Worldwide Classification & Reporting Requirements for … · 2012-05-04 · Prof. Dr. G. Falcone Institute of Petroleum Engineering 2 Worldwide Classification & Reporting Requirements

Worldwide Classification & Reporting Worldwide Classification & Reporting Worldwide Classification & Reporting Worldwide Classification & Reporting Requirements for Geothermal ResourcesRequirements for Geothermal ResourcesRequirements for Geothermal ResourcesRequirements for Geothermal Resources

(after paper SPE 146435)(after paper SPE 146435)(after paper SPE 146435)(after paper SPE 146435)

Prof. Dr. Gioia FalconeProf. Dr. Gioia FalconeProf. Dr. Gioia FalconeProf. Dr. Gioia FalconeInstitute of Petroleum EngineeringDepartment of Geothermal Engineering

03 May 2012

Prof. Dr. G. FalconeInstitute of Petroleum Engineering 2

Worldwide Classification & Reporting Requirements for Geothermal Resources

OutlineOutlineOutlineOutline

�Need for Geothermal Reporting Standards.�Review of Key Definition Attempts.�Analogy with the Oil & Gas Sector.�Risk Assessment.�Need for an Integrated Subsurface/Surface Approach.�Challenges Ahead & Conclusions.



The GoalThe GoalThe GoalThe GoalStandards?

Rules?Guidelines?

Codes?

Flexibility increases uncertainty

Greater uncertainty = greater risk to investor

Less confidence in geothermal development



What is the Target?What is the Target?What is the Target?What is the Target?

�Source?�Reservoir?�Fluids?�Stored heat?�Recoverable volume? �Recoverable heat?�Recoverable power?�….or simply the net $$$?

(SPE et al, 2007)



Example: Geopressured Resources Example: Geopressured Resources Example: Geopressured Resources Example: Geopressured Resources ---- 1111

�Highly pressurised hot brine (water trapped during burial process). �Often saturated with methane.�Found in large, deep aquifers. �Wells flow pressurised to the surface.�Water temperature is 90-200°C.

(Texas Renewable Energy Resource Assessment, 2009)



Example: Geopressured Resources Example: Geopressured Resources Example: Geopressured Resources Example: Geopressured Resources ----2222

3 forms of energy can be exploited:

1.Thermal from the high temperatures.2.Hydraulic from the high fluid flow pressure.3.Chemical from the dissolved methane.

�� Which one is the target resource?Which one is the target resource?Which one is the target resource?Which one is the target resource?

(Texas Renewable Energy Resource Assessment, 2009)



Definition Definition Definition Definition ---- by Temperature & by Temperature & by Temperature & by Temperature & UseUseUseUse

(after Texas Renewable Energy Resource Assessment, 2009)

(5 – 25 oC)

(20 – 75 oC)

(75 – 150 oC)

(> 150 oC)



Calculation of Temperature at DepthCalculation of Temperature at DepthCalculation of Temperature at DepthCalculation of Temperature at Depth

(MIT, 2006)



By Temperature, Use, Type & StatusBy Temperature, Use, Type & StatusBy Temperature, Use, Type & StatusBy Temperature, Use, Type & Status

(after Bromley, 2009)



By By By By ““““PotentialPotentialPotentialPotential””””

(Piot, 2006; Rybach, 2009)



By By By By ““““HeatHeatHeatHeat----inininin----PlacePlacePlacePlace”””” –––– Stored HeatStored HeatStored HeatStored Heat

Sw = water saturationΦ = porosity (AGCC, 2010)



By By By By ““““HeatHeatHeatHeat----inininin----PlacePlacePlacePlace”””” –––– Power PotentialPower PotentialPower PotentialPower Potential

(AGCC, 2010)

Rf = QWH / QR

QWH = heat at wellheadQR = heat in the reservoir (Muffler, 1979)

for liquid-dominated systems



Key Oil & Gas Reporting DocumentsKey Oil & Gas Reporting DocumentsKey Oil & Gas Reporting DocumentsKey Oil & Gas Reporting Documents

�Guidelines for the Evaluation of Petroleum Reserves & Resources (SPE/WPC, 2001).

�Petroleum Resources Management System (PRMS) (SPE, WPC, AAPG, SPEE 2007).

�SEC Regulation S-K, Regulation S-X under the Securities Act of 1933, Securities Exchange Act of 1934 & Industry Guide 2.

�Modernization of Oil and Gas Reserves Reporting Requirements (SEC, 2010).



Differences with Oil & Gas Sector Differences with Oil & Gas Sector Differences with Oil & Gas Sector Differences with Oil & Gas Sector ---- 1111� Commodity to be extracted is heatheatheatheat.

� Commodity (heat) is stored in both rock & fluidrock & fluidrock & fluidrock & fluid.

� For some hydrothermal systems, a recharge may take place on a human time scale human time scale human time scale human time scale vs. a geological one.

� Natural geothermal fluids contain dissolved solids and gas that can be regarded as bybybyby----productsproductsproductsproducts.

� Geothermal energy can be used both for electrical electrical electrical electrical generation & direct usegeneration & direct usegeneration & direct usegeneration & direct use.



Differences with Oil & Gas Sector Differences with Oil & Gas Sector Differences with Oil & Gas Sector Differences with Oil & Gas Sector ---- 2222

� According to the SEC, “proved undeveloped reserves” only applies to projects to be developed within 5 years 5 years 5 years 5 years (too restrictive for geothermal electric power generation projects).

