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Frontiers of Engineering: Reports on Leading-Edge Engineering from the 2014 Symposium (2015)

Chapter: Shale Natural Resources--Stephen Ingram

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Suggested Citation:"Shale Natural Resources--Stephen Ingram." National Academy of Engineering. 2015. Frontiers of Engineering: Reports on Leading-Edge Engineering from the 2014 Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18985.
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Shale Natural Resources

STEPHEN INGRAM
Halliburton

The development of shale natural resources has built on engineering, chemical, and technological innovations applied with entrepreneurial spirit. Its continuing success will depend on attention to geology/geography, technology, infrastructure, and political/social elements. In this paper I discuss the circumstances and technologies associated with these four aspects.

BACKGROUND

Shale is classically defined as a fine-grained (i.e., low-permeability and low-porosity) clastic sedimentary rock composed of mud that is a mix of flakes of clay minerals and tiny fragments (silt-sized particles) of other minerals, especially quartz and calcite. These qualities can lead to uneconomic flow rates under natural conditions, hence the justification for the use of hydraulic fracturing. Most industry professionals identify permeability as the key formational attribute that distinguishes an unconventional formation from a conventional one. Some classify as “unconventional” any formation that requires hydraulic fracturing to establish economic production rates. Sondergeld and colleagues (2010) provide an excellent overview.

The technologies necessary to develop shale opportunities encompass many science and engineering domains, which are broadly described here along with other requirements and opportunities. Infrastructure requirements can be simple or complicated, and a review of the full-cycle infrastructure is necessary to identify possible barriers to economic development, in terms of both servicing the construction of the wellbore and producing the hydrocarbon.

Suggested Citation:"Shale Natural Resources--Stephen Ingram." National Academy of Engineering. 2015. Frontiers of Engineering: Reports on Leading-Edge Engineering from the 2014 Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18985.
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Shale natural resources are globally distributed, with pockets of successful activity, opportunity, and exploration in various locations. North American development is currently the most active, but development is being pursued today for opportunities existing in Saudi Arabia, Argentina, Australia, China, and Russia. Other locations, such as South Africa and Central France, with potential resources for development face barriers to economic production, so it seems likely that North America will continue to sustain the highest level of development in the near and medium term.

GEOLOGY/GEOGRAPHY

The single most important factor for developing a shale asset is the existence of subsurface conditions that promote the creation of hydrocarbons in a rock structure that is conducive to positive economic flow rates. A number of reservoir attributes are crucial to reducing the uncertainty of economic productive capacity. First is the geological structure, meaning the conditions for a large formation system of substantial hydrocarbon reserves, normally with high organic content. Over a geological period of time (pressure and temperature), surface matter is buried and begins the process of diagenesis, which converts organic matter to hydrocarbons of differing carbon chain lengths in the subsurface, subject to migration or transportation under the correct circumstances. Differing carbon chain lengths determine whether the well is gas, condensate, or oil, each of which is traded on the open market and will deliver different financial returns to the well owner.

A leading indicator of quality shale reservoirs, measured early in the exploration phase, is total organic content, typically measured as the percentage of kerogen, which is a mixture of organic chemical compounds. Kerogen has a number of properties (e.g., variable density, porosity) and can therefore be misleading for development purposes. Rickman and colleagues (2008) describe the standard industry approach for using and interpreting subsurface data for the application of hydraulic fracturing of shale reservoirs.

Other geological properties, such as permeability and porosity, are also important to the economic development of a reservoir. These include geomechanical properties, such as Young’s modulus and Poisson’s ratio; geochemical properties, such as clay, quartz, or carbonate content; and reservoir properties, such as temperature and pressure. There are hundreds of other important subsurface properties and considerations, and petrophysical, geological, and geophysical careers are built around their study to determine how they impact the production of reservoirs.

