A drill site and rig in the 250-square-mile Coos Bay Basin in southwest Oregon, where the Beaver Hill pilot program is targeting the Lower Coaledo formation.
Photo courtesy of Torrent Energy
Industry wisdom says the U.S. Pacific Northwest holds trillions of cubic feet of natural gas, waiting to be discovered and produced.
It's the kind of play that makes grown men cry and strong women shudder.
"We go through this about every 20 years," said Ron Teissere, Washington state geologist and oil and gas supervisor in the Washington State Department of Natural Resources (DNR).
"Everybody comes back and says, 'Okay, we're ready to drill here now.' Then they find out how damn hard it is -- no pun intended," he added.
Teissere was talking about the Columbia Basin in southeast Washington, where drilling has kicked back in after a small flurry of exploration in the 1980s.
And "hard" is right. Up to 12,000 feet of Miocene basalt overlies the prospective targets, making seismic suspect and drilling daunting.
"This is as blind of drilling as it gets," Teissere said.
Still, a lot of people are eyeing the Nov. 4 Washington DNR lease sale, which will include parcels in the Columbia Basin. The pre-sale interest has been considerably high.
Shell drilled a series of wildcats in the basin in the 1980s, with drillstem tests showing production from numerous gas zones.
"At that time, there was no infrastructure and the cost of gas was very low. And the drilling was expensive. Shell basically walked away from it," said Rick Carol, a partner in Energy Investments Inc. in Lakewood, Colo.
Now EnCana Corp. is trying a 14,000-foot wildcat near Yakima, Wash., with Shell back as a rumored partner.
EnCana will apply innovative drilling technology to get through the basalt.
"It's going to be difficult to drill because the basalt drills very slowly," Carol said, "but there's been some new drilling techniques used out here that should improve the situation."
Others are eyeing the area, as well. Carol's company put together a 100,000-acre play, and Delta Petroleum Corp. of Denver reported that it has 175,000 net acres under lease in the basin.
Despite decades of interest, only one marginal field has gone into commercial production in southeast Washington.
"The only play that ever came out of the basin was the Rattlesnake Field," Carol said. "It was produced in the 1930s out of volcanics at a shallow depth."
A combination of new drilling and production technologies plus higher gas prices has brought renewed interest to the tricky sub-basalt play.
"The wells drilled by Shell proved that there was good reservoir rock below the basalt, and there's a lot of high heat flow in the basin," Carol said. "It's a real cooking pot."
Step on the Gas
The U.S. Geological Survey's most recent full-scale resource evaluation of the Columbia Basin took place 10 years ago.
AAPG member Lynn Tennyson, a USGS research geologist in Denver, worked on that assessment.
"A lot of water wells have gas in them in that part of the world," she said. "You get the feeling that there's gas everywhere out there."
If the basin holds gas in commercial quantities, it could be in a basin-centered gas play or in a series of conventional plays.
There's an eye-popping difference between those two possibilities.
For a basin-centered play, the USGS mean estimate for potential reserve additions was 12 Tcf, with a 5 percent chance of 30 Tcf.
Reserve additions from a conventional play?
A few hundred billion cubic feet.
According to USGS reports, sub-basalt rocks in the basin consist mainly of Paleogene/Lower Tertiary fluvial and lacustrine rocks of highly variable thickness, consisting of sandstone, mudstone, conglomerate and minor coal.
On the play's northern margin, the Columbia River Basalt Group unconformably overlies thick, folded Paleogene strata. To the west, Oligocene to Quaternary volcanic rocks of the Cascade arc overlie the Paleogene sequence.
Eocene arkosic fluvial sandstone bodies in the Swauk, Chumstick Roslyn, Manastash and Wenatchee units comprise potential reservoirs, at depths from 8,300 to more than 17,000 feet.
Some good news: The thickness of the gas-bearing interval is at least 6,400 feet, based on previous drilling that didn't fully penetrate the prospective zones.
Some bad news: Reservoir units are interbedded with volcanics, probably contain significant zeolitization and have only fair to poor porosities.
"The porosities are very low -- at the depth they're testing, you're probably looking at 4 to 7 percent," Teissere said. "There's better porosities at shallow depths, but there's probably not much shallow gas."
