Understanding the Basics of Gas Exploration and Production Eric K. Albert, PhD And some of the career opportunities created by the industry.

Understanding the Basics of Gas

Exploration and Production

Eric K. Albert, PhD

And some of the career opportunities created by the industry

Our economy runs on energy!

In 2009:

Energy Information Administration

Natural Gas

A non-renewable energy resource Used in a variety of ways:

Energy Information Administration, 2005

As an energy source:

Natural gas burns more cleanly than other fossil fuels

BUT

Still results in CO2 emissions!And unburned natural gas

(methane) is considered a greenhouse gas…

2008 US Natural Gas

Total Production 21,200 Billion Cubic Feet (BCF)

Consumption 23,200 BCF

Imports 3,984 BCF

Exports 1,006 BCF

Wellhead price $7.96 / thousand cubic feet

Avg. City Gate price $9.18 / thousand cubic feet

Top US Gas Producing State 7,760 BCF: Texas

Energy Information Administration

How much energy?

A BTU is the heat required to raise the temperature of one pound of water 1 degree Fahrenheit

One cubic foot of natural gas (volume) contains about 1031 BTU

One candy bar has about 1000 BTU!

One cubic foot of gasoline contains about 961,000 BTU! [about 7.6 gallons]

Equivalent Energy Cost

January 2011* Natural Gas price is $4.48 / Million BTU (MMBTU)

compared to today’s price of $3.19/gallon of gasoline

the equivalent energy price of 1 gallon of gasoline is

$25.23 MMBTU Put another way, at current prices, the

same energy from Natural Gas is about 1/6 the cost!

*NYMEX

How is Natural Gas formed?

Trapped organic matter decomposing under pressure and heat…

In time, depending on conditions, we get:Coal bedsOil fieldsNatural gas

Think: even landfills are recovering methane from decomposing trash

How is it found?

Geologists use a variety of means to locate possible sources…Knowing where it has been found

alreadyHistorical geological settingSpecific site location typically uses

Seismic methods

Historical Oil and Gas Production

USGS

Oil: greenGas: redOil & Gas: yellow

Main Phases of Gas Development

ExplorationLand identification for sitesLocation of depositsEnvironmental concernsProving potential reserves

DrillingLand leasing, right of waysPermitsPad developmentRoads and water infrastructure

ProductionPipeline constructionMonitoring and compliancePumping and storageWell maintenance

Post-productionCapping / sealing wellsWater quality monitoringOther compliance issuesSite reclamation

EXPLORATION

Seismic Survey

An array of geophonesData collection equipmentA “noise” source –

Vibrating trucksExplosives

The reflected sound waves are collected and analyzed with computers to form structural images

Seismic Surveys

Resolution Resources

Marcellus Shale

Gas deposit known since the 1930’sTechnology for recovery not

availablePrice of gas too low for cost of

drilling6,000’ -7,000’ underground,

maybe morePA gas wells: 35,000+ already in

placeEstimates 4,000 per year may be

added

Traps

Both of these types of rocks are impermeable, meaning that they do not allow liquids or gassesto move through them!

Pore spaces filled Pore spaces don’t communicate

Geology.com

Drilling

DTE Energy

Horizontal drilling is employed to connect to the largest reservoir space

The drill string does not turn…but is steered to a horizontal line…

This is accomplished through a steerable drill (Mud Motor)

and a follow-behind probe (Measure While Drilling)

What does a borehole look like?

Top View

Side View

Note: the casing system seals off higher elevations of rocks in the well so that only the production area is eventually connected.

Well Logging

After the well is drilled, a log is made…Gamma ray = natural

radiation in the rocksNeutron = higher reading

means more hydrogen*This along with other

data collected in the log helps to indentify if this will be a productive hole…

Gamma Ray Neutron

*Natural gas is a hydrocarbon!

Final Steps

After the production area is reached:The casing is sealed to this areaThe production area casing is

perforated by blastingThe rocks surrounding the

production area are fractured (hydraulic fracturing)

PRODUCTION

Deal or No Deal?

Even so, after all this, the well might not be productive!

Non-productive wells are plugged with cement and operations cease.

Hydraulic Fracturing might be repeated in one well several times to attempt to increase pressure and recovery

Higher pressure = higher flow rate = more valuable well

Transport

A producing well is then connected to a pipeline for transport

Also, to buffer the effects of seasonal demand, underground gas storage reservoirs are used.

In PA there are at least 88 active reservoirs

Well Maintenance

Well production is monitored both remotely and by on-site inspections

Routine maintenance of the site is necessary to confirm safety and integrity of the well

Water quality monitoring of nearby drinking water sources, as well as natural sites may be needed (looking for leakage of gas into sources…)

POSTPRODUCTION

Well Life

A well might produce for 5, 10, even 20 yearsProduction rates decline with time…Eventually the rate may be deemed

too low to be useful, or non-economic

Wells are disconnected, sealed (capped) with cement, and a surface vent pipe is installed.

Where are the jobs?

ExplorationLand identification for sites

Surveyors, Civil engineers, etc.Location of deposits

GeologistsEnvironmental concerns

Environmental techs, biologists, forest technology, chemists

Proving potential reservesGeologists, Petroleum & NG Engineers

DrillingLand leasing, right of waysPermitsPad developmentRoads and water infrastructure

DrillingLand leasing, right of ways

Paralegals, title search, lawyers, land agents

PermitsHydrologists, civil engineers, land

plannersPad development

Commercial drivers, riggers, drill operators, diesel power generation, construction, welding, electrical, heavy equipment

Roads and water infrastructureSimilar to “Pad development”

ProductionPipeline construction

Heavy equipment operators, diesel techs, welders, riggers, surveyors

Monitoring and complianceElectronics, computer networking,

communications / satellite techs, biologists, hydrologists, chemists

Pumping and storageWell maintenance

Post-productionCapping / sealing wells

Construction, welders, general maintenance

Water quality monitoringOther compliance issuesSite reclamation

Heavy equipment operators, forest / reclamation technology

Sam Kier, 1840’s…

Drake Well Museum

How it all got started…

Questions?