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Shale Gas Introduction
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From the course by University of Colorado System
Fundamentals of Global Energy Business
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Key Capabilities for Energy Business - Fossil Fuels
A range of technological and commercial factors determine accessibility and utilization of conventional energy resources. These lectures review considerations essential to the development of various fossil fuel sources of energy, including coal, oil, gas, and shale gas.
Meet the Instructors
Michael J. OrlandoLecturer
Global Energy Management, Business School
[BLANK_AUDIO]
So, if we look at natural gas production, just total natural gas
production around the U.S., you know, we see the cast of familiar characters.
The, you know, the Gulf region, the Southwest states
Mountain states here have become a bit more important.
Some of these other states like Pennsylvania a lot
of folks may not be familiar that Pennsylvania has
a very old tradition in the petroleum industry but
has not been a, a super significant producer recently.
What's important to notice about this, this map which
is, is to just notice the map on the right which
shows natural gas shale gas basins.
The active basins are in
the, the current, the, the sort of specific areas of the current basins
that are being developed are in the dark, darker pink.
The, the broader basins for exploration for the shale gas are in the lighter pink,
and then prospective new basins are in the sort of yellow orange color.
But what you notice here is, you know, certainly in some of
these traditional petroleum producing states,
you know, around southeast Texas, west Texas, and,
and New Mexico, Oklahoma, you have some of these plays, some of these
shale gas plays.
But up here in Appalachia, you have a big shale gas play that is not
in recent history, been a big producing region, a big, active region.
Up here in Eastern
Montana and North Dakota, you have Bakken.
So, lots of areas, you know, distributed all around the country
with opportunities for gas development in the form of shell gas.
So, I wanted to take a little bit of time to
maybe understand what exactly makes these shell gas opportunities so, so different.
Because this is really where all of the growth is going to come from.
So let's talk about
what exactly it takes to develop gas, in contrast this
new opportunity these unconventional shale gas plays to conventional gas.
So remember, our story with conventional gas, we have,
you know, this up here is a conventional reservoir.
You have, you have oil and gas which
would've separated over time from the, from the water.
You would have an,
a
organic matter rich layer down here that
we traditionally think of as the source rock.
This is where the organic material is baked for a long time
under high pressure and temperature, and eventually it bubbles up into the sand.
And it's kind of in there with water and other stuff and since it's light, it
kind of trickles uphill basically and the water falls down,
the heavy stuff falls down and the lighter stuff, the oil and the
gas, move up and eventually what happens is it gets trapped, up here.
Okay.
So, it's trapped up there.
So we have our porous and permeable, or we have our
source rock down here, our porous and permeable material, the sandstone,
and then it migrates to the, to a trap and that's
how we think of these conventional plays, these conventional resource plays.
Okay.
Now, one unconventional resource play that I'm not
going to talk much about here is coal bed methane.
That's a case where you just happen to have a coal seam somewhere and
it turns out that there are some associated gas, so you can develop that.
I really want to talk because this is where all the growth is in the petroleum
sector, at least what kicked off the growth in the domestic petroleum sector,
this oil, this gas, this shale gas play.
So what exactly is the shale gas play?
Well essentially, what, what some folks started to think was,
well, there may be some parts of this sandstone down here that
aren't so great so that there's, the gas didn't get to trickle up.
To the conventional trapping mechanism.
Up into a conventional reservoir up here.
And instead, there might be some gas stuck in the sandstone.
That's what tight gas is.
That's one form of an unconventional gas play.
But that's still gas stuck in a sandstone.
It's just not exactly where you'd expect it to be.
It's not way up high, it's just kind of
stuck down low, but it's in that, in that reservoir.
It's still in that conventional reservoir rock.
Now, there was a fellow named George Mitchell in in Texas,
who had the idea of may be, because he had drilled through some of these shales
and he actually saw some gas readings when he would drill through here.
He had the idea of why don't we just drill and produce directly out of the shale?
And I hope you can appreciate how
how groundbreaking this mentality was.
Because you're essentially, remember the, the, the shale is like the,
this is the, what we think of as the source rock.
What, in the industry, we've always thought of as the source rock.
So, this is essentially the oven where we bake the organic
matter for a long time until it turns into what we want.
That's what we think in geologic time.
This, this idea of drilling in to the, the shale layer is essentially
like reaching into the oven to take out the cookies way before they're done.
Why would you think that would be a
valuable product when you pull it out of there?
Now, maybe that's a bad analogy because some of us like to just eat cookie dough.
But, that's essentially what what Mitchell Energy decided to do.
And they sort of perfected this technique.
What they found is, if they drill into this layer.
If they drilled vertically through it
There just wasn't enough penetration there to produce much of anything.
But, what they found is, if they drilled
horizontally through it, they could actually connect that well bore to a
lot of that organic material and it did give up some gas.
And further more, what they concluded was if they pushed fluid
in there, under high pressure, with maybe some sand and glass beads and other things
that they could, they could crack the rock and that other stuff that
they pushed in there other than the, than the water and the fluid.
Could maybe go back inside the shale and prop
open the shale layer enough so that this shale would
give up some gas and actually that's essentially what's, what
the largest growth portion of the industry is doing now.
I think it's important to understand some of those details.
Especially as we move on and talk about
some of the political issues around, surrounding this industry.
Because, I think it's important to understand
just how critical the two, two things are.
One is horizontal drilling.
[BLANK_AUDIO]
Okay, this is a source rock, this is not a particularly porous or permeable layer.
So, without horizontal drilling, you just don't penetrate
enough, you're not connecting the well bore to enough
of the, of the rock that you want to
produce oil or gas from to actually recover any.
So that was very important.
Another is the hydraulic fracturing.
Because, even if you penetrate and connect the well bore
to a lot of this rock, what, the way that
these organic, rich, but impermeable layers produce is
they basically, you evacuate the gas that's proximate to the rock face.
And now that rock face wants to give up a little bit of gas to come back into
the, so the, brings the environment back into equilibrium,
because the, the rock, it is the source rock.
So all the while, it's trying to give up a little bit of gas.
It's baking that organic matter out into gas, but
if you don't actually fracture the rock then the only connection you have
to that shale is just whatever part that the horizontal well touched.
You, you're not connecting that horizontal well bore to anything except
the shale face that's immediately adjacent to the, the well bore.
So, both horizontal drilling to connect more of the well to the,
to what we now think of as a producing formation, which we
used to think of only as a source rock, but also hydraulic
fracturing to actually further increase the
connectedness of parts of that reservoir.
That shale gas reservoir that are not necessarily immediately adjacent
to the well bore, but you connect them to the well bore and this allows us to
profitably, evacuate some of the shale, rock of natural gas.
And then the organic matter that's locked
in the shale actually gives up more natural
gas, as, as, it's once all of that, once the gas is evacuated from those fractures.
[BLANK_AUDIO]
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