The Oil Drum

One wonders, sometimes, why folk would want to get into political office these days, given the pervasive problems starting to arise from the end of cheap and easy to produce oil and natural gas. The rising costs of providing fuel for everything from school buses to emergency responders eats away at one end of a budget. The demands for wage increases to help employees cope with rising fuel and food prices nibbles away both at another part of the budget, but also at public and labor relations. And then there is the cost to repair and maintain the existing infrastructure, let alone make provision for future alternate choices for power and transportation. Sectors of the population, such as truckers, are becoming less shy in complaining about their problems, as unemployment bites into their numbers.

Fortunately there are legislators and candidates for office that do understand both the problems and the complexity in finding answers where options are not immediately responsive or popular. For the rest it often becomes easier to try and unify a constituency by invoking an enemy –someone who can, by their actions, be blamed for constituents’ problems. Sadly the world’s history has been filled with stories of such scapegoats, as an easy way of switching attention. Today it is possible that as oil prices rise, both OPEC and Saudi Arabia may become the villain in articles and political slogans. Given the possible outcomes of such positioning, it is perhaps not surprising that, as another American election swings into the beginning of the end game, that oil suppliers, perhaps sensing this, are indicating the chance of a greater flexibility in supply.

This past week, courtesy of Leanan and Gail it seems that there have been more than the usual number of stories on natural gas developments and the potentials of formations such as the Utica shale, the Haynesville shale, and the Marcellus shale. These are all relatively tight deposits that have only become economic because of increasing gas prices and advances in technology. So I thought it might of interest to explain just a little of that technology, and why it costs so much more for the horizontal well. So the post is largely going to be on horizontal wells, vertical natural fractures and slick artificial ones. To “thank” Gail I am also going to try and describe a slide on ethanol use that I saw at a talk I went to this week on Global Warming by Richard Stegemeier, a member of the NAE, and lest it has been missed I will end with a reference to the Worlds Worst Wind Farm.

This post, in a way, is in homage to Connections, which I have just started to watch. I noted today that Leanan had posted that Matt Simmons is giving a talk at UCSB tonight, and I suggested to the Engineer that he might go downstairs and listen. (His report – among other things that the room was too small, but also that Matt did say that we at TOD do “an excellent job” – why thank you, kind sir).

And then I got a bit more curious about the program and found that there is a Conference coming up there on February 9-10 dealing with the need to transition from carbon fuels to renewables. While the current program looks fairly interesting, it is the second in the series. And so I went back to see what they had on the program last year. And there I found a paper on Natural Gas by Chris McGill, from which I took the following graph.

This is the first time that I have seen a comparison of relative production rates between horizontal and vertical wells that were relatively close, so I thought I would pass it on. More under the fold.

This is the third post on the life of a large oilfield, after first looking at a very idealized outline of how a major field might be developed, in the second post I gave some of the events that happened at Abqaiq, which is one of the great oilfields of Saudi Arabia, and which approximated my model. What I would like to try now is to explain some of the reasons that the reality is quite a bit different from the ideal, and some of the geological factors that make the considerable difference between the two.

To begin, Abqaiq, like most giant fields, has been around for a long time, and when it was first developed, by a relatively small group during the Second World War, there were many other things going on that limited development so that it took 4 years to go from drilling the first well to the fifth. Technology was not nearly as advanced as it is now, and the wells were spaced considerably further apart than the spacing I placed mine at in the model. Further while I had estimated the OIP as being some 62 billion barrels, based on porosity, in reality the number was half that. I am grateful that both westexas and plucky underdog had the reasons for this.

With your indulgence I am going to try and explain a little bit more about some of the stages that an oil reservoir might go through, to clarify some of the topics that have arisen in discussing oil production from large oil reservoirs. To do this I am going to build a simple model, to try and illustrate the odd point, concerning production and reservoir collapse. (This might help in understanding some of the debate between Matt Simmons and Jim Jarrell, as reported by Marco. Please bear in mind that this is a very simplified example, to illustrate the points - to those more knowledgeable, I apologize. But please jump in and clarify what I have not made clear or not explained correctly.)

Let me start by assuming that I have a layer of rock that is 300 ft thick, five miles wide and thirty miles long. Let us then assume that this has been folded in the middle, so that it now has trapped oil within all the pores of the rock. And, for the sake of discussion let's assume that it has a porosity of 20%. Now having found this reservoir - which is, let's say some 6,500 ft below the current surface of the ground - back some years ago, the oil moguls of the time decided to drill into it and extract the oil.