February 2011

RickPageCurrently

For those of us still looking for prospects in rock just a little more permeable than the ongoing shale craze, be sure to attend this month’s luncheon talk, “Looking for Gas in All the Tight Places” by Dr. Thomas Davis of the Colorado School of Mines, Reservoir Characterization Project. His study of multicomponent seismic could have applications throughout south Texas’ tight-gas sandstones. For a preview, take a look at the slides from his presentation published in this issue. Also in this issue, be sure to read an enlightening story of perseverance and determination submitted by one of own, Owen Hopkins. His summary of the critical elements that turned one of his early prospects into the highly successful Broussard field is a must-read, especially among our younger members looking for advice on how to “work” a prospect.

Recently

Speaking of Owen, he continues to battle health problems, although if any of you had been around him prior to his recent surgery you’d be hard-pressed to know it. His energy and enthusiasm are boundless and inspiring. For the past 5 years or so he has been the de facto face of the CCGS within the community, tirelessly bringing our educational vision to schools, businesses, and government. And not just here but throughout the nation! I’m sure I speak for the entire membership when I write our thoughts are with him, and we pray for his full recovery.

Commentary

Energy Reality in America, continued.
Nuclear fuel resources

Last month I described electrical generation capacity of the U.S. nuclear power industry and commented on its potential to add significantly to our total energy output. But what about the supply of nuclear fuel? Uranium is almost exclusively the source of nuclear fuel in the U.S., and to understand its availability and accessibility one must understand the nuclear fuel cycle. Uranium, it turns out, is a fairly common metal element within the earth’s crust. About 0.00016 % by weight (1.6 ppm), which makes it about as common as tin, lead, and tungsten, and an order of magnitude more common than silver.1 It is also widely distributed, found in a variety of concentrations within igneous (mostly pegmatitic granites), metamorphic, and sedimentary rocks. Igneous rock assemblages, particularly volcanic and hydrothermal veins, are generally considered the primary sources of uranium. Weathering of those primary sources dissolves and mobilizes the uraniferous minerals. Concentrated accumulations occur as detritus in surface deposits, as vein-like deposits formed in fault/fracture zones, and as precipitates in subsurface sandstones.2Consequently, mining for uranium minerals takes many forms, including open pit surface mining, underground tunneling, and in-situ leaching by wells. Regardless the type of native ore, the concentrated milled product sent off for enrichment is called yellowcake (U3O8) and typically contains around 75% uranium minerals.3 In the U.S. 90 % of the known uranium reserves are contained within sedimentary host rocks. 4 Uraniferous minerals form in conglomerates, sandstones, shales, and coals, but of these only the conglomerate and sandstone deposits have concentrations high enough to classify as commercial ore at today’s prices.

To understand the next step in the nuclear fuel cycle requires a short primer on how uranium is used as a fuel. Uranium minerals naturally contain 0.7% of the isotope U235. This fissile component of uranium generates heat during radioactive decay, which is then used to generate steam in a nuclear power plant. However, for this process to work a sustained reaction must be induced, and for that to happen the uranium fuel must be “enriched” to a U235 concentration of between 4-4.5% (by contrast, weapons grade uranium is enriched to 90% U235). Suffice it to say, from 1000 metric tons (2.2 million pounds) of yellowcake, about 105 metric tons (231 thousand pounds) of enriched uranium fuel (UO2) is produced.5

How much yellowcake does our nuclear industry need to maintain its capacity? Exact numbers are a little hard to come by, but according to a variety of sources, a typical 1000 Mw civilian nuclear power plant in the U.S. produces between 25 and 27 metric tons of spent enriched nuclear fuel each year.6 This must be regularly replaced to maintain output capacity, which means that altogether the 104 operational nuclear power plants in this country need approximately 6 million pounds of fresh, enriched uranium fuel (UO2) each year. That translates to a raw supply of 57 million pounds of concentrated yellowcake (U3O8) each year.

So, how robust is the U.S. supply of yellowcake? According to the Department of Energy’s (DOE) Energy Information Administration (EIA), in 2009 the U.S. mined 3.7 million pounds of concentrated yellowcake, not nearly enough to supply our national fuel need. Peak production was 4.5 million pounds in 2007, still well below the quantity necessary to keep our nukes running at full capacity. Some of the fuel consumed by U.S. nuclear power plant operators is purchased from Russia in the form of reprocessed and diluted weapons grade nuclear material, a result of the partial dismantling of former Soviet Union military stockpiles.7 But the bulk of the yellowcake supply is imported. Australia, Canada, and Namibia are the 3 largest international suppliers to the U.S.8

Currently Australia has the largest known recoverable commercial reserves of yellowcake, estimated at 1.67 million metric tons (3.7 trillion pounds). This is 2.5 times the next source country, Kazakhstan at 651 thousand metric tons (1.4 trillion pounds).9In the U.S. the DOE estimates that at current prices we have 539 million pounds of known yellowcake reserves, about enough to last 10 years without imports. But what is the prospectivity of significantly more undiscovered native reserves waiting to be found? I have my own non-expert opinion, which I’ll share below.

