SEG Forum VII: Unconventional energy sources and the technology race

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Julie Colley

How will petroleum companies, service companies, and governments make the best use of unconventional energy resources? What expertise, techniques, and equipment will be needed? These questions were raised on Monday during the SEG Forum VII Series “Energy’s Future: Unconventional Resource Geophysics” in which a panel of top executives representing these groups discussed their part in these changes from an exploration and development perspective.

The message from all four panelists seemed to be this: Unconventional energy sources will almost certainly be part of the mix for the future, and improvements in technology already are making it easier and less expensive to find and use these resources.

The SEG Forum Series brings together an informative panel of industry, government, and educational leaders for pertinent discussions regarding subjects with wide interest to the industry. The gathering of distinguished speakers may discuss the science involved while bringing insight regarding a company or institution’s philosophy as to why and how they are using current technology and advancing science. This year’s forum on unconventional resources furthers this tradition as development of energy reservoirs once considered research follies are now a major focus of the industry.

The discussion ran the gamut from porous sandstones and limestones to gas hydrates, fractured shales, tar sands, hydrothermal, and other conventional resources.

Larry Lunardi, vice president of Geophysics of Chesapeake Energy Corporation, discussed Chesapeake’s experience with “urban seismic” at the Dallas Fort Worth Airport. A high concentration of pressure has been discovered in this area with 4000 ft. lateral drills (two of which are in the parking lot of the terminal). He reported a cost of US$233 per net acre with 250–300 new wells projected in the next two to three years. Lunardi addressed concerns regarding conflicts caused by drilling at the airport by explaining that the sites are more than 8000 ft below the surface of the tarmac and that there are 17 inches of reinforced concrete serving as a protective barrier; therefore, the operation should not conflict with airport activity. He reported that excellent data had been recovered and anticipates that more is on the way.

Sverre Strandenes, group president, Data Processing and Technology for Petroleum Geo-Services ASA (PGS), believes that unconventional resources are more important now to fulfill future energy needs and that geophysics has a significant role to play. For research and development efforts to be sustained, business models must change and grow with emerging trends in the industry. Strandenes said the majority of unconventional activity was in North America (tar sands, gas) and Venezuela (heavy oil) which will result in attractive and sustained commodity prices, reduced unit cost, reduced environmental impact (greenhouse gases and footprint), and stable and predictable legislation.

J. M. Massett, senior vice president, Exploration and Reservoir in the Total group, showed that hydrocarbon demand continues to increase in the present economy with a 1.5% per year growth for liquids and 3% per year growth for gas. He stressed the importance of promoting social responsibility to address CO₂ issues. Massett said that this can be achieved by mitigating long-term concerns over heavy oil developments and/or unconventional plays and increasing the efficiency of renewable energies.

Ray Boswell, manager of research and development programs in natural gas hydrates, U.S. Department of Energy’s National Energy Technology Laboratory, analyzed gas hydrate issues. He explained that gas hydrate systems are fluxes and fates of methane between gas hydrate systems, the ocean, and the atmosphere. Boswell revealed that while gas hydrates hold more than half of organic carbon on Earth, there is still much uncertainty regarding its use as an unconventional source because the science is still in its infancy.

Boswell said gas hydrates can be safely and economically produced by creating a validated numerical simulation capability, conducting a series of long-term production tests leading to viable production technology, and integrating environmental monitoring into field programs. While it is still a valid concern that gas hydrate development could release CO₂ into the environment, he said there is technology present to prevent such problems.

An audience of more than 500 posed questions to the panel including, “What do we need from geophysicists to solve the problems created by unconventional resources?” Boswell responded that gas hydrates are a marvelous opportunity; however, more research is needed to determine if it is a viable resource, and that much more fundamental research is needed. Lunardi addressed the question, “What is the largest impediment to unconventional resources?” by explaining that one of the biggest concerns was surface access for seismic drilling and production and that there was a definite need to seek technology to overcome this problem such as making use of wireless technology.

J. M. Masset has been senior vice president, Exploration and Reservoir in the Total group (formerly TotalFinaElf) since 2000. He joined Elf in 1976 as a geologist with exploration positions in Norway, the U.S., and Congo where he was exploration manager. In 1990, Masset moved to France as exploration manager of domestic operations and became adviser to senior vice president. He was vice president of new business development at Elf, 1998–2000, evaluating new opportunities in producing assets in West Africa and Europe. Masset is a member of SEG and AAPG, chairman of the board and administration president of Ecole Nationale Supérieure de Géologie de Nancy (ENSG), vice president of the Union Française des Géologues (UFG), and was president of the geological section of the Union Française des Industries Pétroliéres (UFIP) from 1990 to 1994.

Sverre Strandenes is group president, Data Processing and Technology, for Petroleum GeoServices ASA (PGS). He joined PGS in 1995 as department manager of geosciences with Norsk Hydro Research Centre. He has held various management positions with PGS, most recently president, Marine Geophysical EAMA Region. Strandenes receives a master’s degree in geophysics from the University of Bergen in 1981.

Ray Boswell works for the U.S. Department of Energy’s National Energy Technology Laboratory managing programs in natural gas hydrates. He has also managed programs in low-permeability sandstone formations, prepared regional natural gas resource assessments for plays in the Greater Green River, Wind River, and Appalachian basins, and worked as a development geologist for Chevron. Boswell received a bachelor’s degree in geology from the College of William and Mary, and master’s and doctorate degrees in geology from West Virginia University.

Bob Tippee has written about economic, energy policy, seismic technology, and the Middle East, winning awards from the American Business Press, New York Society of Business Press Editors, and Association of Petroleum Writers. He was editor-in-chief of 1997–2001 editions of the International Petroleum Encyclopedia, Tippee is author of Where’s the Shortage? A Nontechnical Guide to Petroleum Economics and coauthor of The Natural Gas Industry: Evolution, Structure, and Economics. He also is coauthor and project editor of Gas and Power in the Developing World: A Systematic Look at Countries and Their Investment Needs. Tippee joined the Oil & Gas Journal in 1977. He received a bachelor’s degree in journalism from the University of Tulsa.

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