Report: A State of the EMD Union Update

Every six months, chairs of the Energy Minerals Division committees convene and report on developments in the areas they cover. In this column, we highlight important observations from these recent reports.

Detailed reports are on the EMD members website.

Shale Gas and Liquids – Global interest in shale plays has grown this report to more than 150 pages summarizing 14 plays in the United States, developments in 11 Canadian provinces/territories, activity and potential in 12 European countries and plays in China, Australia, India, New Zealand, Japan and Indonesia.

The accompanying chart shows the growth of this report as another indicator of the “Shale Revolution.”

Two details from the section on the Barnett, most venerable of these plays, serve as useful myth-busters for members:

  • Daily production from the primary Barnett field is declining far less rapidly than might be expected, given the huge drop in rig count and the assumption that continuous drilling is necessary to maintain high production levels.
  • Degradation of air quality is often cited by opponents of shale gas development as a reason to halt or greatly restrict activities in these plays.

The chairman of Texas Commission on Environmental Quality (TCEQ) said air around the Barnett development is the most monitored in the United States. None of the millions (yes, millions) of tests performed by the Commission has shown concentrations of any of 46 chemicals monitored hourly that have exceeded air quality standards.

Tight Gas Sands – Much of the current investment in Alberta’s Western Canada Sedimentary Basin is focused on the liquids-rich gas held in the fine-grained fringe deposits (or haloes) of the Cretaceous Cardium Formation. This new development is leading some to refer to hybrid plays, with elements of conventional and unconventional fields.

China appears to be testing tight gas sands, in partnership with international oil companies like Shell.

EnCana has decided to stop using proppant sand in hydraulic fracturing operations in the Piceance Basin of Colorado, saving $300,000 per well!

Oil Sands – As of December 2012, Alberta bitumen reserves under development accounted for only 4.8 percent of the remaining established reserves (169 billion BBL/ 2.68 billion m3) since commercial production began in 1967. If present production growth is maintained, in-situ production will overtake mined production by 2015.

At Milne Point, BP Alaska is testing the CHOPS (cold heavy oil production with sand) recovery process in the Ugnu Sands. Initial production from horizontal wells reached peak rates of 500-550 bopd, exceeding model predictions.

BP announced in late 2012 that without tax relief, the company would be ending the pilot.

In Utah, two pilot projects announced to start in 2014 will produce liquids from surface-mined oil sand using a closed-loop solvent extraction process.

In March, the U.S. Bureau of Land Management signed the Record of Decision (ROD) for the Oil Shale and Tar Sands Programmatic EIS, finalizing Proposed Land Use Plan Amendments for Allocation of Oil Shale and Tar Sands Resources on BLM administered lands in Colorado, Utah and Wyoming, and the Final Programmatic Environmental Impact Statement (OSTS PEIS), released in November 2012.

The ROD opens 130,000 Federal acres (52,609 ha) of tar sands in Utah for leasing and development.

Oil Shale – Shell is withdrawing from oil shale development in Colorado, but continuing to work in Jordan using the same technology on a resource no richer, suggesting the barriers in Colorado were not technical.

On the other hand, Red Leaf Resources received its final permit for a large-scale test of its EcoShaleTM in-capsule process, which may bring commercial production to the United States in 2014 for the first time since Union Oil stopped in the early 1990s. Planned production facilities would bring world production of shale oil from oil shale to about 400,000 BOPD by 2030.

Success will depend on companies successfully attracting capital to complex technical projects.

Coal – Dramatic reductions in coal’s share of U.S. energy production have paralleled the rise of natural gas production (and drop in price) over the last several years. EMD’s Coal Committee report indicates that declines in U.S. coal production have been slowed due to increased exports of coal.

Carbon emissions also are part of the conversation about coal’s future.

Texas has two clean coal facilities being developed – the NRG Parish Plant near Houston and the TCEP Summit Plant near Odessa – with potential to reduce emissions by 4.65 million tons per year, and to support enhanced oil recovery.

Gas Hydrates – A joint research expedition in April and May 2013 gathered high resolution seismic data and imagery that will help refine characterization of large methane hydrate resources at shallow subsea depths in the U.S. Outer Continental Shelf.

Japan has conducted a test of gas production from subsea hydrate deposits, and Korea plans one for 2014.

Uranium (nuclear minerals) – 70 new reactors are under construction in 13 countries and 160 sites are under development, most in Asia.

U.S. production of uranium was the highest since 1996. Expenditures for land, exploration, drilling, production and reclamation were up 111 percent in 2012 over 2011, and 11 uranium mines are operating in Texas, Wyoming and Nebraska.

China is developing as a major customer for uranium to fuel 28 new nuclear reactors (and more than 120 are in development).

The U.S.-Russian agreement to downblend weapons-grade uranium from Russian warheads expired in November.

Greenland and Mongolia are moving toward development of rare-earth element resources.

(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.)

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

Division Column-EMD

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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