Unconventional Energy Resources: 2013 Review

This report contains nine unconventional energy resource commodity summaries and an analysis of energy economics prepared by committees of the Energy Minerals Division of the American Association of Petroleum Geologists. Unconventional energy resources, as used in this report, are those energy resources that do not occur in discrete oil or gas reservoirs held in structural or stratigraphic traps in sedimentary basins. These resources include coal, coalbed methane, gas hydrates, tight-gas sands, gas shale and shale oil, geothermal resources, oil sands, oil shale, and U and Th resources and associated rare earth elements of industrial interest. Current U.S. and global research and development activities are summarized for each unconventional energy commodity in the topical sections of this report.     

Unconventional Energy Resources: 2007–2008 Review

This paper summarizes five 2007–2008 resource commodity committee reports prepared by the Energy Minerals Division (EMD) of the American Association of Petroleum Geologists. Current United States and global research and development activities related to gas hydrates, gas shales, geothermal resources, oil sands, and uranium resources are included in this review. These commodity reports were written to advise EMD leadership and membership of the current status of research and development of unconventional energy resources. Unconventional energy resources are defined as those resources other than conventional oil and natural gas that typically occur in sandstone and carbonate rocks. Gas hydrate resources are potentially enormous; however, production technologies are still under development. Gas shale, geothermal, oil sand, and uranium resources are now increasing targets of exploration and development, and are rapidly becoming important energy resources that will continue to be developed in the future.

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Unconventional Energy Resources and Geospatial Information: 2006 Review

This article contains a brief summary of some of the 2006 annual committee reports presented to the Energy Minerals Division (EMD) of the American Association of Petroleum Geologists. The purpose of the reports is to advise EMD leadership and members of the current status of research and developments of energy resources (other than conventional oil and natural gas that typically occur in sandstone and carbonate rocks), energy economics, and geospatial information. This summary presented here by the EMD is a service to the general geologic community. Included in this summary are reviews of the current research and activities related to coal, coalbed methane, gas hydrates, gas shales, geospatial information technology related to energy resources, geothermal resources, oil sands, and uranium resources.

Heavy Oil and Oil (Tar) Sands in North America: An Overview & Summary of Contributions

As conventional oil and gas reservoirs become depleted other unconventional energy sources have to be recovered and produced. Four of the major unconventional resources that are strategic for North American interests are heavy oil, oil sands, oil shales, and coal-bed methane. Recent interest and activity in Canada’s vast oil sands are progressing rapidly as soaring oil prices are fueling a ‘gold rush’ in oil sands development in Alberta. This interest is evident by the record-number of oil sands and heavy oil presentations at Energy Minerals Division (EMD)-sponsored sessions at the 2004 and 2005 Annual Conventions of the American Association of Petroleum Geologists (AAPG), held in Dallas, TX and Calgary, AB.     

Fracability Evaluation Method for Tight Sandstone Oil Reservoirs

Natural Resources Research - As typical low-permeability unconventional fossil resources, tight sandstone oil cannot be exploited economically without effective hydraulic fracturing. Fracability is...     

Assessment Methodology and Results From the Canadian Gas Potential Committee 2001 Report

Since 1991 volunteers from the Canadian Gas Potential Committee (CGPC) have conducted assessments of undiscovered gas potential in Canada. Reports were published in 1997 and 2001. The 2001 CGPC report assessed all established and some conceptual exploration plays in Canada and incorporated data from about 29,000 discovered gas pools and gas fields. Mainly year-end 1998 data were used in the analysis of 107 established exploration plays. The CGPC assessed gas in place without using economic cut offs. Estimates of nominal marketable gas were made, based on the ratio between gas in place and marketable gas in discovered pools. Only part of the estimated nominal marketable gas actually will be available, primarily because of restrictions on access to exploration and the small size of many accumulations. Most plays were assessed using the Petrimes program where it could be applied. Arps-Roberts assessments were made on plays where too many discovered pools were present to use the Petrimes program. Arps-Roberts assessments were corrected for economic truncation of the discovered pool sample. Several methods for making such corrections were tried and examples of the results are shown and compared with results from Petrimes. In addition to assessments of established plays, 12 conceptual plays, where no discoveries have been made, were assessed using Petrimes subjective methodology. An additional 65 conceptual plays were recognized, discussed, and ranked without making a quantitative assessment. No nominal marketable gas was attributed to conceptual plays because of the high risk of failure in such plays. Nonconventional gas in the form of coalbed methane, gas hydrates, tight gas, and shale gas are discussed, but no nominal marketable gas is attributed to those sources pending successful completion of pilot study projects designed to demonstrate commercially viable production. Conventional gas resources in Canada include 340 Tcf of gas in place in discovered pools and fields and 252 Tcf of undiscovered gas in place. Remaining nominal marketable gas includes 96 Tcf in discovered pools and fields and 138 Tcf of undiscovered nominal marketable gas. The Western Canada Sedimentary Basin holds 61% of the remaining nominal marketable gas. Future discoveries from that area will be mainly in pools smaller than 2.5 Bcf of marketable gas and increasing levels of exploratory drilling will be required to harvest this undiscovered resource. A pragmatic, geologically focussed approach to the assessment of undiscovered gas potential by the CGPC provides a sound basis for future exploration and development planning. Peer reviewed assessment on a play-by-play basis for entire basins provides both detailed play information and the ability to evaluate new exploration results and their impact on overall potential.     

