Is the Future Here?

[trysail]

... where you pulled these numbers for future reserves from...

'twasn't just oil & gas ( as you well know ). DeGolyer & McNaughton, Netherland, Sewell, Keplinger, Miller & Lents and all the rest of the reserve engineers do their studies using current prices ( as you well know ). Prices make reserves. XOM's "proved" reserves are ~21 billion BOEs. XOM's "resource base" is ~81 billion BOEs. That's a lot of 2P, 3P, 1C, 2C, 3C reserves and unconventional reserves, not to mention OOIP subject to enhanced recovery by improvements in technology. The same pattern applies to Chevron, Shell, BP, LUKoil, Rosneft, Gazprom, ConocoPhillips, Total, Murphy, Anadarko, Statoil, CNOOC, PetroChina, Petrobras and the rest.

Every time prices get high enough, somebody starts trying to figure out how to make the economics work for Green River Basin oil shale ( the largest oil shale deposit on earth ).

See the SPE definitions of reserve categories on pages 2-13: http://www.spe.org/industry/reserves/docs/Petroleum_Resources_Management_System_2007.pdf


Chevron's Jack project in the GOM tertiary opened up the sub-salt there with estimated reserves in the billions of barrels. Then there's the Bakken, of course. Barnett, Fayetteville, Marcellus, Haynesville, Eagle Ford, and on and on. Hell, the damn USGS just finished goosing their estimate of domestic gas reserves. As you mentioned, there's tons of stuff to which industry doesn't have access.


Powder River coal keeps a lot of lights on in Texas and Lousiana.

http://upload.wikimedia.org/wikipedia/en/5/58/Shaleusa2.jpg​

http://noir.bloomberg.com/apps/news?pid=20601110&sid=atURpnfaNcn4


Shale-Gas Production Forecast Doubled by U.S. Agency
By Simon Lomax

Dec. 16 (Bloomberg) -- Production forecasts for natural gas locked in shale have doubled, which will help the U.S. become less reliant on imported energy, according to a federal agency.

The Energy Information Administration’s annual long-term forecast shows gas from shale will play a bigger role in meeting U.S. demand, Richard Newell, agency administrator, said today in Washington. Production in 2035 is “twice the level that we had in last year’s outlook,” he said.

The Annual Energy Outlook predicts imports will meet 18 percent of U.S. demand by 2035, down from 24 percent last year. Higher prices will spur fuel production, including natural gas, oil and coal, the agency said. Tougher energy-saving rules, such as fuel-economy mandates for new cars, and a boost in biofuel production from crops such as corn also will make the U.S. less reliant on imports by 2035, according to the forecast.

Overall U.S. energy consumption will jump 21 percent by 2035. Coal will remain the “dominant energy source for electricity generation,” although more natural-gas fired plants will be built because of higher supplies of the cleaner-burning fuel, according to the outlook.

The agency forecasts construction of five nuclear plants by 2035, contributing to a 10 percent increase in electricity generated from atomic power. The share of electricity from renewable sources such as hydroelectric dams and solar panels will rise to 14 percent in 2035 from 11 percent last year, according to the outlook.

Gas Reserves
This year’s outlook more than doubles the estimate of U.S. technically recoverable reserves of natural gas from shale, a type of sedimentary rock, to 827 trillion cubic feet from 347 trillion cubic feet. New technologies that let natural-gas producers drill horizontally and fracture the rock formations with injections of water, sand and chemicals account for the increase, Newell said.

Last year’s long-term outlook predicted annual shale-gas production would rise to 6 trillion cubic feet by 2035, Newell said. The updated forecast is 12 trillion cubic feet, he said.

The agency raised its 2035 projection for overall natural- gas production 25 percent from last year’s outlook “as a result of greater supply availability from shale gas plays,” the EIA said.

Average annual Henry Hub natural-gas prices, in 2009 dollars, are predicted to be $4.81 per million British thermal units in 2015, $5.18 in 2020 and $7.19 by 2035. Last year’s forecast for prices in 2035 was $8.88 per million Btu.

