseismic is measuring the fluid flow from fracking or from enhanced geothermal work. It made sense that the way to keep an eye on that CO2 would be to watch it acoustically, if you like, or listen to it, to make sure you know where it's going and that it's staying in the earth. And strangely enough, the very first project that that Microseismic Inc. Did, the project that put us in business, was a CO2 monitoring project up in Wyoming where a company was putting CO2 down in an oil reservoir for pressure maintenance, for enhanced oil recovery. And they were getting, they thought they were getting some leaks and they wanted to know whether microseismic could hear that hissing of the tire, if you like, where the CO2 was leaking out of that reservoir. So we set up an experimen up there and sure enough we heard and identified where the leak was. But that, that was kind of before we got caught up in the shale gale. And we never did another CO2 project until recently. And what happened was as this idea of large scale CO2 injection for sequestration came around, the government started looking for a commercial technology that could be used to monitor this sequestration over the long time. I mean, you're going to have to monitor these things for 50 or 60 years after you put the CO2 in. That's what the regulations are saying. And an opportunity came for a government grant. An initiative was put out by the Government to say, can somebody come forward with what they think is a commercial technology to monitor this CO2 once it's been put in the ground? Well, we talked about karst, the Karst monitoring, the sinkhole monitoring that we'd been doing that involved doing acoustic monitoring in a limited area over a facility or under a facility over a long period of time. So all of the things that the DOE wrote down as the specifications they were going to require in terms you were already doing, we were already doing with the sinkholes. So we filled out an application, we said, we're going to have to tweak what we're doing a little bit. So we got an initial grant to do that engineering study and to model and prove that we could do it. And then we got a bigger grant from the DOE to say, okay, build a prototype and put it on somebody's site and show us what you can do and show demonstrate to the industry that this technology that you've been using for sinkhole will work to answer all of the issues that they have on CO2 sequestration. What are those issues? Number one, you want to make sure that the injection of the CO2 isn't going to induce any earthquakes that could be felt at the surface. Number two, you want to make sure that when you're putting that CO2 into the ground, you're not creating those leaks in the caprock, because it has to have a cap rock that it's going to sit under. You don't want to have the pressure increased to the point where the tire leaks. 

00:28:00 Russell Stewart
Right. 

00:28:00 Peter Duncan
And. And we can hear those hissing. We'd already proven that. And then three, you want to be able to track where the fluid is going, that it's not moving, or somebody else's property or not moving outside the reservoir that you said you're going to store it in. And we can facilitate that with the same technology that we're using to hear sinkholes. So we convinced the government, the doe, that it was worth a try. They gave us some money. It took us a while to find a viable project to deploy our technology, even though it wasn't going to cost the company anything. Took us a while to find that, because the whole licensing or permitting process for doing cot2 sequestration has kind of been caught up in a lot of. I don't know whether it's red tape or bureaucracy or it's just good due diligence, but for a long time, the number of wells that were approved, the number of projects that were approved for actually sticking CO2 in the ground set at zero, that is, there were no new permits issued. That started to get better over the last couple of years, partly because the federal government has allowed certain states who have demonstrated some capacity to do this. States have been given the opportunity to permit the wells themselves. North Dakota can do that. Louisiana can do that now. Texas will soon be able to do that. And that's kind of moved us off high center. So just within the last couple of months, we were finally in a position where we could spend the government's money and deploy this prototype system on an active project. And it's just been drilled into the ground. You remember, we. You may remember that this facility, the way we monitor, we actually drilled geophones down a few hundred feet into the ground, cement them in, and then put an antenna on top of that, wires the data home. So it's a permanent facility that's going to be there for 50 or 60 years, working. We finally have completed installing it just in the last two weeks, and we'll be turning it on shortly. 

00:30:16 Russell Stewart
Okay, so I got to come back in six months. 

00:30:20 Peter Duncan
Come back in a year. 

00:30:21 Russell Stewart
In a year. 

00:30:22 Peter Duncan
Because the first thing we're going to do is before they inject any CO2, we're going to listen for six months just to get the background seismicity, because we want to talk about if they're injecting. We want to be able to prove that it's not increasing the seismicity in the area. So you have to have a background level first, a base level. And then after the six months, the company will start injecting CO2, and we'll start listening for any increase in seismicity, for any hissing of the tire, and we'll start tracking where the CO2 is going. So give me a year. 

00:30:58 Russell Stewart
And then we'll be able to say what company it is and where it is and all that. 

00:31:02 Peter Duncan
Yes. At this point, I can't say any of that. 

00:31:06 Russell Stewart
I understand. I understand. Well, I can't wait. I can't wait to come back. And this is. This is very, very exciting. And, Peter, I really appreciate you inviting me to your office here. Appreciate you taking the time again to do this. I can't wait to do it again. And I'm going to. I know I pulled you out of a meeting to come do this, and I'm sure you've got some other meetings to go to, so I'm going to let you get back to being. To being CEO. But again, I can't thank you enough for coming on the show. 

00:31:38 Peter Duncan
Russell, you come anytime. I love talking to you. And I love talking about what we do because I'm passionate about it and I think we do good stuff that has a lot of good things to say about it. 

00:31:50 Russell Stewart
Okay, well there you go folks. I think today's show's definite. Definitely been worth the price of admission. As always, we thank you. We send a thank you to all our listeners for making this a top rated oil and gas podcast. Please post us on LinkedIn. Tell all your friends about us. If you need a speaker for your conference or some business meeting or sales marketing meeting or whatever, reach out to OGGN for our Bureau of Speakers and we'll see you next time. 

00:32:23 Peter Duncan
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