> From GTI Journal Spring 2003

In the 15 years between 1987 and 2001, annual U.S. natural gas consumption grew by about 30 percent, from 17 trillion cubic (Tcf) to 22.2 Tcf, according to the U.S. Department of Energy (DOE). Looking ahead to 2015, DOE, GTI, and others project that U.S. gas demand could reach 32 Tcf per year—an additional 44 percent increase.

How will the natural gas industry keep up with this surging demand?

“The challenge will certainly include regulatory, political and economic elements,” says Bob Siegfried, Associate Director of GTI’s Unconventional Gas Research, in the Exploration, Production and Gas Processing Center. “But technology will also play a major role.” And the technology pathway to a 32-Tcf future will take an “unconventional” twist, according Siegfried. As traditional gas sources are depleted, he says, producers will turn to so-called unconventional resources—reservoirs that are somewhat more difficult to find and tap.

From 1990 through 2000, he notes, annual production from unconventional resources roughly doubled, from 2 Tcf to 4 Tcf. “That growth was a testament to gas-industry initiative in developing and using new technology,” says Siegfried, “but it was only a start.”

He notes that the projections of DOE and others call for another doubling of production by 2015 from unconventional resources, to 8 Tcf. “Continued technology development will be more important than ever in the coming decade,” says Siegfried.

'Technology Roadmap' Identifies R&D Needs
To help guide future technology development, GTI and the New Mexico Institute of Mining and Technology (New Mexico Tech) conducted five workshops in 2002, at locations in the major U.S. unconventional natural gas basins. At each forum, about 25 invitees—from major and independent producer companies, service companies, academia, research organizations, and government agencies—identified and ranked technology needs. A separate web-based survey gathered additional input from about 50 others unable to attend the workshops. And at a sixth workshop in Houston, 77 participants discussed overall roadmap results as well as policy and investment aspects of gas-supply research.

Those at the workshops identified the following high-priority research needs:

• Reservoir characterization and imaging (including better ways to identify and measure natural fracture systems)
• Stimulation (including improved fracture diagnostics, less-damaging fracture fluids, and modification of fracture models for use with unconventional reservoirs)
• Resource assessments and geologic studies for specific subsurface layers (“plays”)
• Improved data collection and sharing (e.g., geochemical and petrophysical characteristics, fracture treatment reports, and play assessments).

GTI Research Aims to Improve Unconventional Natural Gas Technology
GTI has pursued a robust R&D program on unconventional natural gas technologies for more than 25 years. One major success from that program was the GTI-led development of tools and technologies that transformed coalbed methane from a nuisance and safety hazard in the early 1980s into a resource that provides about 7 percent of current gas supply.

GTI led groundbreaking research in the 1980s on hydraulic fracturing, which is used to establish high-conductivity pathways from tight (low-permeability) formations to the wellbore. Based on advanced modeling tools it developed, GTI showed producers how to optimize fracture treatments to achieve maximum gas production at minimum cost.

GTI also developed new technologies for producing gas from shale formations. This research led to improved formation evaluation, core sampling, well-casing design, and fracturing. Today, more than 37,000 U.S. wells produce shale gas, providing about 3 percent of total U.S. gas supply.

A GTI study (GRI-02/0233) completed in 2002 evaluated shale-gas resources in the Western Canada Sedimentary Basin (WCSB). Researchers found that shales are the most common type of sedimentary rock in the WCSB, that the potential volume of gas in five formations studied was significant, and that stimulation techniques likely would be needed to produce gas at economically attractive levels.

Building on that legacy of research, several current GTI programs are addressing the needs identified in the 2002 roadmap project, as well as related issues.

Defining the Unconventional Natural gas resources are classified as unconventional because of their location, complexity, and composition. Experts in the field generally classify the following gas sources as unconventional: Tight (low-permeability) sands, sandstones, and carbonates Coal seams Shales Ultra-deep reservoirs (deeper than 15,000 feet) Frontier basins and emerging plays (such as methane hydrates).

'Inspecting' the Sweet Spots
GTI just recently introduced two new technologies—InSpect^SM and FluidPro^SM—for more-accurate identification of the most promising productive zones (the “sweet spots”) in unconventional-gas formations. Improved accuracy cuts the risk of drilling a non-productive well.

