the energy water nexus: a dynamic spatial case study of the san juan basin, nm katie zemlick,...

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THE ENERGY WATER NEXUS: A Dynamic Spatial Case Study of the San Juan Basin, NM

KATIE ZEMLICK, PRESENTER

University of New MexicoElmira Kalhor

Janie Chermak, PhDBruce M. Thomson, PhD

Sandia National LaboratoriesVincent C. Tidwel l , PhD

US ASSOCIAT ION FOR ENERGY ECONOMICSNORTH AMERICAN CONFERENCE

OCTOBER 25-28 , 2015

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Chermak, 2015

Objective Develop an integrated approach to understanding the tradeoffs between water and energy development in New Mexico to aid in future decision making.

◦ Quantify resources present, distribution◦ Well-level analysis of gas production

◦ Resource type ◦ Formation◦ Well age

◦ Drivers of gas production◦ Economic◦ Regulatory◦ Supply/Demand

◦ Systems-level analysis

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Chermak, 2015

Objective Develop an integrated approach to understanding the tradeoffs between water and energy development in New Mexico to aid in future decision making.

◦ Quantify resources present, distribution◦ Well-level analysis of gas production

◦ Resource type ◦ Formation◦ Well age

◦ Drivers of gas production◦ Economic◦ Regulatory◦ Supply/Demand

◦ Systems-level analysis

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Geology & Hydrology

Technology: Conventional vs. Unconventional

EconomicsIntroduction Growth in natural gas reserve estimates

◦ Global: 40% increase since 2010 (USGS, 2010)◦ Domestic: 90% increase since 2000 (US EIA, 2015)

◦ Population in American Southwest is growing◦ Economic benefits of energy development

◦ Oil and gas contributed $2.44 billion to the state’s $70.5 billion economy in 2011

2000 2002 2004 2006 2008 2010 2012 2014150

200

250

300

350

400Series1; 354

Series1; 187

Total US Proved Natural Gas Reserves2000-2013

trilli

on cu

bic f

eet

Source: US EIA, 2015

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Energy Water Nexus

Source: New York State Water Resources Institute. http://wri.cals.cornell.edu/research-topics/shale-gas

Water required at nearly every step in energy life cycle: extraction, refining, production

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Energy Water Nexus

Source: New York State Water Resources Institute. http://wri.cals.cornell.edu/research-topics/shale-gas

Water for gas production and produced water

Injection: 2-7 MgalProduction: 6-70 Mgal

Gallegos et al., 2015

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San Juan Basin• The San Juan Basin contains natural gas reserves

• Conventional: 59-165 BCFG• Unconventional: ~50 TCFG

• Water scarcity• Precipitation: 8-40 in./yr.• Evaporation: 40-60 in./yr.

Source: Sullivan Graham, 2015

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San Juan BasinFragmented land ownership presents unique issues

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Historic Data

New Spuds vs. Henry Hub Gas Spot Price

Predominantly Conventional Production

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Historic Data

New Spuds vs. Henry Hub Gas Spot Price

Predominantly Conventional Production

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Historic Data

New Spuds vs. Henry Hub Gas Spot Price

Predominantly Conventional Production

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Historic Data

New Spuds vs. Henry Hub Gas Spot Price

Predominantly Conventional Production

1975 – 2015~28,000 gas producing wells

Monthly observations ~13 million data points

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Data Sources and SoftwareEnergy and Water

Geology and hydrology (Kernodle, 1996; Kelley et al., 2014)

Natural gas resources (USGS TPS Assessment, 2002)

Natural gas well production logs (NM OCD, 2015)

Economics (US EIA, 2015)

Spot Prices

Production costs

Price and demand projections through 2040

Software:ArcGIS, Pandas, R, Powersim

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Conceptual ModelEconometrics and System Dynamics Framework

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Subsurface Model

8 formations, 425 Township Range Boundaries Account for geologic variability

Volume-weighted approach to resource distribution

Generalized geologic cross section of the San Juan Basin

Source: New Mexico Bureau of Geology and Mineral Resources

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Results Historic gas and water production, water injection data

◦ ~28,000 wells◦ Monthly data points, ~13 million◦ SQL for managing, querying, mining of Big Data◦ Lots of challenges with Big Data

◦ Missing data◦ Erroneous data◦ Interpretation

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Preliminary Results

J an 1, 1995 J an 1, 2005 J an 1, 20150

2

4

6

8

10

gas-t

o-w

ate

r ra

tio -

Kir

tland F

ruit

land

Non-commercial use only!