The combined reservoir properties are important to geoscientists and engineers for three reasons:

Suggested Citation:"Shale Natural Resources--Stephen Ingram." National Academy of Engineering. 2015. Frontiers of Engineering: Reports on Leading-Edge Engineering from the 2014 Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18985.
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  • To estimate oil and gas reserve quantities
  • To determine engineering needs and approaches (for drilling and completion)
  • To anticipate surface impacts of development

TECHNOLOGY

The technologies necessary to develop unconventional natural resources span many domains. Technologies that enable surface seismic monitoring, downhole micro seismic monitoring, fiber optic sensing, rock and fluid sampling, and sensor physics are used to better define the shale gas reservoir. Added to these are data integration, visualization, and Big Data management.

Drilling involves top-drive flexible drilling rigs, automated pressure-while-drilling control systems, downhole rotary steerable systems, drill bit design advances, fluid chemistry, telemetry systems (mud pulse technology for data delivery), and mud motor systems. With these technologies a greater number of horizontal wellbores can be drilled faster, safer, and longer, (e.g., 6,000 feet of horizontal wellbore or longer in many cases).

Completion technologies used in unconventional development include hydraulic fracturing, fluid chemistry (specifically, viscosity generation, friction reduction, clay control, complex nanofluids [“surfactant family”], and bacteria control), surface equipment design, fueling advances, and flow-through porous media design. Technological advances in seismic interpretation and associated data integration are useful to both drilling and completion operations.

As the unconventional industry has matured, the technology focus and use has also evolved. In the 1970s, ’80s, and ’90s the use of hydraulic fracturing in low-permeability, low-porosity tight reservoirs was commonplace in vertical wells across the United States and abroad. After more research on fracturing applications in horizontal wellbore configurations, horizontal drilling techniques were adopted in the 2000s. The economic growth observed to date is due to a combination of vertical and horizontal technologies.

King (2010) presents a 30-year survey of seismic attributes with hydraulic fractures in horizontal wells, typically in combination with downhole microseismic data acquisition. Since 2010 the industry has evaluated and interpreted seismic datasets and made advances in data acquisition and interpretation to help reduce the risk of underperforming assets and the uncertainty of field development.

Now, three-dimensional full-azimuth wide-azimuth seismic data are the norm for new data acquisitions in the US market, and the re-processing of old datasets is being completed across most of the country. Abroad, data acquisition systems are less available and cost more to use, so the expected return on investment for such an endeavor is less favorable. Seismic technology enables the use of reservoir attributes, such as fluid type, geomechanics, and even permeability and porosity

Suggested Citation:"Shale Natural Resources--Stephen Ingram." National Academy of Engineering. 2015. Frontiers of Engineering: Reports on Leading-Edge Engineering from the 2014 Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18985.
×

estimations, as well as other nascent properties, such as anisotropy (or the heterogeneous nature of rock systems). In addition to the normal use of seismic data for structure analysis, it is used for fault and subsurface barrier identification and for estimations of oil and gas in place.

INFRASTRUCTURE

Many infrastructure components are necessary for the development of an oil and/or gas project. Major infrastructure involves pipelines, facility separation, gas handling, liquid handling, surface roads, rail lines, storage, water availability, housing, living condition support, water, proppant, maintenance, and personnel.

The development of early unconventional reservoirs was in part a function of existing established infrastructure. The clearest example is the Barnett shale in North Texas, where in the early 2000s an existing highway, county road, and rail line infrastructure in proximity to the Dallas/Fort Worth metroplex, together with legacy oil and gas handling capacity, among other assets, created a low-cost working environment for entrepreneurial oil and gas companies to pioneer shale development.

After this early economic success, there was interest in expanding US shale development, but progress was limited by the slow ramp-up of the Bakken shale in North Dakota and the constrained growth of the Marcellus and Utica shales in West Virginia, Pennsylvania, and Ohio. Examples of the constraints included but were not limited to existing highways and road systems, permitting restrictions of pipelines, lack of local competent and trained human resources, limited rail infrastructure, and sufficient industrial scale water distribution infrastructure.

In the United States, it is typically within the capabilities of the economy, state and federal government, and industries to overcome infrastructure challenges and thus facilitate economic development. This is less true in other locations, such as China, Russia, Australia, Argentina, India, or Europe, where the necessary infrastructure may not exist, thus placing all or part of the burden of development on the oil and gas industry and increasing the associated costs and barriers to economic viability.

