EOR Technology Saves World From Global Energy Shortage

As the US and the globe has struggled to overcome the Great Recession, there has been significant focus, individually and in the national agenda, on economic news from labor, housing, banking etc. as we anxiously seek signs of a sustained recovery.  Just as telling, however has a been a lack of anxiety about energy and oil.

The reason oil production has been out of the spotlight is because the upstream energy sector is not in a state of crisis mainly due to massive increase in US and global production due to improvements in enhanced oil recovery (EOR)  technology.

The quest for US energy independence that has stimulated developments in horizontal drilling and technologies such as hydro fracking and Plasma Pulse well stimulation have allowed the increase of global energy demand without sparking a price driven crisis like the US experienced in the 1970′s.

Rise in World and U.S. Oil Consumption

Global oil consumption rose by 1.4 percent in 2013, according to the 2013 edition of the annually published BP Statistical Review of World Energy.

Collectively, Asia, South America, and Africa have increased consumption by 5.1 million bopd with far and away the greatest growth occurring in Asia Pacific.

China’s consumption grew by 390,000 bopd, and the U.S. also continues its reliance on oil, with consumption increasing by 400,000 bopd in 2013.

2013 BP Annual Report

Troubling Trends in World Production

Global production growth lagged consumption growth at a rate of only 0.6%, or 560,000 bopd in 2013.

Even if OPEC were to produce at full capacity, global production would increase no more than 2 million bopd, falling far short of consumption growth.

Also of concern is declining production in Mexico and Venezuela, two major oil-producing countries which has decreased by 900,000 bopd since 2008.

Without U.S. contributions, worldwide oil production would have only increased by 500,000 bopd since 2008.

Facing Peak Oil

Peak oil is a theory that states because oil is a non-renewable resource, oil production must eventually peak and fall.

Another aspect of peak oil is the exact time of its occurrence is not predictable. Peak oil will only be recognized when it is reached.

Some think peak oil had occurred in 2008, with spikes in oil prices and little signs of increased production, but the increases in U.S. oil production showed this was not the case.

1976 Hubbert Clip

Draw of U.S. Oil Independence

U.S. oil independence is primarily worth pursuing for national economic reasons. The U.S. transportation industry absolutely depends on oil, and a shortage would lead to devastating consequences nationally.

Another benefit of U.S. oil independence is avoiding the need to depend on a potentially inconsistent oil supply.

The Middle East is often in political turmoil. For example, production in Libya has decreased by nearly 1 million bopd since the Arab Spring.

The oil supply from Iraq has so far been uninterrupted, but there are no guarantees the country will remain stable enough to produce a consistent and predictable supply in the future.

U.S. relations with Venezuela are often shaky, and oil production has dropped by 50 percent since war broke out between South Sudan and Sudan.

U.S. Oil Industry Meeting the Challenge

At a time when the world craves stability and is increasingly relying on oil, the U.S. oil industry has increased production, mainly through enhanced oil recovery (EOR).

U.S. tight oil production has increased from about 0.5 million bopd in 2008 to over 3.5 million bopd in 2014.

The industry’s overall production has increased by 3.2 million bopd since 2008. Together with the net drop in U.S. oil consumption since 2008, the U.S. has been able to simultaneously export oil and stabilize oil prices to prevent economic panic.

The increase in oil production has primarily been in tight oil formations, namely the shale regions including Marcellus in the Appalachian Basin; Eagle Ford, Spraberry, Bonespring, and Wolfcamp in Texas and New Mexico; Bakken in Montana and North Dakota; and Niobrara-Codell in Colorado and Wyoming.

U.S. Tight Oil Production

Enhanced Oil Recovery (EOR): Worth the Investment

BP’s 2013 annual report says the world has enough oil to meet consumption for another 53 years, but the only way to tap into that oil is through EOR methods.

Hydraulic fracturing, or fracking, is one such method. Plasma Pulse technology works on similar principles, but is cleaner because it uses a plasma arc to increase oil flow instead of high volumes of water and chemicals.

Supporting EOR and U.S. energy companies makes sense because only through continued extensive oil production can the U.S. continue to work toward oil independence and helping to supply the rest of the world.

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6 Reasons Why U.S. Energy Independence Is So Important

Known as the Arab Oil Embargo of 1973, the Energy Crisis of 1973-1974 was the first time the U.S. experienced the very real possibility it could run out of oil.

After the U.S. provided aid to Israel during the Yom Kippur War in 1973, the Organization of Petroleum Exporting Countries (OPEC) not only increased oil prices but it instituted an oil embargo cutting the U.S. off from Middle East oil resulting in $12 per barrel of oil by the end of 1973, an increase of $8 in less than a year.