J an 1, 1995 J an 1, 2005 J an 1, 20150

500,000

1,000,000

mcf

gas p

roducti

on

mancos

Non-commercial use only!

J an 1, 1995 J an 1, 2005 J an 1, 20150

2

4

6

8

10

gas-t

o-w

ate

r ra

tio -

Mancos

Non-commercial use only!

J an 1, 1995 J an 1, 2005 J an 1, 20150

500,000

1,000,000

mcf

gas p

roducti

on

kir

tland f

ruit

land

Non-commercial use only!Barrel/mcf Barrel/mcf

Sandstone vs. Shale

GA

S P

RO

DU

CT

ION

WA

TE

R-T

O-G

AS

RA

TIO

Kir

tlan

d F

ruit

land

S

ands

tone

Kir

tlan

d F

ruit

land

S

ands

tone

Man

cos

Sha

leM

anco

s S

hale

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Kirtland Fruitland SandstoneProduction distribution 1970-2010

1970

20001990 2010

1980

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Mancos ShaleProduction distribution 1970-2010

1970

20001990 2010

1980

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Conclusions Future natural gas production will likely be from shale

Conventional Wisdom vs. Historic Data◦ Shale does not produce significantly less water than

sandstone◦ Injection data is difficult to interpret◦ Factors other than geology influencing water production◦ Disposal of produced water will be significant◦ New development influenced by land ownership

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Future Work◦ Incorporate econometrics results into system dynamics

model◦ Treatment, reuse, and/or disposal options for produced

water as a function of quality◦ Develop future scenarios based on:

◦ Changes/fluctuations in the price of gas ◦ Regulatory changes◦ Land use changes◦ Climate factors influencing water availability

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Acknowledgements Funding for this research was provided by:

◦ The UNM Center for Water and the Environment, an NSF funded Center for Research Excellence in Science and Technology (CREST), NSF Award #1345169

◦ New Mexico’s Experimental Program to Stimulate Competitive Research (EPSCoR), NSF Award #IIA1301346

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ReferencesKelley, S. E. (2014). Hydrologic Assessment of Oil and Gas Resource Development in the Mancos Shale

in the San Juan Basin, New Mexico. Socorro: New Mexico Bureau of Geology and Mineral Resources.

Kernodle, J. M. (1996). Hydrogeology and Steady-State Simulation of Ground-Water Flow in the San Juan Basin, New Mexico, Colorado, Arizona, and Utah. Albuquerque: U.S. Geological Survey.

McLemore, V. T., & Chenoweth, W. L. (2003). Uranium Resources in the San Juan Basin, New Mexico. New Mexico Geological Society Guidebook, 54th Field Conference, Geology of the Zuni Plateau, (pp. 165-177).

Roach, J., & Tidwell, V. (2009). A Compartmental–Spatial System Dynamics Approach to Ground Water Modeling. Groundwater, 47(5), 686-698.

US Energy Information Administration. (2015, April 2). U.S. Crude Oil and Natural Gas Proved Reserves. Retrieved from US Energy Information Administration: www.eia.gov

U.S. Environmental Protection Agency. (2015, May 7). EPA Analysis of Frac Focus 1 Data. Retrieved from EPA Web site: http://www.epa.gov

US Geological Survey. (2013). Total Petroleum Systems and Geologic Assessment of Undiscovered Oil and Gas Resources in the San Juan Basin, Province, Exclusive of Paleozoic Rocks, New Mexico and Colorado. Denver: US Geological Survey.