Texas Academic Sees Global Abundance of Unconventional Gas

International Oil Daily's July 2, 2009 issue features RPSEA Board Chair Dr. Stephen Holditch's  view on unconventional gas here in the US and throughout the world.
The US probably has much more technically recoverable gas in unconventional reservoirs than in conventional reservoirs, and it seems reasonable to assume that this is also the case in other parts of the world, according to a Texas-based petroleum engineer.

Stephen Holditch, head of the petroleum engineering department at Texas A&M University, says  unconventional gas — from tight sands, shales and coal seams — exists not only in the US, but also in the Mideast, Russia and elsewhere. “They just haven’t been found or recognized yet,” he says. 

Holditch began his career in the 1970s as a Shell Oil production engineer and later served as an adviser to Schlumberger. He has authored over 150 technical articles and is a past-president of the Society of Petroleum Engineers.

At a recent conference in the Netherlands, Holditch said he and his colleagues at Texas A&M have re-examined public geological data from eight US gas basins with a view to developing fresh estimates for “technically recoverable” gas in unconventional reservoirs. They plan to expand on their work to include a further 17 basins.

The estimate for the eight basins evaluated so far indicates that the recoverable unconventional gas exceeds conventional oil and gas in the same basins by an average ratio of around nine-to-one. 

Holditch acknowledges that current US gas prices of around $4 per million Btu or less — which reflect a surge in domestic production from unconventional reservoirs such as the Barnett Shale in Texas — are not high enough to support the development of emerging unconventional plays.

Prices of $6/MMBtu or more might just do the trick. But not all of the technically recoverable unconventional gas will be commercially recoverable at $6/MMBtu. Nevertheless, it’s worth remembering that only a year ago gas prices on both sides of the Atlantic were above $10/MMBtu. 

In the coming decades, Holditch expects gas production from unconventional reservoirs to occur in virtually every major basin in the world, but technology transfer will be crucial for success.

Virtually all unconventional reservoirs are “tight” — that is to say they have low porosity and permeability — and they require stimulation to produce gas at commercial flow rates.

Successful development of shale reservoirs requires pinpointing the brittle portions of the shale, so they can undergo hydraulic fracturing to make the gas flow more freely. Techniques such as nuclear magnetic resonance, horizontal drilling, and micro-seismic analysis will all play a role, Holditch said. 

A few years ago, geophysicists Rogner and Kawata estimated global unconventional gas resources at 32,560 trillion cubic feet (922.4 trillion cubic meters). Of this, North America accounted for 8,228 Tcf (233 Tcm), the former Soviet Union 5,485 Tcf, China 5,094 Tcf, Latin America 3,448 Tcf, the Mideast 3,370 Tcf and Europe 1,254 Tcf.

The worldwide estimate of 32,560 Tcf broke down as 49% shale gas, 28% coalbed methane and 23% tight sands.

Holditch said Texas A&M’s work on reevaluating the potential of US basins, suggests that the global endowment of unconventional gas resources will ultimately exceed such estimates because relatively little exploration has been conducted.

In a poll conducted at the conference in the Netherlands, most of the audience agreed with Holditch that Europe’s Southern Permian Basin — stretching from the Russian border to the southern North Sea — was likely to hold far more unconventional gas resources than conventional gas.

Exxon Chief Executive Rex Tillerson, speaking to mostly the same audience, said he believed large tight gas reservoirs were still to be found in Europe, mainly in eastern Europe and Germany. Costs and technology would be key factors in determining whether they would ever be developed, especially as some were “high temperature, with high acid content,” he added.
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Author: Mark Smedley
Category: rpsea in the news