Kansas Energy Sources: A Geological Review

Kansas produces both conventional energy (oil, gas, and coal) and nonconventional (coalbed gas, wind, hydropower, nuclear, geothermal, solar, and biofuels) and ranks the 22nd in state energy production in the U.S. Nonrenewable conventional petroleum is the most important energy source with nonrenewable, nonconventional coalbed methane gas becoming increasingly important. Many stratigraphic units produce oil and/or gas somewhere in the state with the exception of the Salina Basin in north-central Kansas. Coalbed methane is produced from shallow wells drilled into the thin coal units in southeastern Kansas. At present, only two surface coal mines are active in southeastern Kansas. Although Kansas has been a major exporter of energy in the past (it ranked first in oil production in 1916), now, it is an energy importer.     

A Scenario-Based Hydrocarbon Production Forecast for Louisiana

Conventional oil and gas productions in Louisiana has been in decline for four decades, but in recent years, new technology and capital investment have opened up a significant new resource play in the Haynesville shale, reversing Louisiana’s gas production decline. The need for long-term forecasting has become more important for state planning and for facilitating efficient regulatory development and incentive programs, as the largest oil and gas fields diminish in productivity and the promise of unconventional resources are realized. The purpose of this article is to present a hydrocarbon production forecast for Louisiana using disaggregate resource classes and a transparent analytic framework. A field-level evaluation is employed for producing fields categorized by primary product, resource category, geographic area, and production class. Undiscovered fields are classified according to conventional and unconventional categories and are modeled using a probabilistic and scenario-based forecast. The analytic framework is described along with a discussion of the model results and limitations of the analysis. Louisiana is in the early stages of transitioning to a primarily gas-producing state, and the manner in which the Haynesville shale develops will play a critical role in deliverability and economic prospects in the future.     

极地天然气水合物勘探开发现状及对我国的启示

极地天然气水合物分布于南北极大陆及其毗邻海域的沉积物（岩）中,与广泛分布的永久冻土带密切相关,资源潜力巨大。极地天然气水合物储层类型主要为富砂沉积物储层,能提供天然气水合物高浓度聚集所需的储集渗透性,最可能实现远景勘探和商业利用。随着全球气候变暖,北冰洋海冰加速融化和航道开通,北极地区蕴藏的丰富资源都将从潜在利益变成现实利益,各国的权益纷争也将愈演愈烈。本文综述了极地天然气水合物勘探开发现状和相关国家的水合物开发政策,依据中国海陆域天然气水合物勘查开发现状,提出了中国参与极地天然气水合物研究和开发的思路和途径,为中国极地资源开发利用战略提供参考。     

Proppant Crushing Mechanisms Under Reservoir Conditions: Insights into Long-Term Integrity of Unconventional Energy Production

Proppant crushing, a major proppant failure mechanism, occurs in geothermal energy and oil/gas stimulation production stages when the level of net stress exerted on the proppant exceeds the actual crush resistance of the material. Loss of effective reservoir conductivity due to proppant crushing can result in significant loss in productivity, and so it is crucial to understand the realistic proppant mechanical performances under deep reservoir conditions. This review provides a comprehensive overview of proppant crushing at the micro- to macro-levels by analyzing single proppant breakage, as well as re-arrangement and breakage mechanisms of proppant packs under in situ fracture environments. The choice of an appropriate proppant type based on the fracture treatment plays a key role in effective geothermal and oil/gas recovery. In addition, injection of proppants with better characteristics (higher sphericity, lower size, better gradation and lower granular porosity) can significantly influence the reduction of the extent of proppant crushing. Moreover, this study compares the performances and responses of different types of proppants upon proppant interaction with geothermal and oil/gas reservoir environments. Furthermore, this paper discusses various proppant types and their enhanced characteristics, which can be utilized as controlling measures for proppant crushing during unconventional energy extraction.

