U.S. DOE Upstream Unconventional Oil and Gas ResearchUnconventional Oil and Gas

Upstream PA 2017

Elena MelchertDivision Director, Upstream Oil and Gas Research

March 21, 2017

Acting Director, Office of Technology Transfer

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OFFICE OF FOSSIL ENERGY

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THE OFFICE OF OIL & NATURAL GASA research organization that is developing technologies to advance oil and natural gas production in a safe and sustainable manner.

Vision & Mission

VisionA secure and environmentally sound energy future through responsible production and delivery of our nation’s diverse oil and natural gas resources.

Mission

Maximize the public benefits of oil and natural gas resources and ensure their responsible development and delivery through research, policy analysis, regulation, innovation, and outreach.

Major Research Areas

Onshore Unconventional Oil and GasOffshore Oil Spill PreventionGas HydratesMidstream Infrastructure

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UPSTREAM OIL AND GAS RESEARCH PORTFOLIO

Unconventional Oil & GasResource Characterization, Water Quality, Water Availability, Induced Seismicity

Offshore Spill Prevention Geologic Hazards, Drilling & Completion

Strategy for Federal Multiagency Collaboration on Unconventional Oil and Gas Research: DOE/DOI/EPA

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Economic prosperity requires low cost fuels.Energy security requires stable, abundant domestic resources.

Low carbon economy requires reduction of greenhouse gas emissions.

--2015 Quadrennial Technology ReviewU.S. Department of Energy

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U.S. DOMESTIC CONSUMPTION BY FUEL TYPE

2016

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Economic prosperity requires low cost fuels.Energy security requires stable, abundant domestic resources.

Low carbon economy requires reduction of greenhouse gas emissions.

--2015 Quadrennial Technology ReviewU.S. Department of Energy

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2014 2019 2024 2029 2034 2039

U.S. OIL & NATURAL GAS OUTLOOK TO 2040

Source: U.S. Energy Information Administration, Annual Energy Outlook 2016 Early Release

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U.S. Crude Oil Production

Tight oil

Other lower 48 onshore

Lower 48 offshoreAlaska

Million barrels per day

• The United States has been the world’s top producer of petroleum hydrocarbons since 2013.

• Before 2030, U.S. oil production is expected to exceed the previous historical high of 9.6 million barrels/day in 1970.

U.S. maximum production level of 9.6 million barrels/day in 1970

Trillion cubic feet per year

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2014 2019 2024 2029 2034 2039

U.S. Natural Gas Production, Consumption, and Imports

Domestic Supply

Consumption

Net Imports

• The first U.S. exports of LNG produced in the lower 48 states occurred in February 2016.

• By 2017, the U.S. will become a net exporter of natural gas, presenting significant implications for global markets.

U.S. is a net exporter by 2017, the first time since 1957

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Economic prosperity requires low cost fuels.Energy security requires stable, abundant domestic resources.

Low carbon economy requires reduction of greenhouse gas emissions.

--2015 Quadrennial Technology ReviewU.S. Department of Energy

FUTURE U.S. TIGHT OIL AND SHALE GAS PRODUCTION

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Scale and Nature of UOG Resources

Water Availability

Air Quality

Water Quality

Induced Seismicity

Opportunities for Objective Science

QTR-2015 TECHNOLOGY ASSESSMENTUNCONVENTIONAL OIL & GAS

6 PRIMARY SCIENCE/TECHNOLOGY AREAS; 14 R&D TOPICS

• WELLBORE INTEGRITY• PRODUCED WATER TREATMENT AND MANAGEMENT

• FUNDAMENTAL SCIENCE OF UOG RESERVOIRS• RESOURCE ASSESSMENT/CHARACTERIZATION• RECOVERY EFFICIENCY• DEVELOPMENT INTENSITY

• ANALYSIS AND ATTRIBUTION• PREDICTION AND AVOIDANCE

• ALTERNATIVE WATER SOURCES • LESS WATER-INTENSIVE STIMULATION• WATERLESS STIMULATION

• MEASUREMENT AND ATTRIBUTION• EMISSION MITIGATION

• DEDICATED FIELD LABORATORIES

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DOE’S OIL & NATURAL GAS PROGRAMS PORTFOLIO

