Understanding the Basics of Gas Exploration and Production

1. Understanding the Basics of Gas Exploration and Production And some of the career opportunities created by the industry Eric K. Albert, PhD

2. Our economy runs on energy! In 2009: Energy Information Administration

3. Natural Gas • A non-renewable energy resource • Used in a variety of ways: Energy Information Administration, 2005

4. As an energy source: • Natural gas burns more cleanly than other fossil fuels BUT • Still results in CO2 emissions! • And unburned natural gas (methane) is considered a greenhouse gas…

5. 2008 US Natural Gas Energy Information Administration

6. How much energy? • A BTU is the heat required to raise the temperature of one pound of water 1 degree Fahrenheit • One cubic foot of natural gas (volume) contains about 1031 BTU • One candy bar has about 1000 BTU! • One cubic foot of gasoline contains about 961,000 BTU! [about 7.6 gallons]

7. Equivalent Energy Cost • January 2011* Natural Gas price is $4.48 / Million BTU (MMBTU) compared to today’s price of $3.19/gallon of gasoline the equivalent energy price of 1 gallon of gasoline is • $25.23 MMBTU • Put another way, at current prices, the same energy from Natural Gas is about 1/6 the cost! *NYMEX

8. How is Natural Gas formed? • Trapped organic matter decomposing under pressure and heat… • In time, depending on conditions, we get: • Coal beds • Oil fields • Natural gas • Think: even landfills are recovering methane from decomposing trash

9. How is it found? • Geologists use a variety of means to locate possible sources… • Knowing where it has been found already • Historical geological setting • Specific site location typically uses Seismic methods

10. Historical Oil and Gas Production Oil: green Gas: red Oil & Gas: yellow USGS

12. Main Phases of Gas Development • Exploration • Land identification for sites • Location of deposits • Environmental concerns • Proving potential reserves • Drilling • Land leasing, right of ways • Permits • Pad development • Roads and water infrastructure

13. Production • Pipeline construction • Monitoring and compliance • Pumping and storage • Well maintenance • Post-production • Capping / sealing wells • Water quality monitoring • Other compliance issues • Site reclamation

14. EXPLORATION

15. Seismic Survey • An array of geophones • Data collection equipment • A “noise” source – • Vibrating trucks • Explosives • The reflected sound waves are collected and analyzed with computers to form structural images

16. Seismic Surveys

17. Resolution Resources

18. Marcellus Shale • Gas deposit known since the 1930’s • Technology for recovery not available • Price of gas too low for cost of drilling • 6,000’ -7,000’ underground, maybe more • PA gas wells: 35,000+ already in place • Estimates 4,000 per year may be added

20. Traps Pore spaces filled Pore spaces don’t communicate Both of these types of rocks are impermeable, meaning that they do not allow liquids or gasses to move through them!

21. Geology.com

22. Drilling DTE Energy

23. Horizontal drilling is employed to connect to the largest reservoir space • The drill string does not turn…but is steered to a horizontal line… • This is accomplished through a steerable drill (Mud Motor) and a follow-behind probe (Measure While Drilling)

25. What does a borehole look like? Side View Top View Note: the casing system seals off higher elevations of rocks in the well so that only the production area is eventually connected.

26. Well Logging • After the well is drilled, a log is made… • Gamma ray = natural radiation in the rocks • Neutron = higher reading means more hydrogen* • This along with other data collected in the log helps to indentify if this will be a productive hole… Gamma Ray Neutron *Natural gas is a hydrocarbon!

27. Final Steps • After the production area is reached: • The casing is sealed to this area • The production area casing is perforated by blasting • The rocks surrounding the production area are fractured (hydraulic fracturing)

28. PRODUCTION

29. Deal or No Deal? • Even so, after all this, the well might not be productive! • Non-productive wells are plugged with cement and operations cease. • Hydraulic Fracturing might be repeated in one well several times to attempt to increase pressure and recovery • Higher pressure = higher flow rate = more valuable well

30. Transport • A producing well is then connected to a pipeline for transport • Also, to buffer the effects of seasonal demand, underground gas storage reservoirs are used. • In PA there are at least 88 active reservoirs

31. Well Maintenance • Well production is monitored both remotely and by on-site inspections • Routine maintenance of the site is necessary to confirm safety and integrity of the well • Water quality monitoring of nearby drinking water sources, as well as natural sites may be needed (looking for leakage of gas into sources…)

32. POSTPRODUCTION

33. Well Life • A well might produce for 5, 10, even 20 years • Production rates decline with time… • Eventually the rate may be deemed too low to be useful, or non-economic • Wells are disconnected, sealed (capped) with cement, and a surface vent pipe is installed.

34. Where are the jobs? • Exploration • Land identification for sites • Surveyors, Civil engineers, etc. • Location of deposits • Geologists • Environmental concerns • Environmental techs, biologists, forest technology, chemists • Proving potential reserves • Geologists, Petroleum & NG Engineers • Drilling • Land leasing, right of ways • Permits • Pad development • Roads and water infrastructure

35. Drilling • Land leasing, right of ways • Paralegals, title search, lawyers, land agents • Permits • Hydrologists, civil engineers, land planners • Pad development • Commercial drivers, riggers, drill operators, diesel power generation, construction, welding, electrical, heavy equipment • Roads and water infrastructure • Similar to “Pad development”

36. Production • Pipeline construction • Heavy equipment operators, diesel techs, welders, riggers, surveyors • Monitoring and compliance • Electronics, computer networking, communications / satellite techs, biologists, hydrologists, chemists • Pumping and storage • Well maintenance

37. Post-production • Capping / sealing wells • Construction, welders, general maintenance • Water quality monitoring • Other compliance issues • Site reclamation • Heavy equipment operators, forest / reclamation technology

38. Sam Kier, 1840’s… How it all got started… Drake Well Museum

39. Questions?