Unconventional Oil and Gas Reservoirs Mountain or Molehill?

Transcription

1 ASPO November, 2012 Unconventional Oil and Gas Reservoirs Mountain or Molehill? Scott W. Tinker Bureau of Economic Geology Jackson School of Geosciences The University of Texas at Austin

2 Population (millions) Global Population and Energy Primary energy (quads) Energy demand is about people Year Source: BP Statistical Review of World Energy, QAe874

3 Outline Unconventional Gas Reservoirs To Frack or not to Frack Unconventional Oil Reservoirs Mountain or Molehill Options to Oil Nothing is Perfect

4 Marketed Production (Tcf) U.S. Natural Gas Production and Reserves Annual U.S. Production End-of-Year U.S. Proved Reserves Proved Reserves (Tcf) 0 0 After Steve Harvey, EIA

5 25 U.S. Natural Gas Production (TcF) Shale gas Coalbed methane Tight gas Non-associated offshore Alaska Associated with oil Non-associated onshore

6 Hydraulic Fracturing Fracking 3,000 to 10,000+ feet 3,000 10,000 feet Shale

7 Woodford Shale Frac Depth

8 Annual shale gas production, Tcf U.S. Gas Shale Production QAe Eagle Ford Shale Marcellus Shale Haynesville-Bossier Shale Model: Rice University, Medlock, 2012 Model: Rice University, Medlock, 2012 Woodford Shale Fayetteville Shale Barnett Shale Antrim Shale Tcf/y today Barnett Year Boyer, C., Clark, B., Jochen, V., Lewis, R., and Miller, C. K., 2011, Shale gas: a global resource: Oilfield Review, Autumn, p. 30 [adapted from U.S. DOE and NETL, 2011, Shale Gas: Applying Technology to solve America s Energy Challenges, Washington, D.C.: (accessed )].

9 Human Hair Barnett Shale Nanopores in Organics Orange dots are 20 nm in diameter 50 µm T.P. Sims #2; m 200 nm After Reed, BEG

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11 Unconventional Reservoirs Environmental Traffic/noise/light Water Land Use NORM Methane Quakes Carbon Energy Security Available Affordable Reliable Clean Implications

12 Barnett drilling location University of Texas at Arlington From XTO annual report Innovation driven by necessity Carrizo location UT Arlington

13 1 mile

14 Landowner Royalty Mixed Negative Neg Positive Positive Positive Source: IHS CERA Potential Global Shale Gas Basins

15 Production cost (2008 $/Mbtu) Produced Conventional Coal Bed Methane Arctic Deep Water Natural Gas Supply - Resources and Production Natural gas will be more expensive 5 Tight 4X Shale Sour LNG ,000 1,100 Resources (trillion cubic meters) Source: IEA World Energy Outlook (2009) QAe980

16 Trillion cubic feet U.S. Unconventional Gas Reserves National Petroleum Council NPC Survey Low NPC Survey Mid NPC Survey High Potential Gas Committee Energy Information Administration/ Department of Energy/Minerals Management Service Interstate Natural Gas Association of America ICF International, Inc. Massachusetts Institute of Technology American Natural Gas Alliance Year Note: Materials Management Service (MMS) no longer exists, its functions are now administered by the Bureau of Ocean Energy Management, Regulation and Enforcement. QAe873

17 Outline Unconventional Gas Reservoirs To Frack or not to Frack Unconventional Oil Reservoirs Mountain or Molehill Options to Oil Nothing is Perfect

18 U.S. Oil Production

19 Production cost (2008 $) MB/d Oil Supply 40,000 psi Resources and Cost Reservoir Temp v Pressure EOR Arctic 140 Deepwater / HPHT ,000 20,000 10, Oil shales Coal Gulf of Mexico Shale oil to 80 liquids Oil will be 2X CO 2 EOR more expensive Scorpio, Gas 60 Heavy Campos, to Gulf of Mexico Other oil Brazil Produced Source: IEA World Energy Outlook (2009) Deepwater and ultra-deepwater 2X conventional oil Conventional operating envelope Source: Rod Nelson, Schlumberger MENA Norne, Norway Blind Faith, & bitumen liquids Krishna, India Ghawar, Saudi Arabia Deg C ,000 Resources 1950s (billion 1980s barrels) 2000s 100

20 US Oil Production Source: EIA From: James D. Hamilton, Working Paper 17759, NATIONAL BUREAU OF ECONOMIC RESEARCH, 2012

21 U.S shale liquids projected growth.(mbpd) U.S. SHALE LIQUIDS PROJECTIONS mmbod by % IRR: $68/bbl 10% IRR: $51/bbl 10% IRR: $50/bbl 10% IRR: $44/bbl 10% IRR: $50/bbl Monterey Woodford/Anadarko Utica Barnett Uinta Niobrara Permian Midland Permian Delaware Granite wash Eagle Ford 1 10% IRR: $44/bbl Bakken After Morse et. al., 2012, Energy 2020: North America, the new Middle East: Citi GPS: Global Perspectives & Solutions, figure 14, p. 17. IRR Source: Rystad Energy QAe465

22 Thousand barrels/year US Oil Production (BBY) 1.4 bby shale oil by 2022 From: James D. Hamilton, Working Paper 17759, NATIONAL BUREAU OF ECONOMIC RESEARCH, 2012

23 Trillion Barrels of Oil Global Conventional Oil Resource Forecasts 6 Each color represents a different forecaster after Ahlbrandt et al., 2005

24 Outline Unconventional Gas Reservoirs To Frack or not to Frack Unconventional Oil Reservoirs Mountain or Molehill Options to Oil Nothing is Perfect

25 Options to Oil for Transport I. Biofuels II. o o Valuable supplement, lower carbon Scale, land use, cost CNG, LPG, LNG, GTL Cleaner than oil, regionally cheap, available o No form of energy is perfect o Dirtier than others, regionally expensive III. IV. o o o Electricity Clean depending on source, efficient engine Expensive, chemicals, range Hydrogen Ten years away

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