Author Topic: Full Impact of Shale Revolution Not Yet Seen  (Read 1763 times)

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Offline thackney

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Full Impact of Shale Revolution Not Yet Seen
« on: January 23, 2019, 07:53:43 pm »
Full Impact of Shale Revolution Not Yet Seen
https://www.rigzone.com/news/full_impact_of_shale_revolution_not_yet_seen-23-jan-2019-157979-article/

...“We have not seen the full impact of [the] shale revolution yet. [There is] more to come both for oil and gas and it will have huge implications for the oil industry, gas industry and the markets,” Birol told Bloomberg in the interview.

“There was a major problem in [the] United States in the Permian basin. It is a logistical problem, the pipe capacity was not enough to bring the oil to the markets. And now, as of end of 2019 this problem will be solved with the new construction of the pipelines,” he added.

“[An] increase of two thirds of the existing capacity will come there and [the] U.S. oil industry will be able to react much faster and bolder to the international market developments,” Birol continued.

In the Bloomberg interview, the IEA representative also highlighted that, as a result of recent discoveries, U.S. shale reserves are seven times higher than they were in 2010.

U.S. crude oil production will average 12.1 million barrels per day (MMbpd) in 2019 and 12.9 MMbpd in 2020, with most of the growth coming from the Permian region of Texas and New Mexico, according to the EIA’s latest short-term energy outlook....
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Offline thackney

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Re: Full Impact of Shale Revolution Not Yet Seen
« Reply #1 on: January 23, 2019, 07:56:29 pm »


EIA estimates that U.S. crude oil production averaged 10.9 million b/d in 2018, up 1.6 million b/d from 2017, surpassing the previous record level of annual production set in 1970. EIA forecasts total U.S. crude oil production to average 12.1 million b/d in 2019, up 1.1 million b/d from 2018. In 2020, crude oil production is forecast to average 12.9 million b/d. If the domestic and global forecasts are realized, crude oil production at these levels would allow the United States to maintain its status as the world’s leading crude oil producer in both years.

Increased crude oil production from tight rock formations within the Permian region in Texas and New Mexico accounts for 0.6 million b/d of the U.S. total growth expected by EIA in 2019, and 0.5 million b/d in 2020. The remaining increase comes from the Bakken, Eagle Ford, Niobrara, and Anadarko regions and also from the Federal Gulf of Mexico.

EIA expects the Permian region to produce 4.8 million b/d of crude oil by the end of 2020, which is about 1.0 million b/d more than estimated December 2018 levels and would represent about 36% of total U.S. crude oil production at the end of 2020. Favorable geology and technological and operational improvements have allowed the Permian to become one of the most economic regions for oil production. However, the forecast annual growth rate in 2019 is 0.6 million b/d, which is 0.4 million b/d slower than in 2018. The flattening of the growth rate reflects increasing pipeline capacity constraints in the Permian region, which are expected to lower wellhead prices for the region’s oil producers and to have a dampening effect on Permian’s full production potential in the short term. The widening spread between WTI-Cushing and WTI-Midland crude oil prices contributes to reduce drilling activity growth through the forecast period, which, in turn, slows the rate of forecasted crude oil production growth. In addition, lower forecast WTI price levels in 2019 and in 2020, compared with 2018, lead to an expectation for a slower growth rate. However, with the expectation that pipeline capacity constraints in the Permian are expected will be alleviated in the second half of 2019, EIA forecasts that growth will accelerate on a monthly basis into 2020.

Production in the Eagle Ford region is forecast by EIA to increase by almost 90,000 b/d to 1.4 million b/d in 2019 and then fall slightly in 2020. The Eagle Ford region covers a significantly smaller geographic area with fewer prolific formations and fewer opportunities to drill compared with the Permian region. Although the Eagle Ford region does not have the same pipeline capacity constraints as the Permian region, it is more strongly affected by lower overall WTI-Cushing prices because of its less favorable geology.

EIA estimates the Bakken region, located mostly in North Dakota, produced 1.3 million b/d in 2018 and that production will increase to 1.4 million b/d in 2019 and nearly 1.5 million b/d in 2020. Recent growth in the region reflects the removal of pipeline capacity constraints that affected the region before 2017. However, the Bakken region contains fewer identified prolific formations than the Permian region and is more significantly affected by lower prices and winter weather. Growing capacity constraints for natural gas capture in the region are expected to reduce production growth until the end of 2019, compared with an unconstrained environment.

