Surveys on Shale Plays
Key geological surveys weigh in on shale gas’s geological potential
Some people have just seen everything.
Compared with his European counterparts at Shale Gas World in Warsaw, Poland, that was true for Don Gautier, World Petroleum Project Chief at the US Geological Survey. Based upon what he had witnessed regarding shale gas in North America, Gautier offer his Strategy for Assessment of Global Gas Shales to delegates attending the conference.
First, he recalled a much earlier rush – the gold rush - in the United States. “California basically changed from being a remote agricultural outpost to being what it is today in 1849. Rushes are transformative but rarely end up the way the participants thought,” explained Gautier.
“We at the US Geological Survey are very interested in how these shales will contribute to reserves worldwide, including looking at shale gas in Europe,” he said.
Mr. Gautier painted a picture of shale gas’s waves felt around the globe.
“Just about everybody on the planet knows the resource outlook in North America has changed dramatically, that these new resources have turned things around. But to what degree is the North American experience applicable?” he asked. “I don’t claim to know the answer, but I want to tell you how were thinking about this.”
Geological issues, market forces, technical, environmental and the regulatory regime are all possible constraints upon shale gas production, according to Gautier.
“The Barnett shale of course is arguably the most famous example: 5 million cubic feet of gas and 10,000 wells. It was the target of vertical wells for a long time and these remarkable technological developments have changed all that. Right now it’s quite interesting even though we haven’t seen what the declines of horizontal drilling will be.”
“It’s roughly the area of the Benelux countries,” he remarked, noting “The idea of drilling 10,000 wells across those countries, shows how these two worlds compare.”
Gautier said that the Woodford shale in the Arkoma Basin was typical: not the worst, and not the best, in the context of the geological constraints. “In Northern Europe it would seem typical. Depths are moderate: 1500-4000 meters, well behaved maturation at 1-3%. In other areas it’s less predictable, more erratic and less dependable.”
“For our purposes,” he explained, “we are interested in regional patterns and use gamma ray logs to predict Gross High GR Thickness and Net High GR Thickness.”
“All of these things combined show that it is not at all uniform and predictable. As we head west it gets thicker and properties of significant gas production get more apparent. Most of the drilling in the Woodford has occurred there in the sweet spot. You can find gas almost anywhere on this entire map, but this area is favored,” he said, indicating on a diagram.
Gautier said that about 1,000 wells had been drilled there. “90% are horizontal, and estimated ultimate recovery is less than 1 billion cubic feet, so if you think of gas prices and costs that gets you in the mood of what the economics might be.”
He pledged to explain how the US Geological Survey was approaching the problem of what might be added reserves. “We’re using a technical recoverability approach – applying best practice worldwide, asking how will this affect reserves. The point is to have a comprehensive treatment worldwide to get a range of what the possibilities might be. We hope to have a global project done within the next 2-3 years.”
He spoke of the USGS’ global screening criteria, which includes 20 meter gama ray thickness.
“We selected these criteria because in our judgment most producing shales come out of shales that meet them. We’re trying to capture the most rich shale gas intervals in the world,” Gautier explained. “Our study is done probabilistically.”
“In most of the world there haven’t been any development wells, so we have to bring in the concept of analogs. The next question is ‘what might we expect in terms of EUR distribution from drilling history analogs or from a combination of both?’”
Gautier said that it was necessary to look at vertical and horizontal well EURs and to sample out of the EUR distribution.
“Analogs are needed to assess unit probability, numbers of untested wells and an estimate of development costs.”
“The next steps,” he continued, “include screening candidates on geological criteria, organizing data for assessment aggregate results and appraisal. We intend to do this for Europe in the next couple of years,” he said.
Yet another geological survey representative offered his organization’s experiences in the UK.
Explaining that his role in the hydrocarbon sector is to encourage inward investment in the UK, Antony Benham, Business Development Manager at the British Geological Survey showed a map with important UK geologic formations to depict shale gas prospectivity in the UK.
“There is some potential in the UK,” he said. “It’s not the biggest fish in the ocean, and it’s under explored at the moment. We need to underline the importance of understanding the type of organic matter that’s present. Geologists need to get out there and study shale more, that’s what we get paid to do.”
“What do we need in a shale?” asked Benham. “Geological factors like over 2% organic carbon, maturity, thickness (over 30 meters), high gamma ray content, and we want that it will be quite frackable, and have low clay content.”
“We’d like to go out and drill the holes ourselves and but I don’t think the government sees us as responsible for this, Benham added. “That doesn’t mean we haven’t drilled other bore holes and had a look at them in detail.”
He said that companies active in the UK were reluctant to pass on their commercial information on shales because it was sensitive, so his organization was working with other authorities to make sure that information was confidential.
“It would be great to have it to understand where these gasses occur. We can look at the shales in much more detail to be able to guide them in the right direction perhaps, being there to provide the data from the industry databases once companies actually starting becoming active in the UK.”
In the UK other non-geological factors came into play regarding energy projects, according to Benham.
“Onshore development is likely,” he explained. “There’s a need to be near to markets, minimizing new pipelines, and the ‘nimby/numby’ (not in my back yard, not under my back yard) approach must also be considered. Activists are keen to stir up trouble wherever they can. It’s important that we communicate better with the general public and address their concerns, outline the plusses and the minuses because if you don’t give them information they’ll be against it from the start.”
A coalition of scientific organizations and industry, called Gas Shales for Europe (“GASH”) would like to assist industry in providing correct information about shale gas to the public, and has been evaluating Europe’s shales, among other activities, according to the group’s head, Brian Horsfield.
“It has simple goals,” he stated. “It started officially one year ago, started bringing the pieces together in 2007. It took a lot of violent aggression to make this work.”
“The land rush has happened,” Horsfield reported, noting, “Research played little role in that rush. Tests are being carried out here and in Sweden and other places. Our sponsors and other countries will be providing information through collaboration or publications.”
He explained that while Spain, Ukraine and the UK shales were all in the news, it was certainly too early to discuss sweet spots.
“Finding the sweet spots early on is crucial,” he said. “Hopefully their size is not too devastating. Now is the time to tool up, and GASH is doing that.”
Horsfield said the group’s activities were about applying established methods and building databases and archives, that it was essential to have access to the industry databases of Europe, for data on shale thicknesses, TOC values, etc.
“We’re deploying specialized methods that are inexpensive and will bring a new insight to shale gas productivity. The research that we carry out in GASH now is preparing for the next wave, five years from now.”
“Boiling that down you can see there are 16 basins,” he explained, “of which the most recent I’m aware of is in Spain.”
“Within GASH we can’t focus on all these shales, so we’re focusing on the Alum shale in Sweden and in Northern Germany. We can try and reconstruct the history of how the shale gas was generated in these particular deposits,” Horsfield said.