Oil & Gas Production The Future is Bright: Oil & Gas Production The Future is Bright Tim Carr
Kansas Geological Survey
and
University of Kansas
Energy Research Center
Where I Am Coming From:: Where I Am Coming From: Oil & Gas Background
Geologist & Geophysicist
Enhanced Recovery
Technological Approach
Energy is the Basis of Civilization
Resource is Adequate
Insufficient Investment
Geopolitical Questions
Can Provide Energy & Protect the Environment
Hydrocarbons Are Our Major Energy Source Through the Middle of this Century
Slide3: A Barrel of Crude Provides: Gasoline - 19.5 gallons Fuel Oil - 9.2 gallons Jet Fuel - 4.1 gallons Asphalt - 2.3 gallons Kerosene - 0.2 gallons Lubricants - 0.5 gallons Petrochemicals,
other products - 6.2 gallons One Barrel =
42 gallons American Petroleum Institute, 1999
Overview: Overview Resource
Forecast and Price Trends
Changes in H/C Ratio
Future is NOT a Bell Curve
Future Production Requires Investment
50% Per Decade
Technology and People
Investment
Geopolitics (Access)
Environment In 2004
Economic Growth at 15 Year High
China’s Oil Consumption is increased 15%, 900,000 b/d
World Oil Consumption Increased 2.5 million b/d
Crude oil prices since 1861 : Crude oil prices since 1861
Slide6: U.S. Primary Energy Consumption by Fuel, 1960-2030
(quadrillion Btu) Natural Gas Petroleum Coal Nuclear Renewables Annual Energy Outlook 2006 History Projections
Slide7: U.S. Primary Energy Consumption by Fuel, 1960-2030
(Billions of Barrels of Oil Equivalent) Natural Gas Petroleum Coal Nuclear Renewables Annual Energy Outlook 2006 History Projections
Slide8: Energy Usage: 1750-2000 Coal An Energy Dependent Civilization Steam Steam
locomotive Power
stations Internal combustion engine Air
travel Population
growth Living
standards Global
markets 1750 1800 1850 1900 1950 2000 Telecommunications WWI WWII Satellite Environmental issues Micro-processor Internet Energy Usage ? Modifiers Drivers Cook and Sheath, 1997
Moving Greater H/C Energy Systems: Moving Greater H/C Energy Systems
Projected World Oil Supplies: Geologically-determined peak
could have consequences up to
and including “war, starvation,
economic recession, even
the extinction of homo sapiens”
(Campbell in Ruppert 2002).
“Civilization as we know it is
coming to an end soon. This is
not the wacky proclamation of a
doomsday cult, apocalypse bible
prophecy sect, or conspiracy
theory society. Rather, it is the
scientific conclusion of the best
paid, most widely-respected
geologists, physicists and
investment bankers in the world.” Projected World Oil Supplies
Projected World Oil Supplies: A successful oilman remarked
“I would never hire an exploration
geologist who is not an optimist,
or a petroleum engineer who is
not a pessimist.”
“There are 195 deepwater fields
slated for development from
2005 to 2009 with a total of
37,279 MMBOE”
“If past history was all there as …
the richest people would be
librarians” (Warren Buffet) Laherre’re, 2000 Projected World Oil Supplies
Slide12: Projected World Energy Supplies 1900 1900 1920 1920 1940 1940 1960 1960 1980 1980 2000 2000 2020 2020 2040 2040 2060 2060 2080 2080 3000 3000 20 20 40 40 60 60 80 80 100 100 100 BILLION BARRELS Billion Barrels of Oil Equivalent per Y ear (GBOE) Billion Barrels of Oil Equivalent per Y ear (GBOE) Natural Gas Natural Gas Hydroelectric Hydroelectric Crude Oil Crude Oil Solar , W ind Geothermal Nuclear Electric 1993 Coal Coal Decreasing
Fossil Fuels New Technologies World Energy Demand after Edwards, AAPG 8/97
Slide13: Data: Natural Gas (NPC, 1999) 1,451 Recoverable Portion of In-Place Gas Resource (Tcf) Supply & Technology
Proved oil reserves at end 2004 : Proved oil reserves at end 2004
Oil Reserves-to-Production (R/P) Ratios : Oil Reserves-to-Production (R/P) Ratios BP Statistical Review of Energy, 2005
Proved natural gas reserves at end 2004 : Proved natural gas reserves at end 2004
Natural Gas Reserves-to-Production: Natural Gas Reserves-to-Production BP Statistical Review of Energy, 2005
Oil and Gas Requires Investment: Oil and Gas Requires Investment Catch – About 50% of the daily volume in 10 years is not online.
At present, requires approximately $100 billion a year.