Produced Water Treatment and Management• DOE’s water research addresses a range of issues, including new treatment technology development, improved

cements for annular isolation, and decision support tools for produced water management

Field Observatories • DOE developed a suite of collaborative research sites in Appalachian and Permian Basins to help find ways to extract

as much oil and gas from unconventional reservoirs as possible, with as little environmental impact as possible

Collaboration with States • DOE contributes to the development of data management tools for informed regulatory decision-making and

increased transparency (RBDMS and FracFocus.org)

Region and Basin-Specific Studies• DOE partners with state institutions, universities, and the private sector to conduct research on challenges of O&G

development in particular regions (ex. long-term recovery efficiency in the Marcellus with West Virginia Univ.)

Fundamental Shale Science• DOE leverages the capabilities of its national labs to study subsurface geophysical and geochemical dynamics in

unconventional oil and natural gas resource development

Mission: Maximize the value of U.S. oil and gas resources to the public and ensure their efficient development and delivery through policy, research, innovation, and outreach

Water and Hydraulic Fracturing Research Highlights

MARCELLUS REGION

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Ohio State U. Utica

Pt. Pleasant Shaleeastern, deep dry

gas

Gas Technology Institute Permian Basin

(western, liquid-rich play)

Current Sites

Potential Sites

West Virginia U.Marcellus Shale eastern, dry-gas

SHALE DEVELOPMENT: FROM LAB TO FIELD: SPANNING MULTIPLE TRL

LANL--thermodynamics at nanopore scale--fracture generation and hydrocarbon flow in heterolithic formations

LBNL--fundamental petrophysics of oil-rich shale--petrophysics of water injection on shale gas mobilization into fractures--geomechanics of fracture initiation and propagation and permeability evolution

SLAC--effects of chemical additives especially mineral precipitation

SNL--equations of state for CH4, CO2, and H2O

Fundamental Science at Nanopore scale

Regional Field Observatories

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UNCONVENTIONAL OIL & GAS PROJECTS RELATED TO SUBTER

Wellbore Integrity19 projects*

Subsurface Stress & Induced Seismicity

8 projects*

Permeability Manipulation65 projects*

New Subsurface Signals

24 projects*

* Both active and completed 2007 - present

FE0024296: Methods to Enhance Wellbore Cement Integrity with Microbially-Induced Calcite Precipitation

09122-01: Gas Well Pressure Drop Prediction under Foam Flow Conditions

FE00014144: Well integrity monitoring using Nanite TM

modified cement

10122-43: Diagnosis of Multiple Fracture Stimulation in Horizontal Wells by Downhole Temperature Measurement

NETL-ORD: Fracture propagation and Ground Motion related to UOG Development

FE0024314: Development and Testing of Novel Natural Gas Surface Process Equipment for replacement of water as primary hydraulic fracturing fluid

09122-29 Using Single-Molecule Imaging System Combined with Nano-fluidic Chip to Understand Fluid Flow in Tight and Shale Gas Formation

Regional Field Observatories

10122-19: Zonal Isolation Improvements for Horizontal Wells Drilled in the Marcellus and Haynesville Shales

11122-42 Annular Isolation in Shale Gas Wells: Prevention and Remediation of Sustained Casing Pressure and other Isolation Breaches

DE-FC26-01BC15353 Development & Calibration of New 3-D Vector VSP Imaging Technology; Vinton Salt Dome (U. Houston)

DE-FC26-01NT41234 Development of a 400 Level 3C Clamped Downhole Seismic Receiver Array for 3-D Borehole Seismic Imaging of Gas Reservoirs (Paulson)

DE-FE0013902 Evaluation of Deep Subsurface Resistivity Imaging for Hydrofracture Monitoring (GroundMetrics)