POLITICAL/SOCIAL

The fourth contributing component to the development of unconventional resources is political and social capability, including a market clearinghouse that permits profits to be obtained by all parties involved—land owners, mineral rights owners, service companies, oil and gas operators, and government entities. In this regard, there is considerable variability across both international and domestic geographies.

The United States has a significant enabling social driver to shale development: mineral rights ownership across private lands. As such, mineral rights

Suggested Citation:"Shale Natural Resources--Stephen Ingram." National Academy of Engineering. 2015. Frontiers of Engineering: Reports on Leading-Edge Engineering from the 2014 Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18985.
×

owners (who may or may not be the land owners) have the right to monetize their mineral interests for economic benefit. In most of the world, this federally protected right is not available, and the mineral interest owner is a government entity. Private citizens of those nations thus have more limited access to the wealth creation of mineral rights ownership.

CONCLUSION

The sustainable success of unconventional resource development is a function of geology/geography, technology, infrastructure, and political/social elements. Each of these is integral, and without all four components, sustainable development can be constrained or even made impossible.

REFERENCES

King GE. 2010. Thirty years of gas shale fracturing: What have we learned? Paper SPE 133456 presented at the Society of Petroleum Engineers (SPE) Annual Technical Conference and Exhibition, Florence, Italy, September 19–22.

Rickman R, Mullen M, Petre E, Grieser B, Kundert D. 2008. A practical use of shale petrophysics for stimulation design optimization: All shale plays are not clones of the Barnett shale. Paper SPE 115258 presented at the SPE Annual Technical Conference and Exhibition, Denver, September 21–24.

Sondergeld CH, Newsham KE, Comisky JT, Rice MC, Rai CS. 2010. Petrophysical considerations in evaluating and producing shale gas resources. Paper SPE 131768 presented at the SPE Unconventional Gas Conference, Pittsburgh, February 23–25.

Suggested Citation:"Shale Natural Resources--Stephen Ingram." National Academy of Engineering. 2015. Frontiers of Engineering: Reports on Leading-Edge Engineering from the 2014 Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18985.
×

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Suggested Citation:"Shale Natural Resources--Stephen Ingram." National Academy of Engineering. 2015. Frontiers of Engineering: Reports on Leading-Edge Engineering from the 2014 Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18985.
×
Page 91
Suggested Citation:"Shale Natural Resources--Stephen Ingram." National Academy of Engineering. 2015. Frontiers of Engineering: Reports on Leading-Edge Engineering from the 2014 Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18985.
×
Page 92
Suggested Citation:"Shale Natural Resources--Stephen Ingram." National Academy of Engineering. 2015. Frontiers of Engineering: Reports on Leading-Edge Engineering from the 2014 Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18985.
×
Page 93
Suggested Citation:"Shale Natural Resources--Stephen Ingram." National Academy of Engineering. 2015. Frontiers of Engineering: Reports on Leading-Edge Engineering from the 2014 Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18985.
×
Page 94
Suggested Citation:"Shale Natural Resources--Stephen Ingram." National Academy of Engineering. 2015. Frontiers of Engineering: Reports on Leading-Edge Engineering from the 2014 Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18985.
×
Page 95
Suggested Citation:"Shale Natural Resources--Stephen Ingram." National Academy of Engineering. 2015. Frontiers of Engineering: Reports on Leading-Edge Engineering from the 2014 Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18985.
×
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This volume presents papers on the topics covered at the National Academy of Engineering's 2014 US Frontiers of Engineering Symposium. Every year the symposium brings together 100 outstanding young leaders in engineering to share their cutting-edge research and innovations in selected areas. The 2014 symposium was held September 11-13 at the National Academies Beckman Center in Irvine California. The topics covered at the 2014 symposium were: co-robotics, battery materials, technologies for the heart, and shale gas and oil. The intent of this book is to convey the excitement of this unique meeting and to highlight innovative developments in engineering research and technical work.

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