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Energy Insights – Other New Energy Technologies

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Other New Technologies - Oil Sands, Oil Shales, Gas reservoirs

What is the future for Oil Sands?

Good. Large Oil Sands accumulations occur in Canada. These thick oily sands are mined in huge open cast quarries, by diggers with buckets the size of a detached house. The rock is then pulverised, and heated in large processing plants. The oil is then driven out from the rock and separated – then refined into cleaner oil products. The processed rock is then transported back to the quarry and tipped as back-fill. Eventually the quarry is grassed over and more or less returned to its original condition (grassland or forest).

There is a very successful and economic project in Alabasca Canada that has been producing some 150,000 barrels a day since 2001. Oil prices need to be over about $13 per barrel to make such projects economic. Significant capacity expansion is possible in such low risk projects – albeit capital intensity is high – requiring some $3 billion for 150,000 barrels per day production. It seems likely that such projects will expand because of security of supply issues for North America.

Interestingly, the projects provide a lot of income and employment for the local populations – and environmental concerns have been addressed with the regional and local governments allowing such projects to proceed, on the basis that the quarries will be returned to their natural habitat after extraction. Such projects are easier in remote barren areas where local employment is required, and quarries can be returned quickly to their original environment.

What about Oil Shales?

Oil Shales are fissile mudstones that have high total organic carbon content (typically 20-30%) bound up in the rock. There are a few ways to extract such oil – one is by very closely spaced shallow wells with heaters that cook the total rock area up – wells in between extract oil that migrates out.  This is a very energy intensive and expensive operation – currently considered uneconomic by most energy companies.

Another method is to quarry the oil shale, pulverise the rock, cook the rock and extract hydrocarbons. Again, this is a very energy intensive and costly operation – currently considered either margin or uneconomic. There are simpler ways to extract oil than mine or cook oil shales – and the process requires a big electricity infra-structure and operating expense to extract the oil.

How is recovery in gas reservoirs increased?

Most gas reservoirs produce by normal depletion. This is the decline in pressure from the original reservoir pressure (say 300 bars) to abandonment pressure (say 50 bars). The pressures over the production life of the field will often show a straight line decline. However, if water starts to ingress – this will support pressures and normally keep the production rates higher for longer. However, if water then reaches the well bore, these gas wells often decline and flood, or die quickly – through liquid loading of the wellbore.  Increasing the density of well might increase recovery factors a little – but in permeable reservoirs, additional producing wells are drilled primarily to increase production rates or off-take.

If the gas field does not have a water production problem and is relatively large, it is often economic to build gas compression. This allows gas to be produced to very low pressures – say 5 bars, thence it is compressed to say 25 bars and exported via the gas pipeline infra-structure.

Most large gas fields have gas compression installed in later field life – this can often increase recovery factors by some 10-15%. Because gas flows more efficiently through sandstone and carbonate when compared to oil and leaves less residual gas saturations within the reservoirs – recovery factors can be as high as 95%, typically 75-90%. In oil reservoirs with secondary water or gas injection, recovery factors are typically 40-65%.

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