A productive group

Strippers Get Respect

A little well here, a little well there, some more little wells over yonder …

With apologies to the late Sen. Everett Dirksen (see sidebar), you put enough small oil and gas wells together and pretty soon you’re talking about real energy, too.

Actually, when it comes to stripper wells – those that produce fewer than 10 barrels of oil or 60,000 standard cubic feet of natural gas – their quantity isn’t as important as their quality.

And that’s where the Stripper Well Consortium (SWC), a loose affiliation comprising facets of private industry, academia and the Department of Energy, comes into play.

John Duda, project manager for the Natural Gas and Oil Project Management Division of the National Energy Technology Laboratory, which coordinates the program for DOE, says, somewhat surprisingly, “the goal of the Stripper Well Consortium is not to increase the number of stripper wells,” but to maintain or enhance the wells already in existence.

“The SWC has developed technologies that have helped and will continue to help small operators produce domestic oil and natural gas reserves,” he said.

That, he adds, provides more benefits to the country’s energy picture than drilling for new ones.

To that end, SWC tries to restore production to a level so that wells are no longer categorized as stripper wells, while also sustaining production costs so as to recover the maximum amount of reserves before the well becomes uneconomical.

To put the numbers in perspective, as of Jan 1, 2009, there were approximately 375,589 stripper oil wells and 322,507 stripper gas wells operating in the lower 48 states, representing 20 percent of all the oil and 19 percent of all the gas produced onshore.

Here’s why that’s important: These wells currently produce 4 percent of the daily U.S. oil consumption and 10 percent of daily U.S. gas consumption.

And they don’t just provide energy.

“Nearly 10 jobs, Duda says, “are dependent upon every one million dollars of stripper oil and gas production.”

Without these wells, the United States would have to increase imports by 7 percent.

It would make sense, then, for some entity to be in place to make sure these wells stay healthy.

Program Goals

Enter SWC. Founded in 2000, the organization was charged with three main goals:

  • Maximizing the recovery of domestic hydrocarbon resources by helping small, independent oil and natural gas operators.
  • Minimize environmental impacts.
  • Strengthen the nation’s energy security.

SWC is managed and administered by the Pennsylvania State University with an assist from the Department of Energy’s National Energy Technology Laboratory and the New York State Energy Research and Development Authority.

Since its inception, SWC has engaged with more than 100 different organizations. Currently there are 70 members, the majority of which are small operators that have limited budgets for manpower and research and development.

SWC includes not just oil and gas producers and service and equipment suppliers, but also universities, technology developers and government organizations from over 20 states and two foreign countries.

The reason so many are involved, so many want to work together with SWC is obvious: the health, literally and figuratively, of these smaller wells.

These wells, though, have a small margin for error – and there’s no guarantee that what we can get today from these wells, we will get tomorrow. Hence, the emphasis on finding – and then using – new technology to keep the system working.

“Typically,” Duda said, “once they’re plugged, the reserves that the wells accessed will no longer be economically accessible, as the cost to drill new wells will never be paid back.”

An Economic Boost

SWC is not just interested in the business of squeezing out the last drop, though. In keeping with one of its charges, SWC is making a concerted environmental effort, as well.

Duda points to a project from Clean Tech Innovations in Bartlesville, Okla., called Soil Amendment Product for Oil Brine Contaminated Soil, where a proprietary process, consisting of highly soluble calcium source and fertilizer, is used to till the soil.

“Grass grows in treated soil in two-six weeks instead of years,” he said.

Equally impressive, Duda adds, the product can be applied by the customer, is lower cost than currently available technologies and has been successfully demonstrated at multiple sites across the United States.

Other companies, like Systems of Merritt, have introduced an iPhone app, making it easier and more efficient for companies to gather and transmit field data.

SWC projects range from $25,000 to $400,000, but usually cost between $100,000-$200,000. To receive the government funding, companies must be prepared to cover a minimum of 30 percent of the cost.

As for this funding, while Duda didn’t want to get into the nature and commitment of the two administrations that have controlled its purse strings, the SWC budget has decreased under President Obama, even if its 2010 budget represents a 50 percent increase over the previous year. There were fluctuations of around 40 percent under the Bush Administration.

At the moment, the government funds the program to the tune of $675,000.

“It’s not, though, just the thousands of small operators who benefit from a healthy industry,” Duda said of the consortium and the government involvement, “it’s the U.S. economy.”

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Talking Real Money

Everett Dirksen (1896-1969), U.S. Senator from Illinois, served in the U.S. House from 1933-1948, the U.S. Senate from 1951-69 and as minority leader of the Senate from 1959 until 1969. He was known for his witty speeches delivered in a deep, cello-like voice and his down home demeanor.

The quote for which he is most famous is: “A billion here, a billion there, and pretty soon you’re talking real money.”

However, according to the Dirksen Congressional Center, checks of multiple sources – including the Library of Congress and the Congressional Record, as well as tapes of television news and talk shows on which he appeared – cannot confirm he actually uttered the quote.

The Center also said a fellow airplane passenger sat by Dirksen and asked him about the famous quote. Dirksen replied, “Oh, I never said that. A newspaper fella misquoted me once, and I thought it sounded so good that I never bothered to deny it.”

According to the Center: “Bottom line: The late Senate minority leader certainly would have endorsed the meaning behind the phrase, but it is questionable that he ever coined it.”

Emphasis: Exploration Innovations