January 2011

RickPageCurrently

To each and every one of you I wish a happy and prosperous New Year. For those of us working in the petroleum industry, I have a couple of wishes. I hope 2011 brings some gas price improvement like it did for oil in 2010. And I hope all our prospects get drilled, new fields are discovered, and development is successful. To help us in the latter, Michael Smith with Geotrace will speak to us this month on extracting rock properties in resource plays from high resolution seismic. And our paper this month, by Lowell Waite of Pioneer Natural Resources, brings new insights into the distribution and predictability of reservoir properties in the Stuart City reef trend.

Recently

The CCGS has committed the financial resources to finish our ambitious Sea Level Change video. Estimated release date is March. This promises to be a tremendously valuable teaching tool, describing the local effects of prehistoric climate change on sea level throughout the last full glacial episode. It will be geared for 7th grade through adult and offered to many venues including area schools, libraries, the Natural History Museum, the Aquarium, KEDT, and Padre Island National Park visitor’s center. It will establish for the general public the fact that climate and sea level change is not new, and in fact has changed dramatically even within human prehistory. I envision having a grand premier at the start of one of our technical luncheon meetings, so stay tuned for the announcement!

Commentary

Energy Reality in America, continued.
Hydrothermal

An interesting alternative energy proposal has reappeared in recent years – hydrothermal. Not the electricity produced from hot springs, which I refer to as geothermal. No, this proposal should be of interest to anyone who has ever drilled a dry hole in the geopressured Gulf Coast. The idea is to build a hybrid binary power plant at a well that has penetrated an overpressured, high temperature (> 220F), high permeability (15 md or better), thick reservoir rock ( 60′ gross interval or more. Think Frio, Vicksburg, Yegua)1. Electricity could be generated from 3 potential energy sources at the same time: mechanical from high water flow rates, thermal from the hot brine, and chemical from entrained low-saturation gas. Talk about turning a lemon into lemonade! You lose an oil and gas prospect but gain a power plant!

Sound far-fetched? Well it’s already been tried, over 20 years ago in Brazoria County. A DOE-sponsored pilot program built just such a power plant at the DOE Pleasant Bayou #2 well. It was designed to capture all 3 energy sources, but in practice was only able to process the heat exchange (BHT 309F/ Surface 277F), and the entrained gas (estimated at 440mcf/d). The plant ran for 121 days, operated 97% of the time, and flowed at an estimated 20M BW/day with 22 scf gas/Bbl. It produced a net 905 kW/day, 45% thermally and 55% gas-generated2. Now 905 kW is not much, about enough to supply 21 homes. But in the case of a dry hole drilled for oil and gas, it’s better than nothing.

But could this resource ever have a measureable impact on our national energy budget? To estimate I determined that over the last 20 years, among onshore Gulf Coast wells drilled deeper than 12,000′ (making for a pretty good certainty of TD in geopressure), there were 1881 outright dry holes.3 If as many as 50% of these encountered suitably thick, overpressured, brine-filled reservoirs (may be overly optimistic), then we had the potential for 940 hybrid binary power plants. And if they all had a net 905 kW/day output, the combined cumulative addition to the electrical grid would be 851 mW/d (assuming no depletion, and at least a 20 year plant lifespan). This represents about 7% of the nation’s total net generation of 11.3 gigaWatt hours/day. Not enough to redirect our energy search, but maybe enough to turn a well from non-commercial to commercial.

To be sure there are many obstacles to overcome before this proposal can work, most of them legal. For instance, who owns the produced water (and therefore the energy extracted from it) – surface or mineral owner? What should the primary term be for a “brine” lease, and if longer than the gas lease, what happens to the gas interests after the primary gas term expires? How many acres should a producing “brine” unit well hold, and for a well that produces both brine and gas, which unit prevails? And there would, of course, be issues of downhole brine disposal. But these are all questions that can be answered, either in bureaucratic offices, legislative halls, or the courts. The main inquiry, the engineering question, has already been answered. The technology is available and the resource is waiting. All it takes now is the right set of economics and entrepreneurship.

Nuclear Energy

Nuclear fission used for the generation of electricity has been both hailed and reviled in this country since its commercial inception in 1958. Its potential is enormous but its perceived risks are considered extreme by some. To put nuclear energy in its appropriate national energy context requires a summary of the entire U.S. electrical generation capacity by fuel source. I’ll use 2008 as a type year (latest year I can find complete data)4. That year our nation produced 3895 terrawatts of electricity from all sources, representing 34% of all the energy we consumed. Nuclear plants accounted for 19.6% of the electricity total. Renewable supplies contributed 9.2 %, dominantly from hydroelectric power plants. The remaining 71.2 % came from the burning of coal, natural gas, and oil. The breakdown was 48.4% from coal, 21.5% from natural gas, and only 1.1% from petroleum (it’s too valuable as transportation fuel and petrochemical feedstock to be used to make electricity).

presletter1-11

Here’s an interesting factor that touches on the potential of nuclear fuels – it only required 104 nuclear power plants to supply 19.6 % of our total electricity, while it required over 10,650 municipal and private fossil fuel based generating stations to produce 71.2%. The nukes are generating 26 times the electricity per plant compared to the average fossil fuel station! Let’s consider for a moment coal, the largest fuel source of electricity. In 2008 there were 1885 coal-fired power plants in the nation putting out, on average, 1.3 terraWatts/year. This compares to the average nuclear output of 7.3 terraWatts/year/station. So, it requires over 5.5 average coal power stations to equal one average nuclear power station. Now I can answer the question I posed at the start of this “Energy Reality in America” series, namely how much coal is required to equal the electricity generated from one nuclear power plant? First we need to understand that with heat loss it requires 11,600 BTU to generate 1 kWh in a conventional coal-fired plant. North American coal contains on average 26 million BTU/ton5. I won’t bore you with the math…it takes 958 thousand tons of coal to generate the same electricity as an average U.S. nuclear power plant produces in one year. And one last fun fact: using current U.S. light-water reactor designs, it would require 3912 nuclear power stations to supply our nation’s total energy demand of around 17 billion BOE/year.

When you consider that fully 1/3 of our hydrocarbon supply (mostly coal) is being consumed to produce electricity, a strong argument can be made that nuclear energy needs to occupy a larger role in our energy use, thereby reducing our dependence on coal and allowing for more flexible use of our domestic oil and natural gas.

Next month: Uranium supply

Rick Paige
CCGS President, 2010-11

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1 Griggs, Jeremy. 2005. A reevaluation of geopressured-geothermal aquifers as an energy source. In Proceedings, Thirtieth workshop on geothermal reservoir engineering, Stanford University.
2 UT Permian Basin, Center for Energy and Economic Diversification website, Geothermal Gulf Coast Texas: http://ceed.utpb.edu/energy-resources/renewable-energy/geothermal-gulf-coast-texas/
3 IHS, Inc. Monthly Production Database, August, 2010.
4 All national energy consumption data presented here from U.S. Energy Information Administration website: www.eia.doe.gov.
5 The Geoscience Handbook, AGI Data Sheets, American Geological Institute, 4th ed, 2009, pg250.

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