� Geothermal energy markets are site specificsite specificsite specificsite specific and cannot be compared to global hydrocarbons market.

� Geothermal energy cannot be easily transported from its site of production (or stored), hence it is deemed to stay a local energylocal energylocal energylocal energy, contrary to oil & gas.



(PRMS, 2007)

Resources & Reserves Resources & Reserves Resources & Reserves Resources & Reserves –––– Oil & GasOil & GasOil & GasOil & Gas



Resources & Reserves Resources & Reserves Resources & Reserves Resources & Reserves ---- GeothermalGeothermalGeothermalGeothermal

(AGCC, 2010)



Quantifying Total Project RiskQuantifying Total Project RiskQuantifying Total Project RiskQuantifying Total Project Risk

�Risking the geothermal value starts by identifying the in situ raw resource, and ends with the assessment of current & future market scenarios.

1. Exploration 2. Drilling 3. Well MW capacity4.4.4.4. Reserves estimateReserves estimateReserves estimateReserves estimate5. Geopolitical environment6. Energy markets



Risk on Recovery FactorRisk on Recovery FactorRisk on Recovery FactorRisk on Recovery Factor

�Representative historic database for conventional (i.e. hydrothermal) available for making estimates for new analogue geothermal occurrences.

�…not true for the new generation of exploitation concepts (e.g. EGS, low T binary/organic Rankine cycle power).

�ExampleExampleExampleExample: the overall risk of an EGS project is strongly related to the success of the formation stimulation measures adopted.



Risk on Overall Plant EfficiencyRisk on Overall Plant EfficiencyRisk on Overall Plant EfficiencyRisk on Overall Plant Efficiency

�Energy conversion efficiency�Power plant capacity factor �Power plant downtime & life

�Risk related to technology, fluid chemistry, maintenance plan, etc.

Example of cycle thermal efficiencies for energy conversion

(MIT, 2006)



Need for Integrated Subsurface/Surface ApproachNeed for Integrated Subsurface/Surface ApproachNeed for Integrated Subsurface/Surface ApproachNeed for Integrated Subsurface/Surface Approach1.1.1.1. Identify possible resource.Identify possible resource.Identify possible resource.Identify possible resource.2.2.2.2. Calculate heat in place.Calculate heat in place.Calculate heat in place.Calculate heat in place.

-A, h, depth, T (with corresponding uncertainty)3.3.3.3. Calculate heat arriving at surface.Calculate heat arriving at surface.Calculate heat arriving at surface.Calculate heat arriving at surface.

-K, -Dynamic flow models (reservoir & wells)-Geo-mechanical models-Fluid & heat recharge

4.4.4.4. Calculate recoverable energy.Calculate recoverable energy.Calculate recoverable energy.Calculate recoverable energy.-Efficiency of heat use & energy conversion

5.5.5.5. Apply cutApply cutApply cutApply cut----offs as/when appropriate. offs as/when appropriate. offs as/when appropriate. offs as/when appropriate.

•Q



Geothermal Exploitation ComponentsGeothermal Exploitation ComponentsGeothermal Exploitation ComponentsGeothermal Exploitation Components

Geology & Geophysics

Flow in Porous Media

Drilling, Completions, Fracturing & Production Ops., Plants

Field Performance(after Enel, 2005)



�Forward cascade of calculations, or simultaneous solution of reservoir, wellbore & plant, or iterative procedure?

�What cut-offs and where?�What models/packages?

�Deterministic & statistical approach (including Monte Carlo & Experimental Design).

� Integrated subsurface/surfacesubsurface/surfacesubsurface/surfacesubsurface/surface modelling.�Predictions of cum. heat/energy recovery vs. timetimetimetime.

Need for an Integrated ApproachNeed for an Integrated ApproachNeed for an Integrated ApproachNeed for an Integrated Approach



Challenges Posed by StandardisationChallenges Posed by StandardisationChallenges Posed by StandardisationChallenges Posed by Standardisation

�Different types of resources & plants.�Different uses & economics.�Technology advancements.�Impact of technology & economics on cut-offs.�Naturally permeable aquifers vs. EGS.�Varying environmental, policy & regulatory constraints.�Standardising a workflow!Standardising a workflow!Standardising a workflow!Standardising a workflow!



ConclusionsConclusionsConclusionsConclusions

�Geothermal reporting standards needed to reduce risk to investor & increase confidence in geothermal development.�Difficult to generalise procedures to quantify recoverable heat/power and associated project risk.�Lessons learnt from oil & gas sector.�Need for systematic subsurface/surface workflows.

Worldwide Classification & Reporting Worldwide Classification & Reporting Worldwide Classification & Reporting Worldwide Classification & Reporting Requirements for Geothermal ResourcesRequirements for Geothermal ResourcesRequirements for Geothermal ResourcesRequirements for Geothermal Resources

(after paper SPE 146435)(after paper SPE 146435)(after paper SPE 146435)(after paper SPE 146435)

Prof. Dr. Gioia FalconeProf. Dr. Gioia FalconeProf. Dr. Gioia FalconeProf. Dr. Gioia FalconeInstitute of Petroleum EngineeringDepartment of Geothermal Engineering

03 May 2012