InSpect analyzes seismic data using a new kind of spectral decomposition to reveal “indicators” that show the presence of hydrocarbons in a formation—indicators not obvious using conventional seismic analysis. It can distinguish between gas and brine, can analyze subsurface layers as thin as 15 feet, and can spot discontinuities in reservoir structure not readily visible on broadband seismic charts.

At higher seismic frequencies, a reservoir is clearly defined and bright - a good indicator of the presence of gas. InSpect helps illuminate supporting indicators of gas, including a low-frequency "shadow" below the reservoir (left), and attenuation, visible as a darkened area below the reservoir, at higher frequencies (right).

InSpect has been used to evaluate tight gas sands, and a current project is examining its use for locating coalbed methane deposits. GTI and its research partners also expect it will be useful for detecting natural fractures in gas-bearing shales, and for pinpointing deposits of gas below 15,000 feet.

Unlike other tools for seismic study, FluidPro quantifies the probability of finding commercially viable gas deposits at a particular subsurface location. It integrates geologic, geophysical, and seismic data to characterize the most meaningful properties (e.g., modulus and density) of subsurface fluids such as gas, brine, and oil.

Fusion Geophysical developed InSpect and FluidPro with support from GTI and the Oklahoma University Geophysical Reservoir Characterization Consortium.

Both of these high-resolution tools are expected to be of significant value to gas producers in coming years as they work to better characterize various unconventional gas reservoirs.

GTI is seeking potential clients interested in using InSpect^SM to evaluate formations. Contact Carrie Decker, GTI Exploration, Production and Gas Processing Center, Houston Office: 281/873-5070.

Laser Applications for Well Construction and Completion
GTI continues to develop laser-based technology for potential use in well construction processes within three to five years.

Research that began in 2000 with DOE and others focused on fracturing, melting, or vaporizing rock with a laser as an alternative to conventional rotary drilling. Research planned through 2005 will explore fundamental rock/laser interactions, system development issues, and high-energy completion techniques.

At the same time, attention is now also being given to laser use for more precise and controlled penetration of the casing of a well and the surrounding formation, in order to establish gas flow into the wellbore. GTI is currently working with an industry partner on a project to achieve proof-of-concept for a wellbore perforation system using a state-of-the-art, high-energy laser.

“Producers today commonly use customized explosive charges to perforate the wellbore,” says Brian Gahan, Manager, E&P Technology Development in GTI’s Exploration, Production and Gas Processing Center. “A laser-based system would allow much more precise and accurate perforation,” he says, “minimizing or perhaps even reversing formation damage to improve gas flow from the reservoir to the wellbore.”

Methane Hydrates: A Huge Potential Gas Resource
A longer-term GTI research initiative is evaluating what is considered an “emerging” unconventional resource, called methane hydrates. Hydrates are structures that trap methane molecules within a cage of frozen water molecules. (Picture a chunk of dirty snow or ice that burns when ignited by a match.) Methane hydrates are typically found on or below the seabed, or under the permafrost in northern regions.

“When thawed out,” says Iraj Salehi, leader of GTI’s hydrates resource research, “these hydrates can release a quantity of methane that’s about 160 times the volume of the hydrate itself.” By some estimates, U.S. methane hydrate resources—chiefly offshore in the Lower 48 and beneath Alaska—total 320,000 Tcf. Producing just one percent of this resource could meet U.S. natural gas demand for well over 100 years.

However, Salehi notes, meaningful production won’t happen for at least a decade. “The first task,” he says, “is to better understand the physical properties of hydrates and the rock surrounding them. Only then can we assess seismic and well-log data from actual formations with any confidence.”

In GTI’s dedicated hydrates laboratory, Salehi and his colleagues are studying actual as well as synthetic cores to better understand (a) the seismic “signature” of hydrate-impregnated sediments and (b) the dissociation process by which gas evolves from hydrates as pressure and temperature change. Results are being used to develop theories and models to guide further study and to explore potential options for safe, cost-effective production.

Meeting the Challenge
For the near-, mid- and long term, GTI continues to develop new tools and techniques that will be essential to doubling production of unconventional natural gas in the next 15 years. Besides helping expand production from known formations, says Bob Siegfried, new technology also may help expand production from previously identified resources. For example, laser technology and the new InSpect tool could find application in coalbeds and other tight formations that, to date, have not been major gas producers.