“The beauty of the unconventionals is, while they’re expensive, we know where they are.”
That’s Carlos Torres-Verdin, Brian James Jennings memorial endowed chair and Zarrow centennial professor of petroleum engineering at the University of Texas at Austin, talking about the promise of unconventional energy production in the United States, both from an industry standpoint and with a view to its position in the country’s future energy mix.
“Unconventionals,” he said, pointing to the very short time between drilling and production, “will play a significant role in the goal of net zero by 2030 or 2050,” he said, whichever of those two dates is ultimately targeted.
Many in the industry are watching those dates as well.
According to a study by the Harvard University Business School, by 2030, 3.8 million jobs, half of which would be accessible to middle-skilled workers, could potentially be supported by the development of unconventional resources. The study concluded this would translate into annual energy savings of $1,070 per household from low-cost natural gas, contribute almost $600 billion in annual GDP, as well as $160 billion in government tax revenue from production-related activities alone. There would also be positive ripple effects in energy-intensive industries such as plastics, metals and heavy manufacturing.
Torres-Verdin summed it up more succinctly.
“Gas will be extremely important,” he said.
More R&D Needed
Torres-Verdin, who will be speaking at this year’s Unconventional Resources Technology Conference in Houston, said the problem is that we don’t have all the tools we need to recover all the energy out there in an efficient manner. Before we do, he said we need to ask ourselves why some wells produce fast and peter out, why some produce over long periods of time, and some have short lives, and ultimately what makes up production.
And that, he said, comes down to three main elements: the properties of the rock, how we drill and how we unlock the resources. Also, location.
“Location, location, location,” he said, laughing, sounding every bit like an ebullient real estate agent.
Torres-Verdin, whose work is focused these days on the petrophysical, geophysical, mechanical and geological description and quantification of the near-borehole region from core samples, geophysical measurements (open hole, logging-while-drilling and cased hole), and in-situ permanent sensors, said what’s holding us back from a better, more productive understanding of those three elements is, no great surprise here, financial investments in research and technology development.
“It’s expensive,” he admitted, which is understandable but still regrettable, as “we don’t have all the technology we need. I mean, everyone knows this.”
Exacerbating the problem is that inventories are full and demand is less than robust, so there isn’t as much incentive at the moment to find the resources needed to invest in the new systems.
And that will change, he said, “Only when demand outcompetes inventory.”
As to the technology, since the infancy of hydraulic fracturing in unconventional reservoirs, determining where fluids flow during treatment, and ultimately, from where fluids return during production has been a challenge, especially since no two reservoirs are exactly alike. Torres-Verdin, who has won the Society of Exploration Geophysicists’ 2020 Virgil Kauffman Gold Medal, as well as the Society of Petroleum Engineers’ Anthony F. Lucas Gold Medal, said that trial and error is used more often than not because deep-probing borehole electromagnetic technology – presently the only reliable borehole technology out there to probe rocks tens of feet away from the borehole while drilling – is often cost-prohibitive. Much of the success of unconventionals depends on our ability to “steer” the well trajectory for all-around optimal stimulation, production and ultimate recovery.
“And we must find better and more efficient ways,” said Torres-Verdin.
His presentation at this year’s URTeC, entitled, “Present and Future Technological Challenges in the Formation Evaluation of Unconventional Sources of Subsurface Energy,” will summarize the state-of-the-art in the formation evaluation of unconventional subsurface resources, with emphasis on production, measurement technology and integrated interpretation approaches. Examples of contemporary applications will be complemented with a survey of future technological challenges for low-risk and financially viable exploration and development.
This will be key to America’s energy future because, as he points out, unconventional hydrocarbon resources will be there “when we need them to complement renewable sources of energy. They are complex and difficult to produce efficiently … but once discovered, we’re able to produce them in a short period of time to satisfy demand in a sustainable way.”
The Right Tools for the Job
The key, he emphasized, is finding those technologies that will help improve accuracy, spatial definition and efficient stimulation.
“We need to employ all kinds of strategies, for sometimes we don’t have all that we need,” he said.
He likens this to a project where a Phillips screwdriver is needed. The solution is both simple and complex.
“If we don’t have one, we need to find one,” he said.
Unlike conventional energy, in which rock and fluid properties are relatively well understood in space and time, but harvesting it often takes years of planning and building production infrastructure, Torres-Verdin said, “With unconventionals, time is very short between drilling and producing,” adding that “if we use unconventionals to their best potential, we will be in a favorable position in the future.”
And that is because an unconventional well, while expensive initially, will have the opportunity to be repeated many times over. Some say it’s like driving a car: Once you know the car runs, you put the key in the ignition and you are heading down the road.
Torres-Verdin’s metaphor is much more compelling.
“It’s like a bank account. It may be tough to get out, but once we do, we know where it is to be used at the right time and for the right purpose.”