[Graeme]

New drilling technologies could give us so much oil, the climate won’t stand a chance

New oil drilling technologies could increase the world’s petroleum supplies six-fold in the coming years to 10.2 trillion barrels, says a report released today by market research firm Lux Research.
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The most common and controversial technique is hydraulic fracturing, or fracking, in which chemical-laced water is injected to break up subterranean rock formations to extract oil and natural gas. But the Lux report details a host of exotic so-called Enhanced Oil Recovery (EOR) technologies—from solar-powered steam injection to microorganisms—that could be used to extend the life of old oil fields and gain access to so-called unconventional petroleum reserves like oil sands.
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“In light of current oil prices, the peak oil hysteria and projection of $300 [a barrel] prices of a few years ago seem overblown – if not outright silly,” the report states. “But in a sense, they were accurate forecasts of what would have happened if EOR technologies had not come online and made unconventional oil reserves – which vastly exceed conventional ones – accessible.”
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But don’t ditch your electric car just yet. The development of such technologies is predicated on high oil prices – at least $100 a barrel – to offset the costs and induce a conservative industry to invest in and deploy new methods. And many of the technologies are still young.
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Morever, as we’ve seen with fracking, political opposition to technologies that could pollute the environment and use lots of water could derail their use. And as climate change accelerates, opposition to carbon-intensive extraction of fossil fuels and their expanded use is sure to grow.

quartz

[rollin]

First, I must proclaim, using solar power to increase the production of an oil well seems like blasphemy or at least a crime against nature. I suppose people will always use inventions in harmful ways.

That said, EOR techniques are quite expensive. CO2 and nitrogen injection are being used now in certain places. The DOE put out a report a year or two ago about using several times the normal CO2 injection and how it might double the total recovery of a well. However, CO2 is produced by burning natural gas or other fossil sources and must be captured and either pipelined or liquefied and delivered by truck to the field. Extra drilling, separating and recapture of the CO2 with final sequestration in the ground (hopefully). If all these factors are low enough in cost, it would work.

All the EOR techniques are high in cost and only work in certain types of rock. We all know the continuous fields (fracked) are short life fields and expensive.

Basically, we can increase the total output of some oil fields using advanced EOR techniques but that does not mean the rate will be very high. All these techniques are limited by the availability and cost of industrial resources and extra field equipment. The big question is the rate, will the rate of production be adequate to slow the descent of oil, even when one does not consider the economics? Considering economics, will $150 to $200 a barrel oil cause a large reduction in demand, thus crashing the price again and eliminating the viability of advanced EOR techniques?

Oil companies and other industries may not be willing to invest in large amounts of production and transportation infrastructure if they think demand will fall due to price rise. Same with investment banks.

Oil is hitting the geological wall and EOR techniques along with unconventional oil is pushing it into the economic wall.

[ROCKMAN]

Again, a valid point that higher oil prices are making extracting difficult reserves via these ”new” technologies economic these days. But again the foolish claims that these methods are new. They’ve been around for 20 to 50 years depending on the tech with no great change.

“However, CO2 is produced by burning natural gas or other fossil sources and must be captured and either pipelined or liquefied and delivered by truck to the field.” A gross misstatement of fact about almost all CO2 EOR projects that have taken place. Virtually all CO2 used for EOR are produced from natural CO2 reservoirs. But there is a new movement to transport CO2 produced in power plants to old oil fields. A $160 million pipeline is planned to do just that on the Texas coast. There are no commercial applications for truck delivered CO2 for EOR. In those few cases where it has been done it was for other applications.

“Oil is hitting the geological wall and EOR techniques along with unconventional oil is pushing it into the economic wall.” True but that dynamic has been in place for over 60 years. All oil/NG investments swing with the short term price outlook whether they are drilling or EOR projects. But the article does make the strong point that future increased oil production from all sources and methods are dependent upon the current high oil prices.

