shale gas development
DESCRIPTION
Presentation to: APEC Unconventional Natural Gas Workshop Sally Kornfeld Team Leader – International Oil and Gas Activities Office of Fossil Energy November 14, 2012. Shale Gas Development. National Petroleum Council Reports: Dramatic Change in Gas Supply. - PowerPoint PPT PresentationTRANSCRIPT
Shale Gas Development
Presentation to:APEC Unconventional Natural Gas Workshop
Sally KornfeldTeam Leader –
International Oil and Gas ActivitiesOffice of Fossil Energy
November 14, 2012
National Petroleum Council Reports: Dramatic Change in Gas Supply
“North American and U.S. natural gas production is likely to lag projected demand growth over the study time frame, requiring significant growth in LNG imports….Forecasts range from 2.5 percent of U.S. supply to 16 to 18 percent by 2030.”- National Petroleum Council, 2007
“As a result of drilling technology advances and the emergence of the recent ‘game changing’ shale gas plays, the gap between U.S. demand and productionIs closing rapidly and likely to reduce greatly the future need for LNG imports.”- National Petroleum Council, 2011
Shale gas offsets declines in other U.S. production sources
U.S. dry gas productiontrillion cubic feet per year
Source: EIA, Annual Energy Outlook 2012 Early Release
2%
Non-associated offshore
ProjectionsHistory
Associated with oil
Coalbed methane
Non-associated onshore
Shale gas
2010
10% 7%
9%7%
21%
23%
9%
9%
7%
49%
Alaska 1%
Tight gas26% 21%
Energy Security: U.S. Becomes Self-sufficient in Natural Gas
4
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
-100
0
100
200
300
400
500
600
700
800
U.S. dry gasbillion cubic meters per year
• Source: EIA, Annual Energy Outlook 2012 Early Release
ProjectionsHistory 2010
Consumption
Domestic supply
Net imports
North American Shale Plays
Conventional vs. Unconventional Resource Play
Source: U.S. Geological Survey
Or “continuous” …
Deregulation, Tax Incentives and Government R&D Facilitated Unconventional Gas
0
500
1000
1500
2000
2500
3000
3500
4000
4500
Bill
ion
cubi
c fe
et p
er y
ear
DOE CBM R&D 1978-1982
DOE Shale Gas R&D 1978-1992
Section 29 Credit 1980-2002
Natural Gas Policy Act, 1978 Natural Gas Wellhead Decontrol Act, 1989
Shale Gas
Coalbed Methane
Tight SandsSingle-stage HF
Tight SandsMulti-stage HF
Shale – horiz well +Multi-stage HF
Multi-stage hydraulic fracture stimulation (HF) unlocks gas in unconventional reservoirs
1850’s to present 1950’s to 1990’s 1990’s to present 2000 to present
Conventional Reservoir
Hydraulic Fracture Stimulation- The Key to Today’s Natural Gas Revolution
Hydraulic Fracturing
Well Bore Integrity Key to Environmental Protection
Multiple layers of Protection• Conductor casing is set
and cemented• Surface Casing is
cemented below deepest aquifer
• Surface casing is cemented to surface
• Production casing inside surface casing to formation
• Production casing cemented back to surface
• Steel production tubing • Internal plastic coating on
tubing to prevent corrosion
Composition of Hydraulic Fracturing Fluid
Source: ARI, 2009 after Arthur, J. D., et al, 2008
Shale Gas Far Below Useable Groundwater
COMPARISON OF TARGET SHALE DEPTH AND BASE OF TREATABLE GROUNDWATER
Source: 2009 Shale Gas Primer
Water Management is Critical for Shale Gas Development
Phases of water management for shale gas development● Withdrawal● Transport● Storage● Use (drilling and fracturing)● Treatment and
reuse/recycle● Treatment and disposal
Logistics, costs, water volume/scale of operation, and timing
DOE is sponsoring a number of studies on water management for shale gas production
13
Courtesy of All Consulting, Inc.
Secretary of Energy Advisory Board Recommendations
Manage short-term and cumulative impacts on communities, land use, wildlife, and ecologies
Protect water resources Disclosure of fracturing fluid
composition Identify research and development
needs Create a public, national portal
improving public information. Organize for sharing best
practices Improve communication among
state and federal regulators Reduce use of diesel fuel in
fracturingwww.shalegas.energy.gov
EPA: Study the Potential Impacts of Hydraulic Fracturing on Drinking Water Resources
•Best available science
•Independent sources of information
•Transparent, peer-reviewed process
•Consultation with others
Next Steps:
•Publish an interim report of results in 2012
•Provide additional results in a 2014 report
EPA Shale Gas Study
Available Resources:
In 2009, DOE and the Ground Water Protection
Council (GWPC) published “Modern Shale Gas Development in the United States: A Primer,” an in-depth analysis of Shale Gas development , including water management and disposal issues related to shale gas stimulation and production.
In 2009, DOE helped fund GWPC publishing a comprehensive review of regulations designed to protect water resources nationwide. This report, “State Oil and Natural Gas Regulations Designed to Protect Water Resources,” includes a detailed look at current state oil and gas regulations intended to protect water resources, including regulations related to hydraulic fracturing and waste handling.
Available at www.fossil.energy.gov/programs/oilgas/index.html, www.netl.doe.gov/technologies/oil-gas, and www.gwpc.org.
Successful Regulatory Strategy
A successful regulatory strategy… Mitigates adverse impacts
Scientifically quantifies risks Ensures public safety Protects environment
GOAL: Clear rules and regulations to encourage investment while protecting public safety and environment.
COMMUNITYand NGOs
TheENVIRONMENT
TheENVIRONMENT
GOVERNMENT INDUSTRY
IEA Projects Rise in World Unconventional Gas Production
18IEA, “Golden Rules for a Golden Age of Gas,” 2012
Below Ground:
Favorable Geology
Technology – Including U.S. Government R&D
Infrastructure – pipelines and domestic industry
Above Ground:
Stabile & Transparent Regulatory/Taxes/Fiscal Terms
Developed Gas Markets
Ease in Leasing
Factors in U.S. Shale Gas Success
Factors in Global Shale Gas Development
Additional Factors to those in U.S.:
Access to: • Resources, • Gas Treatment, • Pipelines, and • Markets
Ability/Willingness to Import Expertise:
• Investment Climate: Huge Capital Required
• Equipment• People (Visa support)
Great Potential, BUT:In infancy – shale geology not yet provenYou never know if it is economic until drilled!!
Shale Gas Wells Drilled 2008-2011(PFC Energy)
Questions?