Oil Refinery Utilization : Oil Refinery Utilization BP Statistical Review of Energy, 2005
Requirements to Meet Demand: Requirements to Meet Demand Evolution of Technology
Available Expertise
Geopolitics
Access
Investment Climate
Price Today, 1.6 billion people –one quarter of the world population have no access to electricity.
In 2030, 1.4 billion people 17% of the world population will still not have electricity.
2.4 billion people rely on traditional biomass – wood, agricultural residues and dung – for cooking and heating.
Technical Challenges: Technical Challenges Greater Depths
Deeper Water
Decreasing Quality
Reservoir
Hydrocarbon
Distance to Market
Price WHO estimates that 2.5 million women and young children die prematurely each year from fumes from biomass stoves. Shifting to LPG reduces health risk by > 100
In sub-Saharan Africa only half the population has access to an improved water source (energy for pumps and purification)
In India, up to seven hours a day are devoted to collecting fuel for cooking.
Energy Production is High-Tech Science: Energy Production is High-Tech Science Multiple Discipline Professionals evaluate “Mountains” of data to maximize reservoir recovery.
The extraction process is based primarily on
management of the pressure and fluids
placement of wells to maximize efficiency.
Historically,
Traditional “pumping” technologies extracted 20 percent of hydrocarbons in a reservoir
New Computer Models and technologies improve recovery to greater than 35 percent (75% Goal).
This Science Continues to Improve with new breakthroughs
Petroleum Technology Breakthroughs: Petroleum Technology Breakthroughs
Data Models for Energy Recovery: Data Models for Energy Recovery Data Models are collected utilizing seismic readings.
Computer Models are put in place to view these readings in a 3D Model
Data is collected over time intervals for a 4D view of the data and changes over time
Data sets are in Terabyte range with future projections in Petabyte range as information improves View of 3D Seismic Data
Key Technologies: Key Technologies 3D Seismic,
Computer Assisted Exploration Deep-water,
Sub-sea,
FPSO Horizontal Drilling,
Geosteering, &
Rotary Steering Systems
Source: Bates, 2002, GCAGS Baker Hughes
Ultra-Deep Water: Ultra-Deep Water
Oil Sands - In Situ Deposits: Steam Injection Source: PetroCanada Oil Sands - In Situ Deposits 80% of resource in situ
too deep to mine
current in situ production of 325,000 b/d bitumen + diluent for pipeline
new technology developments:
cyclic steam stimulation
Steam Assisted Gravity drainage (SAGD)
VAPEX, MSAR
Oil Sand Cost Trends: Oil Sand Cost Trends Oil & Gas Journal 7/28/2003. Revolutionary Evolutionary
Slide29: Environmental Impact
Tarr Farm, Pennsylvania 1862
Slide30: 1000 Year History Atmospheric Concentration of CO2 800 1000 1200 1400 1600 1800 2000 260 280 300 320 340 360 380 D57
D47
Siple
South Pole Years Concentration of CO2 PPM Cook and Sheath, 1997
CO2 Emissions – Real Issue: CO2 Emissions – Real Issue 1990 2050 2100 Economic Model Projections of
Global CO2 Emissions (No Kyoto) China India USA W. Europe Russia & EE Mideast & OPEC Other Japan Canada
Australia, NZ
Geopolitics and Atlantic Gas Access: Halifax Geopolitics and Atlantic Gas Access Anticosti Basin Magdalen
Basin Scotian Basin Deep Panuke
400 MMcf/d – 2005
St. John’s SOEI ~ 500 MMcf/d
Boston
Geopolitical Decision: Restricted Access to Gas Resource Base: 21
TCF 346
TCF 31
TCF 43
TCF 100% 40% 100% 56% Restricted Percentage Geopolitical Decision: Restricted Access to Gas Resource Base Approximately 29 trillion cubic feet (TCF) of the Rockies gas resources are closed to development and 108 TCF are available with restrictions.
Urban Legends (Energy): Urban Legends (Energy) CONVENTIONAL OIL & GAS NEAR A PEAK
TAR SANDS AND OTHER UNCONVENTIONAL RESOURCES ARE TOO DIRTY OR COSTLY TO BE PRODUCED
ENERGY OUTPUT FROM ETHANOL IS NEGATIVE
EVIRONMENTAL IMPACT FROM OIL AND GAS PRODUCTION AND USE CAN NOT BE MITIGATED
EASY OIL IS GONE, COSTS ARE RISING
GEOLOGISTS ARE YOUNG AND HANDSOME
Slide35: Eastern Montana, 1978 “…. you must in the first place realize this that the world
has now grown old and does not abide in that strength
in which it formerly stood. …. Less and less marble is
quarried out of the mountains, and veins of gold and
silver are dwindling day by day…… So no one should
wonder nowadays that everything begins to fail, since
the whole world is failing, and is about to die.”
St. Augustine
3th Century
Quoted in: St. Augustine
Rebecca West, 1933, p.159