EIA expects production from the Federal Gulf of Mexico to average of 1.9 million b/d in 2019 and 2.2 million b/d in 2020, up from an average of 1.7 million b/d in 2018. In 2018, 11 new projects came online contributing to record high production in the region. In 2019, 6 more projects are expected to come online, and 12 more projects are expected to start up in 2020.

Elsewhere, EIA expects growth from 2018 through 2020 in the Niobrara and Anadarko regions. Crude oil production in Alaska is expected to remain flat at 0.5 million b/d in 2019 and in 2020.

https://www.eia.gov/outlooks/steo/report/us_oil.php
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Offline bigheadfred

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Re: Full Impact of Shale Revolution Not Yet Seen
« Reply #2 on: January 23, 2019, 08:23:54 pm »
After the Arab Oil Embargo, my dad (Agronomist) established a USDA farm/nursery in NW Colorado for the propagation/reintroduction of native plants after coal and oil shale strip mining. But it never really got off the ground. There was a lack of technology to make oil from oil shale. At that time, in that neck of the woods, oil shale was the "buzzword". But that lack of technology combined with the environmental blowback killed it.

I think it is fantastic they have the ability to make use of shale deposits.

@Smokin Joe

Do you guys have any reading recommendations beyond Wikipedia?
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Offline bigheadfred

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Re: Full Impact of Shale Revolution Not Yet Seen
« Reply #3 on: January 23, 2019, 08:26:53 pm »
Maybe there was some technology. I can't really remember. I do remember the term "economic feasibility" being tossed around.
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Offline thackney

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Re: Full Impact of Shale Revolution Not Yet Seen
« Reply #4 on: January 23, 2019, 08:31:35 pm »
After the Arab Oil Embargo, my dad (Agronomist) established a USDA farm/nursery in NW Colorado for the propagation/reintroduction of native plants after coal and oil shale strip mining. But it never really got off the ground. There was a lack of technology to make oil from oil shale. At that time, in that neck of the woods, oil shale was the "buzzword". But that lack of technology combined with the environmental blowback killed it.

I think it is fantastic they have the ability to make use of shale deposits.

@Smokin Joe

Do you guys have any reading recommendations beyond Wikipedia?

With your historical reference, start with an understanding of the difference between oil shale and shale oil.

https://geology.utah.gov/map-pub/survey-notes/oil-shale-vs-shale-oil-whats-the-difference/
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Offline thackney

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Re: Full Impact of Shale Revolution Not Yet Seen
« Reply #5 on: January 23, 2019, 08:36:59 pm »
With your historical reference, start with an understanding of the difference between oil shale and shale oil.

https://geology.utah.gov/map-pub/survey-notes/oil-shale-vs-shale-oil-whats-the-difference/

@bigheadfred

After recognizing the difference, the "shale" oil was made economic by two major developments and a lot of little ones.  Horizontal steerable drilling and hydraulic fracturing.  Even those two came from lots of little advances and @Smokin Joe or @IsailedawayfromFR  may have differing opinions of the major contributions.

Start with:

https://fracfocus.org/hydraulic-fracturing-how-it-works/hydraulic-fracturing-process

And if you want more:

https://fracfocus.org/sites/default/files/publications/hydraulic_fracturing_101.pdf

and:

The Revolution Rotary-Steerable System - How It Works
https://www.youtube.com/watch?reload=9&v=9TEyYRAu2Uk
« Last Edit: January 23, 2019, 08:39:31 pm by thackney »
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Offline bigheadfred

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Re: Full Impact of Shale Revolution Not Yet Seen
« Reply #6 on: January 23, 2019, 08:37:09 pm »
With your historical reference, start with an understanding of the difference between oil shale and shale oil.

https://geology.utah.gov/map-pub/survey-notes/oil-shale-vs-shale-oil-whats-the-difference/


Ah so... Thanks!
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Offline bigheadfred

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Re: Full Impact of Shale Revolution Not Yet Seen
« Reply #7 on: January 23, 2019, 08:54:37 pm »
Again, thanks. I need some focused reading on a topic that I have interest in. Not the predictable sci-fi novels I have been reading. Nor being on here until I sink into depravity.

I began my college "career" in mining engineering. 2 1/2 years. Didn't finish. After spending a year in Egypt, and several more months in Europe I came back without a clear path.