The cheaper price will drive up the use of natural gas as a fuel for generating electricity, at the expense of coal and renewable sources such as wind turbines, the EIA said. Natural- gas electricity generation by 2020 is 29 percent higher in this year’s outlook. Gas-fired generation by 2035 is 17 percent higher than last year’s forecast, the EIA said.

 

[Handley_Page]

I remember when BP announced "the Golden Bug", a microbial method of cleaning up crap in oil.
IT did not last long, and they shut up about it quite soon after.

Similarly, we've all seen the "wonder power" thing in the press; we had an old engineer who claimed to have a motor sufficient for a car that ran on water. Sadly he died a few months later and his daughter stopped everything to do with it.

But of course, big business has a need to stay viable. Ever hear the rumours about the "wearless tyre" of the "never-replaced spark plug" all bought up by the big businesses who job it is to maintain the status quo.

But I heard on the news about gas in shale. how do they get that out, I wonder ?

 

[Stella_Omega]

I remember when BP announced "the Golden Bug", a microbial method of cleaning up crap in oil.
IT did not last long, and they shut up about it quite soon after.

Similarly, we've all seen the "wonder power" thing in the press; we had an old engineer who claimed to have a motor sufficient for a car that ran on water. Sadly he died a few months later and his daughter stopped everything to do with it.

But of course, big business has a need to stay viable. Ever hear the rumours about the "wearless tyre" of the "never-replaced spark plug" all bought up by the big businesses who job it is to maintain the status quo.

But I heard on the news about gas in shale. how do they get that out, I wonder ?

Just like squeezing blood out of a turnip!

 

[trysail]

...But I heard on the news about gas in shale. how do they get that out, I wonder ?

Here are some explanations:

Shale, n.

A fine-grained, fissile, detrital sedimentary rock usually with a high percentage of quartz formed by consolidation of clay- and silt-sized particles into thin, relatively impermeable layers. It is the most abundant sedimentary rock. Shale can include relatively large amounts of organic material compared with other rock types and thus has potential to become a rich hydrocarbon source rock, even though a typical shale contains just 1% organic matter. Its typical fine grain size and lack of permeability, a consequence of the alignment of its platy or flaky grains, allow shale to form a good cap rock for hydrocarbon traps.

Gas shows from shales during drilling have led some shales to be targeted as potential gas reservoirs. Various clay types and volumes influence the quality of the reservoir from a petrophysical and geomechanical perspective. The quality of shale reservoirs depends on their thickness and extent, organic content, thermal maturity, depth and pressure, fluid saturations, and permeability, among other factors.

http://www.glossary.oilfield.slb.com/Display.cfm?Term=shale

Hydraulic fracturing

1. n. [Shale Gas] ID: 4647

A stimulation treatment routinely performed on oil and gas wells in low-permeability reservoirs. Specially engineered fluids are pumped at high pressure and rate into the reservoir interval to be treated, causing a vertical fracture to open. The wings of the fracture extend away from the wellbore in opposing directions according to the natural stresses within the formation. Proppant, such as grains of sand of a particular size, is mixed with the treatment fluid to keep the fracture open when the treatment is complete. Hydraulic fracturing creates high-conductivity communication with a large area of formation and bypasses any damage that may exist in the near-wellbore area.

http://www.glossary.oilfield.slb.com/search.cfm

Hydraulic fracturing, n.

Developed in the late 1940s, hydraulic fracturing, also known as a frac job, is the practice of injecting a well with large amounts of frac fluids under high pressure in order to break the rocks. Performed on both openhole and cased-well perforations, hydraulic fracturing quickly replaced explosive fracturing.

Used in a gel-like state, frac fluids consist of water and polymers, or long organic molecules that form a thick liquid. Both oil-based and foam-based frac fluids use nitrogen bubbles to achieve the fracture. Carbon dioxide can be used, as well, to minimize formation damage.