[rollin]

“However, CO2 is produced by burning natural gas or other fossil sources and must be captured and either pipelined or liquefied and delivered by truck to the field.” A gross misstatement of fact about almost all CO2 EOR projects that have taken place. Virtually all CO2 used for EOR are produced from natural CO2 reservoirs. But there is a new movement to transport CO2 produced in power plants to old oil fields. A $160 million pipeline is planned to do just that on the Texas coast. There are no commercial applications for truck delivered CO2 for EOR. In those few cases where it has been done it was for other applications.

Thanks for pointing out the natural sources of CO2. I had used the DOE and some other sources that did not speak of natural sources of CO2. I also found this paper on CO2 sources for EOR operations
http://www.spe.org/ejournals/spe/EEM/20 ... e_0412.pdf

According to the included map, most of the CO2 reservoirs are far from the major oil fields and would need extensive pipeline infrastructure to access them. Natural gas well sources are predicted to be the significant source of increased CO2 demand by 2015. I assume that pipeline infrastructure would also be needed to move the CO2 to the various oil fields from the natural gas . The paper shows hydrocarbon conversion (burning) sources of CO2 starting to take a significant and increasing role by 2015.
C02 EOR supplied 280,000 bpd in 2010, about 1.5% of US daily use. To bring it up to even 25% of daily use would mean a 17 fold increase in CO2 demand and if the new DOE technique is used to make real gains in production, up to five times that. That would limit natural sources to about one half year of supply, if it could supply the rate. Known natural reserves would produce a few years to less than one year of demand if this technique is used extensively. So basically, a plan to use increased CO2 EOR will involve a large use of other than natural sources of CO2.

We seem to keep hitting up against natural limits.

[ROCKMAN]

rollin – Which is a big problem with expectations of a great boom in CO2 recovered oil in the future: lack of pipeline CO2. A few months ago I looked at a great potential project in west Texas: a shallow (2,400’) field with over 700 million bbls of proved oil. The recovery from the field was only 11%. Two offset fields with the same reservoir had increased recoveries to over 25% due to CO2 injection and production was still increasing. That extra 14% recovery would be equal to 100 million bbls of oil. All the wells are already in place. And we’re not doing the deal. Nor is anyone else. There is no CO2 available. All that’s being shipped into the area is going into those existing floods. So maybe in 10 or 15 years when those other injection projects end they get the CO2 for this field. In the meantime the field produces less than 100 bopd. But if someone claims there’s 100 million bbls of proved recoverable oil via CO2 injection from this one field they wouldn’t be fibbing. But they might not point out it could be decades before any of those bbls are produced.

There a huge natural CO2 field in Mississippi. Oddly it was created by deep igneous activity. And one company bought the field years ago before oil prices boomed. Now they only produce enough CO2 to satisfy their EOR projects. Why would they sell any to other operators? Those companies could then justify buying the old oil fields for EOR. This was the company owning the CO2 field has effectively killed the competition for those old fields.

And thus the reason we'll see more projects using manmade CO2. As long as oil prices stay high, of course.

[rollin]

Thanks Rockman, that was very illuminating. So many people take oil for granted, not knowing how complex it can be just to get some gasoline into their car's fuel tank.

[Subjectivist]

Sounds to me like this thread should be called infinite price oil available, or perhaps High Cost Oil Available with New Technology!

This reads like another tight oil/EOR will save us fluff piece.

[Beery1]

This reads like another tight oil/EOR will save us fluff piece.

Aren't all technology-related threads basically that? All one has to do, whenever the word 'technology' comes up in relation to some supposed future development is replace it with the words 'fairy magic' and Hey Presto!, all these stories get a much needed dose of reality.

[ROCKMAN]

sub - I've evaluated many such proposals. Some were clearly IMS projects. They can make an operator a tidy little profit. Oh...yeah...IMS = Investor Money Separation. LOL.

[Graeme]

Here's more on this topic quoting actual barrels of oil.

How Much Recoverable Oil Do We Have?