U.S. Energy Crisis

Although lifted in 1974, the embargo and the resulting energy crisis wreaked havoc economically on the U.S., creating a recession that plagued the Carter administration through the 1970s. Economists and political scientists studying the after effects of the embargo strongly urged the U.S. government to explore techniques that would place the U.S. in a more oil-independent position.

6 Reasons Why U.S. Energy Independence Is So Important

  1. Producing our own energy eliminates the pressing need to remain on “friendly” terms with oil-rich Middle Eastern countries that possess anti-democratic ideologies
  2. Lower energy costs from the elimination of high priced imported oil will stimulate the economy and drive job growth
  3. Energy independence will strengthen our standing as a super power and provide leverage in dealing with rogue or terrorist nations who threaten global oil supply
  4. U.S. economy will become less susceptible to damage from volatility in global oil prices providing enabling steadier growth
  5. U.S. balance of trade will improve further driving US economic and job growth
  6. Small and medium enterprise (SME), an outsize influence on domestic economic growth and a sector especially susceptible to damage from energy price volatility will benefit

Enhanced Oil Recovery Techniques Will Contribute to U.S. Energy Independence

Enhanced Oil Recovery or EOR is an umbrella term used to describe techniques that facilitate tertiary extraction oil and gas. Commonly known EOR methods include hydraulic fracturing (fracking) and water, CO2 and steam flood injections as well as less costly and more sustainable methods such as plasma pulse well treatment.

Plasma Pulse Technology

Plasma Pulse (PPT), used in hundreds of wells globally is designed to stimulate well production by releasing high energy plasma impulses (like lightning) in the well which clear clogged perforation zones, improving permeability and lowering viscosity of the surrounding reservoir.  The well treatment is sustainable in its lack of water consumption and use of chemicals, safe to apply downhole.  Next generation PPT tools recently developed deliver enhanced performance and lower treatment cost due to improved ease of operation and wireline compatibility.

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California Senate Bill 4 Introduces Controversial Fracking Regulations

In September 2013, the California Senate passed Senate Bill 4. The legislation is set to take effect January 2015 with the California Division of Oil, Gas and Geothermal Resources (DOGGR) now developing regulations to implement the bill. This legislation is the first to govern hydraulic fracturing (fracking) in the state, and it has been met with some controversy.

California

Controversy Over SB 4

Some environmental interests have expressed concern over SB 4 and have proposed regulations related to the bill. They argue the bill is in disagreement with California’s stated goals of increasing green energy utilization and fighting climate change. Programs such as the Low Carbon Fuels Standard and 33 Percent Renewable Portfolio Standard seem contradictory to legislation governing oil production.

Others applaud SB 4 as a realistic effort. They point to “Peak Oil”, a concept describing the inevitable peak in oil production that will be followed by a drop. A number of estimates point to 2007 to 2025 as the period in which Peak Oil is likely to occur. Eventually, the theory claims, the world will need to turn to renewable energy sources exclusively.

Until renewable energy production is sufficient, the U.S. and rest of the world need to figure out how to maintain oil production rates to keep pace with demand. SB 4 proponents point to fracking as one of a few options for enhanced oil recovery (EOR) to increase oil recovery rates, meet energy needs, and prevent the catastrophic collapses in national economies that would result from fuel shortages.

Need for Increased Oil Production

Until now, oil needs have largely been met through primary extraction methods that rely on the pressure of gravity and natural gas within an oil well. Oil flows into the wellbore and is pumped surface for collection. Oil from primary extraction has been cheap, but the days of cheap oil are over. Oil prices have increased by 10-fold in the past 20 years.

Primary extraction methods recover only a small portion of the oil in a given well. Today, about 65 percent of the world’s oil remains untouched. Primary extraction is not sufficient to access this oil, but enhanced oil recovery (EOR) methods can recover a significant amount of this oil. Fracking is just one type of EOR method. It uses water and chemicals to generate pressure in the oil well and stimulate oil flow. Californian companies have, until now, been fracking without any specific regulations.

Motivation for SB 4

Concerns over the effects of fracking have led to the call for legislation such as SB 4. Fracking uses a high volume of water and chemicals that may contaminate surrounding air and water. The bill is an effort to allow California to continue to produce enough oil to promote U.S. energy independence while still protecting the environment.

Protective Provisions of SB 4

The bill is the first statewide piece of legislation to restrict fracking. It takes into consideration several recommendations from environmentalists from Berkeley Law’s Center for Law, Energy & the Environment and Wheeler Institute for Water Law & Policy and includes the following provisions designed to reduce the environmental impact of fracking.

