Groningen: unconventional gas – 9 times as much as conventional?

http://www.d-e-j.com/displaynews.php?NewsID=1027&PHPSESSID=faa2p8dt136namgegdjkreod50

Feature Articles, Sep 01 2009 (Digital Energy Journal)

- Stephen Holditch, head of petroleum engineering department at Texas A+M university, said he thought that in every gas field in the world there could be nine times as much gas as so-called ‘unconventionals’ – such as tight gas, coalbed methane, gas hydrates and gas shales.

Stephen Holditch, head of petroleum engineering department at Texas A+M university


He was speaking at the June 27th conference to celebrate the 50th anniversary of Groningen gas field.

Mr Holditch bases his theory on studies made by his university of known information about US unconventional gas fields, trying to assess how much ‘technically recoverable gas’ exists. The definition of technically recoverable is “we know where it is, we can drill it, we can produce it, but it hasn't been economic yet,” he said.

Mr Holditch is running a research project into unconventional gas in North America, and has already identified 25 basins in the US with a lot of unconventional resources.

According to the study, there is generally nine times more gas that's technically recoverable than conventionally recoverable.

There could be 32,560 TCF of unconventional gas reserves in the US, Mr Holditch estimates. “But I think that's very low – no-one has tried to quantify this other than in n America, and most of the technology to develop tight gas has been developed in N America.”

Mr Holditch believes that this rule may apply for every gas field in the world. “You can take all conventional resources – and you'll have nine times more unconventional resource that's technically recoverable,” he said.

Or course, of the enormous volumes of unconventionals Mr Holditch believes exists, some of it will be more accessible than others. How much is accessible will depend on the gas price of the day.

But the price does not have to rise very much higher from where it is now for a lot more tight gas drilling in the US to become viable, he said.

As the oil price rises, more different types of oil and gas will become viable to produce. Right now, “there are enormous deposits which are just not economic,” he says.

Mr Holditch’s theory is that all natural reserves are all distributed ‘log normally’ – or in other words, there are some areas with a small amount of very pure substance, areas with a large amount of impure substance.

Gold is an example of this. It is very occasionally found as gold nuggets, and more often found in a very impure state, for example many small grains of gold in sand. Following the same rule, there is likely to be much more oil and gas which is available in a less perfect form than normal crude oil and methane.

Unconventional oil is likely to be close to conventional oil. “Where you find a lot of gas and oil – if you look around you'll find a lot of unconventional reserves in that basin. It just has to be there,” he says.

“If you don't know its there it’s because you haven't looked for it.”

Technology

Extracting tight gas calls on a range of different technology and skills, including petrophysics, hydraulic fracturing, horizontal drilling, microseismic, 3d seismic, gas to liquids.

“Petrophysics is important because these are rocks which porosity as low as 10 per cent. If you're looking for gas shales, you have to find the brittle parts so you can stimulate it,” he said. “You have to find natural fractures. The mechanical property of the rock is very important.”

“The service companies have done a very good job at coming up with new logging tools that let us understand the rocks better,” he said.

“Directional stress can be very important when developing these reservoirs. We have to bust up the shale so it can produce.”

Also understanding the rock at high resolution is very important. “It has different properties foot by foot,” he said.

Mapping hydraulic fractures using microseismics (listening to the sound made by fracturing from the wellbore is “very important to understand what we're doing,” he said.

The biggest environmental concerns about tight gas have been around the number of wells which need to be drilled, which can cause environmental damage on the surface. “You might drill 1 well in Groningen – and have 1,000 tight gas wells to get the same amount of gas. There's a lot of pressure to minimise the footprint.”

“It’s more the issue that's in the forefront of the US,” he said. “C02 emissions have not surfaced as any sort of barrier to developing unconventional gas.”

There are challenges of working out how small gas deposits about the world can be commercialised.

“There's a lot of stranded gas – so gas to liquid technology is something we have to be continually working on,” he said.

One company is already using a surplus of gas supplies to extract aluminium from a bauxite ore, he said. “Anything you can do to make money with the gas is just fine.”

David Lawrence, executive vice president of exploration with Shell, agreed that there could be large reserves of unconventional gas. “Many wells are drilled that are categorised as dry holes when they have a lot of unconventional gas potential.”

Gas hydrates in Canada

David J. Scott, director of Economic Development Programs in the Earth Sciences Sector of Natural Resources Canada (a Canadian government agency) talked about experimental work taking place in the Canadian Arctic to find ways to extract gas hydrates.

Gas hydrates are a crystalline substance containing gas and water. They are formed in special geological conditions – either in permafrost or the offshore continental margin.

Many countries, including Japan, South Korea, India and Taiwan, are particularly interested in gas hydrates because they might turn out to be the biggest energy resources the country has, he says.

Because the gas is stored as a solid, the energy density is much higher – 164 more than gas.

An experimental camp has been set up at Mallik, in the Mackenzie Delta in North West Canada, where 100 people, including a delegation from Japan, worked on a project to try to extract gas hydrates.

In Mallik, it proved possible to extract the gas hydrates – 12,000 m3 over 6 days. Less water was produced with the gas hydrates than expected. The water was so clean, it might prove possible to dispose of it on surface, he said.

There is a lot of sand though – the first production on Mallik was done without sand control equipment, and the downhole pumps were destroyed.

But there are still plenty of hurdles to overcome, not least working out how to extract gas from it and transport it. A 1200km pipeline would cost around $16bn. “The size of the prize has to be big enough to pay for the transport infrastructure.”

But some people have estimated that there could be 21,000 TCF just in the Arctic region of Canada alone – compared to the 100 TCF expected lifetime production of Groningen, Europe’s largest gas fields.

These numbers have only been calculated by extrapolating the estimated finds from some very small wells drilled so far. “I wouldn't take these numbers to the bank,” he said.

“These are early days – we have a lot to learn,” he said.

Gas hydrates might not seem so interesting now, when no-one has money to invest and there is oversupply of gas. “But what about in a decade when the economy is recovering and we get the inevitable growth?” he asked. “Demand for gas in the US is likely to grow – in the shift towards cleaner energy.”

Gas hydrates can be discovered using seismic technology, because they have a particular signature which shows up on the seismic picture.

Until industry is able to extract gas hydrates, government will need to fund the research – it is what Mr Scott calls a “pre-competitive environment.”

There are serious global warming concerns around gas hydrates – that they will release methane into the atmosphere as it warms – and methane is of course a __ x more powerful greenhouse gas than carbon dioxide.

This could create the imperative to extract the gas hydrates, and burn them (capturing the carbon dioxide), before the gas can escape to the atmosphere, he said. “We might need to push these resources ahead of conventional resources for this reason.”

Unconventionals in Western Europe

The audience was asked if they thought that the South Permian basin, an oilfield which extends approximately from mid England (West) to Poland border with Russia (East) and Copenhagen (North) to Slovakian border with the Czech Republic (south) contains nine times more technically recoverable but unconventional gas than has already been discovered – in accordance with Mr Holditch’s theory that every basin has nine times more unconventional gas than conventional.

In an electronic vote, 57 per cent of the audience agreed or fully agreed, and 43 per cent disagreed.

Rien Herber, vice president exploration for Shell in Europe, chairing the session, said “I know there are people in this room who looked for it and didn’t find it.”

Mr Holditch said that if people don’t believe it is there, it is because they don’t have enough information.

Hans Doornenbal, project manager for the European Black Shale Database, who recently put together a geological atlas of the Permian basin, said that he would agree with the idea, noting that there is still a lot of source rock which has not been fully researched.