A recent report from analysts at Lux Research, "Evaluating New EOR [Enhanced Oil Recovery] Technologies in Oil Industry Mega-projects," proposes that by means of EOR, the industry may be able to tap up to 10.2 trillion barrels of unconventional oil, over and above 1.4 to 1.6 billion barrels of conventional oil. (Lux puts the number for conventional oil reserves at 1.6 tbl; a year ago, IEEE Spectrum cited an estimate of 1.4 tbl, based on work by Michael Klare.)

Klare, a professor of peace and world security studies at Hampshire College in Massachusetts, seems to be in general accord with Lux's view that the age of oil is far from over. Writing in the Huffington Post, the left-liberal online publication, Klare said that "humanity is not entering a period that will be dominated by renewables. Instead, it is pioneering the third great carbon era, The Age of Unconventional Oil and Gas." According to Lux, EOR techniques can boost recovery of oil in existing fields from an average of 25 percent today to up to 65 percent. Klare, citing International Energy Agency estimates, says that investment in such techniques will exceed US$ 22 trillion between now and 2035—three times the investment in renewable technology—and that world demand for oil will grow 26 percent in that period.

An article that appeared in the July 13 issue of Eos (the transactions of the American Geophysical Union) presented a radically different view of things. Taking a more economic view of what it means for oil to be recoverable, scientist James W. Murray and analyst Jim Hansen suggest that oil prices—and with them oil production—already have arrived at the limit of what consumers worldwide are willing to pay. "Global production of crude oil and condensates…has essentially remained on a plateau of about 75 million barrels per day since 2005 despite a very large increase in the price of oil," say Murray and Hansen. (The latter is not to be confused with famous climate scientist Jim Hansen, of the Goddard Institute for Space Studies at Columbia University.) In effect, they suggest, prices have reached a level where consumers seek alternatives or conserve, rather than pay more; if oil prices go significantly higher, then the effect is to plunge the industrial world into recession, lowering demand.

The silver lining, Murray and Hansen suggest, is that the expert bodies like the Intergovernmental Panel on Climate Change (IPCC) may have over-estimated future carbon emissions resulting from oil combustion. It will be interesting to see, when the next major IPCC assessment appears next month, how it handles that issue.

ieee

[TheDude]

Here's an overview from ASPO-USA of EOR's performance over the decades: Most Enhanced Oil Recovery Remains Confined to Non-Conventional Fields.

In a series of eight Commentaries in 2007, I showed how each EOR process targeted oil fields with highly specific physical properties, fields that would best be labeled as non-conventional. OGJ’s 2010 EOR survey largely confirms this trend, with a slight shift by one category of EOR toward more conventional fields.

The graph represents results of EOR applications that followed three decades of research and field tests to determine which processes could extract additional oil beyond conventional pressure maintenance. Many U.S. oil fields were the world’s first to have most primary and secondary reserves extracted, and thus became proving grounds for EOR applications. So-called tertiary reserves would be targets of EOR processes.

The industry has long seen tertiary reserves as having a greater potential for recovery than primary and secondary reserves. Research during the 1950s and 1960s, however, revealed that EOR was not universally applicable to all fields. Instead, certain processes could be effective in oil fields with highly specific physical characteristics, typically outside the population of conventional fields.

Here's another piece, a bit more forthright in tone, shall we say, from Kurt Cobb: Will enhanced oil recovery be an oil supply savior?

To read ExxonMobil Corporation's website one might get the impression that the world's largest oil and gas company has begun only recently to employ enhanced oil recovery (EOR) techniques. If that were true, this industry bellwether might have been able to say that these techniques will have a substantial effect on the future flow of oil. After all, the claim for EOR is that it could potentially double the amount of oil we can get out of the Earth--from the current one-third to two-thirds or so of the original oil in place. The implication is that not only will future wells yield more of their oil than previous ones, but that far more oil can now be harvested from existing wells.
The big problem with this thesis is that EOR is already being widely applied--so much so that the Oil & Gas Journal will sell you its most recent worldwide survey of EOR projects for only $330. You can get the full historical database all the way back to 1986 for a mere $1,100. (Hint: Both contain more than a few entries.)