     

Long-term implications of new U.S. gas estimates

The US Geological Survey’s 1995 estimates of domestic undiscovered plus undeveloped natural gas nearly tripled quantities estimated in its 1989 Assessment. Much of the increase came from selected unconventional resources assessed using the paradigm of continuous-type accumulations. These include such seemingly unrelated “unconventional” gas occurrences as “tight gas,” coalbed gas, gas in shales, and deep basin-center gas. Though only a small fraction of the assessed 352 trillion cubic feet is now economic, the quantity is nevertheless significant. Moreover, the lowest cost resources are close to major gas markets where competing conventional gas is modest. With continued technological improvements these resources can contribute significantly to future U.S. gas supply, even without subsidies     

Oil resources for the next century: What's ahead?

Proven reserves of liquid hydrocarbons are now assessed at between 950 and 1,000 billion barrels, depending on the source. Their life expectancy at the current rate of world production is about 41 to 45 years. This lifetime is much longer than what was predicted in both 1970 and 1980. However, this wealth of resources does not necessarily mean that the security of oil supplies is guaranteed for all countries. Oil reserves are unequally distributed from a geopolitical standpoint. Reserves and output are mainly due to big fields (with more than 500 million barrels of initial reserves).Though oil supplies seem to be ensured for the coming 30 to 40 years, what does the picture look like beyond 2020–20307 The increased lifetime of proven oil reserves has been apparent only in the last 10 to 20 years. The considerable increase in proven oil reserves reported after 1986 is, in fact, mainly due to revisions and extensions, rather than to new sources of oil: conventional oil (with the price per barrel of oil on the order of $20 and recovery rate around 30 percent) remaining to be discovered today; oil resources stemming from an improvement in recovery rate; oil resources resulting from exploitation of new zones, such as deep sea zones; and unconventional types of oil, such as extra-heavy crudes, tar sands, shale oils, and liquid hydrocarbons from chemical-enhanced oil recovery methods.     

Conventional and Unconventional Hydrocarbon Resource Potential Evaluation of Source Rocks and Reservoirs: A Case Study of the Upper Xiaganchaigou Formation,Western Qaidam Basin,Northwest China

The Paleogene upper Xiaganchaigou Formation (E₃²) is the most important source rock and reservoir in the Qaidam Basin. However, there are few studies on the processes of hydrocarbon accumulation in this formation; therefore, its hydrocarbon resource potential has not been estimated reasonably. This paper evaluates the hydrocarbon generation properties in light of an improved hydrocarbon generation and expulsion potential model. According to the geochemical characteristics of source rocks and the petrological features of reservoirs, the potentials of different resource types, including conventional oil, tight oil and shale oil, are quantified by combining the buoyancy-driven hydrocarbon accumulation depth (BHAD) and the lower limit for movable resource abundance. The results show that the source rocks are characterized by a large thickness (more than 1000 m), moderate organic matter content, high marginal maturity and a high conversion rate (50% hydrocarbons have been discharged before R_o?=?1%), which provide sufficient oil sources for reservoir formation. Moreover, the reservoirs in the Qaidam Basin consist mainly of low-porosity and low-permeability tight carbonates (porosity of 4.7% and permeability less than 1 mD). The maximum hydrocarbon generation, expulsion, retention and movable retention intensities at present are 350?×?10⁴ t/km², 250?×?10⁴ t/km², 130?×?10⁴ t/km² and 125?×?10⁴ t/km², respectively. The thresholds of hydrocarbon generation, expulsion and BHAD were 0.46% R_o, 0.67% R_o and 0.7% R_o, respectively. Moreover, the dynamic evolution process of hydrocarbon accumulation was divided into three evolution stages, namely, (a) initial hydrocarbon accumulation, (b) conventional hydrocarbon reservoir and shale oil accumulation and (c) unconventional tight oil accumulation. The conventional oil, tight oil and movable shale oil resource potentials were 10.44?×?10⁸ t, 51.9?×?10⁸ t and 390?×?10⁸ t, respectively. This study demonstrates the good resource prospects of E₃² in the Qaidam Basin. A comprehensive workflow for unconventional petroleum resource potential evaluation is provided, and it has certain reference significance for other petroliferous basins, especially those in the early unconventional hydrocarbon exploration stage.