07122-15 Reservoir Connectivity and Stimulated Gas Flow in Tight Sands

07122-41 Improved Reservoir Access through Re-fracture Treatments in Tight Gas Sands and Gas Shales

09122-12 Integrated Experimental and Modeling Approaches to Studying the Fracture-Matrix Interaction in Gas Recovery from Barnett Shale

10122-42 A Geomechanical Analysis of Gas Shale Fracturing and Its Containment

09122-06 Prediction of Fault Reactivation in Hydraulic Fracturing of Horizontal Wells in Shale Gas Reservoirs (WVU)

12122-91 4D integrated study to Develop Assessment Models for Potential Induced Seismicity Risk (U. Oklahoma)

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FUNDAMENTAL SHALE PROJECTS AND SUBSURFACE SCIENCE

Wellbore Integrity Subsurface Stress & Induced Seismicity

Permeability Manipulation

New Subsurface Signals

LANL: Experimental Study of In Situ Fracture Generation and Hydrocarbon Migration in Shale

SNL: Fundamental Understanding of CH4-CO2-H2O Interactions in Shale Nanopores

LBNL: Understanding Water Controls on Shale Gas Mobilization into Fractures

LBNL: Understanding Water Controls on Shale Gas Mobilization into Fractures

LBNL1: get better title

LBNL: Lab and Numerical Modeling of HF Propagation and Permeability Evolution

SLAC: Chemical Control of Fluid Flow in Shale Microfracture

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• 5 yrs: $13.4M DOE Costs: $9.23M• Site characteristics

– dry gas; slightly over-pressured

– high total organic carbon

– low-clay/high-quartz; brittle shale– Active site; Long history of env. monitoring

• Timing: October 2015 – All three wells drilled

November 2015 – Well completion and stimulation

May 2016: Data and Core analysis, and Reservoir Modeling

Oct-Nov—drill 2 laterals

• Partners: West Virginia University w/ Ohio State & Northeast Natural Energy, Schlumberger

Objectives: long-term monitoring of air and produced water; monitor noise and light; develop improved reservoir understanding to increase production with lower environmental footprint;

Milestones/Activities: 100’ of 4” core through the entire Marcellus; about 150 sidewall cores

MARCELLUS SHALE ENERGY AND ENVIRONMENTAL LABORATORY (MSEEL)

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MARCELLUS SHALE ENERGY AND ENVIRONMENT LABORATORY

www.MSEEL.org

Subsurface Science

Geochemistry (Sharma, Weislogel, Donovan - WVU; Cole, Darrah - OSU)

• Rock – Kerogen; TOC; C/N/S; XRD; FIB/SM; cryo-laser ablation; Hg porosimetry

• Fluids/Gases – Continuous monitoring S/C/O/H isotopes, organics, DOC, NORM, noble gases

Microbiology (Mouser, Wrighton - OSU; Sharma - WVU)

• Biomass; microbial lipids, metagenomics

Petrophysics/Geomechanics (Aminian, Wang, Siriwardane – WVU)

• Steady-state permeability (in situ P/T); porosity; pore-size; adsorption dynamic petrophysics f(P); vertical/lateral heterogeneity.

• Mechanical strength measurements (laboratory and well-log)

• FIB/SEM: pore and mineralogical structure

• Log to core calibration; comparison to industry standard methods;

• Real-time, actionable data for HF operations; comparative geometric (5H) and engineered (3H) completions

• natural fracture imaging; fibre-optics monitoring Multi-scale (nano-scale to SRV) numerical simulation.