But first, as many of you are aware, south Texas has a major hand in the yellowcake supply game. Since October 2005 local operator, Mestena Uranium, LLC, has been producing yellowcake from the Alta Mesa Project in Brooks county using the in-situ leaching (ISL) method.10 To help me understand the geology and engineering of the Alta Mesa field I contacted Kevin Frenzel, senior geologist with Mestena, and supervisor of Alta Mesa field development. Kevin explained that in Alta Mesa the uranium ore lies in sandstone units of the Goliad formation less than 800′ deep, and forms narrow, elongate mineralized deposits called “roll fronts”. These roll fronts form where uranium- charged mobile groundwater encounters a change in Eh/pH causing the dissolved uranium to precipitate. Injecting oxygen changes the water chemistry from reductive to oxidizing, redissolving the uranium. The uranium-bearing groundwater is pumped out, put through a process to reprecipitate and extract the uranium oxide, and then the uranium-depleted water is returned to the productive formation. In Alta Mesa field a good well will produce 40 -50 gal/min groundwater containing 300 ppm dissolved U. It can produce up to 50 -60 pounds/day of concentrated yellowcake. Depletion is fairly quick by oil and gas standards, with a typical well producing commercial quantities for 6 months to a year. A roll front is commonly 30 to 35′ wide (along depositional dip), and long and sinuous in the depositional strike direction. Field development will involve drilling many wells, both injectors and extractors, typically on 75′ spacing, following the front much like a hard rock miner follows a vein. But unlike oil and gas wells, uranium leach wells are inexpensive as they can be drilled with water well rigs, and cased with PVC.

Currently the Alta Mesa Project is one of only 3 operating ISL sites in this country.11 Add to that a total of 14 underground uranium mines operating at the end of 2009 (zero open pit mines) and you can see we don’t have a very large production capacity in this nation. This brought my discussion with Kevin to the prospect of undiscovered potential for uranium mining in south Texas. Based on this conversation and additional reading, it is my understanding that regional proximity to volcaniclastic mountainous uplifts, such as the Eocene/Oligocene Sierra Madre Oriental in northern Mexico and west Texas, is key. A heavy ash-fall component blanketing large portions of watershed drainage systems increases the potential for uranium enrichment in surface and groundwaters.12 High transmissivity also plays a strong role, meaning that alluvial fan and fluvial depositional systems (the latter found in abundance within Tertiary south Texas depositional systems, such as the Goliad, Oakville and Catahoula formations) are likely hosts for uranium mineralization fronts.

So, in my non-expert opinion, there is high potential for significantly more uranium reserves in south Texas. Supporting this viewpoint, most of us in the oil and gas industry have observed “hot” gamma-ray signatures of radioactive sands within the Tertiary section, which may represent preserved roll fronts. Determining the commercial value of any of these is simply a matter of depth, areal extent, and price. Furthermore, I believe the nature of uranium dissolution and transport bodes well for the likelihood of additional commercial production in sedimentary basins flanking other orogenic belts in the U.S., including the Rocky Mountains, Sierra Nevadas, and maybe even the older Ouachitas and Appalachians.

It just might behoove those of us in the oil and gas drilling biz, as we explore and develop the Gulf Coast onshore province, to run an open-hole log over the fresh-water, surface- cased interval from time to time. We just might find a commercial uranium resource to promote along with an oil and gas field!

Next month: coal.

Rick Paige
CCGS President, 2010-11

P.S. My thanks to Kevin for educating me on ISL mining in general and Alta Mesa field development in particular.

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1 Press, F., and R. Siever, Earth, W.H. Freeman & Co., 1978.
2 Galloway, W.E., and D.K. Hobday, Terrigenous Clastic Depositional Systems, Springer-Verlag, 1983.
3 www.areva.com
4 Galloway, W.E., and D.K. Hobday, Ibid.
5 www.wise-uranium.org, Nuclear Fuel Material Balance Calculator.
6 www.eia.doe.gov. Also, www.world-nuclear.org. And, Press, F, and R. Siever, Ibid.
7 www.usec.com/megatonstomegawatts.htm
8 www.wise-uranium.org
9 www.world-nuclear.org
10 Tanner, G., and P. Goranson, Newest in situ Uranium Mine in South Texas, CCGS Bulletin, Feb 2007.
11 www.eia.doe.gov
12 Galloway, W.E., and D.K. Hobday, Ibid.

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