  • Requires 30 day notice prior to commencement of a frack job
  • Requires groundwater testing before and after fracking
  • Requires reporting on chemical usage, water usage and disposal
  • Requires seismic testing before fracking
  • Requires a scientific risk evaluation study

State Development of Regulations

In November 2013, DOGGR released a proposed set of regulations in accordance with SB 4 that were subject to a 60-day public comment period. Controversy continued past the period and DOGGR went back to work on the proposed regulations. The agency released another draft of regulations last month and is currently seeking public comments. The regs must be completed by the time SB 4 goes into effect in January of 2015.

Future of EOR

Controversy will undoubtedly persist as federal, state, and local governments continue to balance concerns of environmentalists with the reality of U.S. oil demand. EOR is clearly required if the U.S. is to move toward increased energyl independence. With the passage of SB 4, cities and other local governments are likely to propose their own laws regarding EOR.

Cleaner approaches to EOR are likely to receive more attention as fracking regulations increase. Plasma Pulse  and microbial enhanced oil recovery (MEOR) are such examplesthat do not pose the same threat for water and air contamination as fracking.

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“Best Place to Find Oil Is In An Oil Field”

Cheap oil has allowed the modern world to develop as it has, but cheap oil is becoming a thing of the past. Oil prices have risen about 10-fold over the past two decades, and the trend is likely to continue as oil becomes scarcer, small and recent fluctuations notwithstanding.

According to some experts, Peak Oil is inevitable because of the world’s finite oil supply. Some worry that the world may have already reached this maximal level of production. Continuing to meet the world’s oil demands until alternative sources of energy replace fossil fuel will require innovation in enhanced oil recovery (EOR) applied to existing reserves.

Oil Field

Basics Truths of Peak Oil

The theory behind Peak Oil is that the oil industry will inevitably reach its peak rate of production. Then, production will hold steady for a time and eventually slow down. Few are likely to recognize Peak Oil before it happens, but many projections point to the period of 2007 to 2025 as the most likely time when it occurs.

Worrisome Signs in Oil Production

U.S. production of oil peaked in the 1970s before gradually decreasing until about 2005. Another sign that Peak Oil may be upon us is that four out of five oil fields worldwide are reducing oil production by an annual average of 8 percent. The Cantarell Oil Field in Mexico, for example, decreased production from 2.2 million barrels of oil per day (BOPD) in 2003 to 1 million BOPD by 2011.

Consequences of Peak Oil

Oil production will hold steady and then drop as the world hits and passes Peak Oil. The consequences could be disastrous for the world. As soon as within the current century, global energy demand will surpass the oil supply. Oil supply is currently meeting demands, but may not for long. The International Energy Agency (IEA) predicts an increase in global oil demand by 50 percent.

The U.S. itself can also be hit hard if domestic oil production declines. The country currently gets 38 percent of its energy from oil. Most is consumed by transportation and no alternative sources of fuel come close to replacing gasoline as transportation’s primary fuel. A drop in U.S. oil production can lead to increased U.S. dependence on foreign energy sources the majority of which are from countries prone to political turmoil like Iraq or Libya or who are outright hostile to U.S. interests like Venezuela.

Complacency Is Not an Option

Alternative sources may one day supply a large portion of the globe’s energy needs but only in the distant future. In February of 2007, the U.S. Government Accounting Office (GAO) presented a report to Congress addressing the potential crisis presented by that peak oil. The report urged development of near term strategies to meet the looming crisis.

Because sustainable energy sources are a long way of from meeting our energy needs, increasing oil production is the most realistic solution for meeting global energy demand. Clearly the easily retrievable oil is diminishing fast and new reserve discoveries are few and far between. However, enhanced oil recovery (EOR) can help the U.S. and world meet current energy needs and can bridge the gap to a time when alternative energy sources can meet global demand.

EOR Can Bridge the Gap

Primary extraction methods are relatively inexpensive because the forces of gravity and natural gas in an oil reserve aid in the recovery of oil. The theory that Peak Oil has been reached mistakenly assumes that primary extraction is the main approach to oil recovery.

Primary extraction only enables the recovery of 5 to 15 percent of the oil in a reserve, and about 65 percent of the oil in existing reserves the world is still untouched. Projections indicate that for each additional 10% of the remaining oil that is recovered, the world’s energy needs can be met for another 20 years. That is where EOR comes in.