Still should have "at least" become a geologist. Cause...rocks rock.
She asked me name my foe then. I said the need within some men to fight and kill their brothers without thought of Love or God. Ken Hensley

Offline thackney

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Re: Full Impact of Shale Revolution Not Yet Seen
« Reply #8 on: January 23, 2019, 09:12:59 pm »
...Cause...rocks rock.

 :thumbsup:

This stuff is really just my hobby interest.  I work around this stuff, but as an electrical power engineer, my work really is only related at best.
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Online Smokin Joe

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Re: Full Impact of Shale Revolution Not Yet Seen
« Reply #9 on: January 24, 2019, 02:50:17 am »
After the Arab Oil Embargo, my dad (Agronomist) established a USDA farm/nursery in NW Colorado for the propagation/reintroduction of native plants after coal and oil shale strip mining. But it never really got off the ground. There was a lack of technology to make oil from oil shale. At that time, in that neck of the woods, oil shale was the "buzzword". But that lack of technology combined with the environmental blowback killed it.

I think it is fantastic they have the ability to make use of shale deposits.

@Smokin Joe

Do you guys have any reading recommendations beyond Wikipedia?
Howdy, @bigheadfred !

Sorry I haven't responded sooner, I was up all night picking intermediate casing point on the well I'm on and had to get some sleep.
These guys have put together a pretty good primer, and it touches on drilling, fraccing, and what's involved, with bits from a few sources. It is directed toward the Illinois Basin area (local for them), but the basics are the basics, and those are pretty well covered.

https://www.woolseyenergy.com/media/files/WOC-Drilling-Brochure.pdf

I'd be happy to answer any questions I can, and if I can't, I'll find the answers for you, so feel free to ask.

I know a little about the Green River Oil Shales, having worked in the Piceance Basin, south of Rifle, CO many years ago on horizontal gas wells for Oryx. The facility over by Parachute didn't work economically, trying to cook the oil out of the mined shale, and the Government project (Project Rulison part of Project Gasbuggy) had its problems, too, as the fenced off area south of Rifle attests (and one up on the Book Cliffs). There is a lot of oil bound in those shale beds, and some day someone will figure out how to get it out--seems there are a host of ideas that have been tried, and I have little doubt others are in the works.
Another interesting aspect of those  shales is the preservation of insects--in some beds the preservation is amazing, I have found fossil gnats and mosquitoes, bot fly larvae, and other odds and ends in them up by Rio Blanco and Douglas Pass.

Keep in mind that the shale in these plays is the source rock, the origin of the organic material the hydrocarbons form from, be they gas or oil or both. For now, most 'shale plays' are actually releasing the trapped oil in laminations and beds of siltstone, 'tight' sandstone, and other rocks which have low permeability and would be difficult (and prohibitively expensive) to produce using vertical wells.

Resources: Sedimentary Rocks https://www.britannica.com/science/sedimentary-rock

And in pictures and outline form apparently for a course at U WVa (nice presentation) and downloadable http://pages.geo.wvu.edu/~kammer/g100/SedimentaryRocks.pdf
(Sometimes it helps to put a face on the rocks)

For the oil and gas industry, beyond the type of rock, there are some properties which are important, and are affected by rock type, mineral content, and the arrangement of the particles in the rock--and what has happened to the rock since it formed.

It is the space within the rock, between grains, in dissolved cavities, even in voids created by fossils (porosity), how well those spaces are connected and allow flow from one space to another (permeability), and the fluids in those spaces which determine whether a formation (rock layer) can produce oil or gas (and make money, too).

Shale has lots of porosity. It is composed of extremely small fragments, usually clay minerals, often contains organic material (plant or animal fossils or both), so it is a great place to form and trap hydrocarbons. But those pore spaces, although abundant, are seldom interconnected, so whatever hydrocarbons form tend to be trapped in the rock and only released over a very long period of time. When that happens, those fluids migrate into the pores in adjacent, more porous rock, usually upward, but sometimes downward to where the pressure in the pores is lower than it is in the shale. The Three Forks is one such case, where oil and gas from the Lower Bakken Shale have been squeezed downward into the silt, dolomite, and sand in the upper part of the Three Forks.

Siltstone is a little coarser than shale, has fewer but larger pore spaces (if they aren't filled by clay or other minerals), but the interconnections are still so small that fluid can't readily flow from one space to another. While that flow can happen and often does, it takes a long time for those fluids to move around. Too long for some driller who is waiting for a paycheck.

