Even More Advanced Gas, Oil Technologies Ahead

February 15, 2015
By Robert W. Chase , Shale Play

Part of the lore of the oil and natural gas industry is how new drilling techniques and fracing methods were used over the years to produce more oil and gas out of conventional vertical wells. Until the 1970s, however, a large amount of oil and gas was left behind in the reservoirs we discovered in spite of those techniques. The development of enhanced recovery methods such as water flooding, steam flooding, and carbon dioxide flooding have enabled companies to increase the amount of oil recovered in some reservoirs from 15 percent to more than 60 percent.

Now the race is on to develop innovative ways to improve the efficiency of hydraulic fracturing and horizontal drilling in shale fields where only approximately 10 percent of the natural gas trapped in tight rock formations and 5 percent of the oil is being recovered today.

Although shale oil and gas production is growing, it's happening because more and more wells are being drilled.

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But as the price of oil and gas continues to fall, companies know that in order to remain competitive they must reduce the cost of drilling and fracturing in tight reservoirs like the Utica shale here in Ohio and the Marcellus shale in West Virginia and Pennsylvania.

Going forward, one idea calls for using liquefied carbon dioxide to flood into the tight rocks and push the oil out ahead of it. Another is to use gelled propane - not water - during fracking, a technique that is drawing considerable attention, since not using water to create fractures in shale would be perceived as better for our above-ground water resources.

Perhaps most importantly, the oil and gas industry is searching for ways to improve its understanding of shale geology, so that drillers can hit the "sweet spots" in the reservoir and ultimately bolster oil and gas production. Employing inventive techniques, including some that would shave days off the drilling and well completion process, could make a big difference in keeping production costs down.

Producers are optimistic about their ability to overcome difficulties in drilling and completing shale wells, such as cement or casing failures that have been linked in only a few rare instances to elevated methane levels in ground water, provided the government does nothing to hamper the adoption of new technologies. After all, misguided energy policies can have bad outcomes. For instance, New York State's ban on fracking, the federal ban on crude-oil exports, and EPA carbon rules are interfering with energy markets and making it more difficult for the oil industry to sustain production, especially at a time when world oil prices have plummeted.

The greatest risk is that shale oil and gas production could slow down significantly, cancelling out the remarkable economic and environmental benefits from the shale revolution - such as the creation of tens of thousands of jobs in energy production and manufacturing, along with reduced carbon emissions from greater use of natural gas in electricity production.

Companies operating in Ohio, West Virginia, and Pennsylvania are reporting cutting back their exploration budgets by as much as 30-40 percent for 2015 due to the plummeting price of oil and gas. Hopefully, price stability will return soon at a level that satisfies both the consumer and producer of these valuable energy resources.

The shale revolution has transformed the nation's economy and benefitted every person in the country. The hope is that other countries, such as Argentina, Australia and China, will be able to adopt U.S. drilling and fracking techniques so they can tap their own shale resources.

One thing is for sure, the United States is not going to run out of oil and gas resources - or new ideas for tapping them - anytime soon.

Chase is chairman and Benedum Professor of the Department of Petroleum Engineering & Geology at Marietta College.



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