Secondary and tertiary extraction methods such as hydraulic fracturing, gas injections, microbial recovery, and thermal recovery are used to increase oil recovery from oil fields. They do not require the discovery of new fields, and can increase recovery to 30 to 65 percent. Plasma pulse technology is a newer method of EOR that has been successfully applied throughout the globe. Initial and ongoing production have increased with plasma pulse. The method doesn’t require chemicals or large volumes of water and instead relies on hydraulic pulse waves to increase permeability of reservoirs and facilitate liquid mobility to the well perforation zone.

Peak Oil may pose challenges to the world’s energy structure but innovation in enhanced oil recovery alleviates some of the issues by meeting energy demand from existing reserves through secondary and tertiary recovery and allows such enhanced recovery at potentially lower financial and environmental cost as with CO2 floods and plasma pulse.

Image courtesy of Victor Habbick / FreeDigitalPhotos.net

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New Technologies Enable Waterless Well Stimulation

The oil industry is booming in the United States, with production at an all-time high, but the industry needs to innovate if supply is to keep pace with demand.

Oil PumpGlobal oil demand is expected to continue to increase over the next few decades, and the discovery of new reserves is not likely to be sufficient to meet these needs.

Instead, enhanced oil recovery is a more promising approach, with secondary and tertiary strategies permitting the extraction of another 30 or 40 percent of the oil that remains after primary extraction methods have removed the first 10 percent of oil in a reserve.

Hydraulic fracturing and other water-based methods can provide the necessary pressure to drive oil to the surface and increase yield, but such methods pose threats to the environment and have other drawbacks. Waterless well stimulation is an emerging focus made feasible by new technologies, and multiple waterless methods are currently being used.

Water-Based Methods

Water-based methods include hydro slotting, hydro pulse, and hydraulic fracturing, or fracking, which may be the best known water-based method. In this technique, oil companies build vertical and/or horizontal wells that will conduct oil and allow it to move to the surface. Water and chemicals are pumped into the wells at high pressure to break the surrounding rock and force the oil to move toward the surface.

While this method increases oil extraction rates, fracking has its detractors who point to various concerns.

  • Cost – fracking in a single well costs millions of dollars.
  • Water use – each well requires millions of gallons of water, which not only uses up water resources but also requires the transport of water to the site.
  • Contamination – the water used in fracking can be contaminated with radioactive substances and is usually allowed to flow from the site as run-off. The Guardian reports that the toxic waste water used annually in hydraulic fracturing procedures is “enough to flood Washington DC.”

Investments in Research and Development

With these drawbacks, oil companies seem justified in their significant investments in research as they search for more economical and safer techniques for recovering oil. In fact, Natural Gas Intel reports that oilfield service provider Baker Hughes Inc says that its top 100 clients spend over $100 billion on research annually, and the company debuts a new product every two or three days. Some emerging waterless methods appear promising.

Propellant-Generated Gas

This technique has a similar concept to hydraulic fracturing in that it uses horizontal and vertical drilling. The set-up is similar to that of fracking. The propellant-generated gas method takes advantage of a propellant involving nitrogen gas or C02 injection, instead of high-pressure water pumping as used in fracking, and the gas stimulates the oil to flow better as a foam so that it can rise to the surface. The method is better suited for fragile rock formations that might not hold up under the pressure of water, and it can increase oil extraction rates in depleted reserves.

Plasma Pulse Technology

Plasma pulse technology also takes advantage of horizontal and vertical fissures, but does not use chemicals, gas, or water. Instead, this recently developed method uses a short, intense burst of heat that clears away any sedimentation that is clogging the perforation zone. The waves and vibrations increase permeability and reduce viscosity so that oil can flow to the surface and be collected.

Plasma pulse technology has the following benefits.

  • It does not require water.
  • It does not require chemicals.
  • No unforeseen damage or accidents have occurred after use in over 200 wells.
  • It is fast, requiring only a few hours compared to weeks in microbial alternatives.
  • The velocities do not damage the well.

Microbial Approaches

People have been aware of microbial approaches to oil extraction for over a century, but focus on microbial enhanced oil recovery (MEOR) has increased only recently as the reach of primary extraction methods has been limited. It may take place as nutrients are transferred via previously placed water floods to stimulate microbial growth. The microbes reduce oil-water surface tension, permitting oil to flow better. Microbes also aid in directing oil flow toward the surface because they block certain water flow paths.

As the oil industry relies increasingly on enhanced oil recovery and water conservation and the environment receive more support, new methods for oil extraction will be at a premium. New technologies are permitting the exploration of waterless well stimulation methods to allow for a constant oil supply.

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