EOR gets trotted out every now and then as our ace in the hole. Not sure what's supposed to be so brand spanking new about the techniques listed in the OP. Companies have been pumping in all sorts of bizarre junk into old fields for ever now.

[ROCKMAN]

Dude - The history goes back a good bit before 1987. CO2 EOR projects have been conducted in Texas for over 40 years. Over 11,000 CO2 injection wells have been used here. More CO2 is injected here than anywhere else in the world. About 15% of Texas oil production (the biggest oil producing state) comes from such EOR.

Yes: CO2 EOR is a great technique...and has been for more than 4 decades. The problem is a lack of natural CO2...not a lack of desire to do it. As I mentioned early I just studied a field with a 100 million bbl of oil recoverable via CO2 injection. But all the available CO2 is tied up in existing projects. Might be 10 years before it becomes available. And no: manmade CO2 is economic. Would be great if they built a ff power plant nearby and I could get that gas but no demand for the e- out there.

[John_A]

Dude - The history goes back a good bit before 1987.

Of course. But consider the source, no one says that someone speculating on technical aspects of an industry they know little or nothing about is required to understand either those modern technical aspects, or the history itself.

If these folks even took a minute or two to review some basic texts on these topics they wouldn't continually prove Abraham Lincoln right ("Better to remain silent and be thought a fool than to speak out and remove all doubt").

"History of Petroleum Engineering" published by Executive Committee on Drilling and Production Practice of the Institute's Division of Production, my copy was published 1961, there may be a newer reprint.

Good place to start for knowing why "easy" oil isn't.

[SamInNebraska]

"History of Petroleum Engineering" published by Executive Committee on Drilling and Production Practice of the Institute's Division of Production, my copy was published 1961, there may be a newer reprint.

Good place to start for knowing why "easy" oil isn't.

John, where did you get that book? It isn't even a standard library reference work unless you have one hell of a local library. University of Kansas? Texas A&M?

[ROCKMAN]

Sam - Amazon has a used hardcover for $16.

[John_A]

Sam - Amazon has a used hardcover for $16.

I didn't get mine from Amazon.

You think any of those blokes over at TOD even bothered to collect their own copy? Surely at least one of them should have a copy, if only to pass around to others.

[SamInNebraska]

Sam - Amazon has a used hardcover for $16.

You have a copy on your desk Rockman? Know anyone who does? I'm not even sure today's graduates know something like that exists....computers and such, they know those exist.

[ROCKMAN]

Sam - I "loaned" my copy to my engineer/partner about 20 years ago on the condition that he had to keep me employed. It worked: he's prez of my current company. LOL

[SamInNebraska]

Sam - I "loaned" my copy to my engineer/partner about 20 years ago on the condition that he had to keep me employed. It worked: he's prez of my current company. LOL

There ya go! So you had one, your boss now has it, John apparently has one, I've seen it in a library before.

It seems to be that all anyone needs to know about how much EOR can generate in terms of resource to reserve conversion has been mentioned, and the only question is how fast, and for how much.

http://www.usgs.gov/newsroom/article.asp?ID=3248

The reference to Kobb in particular was pretty lame, he can't say its a disaster after talking about it having a positive effect for the better part of both the 20th and 21st centuries now, so he just implies it isn't enough (enough being "not enough" with no quantification other than a generic strawman assumption). Certainly the scientists estimating this have put a number on it, how long will it take before someone then tells us what we really need to know, how fast and how much will it cost?

[TheDude]

I've a copy of "Non-Technical Guide to Petroleum Geology," that covers all bases albeit is a titch spendy. "Oil 101" is a nice tome too. Some website with a timeline of EOR projects' debuts would be handy, there have been so many, from detergent to smart polymers.

Snooped around a bit today for info on the Weyburn Field, that was the one that was the poster child for CCS. A few years back the numbers weren't promising but it seems they did manage to finally kick production up close to target. They were in the news with a CO2 leak though, so much for carbon credits or whatever. Dunno if it was major or minor.