Geophysics (Wilson – WVU)

• Borehole microseismic – SRV characterization in multi-well context

Surface Science

Surface Water: Organics, inorganics, radsProduced Water: Major cation/anion & trace elements, DOC, Sr/Li isotopes, S/C/O/H isotopes, organics, lipids, genomics, noble gas and radioactive elementsAir: C, H isotope composition of methane, ethane, CO2, noble gas isotopes, particulates & NOx

Additional Science (enabled by NETL/MSEEL) From NETL In House• (NETL): multi-scale CT imaging/micro-scale structure; MSCL• (NETL): Sr/Li isotopes; major cation/anion/trace elements• (NETL): surface micro-science array; fracturing and relaxation• (NETL): SRA/TOC • (NETL): fracture modeling (FMI)

From Existing National Laboratory Contributors• (LANL): tri-axial core-flood w/tracers & AE in situ fracture formation and

permeability; X-ray tomography apertures and conductivity.• (LBNL): thermodynamic; X-Ray CT laboratory and numerical studies of fluids

flow and mobility in shales t

From Collaborating Federal Agencies• Orem (USGS): contaminants in drill cuttings – wastewater evaluations

From Shale Gas Cooperative Agreement Contributors• Daigle (UT-A): tri-axial compressive strength; ultrasonic velocity; NMR during

fracture; SEM and FIB• Puckett (Ok. St.): petrophysical protocols: shale-fluid interaction• Flemings (UT-A): relative effect of pore pressure & confining stress on permeability• Barger (SLAC): shale and fracturing fluid at the micro-nanoscale

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MSEEL

Accomplishments

• All three MSEEL wells (MIP 3H, MIP 5H and MIP SW) were drilled and logged October 2015.

• Completion and stimulation on the MIP5H with 30 stages was completed on 6 November 2015.

• Completion and stimulation on the MIP3H with 28 engineered stages of variable cluster design was completed on 15 November 2015.

• Fiber optic (FO) cable for monitoring of acoustic and temperature during stimulation and production was installed in the MIP 3H.

• The SW well was used for microseismic monitoring during stimulation.

• Surface seismic array also installed and used to monitor stimulation.

• Production started on 10 December and is being monitored with FO cable.

• 111’ of whole round 4” vertical core from the 3H well; through the entirety of the Marcellus

• Sidewall cores – 50 from 3H

• Sidewall cores – 147 from SW (50 set aside for SubTer)

• Terratek logged and split (2/3-1/3) vertical core; 30 core plugs extracted (~ every 3 feet)

• NETL Core lithological description and imaging (multi-sensor core logger and medical computed tomography scanner)

• Cuttings collected approximately every 250’ from 5H well

Current Status

• Core analysis

o XRD/XRF & ICPMS analysis underway

o RockEval & metal isotope analysis underway

o Biomarker, isotope analysis, elemental analysis, porosity/pore structure, and noble gas analysis are underway and expected to completed by end of summer 2016.

o (FIB)/SEM initiated to assess organic matter (OM) regions, with regard to pores and mineral associations

o Sr/Li isotope analysis underway

• Drill cuttings are being analyzed for major cations to evaluate geochemical trends, and will undergo sequential extraction leaching tests to evaluate leaching of trace metals during disposal

• PW/FB fluids are being processed for biomass, reactive chemistry, organic acids, and noble gas and stable isotope analysis

• Produced gas samples are being analyzed for molecular composition and C/H isotope composition of methane, ethane and CO2

• Surface water analysis continues for organics (major cations/anions), inorganics and radionuclides

• Numerical modeling underway to investigate the influence of fluid injection rates, volume and proppant mass on hydraulic fracture geometry

• Reservoir and fracture analysis modeling underway: integration of microseismic, fracture logs, and fiber optic data to assess fluid & proppant placement through the establishment of a detailed rock velocity model

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ECONOMIC PROSPERITY AND ENERGY SECURITY REQUIRE STABLE ABUNDANT DOMESTIC SUPPLIES OF OIL AND NATURAL GAS

Oil and gas play an essential role in our nation’s economic prosperity, energy security, and national security.

There are operational and efficiency challenges to the development of stable, abundant domestic supplies of oil & gas.

DOE’s investment in innovative technology R&D in concert with our partners focuses on the efficient development of oil & gas resources.

Note: Sum of components may not equal 100% due to independent roundingSource: EIA Monthly Energy Review July 2016 and Annual Energy Outlook Early Release 2016 Reference Case

EIA estimates about 963,000 wells being drilled in lower 48 states from 2016 to 2040

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https://www.energy.gov/fe/office-fossil-energy