     

Exploring the Association of Communication Satisfaction with the Oil and Natural Gas Industry and Risk Perceptions of Shale Energy Development

Despite the vast literature on shale energy development, surprisingly little empirical research has been conducted on the shale energy communicators, communication practices, and community outreach programs. Using data drawn from a random sample of individuals in two counties in the Eagle Ford Shale region of south Texas, we present a newly-constructed unidimensional scale that can be used to measure stakeholders’ level of satisfaction with the oil and natural gas industry’s communication performance. We then examine the relationship between individuals’ level of communication satisfaction with the oil and gas industry and their perceptions of risk in regard to shale energy development in the Eagle Ford Shale. We find substantial support for the hypothesis that communication satisfaction with the oil and natural gas industry is negatively associated with risk perception. We conclude the paper with several suggestions for future research.     

A Severance Tax Revenue Forecast Model for Louisiana

Most states levy severance taxes on the value of natural resources when they are severed or extracted from the ground or subsurface. In Louisiana, severance tax on oil and gas production contributes to the majority of mineral revenue in the state, and over the last decade, has ranged between $400 million and $1.1 billion, or between 5 and 9% of annual state revenue. The purpose of this article is to develop a forecast model for severance tax revenue to better understand the severance tax regime and to assist in state budgeting and planning purposes. We couple an oil and gas production model with empirical relationships describing historical severance tax receipts to perform the forecast. We demonstrate that oil production correlations are robust, but that in recent years, unconventional gas production from the Haynesville shale has led to a significant departure from historic trends. We estimate that cumulative oil and gas severance tax revenues during 2011–2015 will range from $1.0 to $2.1 billion for oil and $1.3–$1.9 billion for gas. Louisiana is transforming into a gas-producing state, and more attention needs to be paid to tax design and the impact of exemptions on future severance revenue receipts.     

Natural Gas Hydrate Stability in the East Coast Offshore-Canada

The methane hydrate stability zone beneath the Canadian East Coast oceanic margin has developed to a depth of more than 600 meters beneath the deep water column in the area of the deep shelf and the slope. This zone is continuous spreading from the Labrador continental shelf in the north to the slope of the Nova Scotia shelf in the south. Gas hydrates within the methane hydrate stability zone are detected only in one situation, however, they are numerous in the deeper zone in which type II gas hydrates are present through the whole area at water depths as low as 100-200 m. Well-log indications of gas hydrate situated deeper than the base of the methane hydrate stability zone may be an indication of wetter, compositionally more complicated hydrates that probably are not of bacterial only origin. This could indicate a deep thermogenic source of gas in hydrates. The presence of hydrates in the upper 1000 m of sediments also can be considered as an indicator of deeper hydrocarbon sources.     

A Review of Louisiana Drilling and Production Activity, 1980–2011

Louisiana plays an important role in domestic oil and natural gas production, and in 2012 ranked sixth in oil production and third in gas production in the United States. Conventional oil and gas production in Louisiana has been declining steadily over the past four decades, while unconventional gas production has seen spectacular growth in recent years, effectively doubling the state’s natural gas output over three years. The structural changes impacting Louisiana’s oil and gas industry are complex and dynamic, and to better understand the relationships between activity drivers, a review of drilling and production data between 1980 and 2011 is performed and correlative relationships are developed. Drilling and completion trends, including completion and success rate statistics and drilled footage, are summarized by region. Correlative relationships are established between measured footage and the number of wells drilled, drilling activity, abandonments, and commodity price. We show that drilling activity in North Louisiana is highly responsive to changing oil prices, whereas in South Louisiana, activity is relatively inelastic. Well abandonments are shown to be negatively related to commodity prices. Horizontal, directional, active, idle, and orphaned well inventories are summarized.     