A frac job is performed in three steps. First, a large amount of frac fluids are pumped into the well. The high-pressure of the frac fluids and the continual pumping increases the pressure in the well, overcoming the strength of the reservoir rocks to break them apart. Fracing fluids are pumped into the well until the rocks are cracked to a desired length Then, frac fluid and propping agents are introduced into the well to extend the breaks and pack them with proppants, or small spheres composed of quartz sand grains, ceramic spheres or aluminum oxide pellets, that hold the fractures open after pumping has ceased. This is important, because then the hydrocarbons can flow through the open cracks in the reservoir rocks. Finally, the well is back flushed to remove the frac fluids.

Increasing both the rate of production and the overall production of a well, hydraulic fracturing is best employed in medium and hard formations. In fact, hydraulic fracturing is used in almost all tight gas sand reservoirs. In onshore US wells, approximately 50% of the gas wells and 30% of the oil wells are fraced...


http://www.rigzone.com/training/insight.asp?insight_id=319&c_id=4

 

[TxRad]

Yes, our Mr trysail must work for an oil company because what he is say is true on paper but ain't panning out in the field.

The thing about shale gas is that it costs like hell to drill horizontal wells to get enough area to make them economical, but and there is always a but. The major cost is in the fracturing of the shale to get the gas out. The shale has porosity but it is like Styrofoam. The gas is locked into the pores. It has to be cracked to get it out.

You get a large shot of gas and then.... Ya got to frac it again and again and again. But.... there's that bad word again. After a while you've buried your well bore in dead shale. So we got to drill again.

Also the price of natural gas has to go well above 6 dollars to even break even.

Been drilling these wells in Northwestern Louisiana and east Texas for the last three years. You would not believe the costs to get this shale gas. The same holds true for just about every field that is marked on his pretty map. These are not reserves, they are possible reserves if the price goes high enough.

Stop copy and pasting there trysail and learn something about what you are posting about. You're always flogging the economics of everything. You need to do so real research and quite copying what the oil companies put out as propaganda to get more money out of investors.

 

[trysail]

Of course I know you work in the oil patch, Tx. Why else do you think I asked you about the technique for casing horizontal wells last summer? I sure as hell wouldn't ask an English major. You provided a polite answer to my question for which I expressed thanks.


I've spent many years in, around and following the business. I've spent time on both land and offshore rigs.

 

[trysail]

...These are not reserves, they are possible reserves if the price goes high enough.

...quite copying what the oil companies put out as propaganda to get more money out of investors.

'tain't me.

It's right out of the DOE's (EIA ) mouth...
http://www.rigzone.com/news/article.asp?a_id=102261

As the above article states, in December, they more than doubled their estimate of domestic natural gas resources. Here's the press release:

http://www.eia.doe.gov/neic/press/press352.html

U.S. Energy Information Administration (EIA) now estimates the U.S. to have technically recoverable unproved shale gas resources totaling 827 trillion cubic feet (Tcf) as of Jan. 1, 2009, or 474 Tcf larger than previously estimated.

The new estimate was released today in the Annual Energy Outlook 2011 (AEO2011) Reference case, which also detailed updated projections for U.S. energy markets through 2035. The increased shale gas estimate reflects additional information that has become available with more drilling activity in new and existing shale plays, and leads to nearly double the shale gas production and more than 20 percent higher total Lower-48 gas production in 2035...

 

[trysail]

http://www.theatlantic.com/magazine/archive/2010/12/dirty-coal-clean-future/8307/1/


Dirty Coal, Clean Future
By James Fallows

... we would all like to think that wind, solar, and conservation will solve the problem for us,” David Mohler of Duke Energy told me. “Nothing will change, our comfort and convenience will be the same, and we can avoid that nasty coal. Unfortunately, the math doesn’t work that way.”