A 'Frustrating' Factor
Interpreting reverse faults and folds, or reading the ripples, also presents a challenge in the area. Pressures may have affected the basalt differently from surrounding rock, according to Teissere.
"The question of how those basalts got pushed into those structures is an issue today," he said.
One major question for exploration is whether fold crests in the basalt coincide with sub-basalt structural highs.
"There could be a disconnect between the surface anticlines and the sub-basalt, but nobody knows for sure," Carol said.
"It's a frustrating play," Tennyson noted. "Seismic just doesn't work well through basalt."
Only further drilling can define the nature of the sub-basalt formations and the amount of gas they hold. A study subsequent to the USGS evaluation appeared to point away from a basin-centered play.
"One guy took another look and found with the Shell wells showing more water than we thought, that we might be talking about conventional instead of continuous gas," Tennyson said.
"His conclusion was that there's too much water in the tests for it to be a classic basin-centered gas accumulation," she added.
Teiserre's thinking leans the same way.
"I suspect you're going to find lots of pockets of gas, but you'll have trouble connecting the dots," he said.
Still, he conceded, "there may be surprises down there" because of the lack of current information about the sub-basalt geology.
"We know so little about the reservoir rock potential," Tennyson noted. "We assume it isn't much, but we have so few samples to go on."
Eocene coalbeds and carbonaceous rocks provide a proven gas source in the Columbia Basin. On the western side of the Cascade range, along the Washington and Oregon coasts and at shallower depths, gas-bearing beds have given rise to a nascent coalbed methane (CBM) play.
Methane Energy Corp., a subsidiary of Torrent Energy of Vancouver, is developing a methane-production pilot program in the 250-square-mile Coos Bay Basin in southwestern Oregon.
"On the east side of the mountains the oil and gas prospects are covered by basalt. These (coalbed) deposits are much shallower, in the 2,000 to 3,000 to 4,000 foot depth," said AAPG member Steve Pappajohn, Methane Energy president.
The company is drilling five wells in its Beaver Hill pilot program, primarily targeting the Lower Coaledo formation at a depth of 4,200-4,400 feet. Pappajohn said it already has applied for five permits for a second project in the area.
Methane Energy began with holdings of 70,000 contiguous acres at Coos Bay, leasing for as little as $1 an acre, and expects to increase that number to 100,000 acres.
At an estimated 10 Bcf of gas in place for each square-mile section -- much higher than a more typical 2-to-5 Bcf content for CBM projects -- the company believes it has a 1.1 Tcf resource in the basin.
Using a combination of bond and lottery money, Coos County earlier built a 60-mile, $50 million gas pipeline to connect to the Northwest Natural Gas main system. Torrent said it can easily tie its wells into that feeder line and its laterals.
Another Torrent Energy subsidiary, Cascadia Energy Corp., has leased 365,000 acres in Lewis, Cowlitz and Skamania counties in southwestern Washington.
Cascadia will focus on developing another 100,000-acre CBM project in that area, Torrent said.
In Washington, the economics for CBM projects could be challenged by the cost of groundwater injection, according to Teissere.
"There is quite a bit of methane in these coals," he said. "The problem in western Washington, unlike the Powder River Basin, is that when you're at a depth of 2,000-2,500 feet you've got a lot of water."
Because of treatment and injection costs, the payout from a CBM project might not come fast enough for companies with large overhead burdens, Teissere explained.
Washington coals may contain arsenic and other contaminants that make groundwater treatment problematic and expensive, he noted.
"You're drilling along and everybody's happy, and the next day you've got a Superfund site," he said.
A Lot? A Little?
The USGS identified eight conventional petroleum plays in Washington, including two oil plays, in addition to the basin-centered and coalbed gas plays. None of the conventional plays showed any promise of prolific production.
According to the state DNR, about 600 wells have been drilled in Washington with no commercial oil or gas production since 1962.
"We have had activity in other places, notable in Whatcom County up near the Canadian border, but in other places as well," Teissere said.
Right now, no one knows how incredibly much gas, or how incredibly little, the Pacific Northwest will produce. That puzzle will take shape as exploration continues in the coming years.
"The amount of acres we have untested is millions of acres," Teissere observed, "so I think we'll see drilling out here for a while."