As the grains in the rock become coarser, the pores become larger, and the interconnections better, so fluid can flow and accumulate (and be produced) better, so sandstone (coarser grains, larger pores yet) is a better reservoir and can be produced with vertical wells.

Lots of things can happen to that rock to either make that porosity or permeability better --or worse, but the big ones involve folding the rock during episodes of mountain building, fracturing associated with that folding and or even faulting, and minerals deposited or removed by fluids passing through.

Those rocks are commonly conceived of as being in nice layers, and sometimes even are, but often, especially in the case of low permeability reservoirs, are in discrete lenses, separated by permeability barriers, in 'pods' which are not interconnected. They may even be lenses in and dispersed throughout the shale that is the source rock, but it is tough to produce oil from limited units of tight rock.

That's where horizontal drilling comes into its glory, because it offers the ability to connect a bunch of those reservoir pods to a single wellbore. That is further enhanced by hydraulic fracturing, which generates fractures which not only make the permeability within the lens better, but can also connect multiple lenses near to the wellbore that the wellbore did not penetrate directly. During a frac, those created fractures are propped open by sand grains pumped in with the frac fluid (or some other proppant, including ceramic beads, but sand is the most common). That creates pathways for the oil or gas trapped in the tight reservoir lenses and tight rock to escape to the wellbore, and even allow more oil or gas to escape from the source rock.
At times those fractures intersect natural ones, and that can work even better.


Some more on sedimentary rocks and oil reservoirs: http://infohost.nmt.edu/~petro/faculty/Adam%20H.%20571/PETR%20571-Week3notes.pdf

I'd be happy to answer any questions you have.
« Last Edit: January 24, 2019, 02:51:46 am by Smokin Joe »
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Offline bigheadfred

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Re: Full Impact of Shale Revolution Not Yet Seen
« Reply #10 on: January 24, 2019, 03:38:03 am »
Thanks for the very informative post and the links. Questions may come after some reading.

I'm almost desperate enough to delve into the Complete Story of Civilization by Will Durant collection I have. ;-)
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Online Smokin Joe

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Re: Full Impact of Shale Revolution Not Yet Seen
« Reply #11 on: January 24, 2019, 04:28:55 am »
Thanks for the very informative post and the links. Questions may come after some reading.

I'm almost desperate enough to delve into the Complete Story of Civilization by Will Durant collection I have. ;-)
You're welcome fred! Feel free to ask questiions, and I'll do my best to answer.
How God must weep at humans' folly! Stand fast! God knows what he is doing!
Seventeen Techniques for Truth Suppression

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

C S Lewis

Offline IsailedawayfromFR

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Re: Full Impact of Shale Revolution Not Yet Seen
« Reply #12 on: January 25, 2019, 03:12:11 am »
Howdy, @bigheadfred !

Sorry I haven't responded sooner, I was up all night picking intermediate casing point on the well I'm on and had to get some sleep.
These guys have put together a pretty good primer, and it touches on drilling, fraccing, and what's involved, with bits from a few sources. It is directed toward the Illinois Basin area (local for them), but the basics are the basics, and those are pretty well covered.

https://www.woolseyenergy.com/media/files/WOC-Drilling-Brochure.pdf

I'd be happy to answer any questions I can, and if I can't, I'll find the answers for you, so feel free to ask.

I know a little about the Green River Oil Shales, having worked in the Piceance Basin, south of Rifle, CO many years ago on horizontal gas wells for Oryx. The facility over by Parachute didn't work economically, trying to cook the oil out of the mined shale, and the Government project (Project Rulison part of Project Gasbuggy) had its problems, too, as the fenced off area south of Rifle attests (and one up on the Book Cliffs). There is a lot of oil bound in those shale beds, and some day someone will figure out how to get it out--seems there are a host of ideas that have been tried, and I have little doubt others are in the works.
Another interesting aspect of those  shales is the preservation of insects--in some beds the preservation is amazing, I have found fossil gnats and mosquitoes, bot fly larvae, and other odds and ends in them up by Rio Blanco and Douglas Pass.

Keep in mind that the shale in these plays is the source rock, the origin of the organic material the hydrocarbons form from, be they gas or oil or both. For now, most 'shale plays' are actually releasing the trapped oil in laminations and beds of siltstone, 'tight' sandstone, and other rocks which have low permeability and would be difficult (and prohibitively expensive) to produce using vertical wells.