The math he has in mind starts with the role that coal now plays around the world, and especially for the two biggest energy consumers, America and China. Overall, coal-burning power plants provide nearly half (about 46 percent this year) of the electricity consumed in the United States. For the record: natural gas supplies another 23 percent, nuclear power about 20 percent, hydroelectric power about 7 percent, and everything else the remaining 4 or 5 percent. The small size of the “everything else” total is worth noting; even if it doubles or triples, the solutions we often hear the most about won’t come close to meeting total demand. In China, coal-fired plants supply an even larger share of much faster-growing total electric demand: at least 70 percent, with the Three Gorges Dam and similar hydroelectric projects providing about 20 percent, and (in order) natural gas, nuclear power, wind, and solar energy making up the small remainder. For the world as a whole, coal-fired plants provide about half the total electric supply. On average, every American uses the electricity produced by 7,500 pounds of coal each year.

Precisely because coal already plays such a major role in world power supplies, basic math means that it will inescapably do so for a very long time. For instance: through the past decade, the United States has talked about, passed regulations in favor of, and made technological breakthroughs in all fields of renewable energy. Between 1995 and 2008, the amount of electricity coming from solar power rose by two-thirds in the United States, and wind-generated electricity went up more than 15-fold. Yet over those same years, the amount of electricity generated by coal went up much faster, in absolute terms, than electricity generated from any other source. The journalist Robert Bryce has drawn on U.S. government figures to show that between 1995 and 2008, “the absolute increase in total electricity produced by coal was about 5.8 times as great as the increase from wind and 823 times as great as the increase from solar”—and this during the dawn of the green-energy era in America. Power generated by the wind and sun increased significantly in America last year; but power generated by coal increased more than seven times as much. As Americans have read many times, Chinese companies are the world’s leaders in manufacturing solar panels, often using technology originally developed in the United States. Many of the panels are used inside China for its own rapidly growing solar-power system; still, solar energy accounts for about 1 percent of its total power supply. In his book PowerHungry, Bryce describes a visit to a single coal mine, the Cardinal Mine in western Kentucky, whose daily output supports three-quarters as much electricity generation as all the solar and wind facilities in the United States combined. David MacKay, of the physics department at Cambridge University in England, has compiled an encyclopedia of such energy-related comparisons, which is available for free download (under the misleadingly lowbrow title Sustainable Energy—Without the Hot Air). For instance: he calculates that if the windiest 10 percent of the entire British landmass were completely covered with wind turbines, they would produce power roughly equivalent to half of what Britons expend merely by driving each day...

*****​

...The most advanced of today’s “ultra-supercritical” coal-fired plants, which operate at very high temperatures and pressures to maximize the efficiency of combustion, convert up to 48 percent of the coal’s potential energy to electric power; the rest is lost as heat. “Subcritical” plants typically have efficiencies in the mid-30s. The costliest and most advanced technology is an improvement—but not a breakthrough. A breakthrough is what it would take to move beyond reliance on coal.

“I know this is a theological issue for some people,” Julio Friedmann of Lawrence Livermore said. “Solar and wind power are going to be important, but it is really hard to get them beyond 10 percent of total power supply.” He pointed out the huge engineering achievement it has taken to raise the efficiency of solar photovoltaic cells from about 25 percent to about 30 percent; whereas “to make them useful, you would need improvements of two- or threefold in cost,” say from about 18 cents per kilowatt-hour to 6 cents. He recited a skeptic’s line used about the Carter administration’s clean-energy programs—“You’re not going to run a steel plant with solar panels”—and then made a point that summarized the outlook of those who have decided they can best wage the climate fight by working on dirty, destructive coal.

“It is very hard to go around the world and think you can make any difference in carbon-loading the atmosphere without some plan for how people can continue to use coal,” Friedmann said. “It is by far the most prevalent and efficient way to generate electricity. People are going to use it. There is no story of climate progress without a story for coal...

*****​

more...

 

[xssve]

In short, when eventually, it's realized that renewables and micropower are the only alternatives, there goes the carbon credit trading game.