Evaluation of Engineered Geothermal Systems as a Heat Source for Oil Sands Production in Northern Alberta

This paper evaluates the application of geothermal energy by numerically modeling the heat extraction that would result from the injection of cold water into an artificially fractured hot dry rock (HDR). The HDR that would be utilized in Alberta is expected to be granite with a network of pre-existing natural fractures. However, to ensure a continued flow of injected water from the reservoir to the production wells, creation of additional fractures is required. Thus, the properties of these fractures are of prime importance to the efficiency of geothermal energy production. The fracture networks for the simulations were created using a numerical code and were converted into a grid format to be used in a commercial thermal simulator. A new approach to embed a complex fracture system into the numerical model was applied. Various properties of the fractures such as aperture, length, and spacing were changed and their absolute and relative effects on energy production were quantified and the results are presented in this paper. This modeling technique was also verified by comparison with the conventional dual porosity model and by performing a history match with real field data obtained from literature. The applicability of this approach to provide heat for oil sands extraction was investigated using the volumes of water currently needed in northern Alberta. Based on these constraints, numerical simulations were run to evaluate the optimum well spacing that would be required using a three-well configuration. In this simulation, the fracture parameters (density and aperture) were kept fixed assuming that they are not affected by cold water injection. The results of this study suggest that geothermal energy has a potential to be a sustainable form of thermal energy for oil sands extraction in northern Alberta.     

Development of an Improved Methodology to Assess Potential Unconventional Gas Resources

Considering the important role played today by unconventional gas resources in North America and their enormous potential for the future around the world, it is vital to both policy makers and industry that the volumes of these resources and the impact of technology on these resources be assessed. To provide for optimal decision making regarding energy policy, research funding, and resource development, it is necessary to reliably quantify the uncertainty in these resource assessments. Since the 1970s, studies to assess potential unconventional gas resources have been conducted by various private and governmental agencies, the most rigorous of which was by the United States Geological Survey (USGS). The USGS employed a cell-based, probabilistic methodology which used analytical equations to calculate distributions of the resources assessed. USGS assessments have generally produced distributions for potential unconventional gas resources that, in our judgment, are unrealistically narrow for what are essentially undiscovered, untested resources. In this article, we present an improved methodology to assess potential unconventional gas resources. Our methodology is a stochastic approach that includes Monte Carlo simulation and correlation between input variables. Application of the improved methodology to the Uinta–Piceance province of Utah and Colorado with USGS data validates the means and standard deviations of resource distributions produced by the USGS methodology, but reveals that these distributions are not right skewed, as expected for a natural resource. Our investigation indicates that the unrealistic shape and width of the gas resource distributions are caused by the use of narrow triangular input parameter distributions. The stochastic methodology proposed here is more versatile and robust than the USGS analytic methodology. Adoption of the methodology, along with a careful examination and revision of input distributions, should allow a more realistic assessment of the uncertainty surrounding potential unconventional gas resources.     

Natural Gas Hydrates in the Offshore Beaufort–Mackenzie Basin—Study of a Feasible Energy Source II

In the offshore part of Beaufort–Mackenzie Basin depth of methane hydrate stability reaches more than 1.5 km. However, there are areas in the western part of the basin where there are no conditions of methane hydrate stability. Construction of the first contour maps displaying thickness of hydrate stability zones as well as hydrate stability zone thicknesses below permafrost in the offshore area, shows that these zones can reach 1200 m and 900 m, respectively. Depth to the base of ice-bearing relict permafrost under the sea (depth of the –1°C isotherm-ice-bearing permafrost base) and regional variations of geothermal gradient are the main controlling factors. Hydrostatic pressures in the upper 1500 m are the rule. History of methane hydrate stability zone is related mainly to the history of permafrost and it reached maximum depth in early Holocene. More recently, the permafrost and hydrate zone is diminishing because of sea transgression. Reevaluation of the location of possible gas hydrate occurrences is done from the analysis of well logs and other indicators in conjunction with knowledge of the hydrate stability zone. In the offshore Beaufort–Mackenzie Basin, methane hydrate occurs in 21 wells. Nine of these locations coincides with underlying conventional hydrocarbon occurrences. Previous analyses place some of the hydrate occurrences at greater depths than proposed for the methane hydrate-stability zone described in this study. Interpretation of geological cross sections and maps of geological sequences reveals that hydrates are occurring in the Iperk–Kugmallit sequence. Hydrate–gas contact zones, however, are possible in numerous situations. As there are no significant geological seals in the deeper part of the offshore basin (all hydrates are within Iperk), it is suggested that overlying permafrost and hydrate stability zone acted as the only trap for upward migrating gas during the last tens of thousand of years (i.e., Sangamonian to Holocene).