Resources: Sedimentary Rocks https://www.britannica.com/science/sedimentary-rock

And in pictures and outline form apparently for a course at U WVa (nice presentation) and downloadable http://pages.geo.wvu.edu/~kammer/g100/SedimentaryRocks.pdf
(Sometimes it helps to put a face on the rocks)

For the oil and gas industry, beyond the type of rock, there are some properties which are important, and are affected by rock type, mineral content, and the arrangement of the particles in the rock--and what has happened to the rock since it formed.

It is the space within the rock, between grains, in dissolved cavities, even in voids created by fossils (porosity), how well those spaces are connected and allow flow from one space to another (permeability), and the fluids in those spaces which determine whether a formation (rock layer) can produce oil or gas (and make money, too).

Shale has lots of porosity. It is composed of extremely small fragments, usually clay minerals, often contains organic material (plant or animal fossils or both), so it is a great place to form and trap hydrocarbons. But those pore spaces, although abundant, are seldom interconnected, so whatever hydrocarbons form tend to be trapped in the rock and only released over a very long period of time. When that happens, those fluids migrate into the pores in adjacent, more porous rock, usually upward, but sometimes downward to where the pressure in the pores is lower than it is in the shale. The Three Forks is one such case, where oil and gas from the Lower Bakken Shale have been squeezed downward into the silt, dolomite, and sand in the upper part of the Three Forks.

Siltstone is a little coarser than shale, has fewer but larger pore spaces (if they aren't filled by clay or other minerals), but the interconnections are still so small that fluid can't readily flow from one space to another. While that flow can happen and often does, it takes a long time for those fluids to move around. Too long for some driller who is waiting for a paycheck.

As the grains in the rock become coarser, the pores become larger, and the interconnections better, so fluid can flow and accumulate (and be produced) better, so sandstone (coarser grains, larger pores yet) is a better reservoir and can be produced with vertical wells.

Lots of things can happen to that rock to either make that porosity or permeability better --or worse, but the big ones involve folding the rock during episodes of mountain building, fracturing associated with that folding and or even faulting, and minerals deposited or removed by fluids passing through.

Those rocks are commonly conceived of as being in nice layers, and sometimes even are, but often, especially in the case of low permeability reservoirs, are in discrete lenses, separated by permeability barriers, in 'pods' which are not interconnected. They may even be lenses in and dispersed throughout the shale that is the source rock, but it is tough to produce oil from limited units of tight rock.

That's where horizontal drilling comes into its glory, because it offers the ability to connect a bunch of those reservoir pods to a single wellbore. That is further enhanced by hydraulic fracturing, which generates fractures which not only make the permeability within the lens better, but can also connect multiple lenses near to the wellbore that the wellbore did not penetrate directly. During a frac, those created fractures are propped open by sand grains pumped in with the frac fluid (or some other proppant, including ceramic beads, but sand is the most common). That creates pathways for the oil or gas trapped in the tight reservoir lenses and tight rock to escape to the wellbore, and even allow more oil or gas to escape from the source rock.
At times those fractures intersect natural ones, and that can work even better.


Some more on sedimentary rocks and oil reservoirs: http://infohost.nmt.edu/~petro/faculty/Adam%20H.%20571/PETR%20571-Week3notes.pdf

I'd be happy to answer any questions you have.
A very nice post indeed, as is typical from @Smokin Joe

A couple of comments to clarify further:

Oil shales do not contain oil and gas as a shale oil interval does.  Oil shales contain solid kerogen, not liquids, which means there is no flow possible; hence, it has to be mined like coal ore, then retorted into liquid oil and gas.  All of that makes it far more expensive than shale oil wells where a few wells enable liquid oil and gas to flow into the drilled wells. 

The downside of shale oil is a low recovery % (10% - 20%) of discovered oil and gas recovered.  Oil shales on the other hand recover almost 100% since it is mined.

The other comment is SJ alluded to coarser grains have greater porosity,  It is the distribution of different grain sizes which effects the porosity and permeability the greatest, as smaller sizes tend to destroy porosity between the larger grain size pore throats.

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Offline Bigun

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Re: Full Impact of Shale Revolution Not Yet Seen
« Reply #13 on: January 25, 2019, 03:42:41 am »
I'm thinking that a fellow could get a damned good education just hanging out with a few of the folks who populate TBR.
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Offline IsailedawayfromFR

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