Understanding the Basics of Gas Exploration and Production

Report
Understanding the Basics
of Gas Exploration and
Production
And some of the career opportunities
created by the industry
Eric K. Albert, PhD
Our economy runs on energy!
In 2009:
Energy
Information
Administration
Natural Gas


A non-renewable energy resource
Used in a variety of ways:
Energy Information
Administration,
2005
As an energy source:

Natural gas burns more cleanly than
other fossil fuels
BUT
Still results in CO2 emissions!
 And unburned natural gas (methane)
is considered a greenhouse gas…

2008 US Natural Gas
Total Production
21,200 Billion Cubic Feet
(BCF)
Consumption
23,200 BCF
Imports
3,984 BCF
Exports
1,006 BCF
Wellhead price
$7.96 / thousand cubic feet
Avg. City Gate price
$9.18 / thousand cubic feet
Top US Gas Producing State
7,760 BCF: Texas
Energy Information
Administration
How much energy?
A BTU is the heat required to raise the
temperature of one pound of water 1
degree Fahrenheit
 One cubic foot of natural gas
(volume) contains about 1031 BTU
 One candy bar has about 1000 BTU!
 One cubic foot of gasoline contains
about 961,000 BTU! [about 7.6 gallons]

Equivalent Energy Cost
January 2011* Natural Gas price is
$4.48 / Million BTU (MMBTU)
compared to today’s price of
$3.19/gallon of gasoline
the equivalent energy price of 1 gallon
of gasoline is

$25.23

MMBTU
Put another way, at current prices, the
same energy from Natural Gas is about 1/6
the cost!
*NYMEX
How is Natural Gas formed?
Trapped organic matter decomposing
under pressure and heat…
 In time, depending on conditions, we
get:

Coal beds
 Oil fields
 Natural gas


Think: even landfills are recovering
methane from decomposing trash
How is it found?

Geologists use a variety of means to
locate possible sources…
Knowing where it has been found already
 Historical geological setting
 Specific site location typically uses
Seismic methods

Historical Oil and Gas Production
Oil: green
Gas: red
Oil & Gas: yellow
USGS
Main Phases of Gas Development

Exploration
Land identification for sites
 Location of deposits
 Environmental concerns
 Proving potential reserves


Drilling
Land leasing, right of ways
 Permits
 Pad development
 Roads and water infrastructure


Production
Pipeline construction
 Monitoring and compliance
 Pumping and storage
 Well maintenance


Post-production
Capping / sealing wells
 Water quality monitoring
 Other compliance issues
 Site reclamation

EXPLORATION
Seismic Survey
An array of geophones
 Data collection equipment
 A “noise” source –

Vibrating trucks
 Explosives


The reflected sound waves are
collected and analyzed with
computers to form structural images
Seismic Surveys
Resolution Resources
Marcellus Shale

Gas deposit known since the 1930’s
Technology for recovery not available
 Price of gas too low for cost of drilling

6,000’ -7,000’ underground, maybe
more
 PA gas wells: 35,000+ already in
place
 Estimates 4,000 per year may be
added

Traps
Pore spaces filled
Pore spaces don’t communicate
Both of these types of rocks are impermeable,
meaning that they do not allow liquids or gasses
to move through them!
Geology.com
Drilling
DTE Energy
Horizontal drilling is employed to
connect to the largest reservoir space
 The drill string does not turn…but is
steered to a horizontal line…
 This is accomplished through a
steerable drill (Mud Motor)

and a follow-behind probe (Measure
While Drilling)
What does a borehole look like?
Side View
Top View
Note: the casing system seals off
higher elevations of rocks in the
well so that only the production
area is eventually connected.
Well Logging
Gamma Ray
Neutron

After the well is drilled, a log
is made…
Gamma ray = natural
radiation in the rocks
 Neutron = higher reading
means more hydrogen*


This along with other data
collected in the log helps to
indentify if this will be a
productive hole…
*Natural gas is a hydrocarbon!
Final Steps

After the production area is reached:
The casing is sealed to this area
 The production area casing is perforated
by blasting
 The rocks surrounding the production
area are fractured (hydraulic fracturing)

PRODUCTION
Deal or No Deal?
Even so, after all this, the well
might not be productive!
 Non-productive wells are plugged with
cement and operations cease.
 Hydraulic Fracturing might be
repeated in one well several times to
attempt to increase pressure and
recovery
 Higher pressure = higher flow rate =
more valuable well

Transport
A producing well is then connected to
a pipeline for transport
 Also, to buffer the effects of seasonal
demand, underground gas storage
reservoirs are used.
 In PA there are at least 88 active
reservoirs

Well Maintenance
Well production is monitored both
remotely and by on-site inspections
 Routine maintenance of the site is
necessary to confirm safety and
integrity of the well
 Water quality monitoring of nearby
drinking water sources, as well as
natural sites may be needed (looking
for leakage of gas into sources…)

POSTPRODUCTION
Well Life

A well might produce for 5, 10, even
20 years
Production rates decline with time…
 Eventually the rate may be deemed too
low to be useful, or non-economic


Wells are disconnected, sealed
(capped) with cement, and a surface
vent pipe is installed.
Where are the jobs?

Exploration

Land identification for sites
 Surveyors,

Civil engineers, etc.
Location of deposits
 Geologists

Environmental concerns
 Environmental
techs, biologists, forest
technology, chemists

Proving potential reserves
 Geologists,

Drilling
Petroleum & NG Engineers

Drilling

Land leasing, right of ways
 Paralegals,

title search, lawyers, land agents
Permits
 Hydrologists,

civil engineers, land planners
Pad development
 Commercial
drivers, riggers, drill operators,
diesel power generation, construction,
welding, electrical, heavy equipment

Roads and water infrastructure
 Similar
to “Pad development”

Production

Pipeline construction
 Heavy
equipment operators, diesel techs,
welders, riggers, surveyors

Monitoring and compliance
 Electronics,
computer networking,
communications / satellite techs, biologists,
hydrologists, chemists
Pumping and storage
 Well maintenance


Post-production

Capping / sealing wells
 Construction,
welders, general maintenance
Water quality monitoring
 Other compliance issues
 Site reclamation

 Heavy
equipment operators, forest /
reclamation technology
How it all got started…

Drake Well Museum
Sam Kier, 1840’s…
Questions?

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