Report Offers Commodity Updates

American Association of Petroleum Geologists (AAPG)

The AAPG Energy Minerals Division covers many scientific disciplines and interests – and because previous EXPLORER articles featured shale gas and oil shale, this quarter will focus on highlights from this year’s EMD November Mid-Year Meeting Commodity Reports.

Detailed reports can be found on the EMD Members website.

(Are you interested in the details, but not yet an EMD member? Upgrade your membership today – at no additional cost to AAPG members – for online access to our research and reports.)

EMD also is updating its website, with many improvements to come in the months ahead. So please, excuse our dust during this transition.

♦ Uranium and Nuclear Minerals: Nuclear power production is forecast to remain steady at about 18-20 percent of electricity generation (EIA). Yellowcake price futures are favorable for increase as plant construction plans to develop in Southeast Asia and China and exploration targets emerge in India, Africa, Australia and South America.

U.S. uranium production in Q3 2012 was 1,048,018 pounds U3O8, down 1 percent from Q2 but up 24 percent from Q3 2011.

As uranium prices rise and geopolitical developments evolve, these factors will serve to enhance the economic potential for recovering both rare-earth elements and uranium.

♦ Gas Hydrates: The Ignik Sikumi test, which was a 60-day or so gas hydrate exchange trial carried out in Alaska’s Prudhoe Bay Field in early 2012, was the first-ever field trial of methane hydrate production. CO2 was exchanged in situ with methane molecules resulting in methane gas and CO2 hydrate.

Other updates include an LWD drilling program offshore India (late 2012) targeting reservoir delineation and resource assessment of hydrate-bearing sands, and a gas hydrate production test in the Nankai area offshore Japan planned for early 2013. 

♦ Oil (Tar) Sands: The EMD-sponsored AAPG Studies in Geology 64, titled “Heavy Oil and Oil Sand Petroleum Systems in Alberta and Beyond,” will be published this month. Also, the upcoming AAPG Annual Convention and Exhibition in Pittsburgh will feature a poster session dedicated to tight oil sands.

Alberta production of upgraded bitumen passed 1.6 million barrels per day; and the ratio of surface-mined to in situ production changed from 60/40 in 2007 to 55/45 in 2009 to nearly 50/50 in 2012.

Current technology development focuses on alternative methods of recovery, including combinations of existing and developing technology, alternative sources of energy for steam production and reducing environmental impacts of surface extraction. 

♦ Tight Gas Sands: The boundary between tight gas sand and gas shale, reflected in silty shale, siltstone and intimately interbedded sandstone/siltstone/ shale formations, makes it difficult to define some plays as tight gas sand or shale gas plays. Our EMD committee is expanding its focus beyond the Americas and is looking at global advances, with current interest in China. 

♦ Shale Oil and Oil Shale: Total global production of shale oil is currently about 30,000 barrels per day (BOPD). American Shale Oil has restarted a pilot of its in situ process, and Shell is developing a test program on a multi-mineral Research, Development and Demonstration (RD&D) lease in western Colorado.

The U.S. Bureau of Land Management announced the award of two RD&D leases in Colorado to ExxonMobil and Natural Soda Holdings Inc.

In international news, a May 2012 Jordanian oil shale symposium highlighted recent devel­opments and focused attention on large deposits in the Middle East, and Eesti Energia has begun production from its Enefit 280 retort system in Estonia, which adds about 5,000 BOPD in production.

♦ Shale Gas and Liquids: International production of shale gas largely has been in Canada, benefitting from the U.S. boom, but testing also is under way in Europe (U.K., Poland) and Asia (China, Australia, India, New Zealand and Japan).

Recent U.S. highlights include:

  • Bakken oil production in North Dakota exceeded 700,000 BOPD by year-end 2012.
  • Eagle Ford oil production averaged >300,000 BOPD in April, and since varies from 325,000-350,000 BOPD.
  • Barnett Shale production peaked in May 2011 at 5.87 BCF/D.
  • Haynesville Shale production has declined after a 2012 peak.

Rig counts have decreased steadily in most plays due to commodity price, even as drilling in liquids-rich plays has increased. 

♦ Coal: The latest released data shows total coal distribution in 2011 was 1,080.8 million short tons (mmst), an increase of 0.02 percent from the previous year (EIA, 2012). Distribution to domestic destinations accounted for 973.6 mmst, a 2.5 percent decrease compared to 2010, whereas distribution to foreign destinations, which was 107.3 mmst, increased by 31.3 percent over 2010.

In April 2012, net electric generation from natural gas was 95.9 million megawatt hours, almost equal to that from coal (96.0 million megawatt hours). 

♦ Geothermal: The U.S. Geological Survey’s public domain geothermal database is going forward, and TGS-Nopek is compiling a bottom-hole temperature database with a focus on the west Texas Delaware Basin.

March 12-14, Southern Methodist University in Dallas will hold its geothermal conference titled “Geothermal Energy and Waste Heat to Power: Utilizing Oil and Gas Plays,” focusing on geothermal in oil and gas producing areas.

Upcoming EMD events:

EMD is co-sponsor of two upcoming events with the Division of Environmental Geoscience (DEG):

Solving Water Problems in Oil and Gas Production: New Technologies for Cost Savings and New Revenue Streams is a Geoscience Technical Workshop (GTW) planned for Feb. 26-27 in Fort Worth. (See story.)

“Protecting Assets with Environmental Baseline and Ground-Water Monitoring” is a short course to be held during the AAPG Pacific Section Meeting in Monterey, Calif., in April.

EMD also is gearing up for the AAPG ACE in Pittsburgh May 19-23. We have an exciting program planned – seven oral and five poster sessions, two short courses/workshops, three field trips, and a luncheon featuring Seamus McGraw, author of “End of Country.”

Watch our article in the May EXPLORER for more details.

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Jeremy Boak, P.G., EMD President 2013-14.

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The Energy Minerals Division (EMD), a division of AAPG, is dedicated to addressing the special concerns of energy resource geologists working with energy resources other than conventional oil and gas, providing a vehicle to keep abreast of the latest developments in the geosciences and associated technology. EMD works in concert with the Division of Environmental Geosciences to serve energy resource and environmental geologists.

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