As conventional fields in non-OPEC countries dwindle, petroleum companies must use ingenuity and new technologies to extract energy.
The oilsands of Alberta represent one of the world’s largest deposits of unconventional oil. Unlike conventional oil, which can be brought to the surface using wells and pumps, the oilsands must be either dug up in open pit mines and separated from its sandy matrix, or coaxed to the surface using in-situ thermal methods, such as steam injection. Last year, petroleum companies spent $C 20 billion on various oilsands projects, but investments plunged to half that level this year, thanks to the global recession and freeze up in financial markets.
In addition, the oilsands are seen as ‘dirty oil’, in that it takes more energy, and thus more GHG emissions, to produce a bbl of crude when compared to conventional oilfields. Already, low carbon legislation has emerged in the USA (the largest market for oilsands) that could target oilsands output. Still, the oilsands are seen as a secure supply with tremendous potential for growth, and industry and government are working hand-in-hand to reduce its carbon footprint. The Canadian Association of Petroleum Producers (CAPP) expects current production levels of 1.2 million bpd to reach 3.3 million bpd by 2020.
Shale gas is the latest unconventional source to gain widespread popularity in the oilpatch. Although shale can contain over 100 billion ft3 per square mile, it is characterised by low porosity and low permeability. Operators must use immense fracture stimulation, often running millions of gallons of water into a wellbore, in order to fracture the shale for a radius of several hundred feet. Unlike coalbeds, however, shales offer much greater reservoir thickness, often hundreds of feet of high gas pay. The US Geological Society (USGS) estimates that basins within the USA contain over 600 trillion ft3 of shale gas in place, with 264 trillion ft3 of producible reserves.
Oil shale is another unconventional resource with both great potential and great problems. The USGS reckons that as much as 1.5 trillion bbls of oil sit in formations spread throughout the western states of Colorado, Utah and Wyoming. The oil exists as finely distributed kerogen and the thick sediments contain as much as 1 million bbls per acre. Various experiments have been conducted to find the best way to produce oil shale. During the 1970s, efforts focused on underground mining and surface retorting (heating the oil shale to 370 °C in order to convert the kerogen to petroleum liquids and gases). The method consumed large amounts of water and left behind a mountain of waste shale.
The development of unconventional resources - in fact, all fossil fuels - will be significantly shaped by climate change. Currently, the Obama administration is encouraging legislation in an effort to reduce the 6 billion t of carbon annually emitted into the atmosphere by the USA. The legislation contains huge incentives to promote renewable energy resources, such as wind, solar and geothermal power, as well as cap and trade legislation to put a price on carbon emissions. It could place burdens on oilsands and oil shales (which have a greater carbon footprint), while encouraging natural gas (which produces less carbon per unit of energy in comparison to coal or oil). In the meantime, further development of unconventional resources must await a return of healthier commodity prices.
Author: Gordon Cope, Oilfield Technology Correspondent
To read the full version of this article see October issue of Oilfield Technology magazine.
Read the article online at: https://www.worldcoal.com/special-reports/30092009/unconventional_resources_current_options/