Wednesday, September 30, 2009

Driving numbers continue to rise

Having been away for a couple of weeks, it is time to settle back to look at some of the regular data that I post on when not traveling. The first of these is the weekly visit to This Week in Petroleum (TWIP) to see how the demand for gasoline is holding up, and to note what the EIA considers important this week. To comment on the latter first, and at the time where the emphasis has changed from driving to heating needs, this week the site comments on the high level of available fuel going into the winter – which comes about, according to the article, in some part because of the collapse last winter, yet the inertia in the oil business which kept the system going long enough for these surpluses to develop. Natural gas stored, for example, is at a volume that is 16% above that of the 5-year average. Similarly coal stocks and oil stocks are high – we will have to see whether the coming of an El Nino will have much effect.

This one does not seem to be typical (which would mean a warmer winter, and less need for fuel) and some caution is now being expressed.
But with this "black sheep" El Niño, as he calls it, "as you move to the central and eastern regions, you start to see pitfalls and [different] opinions."

What that means for the natural gas-reliant Midwest and home-heating-oil usage in the Northeast is that El Niño's influence could wane as it crosses the country. As a result, other weather phenomena could at times take precedence, so a warm winter isn't a given, Schlater says. "From the central Rockies to the Ohio Valley, you could see temperature volatility," he says.
Adam Sieminski, an analyst at Deutsche Bank, concurs and notes that the winters of 2002-03 and 2004-05 had weak to moderate El Niños but were very cold in the Midwest and East. "While we do not anticipate a repeat of those events, the pattern is shaping up such that the 'warm winter' may be confined to the Pacific Northwest to the Northern Plains, making the East favorable for colder-than-normal conditions, possibly along the lines of 2004-05," he said in a note.
Earlier predictions of a strong El Nino and resulting impact on climate and global temperatures seem now to be fading into a forgotten past. But with the situation now indeterminate, we’ll just have to wait and see how the weather turns out.

Getting back to the TWIP, one of the graphs that is interesting to watch is domestic crude production, which has been increasing for a while – wonder how long that will last?

Domestic crude Production over the past year (EIA )

But it is gasoline demand that shows that something at least is growing in the economy.

(Source EIA).
The downturn marks the seasonal transition from producing gasoline for summer driving, to preparing fuels for the winter. Nevertheless, if one goes over to the FHWA for the monthly traffic report for July, one sees that travel was up 2.3% over July 2008. The Texas area was highest with a 2.9% increase, while the North East was held to only 1.4% gain.

This result means that the 12-month rolling average for Vehicle Miles Driven (VMD) now definitely shows an uptick over the depth of the recession in driving.

Moving 12-month total of VMD on all Roads (source FHWA

The rise back to the old peak levels will likely take more than another year or so, but will help indicate where we stand. (Bear in mind however that July is now 3-months ago, and so the recovery today should be more marked). Urban driving, while still up over last year, is not as far along on this as is rural driving, where the numbers now nearly match this time in 2007 – before the recession and gas prices both came seriously into play.

Read more!

Monday, September 28, 2009

Water Floods and improving oil flow

I am going to insert a topic here before going on to Carbonates, as I had mentioned doing in the last post, because it will help to explain a developing problem that comes when extracting oil from rocks such as chalk. And, because I used this example in my original post let me again start by creating an analogy.

The oil business is one of great complexity and there are some challenges even in trying to explain some of the basic reasons why, when price goes up, producers can't just turn a tap and pull more oil out of the underground reservoir.

I was trying to think of a way of explaining it, and offer the following, in the hope that not too many of those who know reality will be offended at the simplification.

Way back at the beginning of the current Elizabethan era it used to be fun, after dinner, to float cream on top of coffee. I still do it when the cream is of the right sort, and it gives the coffee a different taste. Putting the cream over the coffee is a bit of a challenge, you start by using the back of a spoon, and when you get better pour it down the side of the cup.

So now we have quarter of an inch of cream floating, unmixed, on top of the coffee. This can be very simply considered to be the oil floating on an underground pool of water in the porous rock underground. Now take a straw, put it into the cream and try and remove it without sucking up any coffee. If you suck gently you might be able to get a lot of the cream up, especially if you bend the straw to run across the top of the cup. But if you suck too hard then you not only pull the coffee into the straw and can't get any more cream from that particular place, but you also mix up the cream around that point into the coffee, and you lose the chance to recover that cream later. Separating the cream from the much larger amount of coffee beneath it is not really an option (though as you will see it is needed with oil and water).

Oil is somewhat the same, in that, if you try pulling it out of the ground too fast, you can cause changes in the flow pattern that drop the total amount you can get out from any one well, and the immediately surrounding rock, pretty severely. I will return to this topic of fluid control in a later post (and yes I know, there is an alcoholic version of this example, but it would be (grin) socially highly irresponsible to encourage folk to try doing this with different layers of liquor - especially since I can't remember which colors you have to use and which liquor you have to float on which to get them to stay separate. Research may be needed.)

So, if we can’t just change the differential pressure between the well and the surrounding rock to get more of the oil out, then how can we do it?

Given the volumes of space that the oil occupies, and the distances and rock it must pass through to get to the well, it would be easier if the oil continued to flow out of the well by itself. But if the natural driving forces that I mentioned last time (the pressure difference and the gas and water pressures) have all played their part then the next step is often to pump another fluid back into the ground to fill the space left by the oil and thus to recreate, or better to keep up the pressure in the oil, so that there is still a differential pressure that is pushing the oil out. So let’s go back to the section of the rock that contains the oil, and which I have used before:

Simplified sketch of an oil bearing layer in the ground.

There are two ways to inject fluid to keep up the oil pressure. One is to pump in a gas, under pressure, into the rock just over where the oil is, and this will move the oil to the well. If you have that sort of imagination it is similar in effect to going from the small toy water pistol that I could just about hit my baby brother with when he was really close, and still a child, to now having one of those more modern Super Soaker water guns that pump air under pressure behind the water. Now you put out more water faster, and can hit that obnoxious kid over on the next block.

However when this is tried in an oil well, while the gas works, you have to get it from somewhere, and it also turns out not to work as well as pumping in water below the oil. And so pumping water into the ground is often used, after the initial pressure has dropped, to keep some pressure in the well and help with what is known as secondary recovery (the initial flow being called primary).

In developing the large Saudi oil fields Aramco decided to speed the process up by combining the water flood with the initial extraction since, in this way they could keep a higher pressure in the rock, and the oil would thus flow out faster (the Super Soaker approach). The idea, as I recall, originated in what was then the Soviet Union, water injection being used at Samotlor, for example, in the 1970’s, for which I will quote from John Grace’s “Russian Oil Supply”, later.

It I possible, though it depends on individual project economics to also include a surfactant with the water (think detergent) so that the oil can be more efficiently driven ahead of what is known as a water flood.

When the technology was first developed pre-existing wells were used to pump water into the ground in a relatively localized operation so that, for example in the illustration above, I might use four wells surrounding well A to inject water so that locally I could raise the pressure, so that A would continue to produce.

However, with larger fields this tends to be less efficient, and so what is now more common in larger fields, is to start at the edge of the field , say at B, and inject water along the edge of the field. This not only increases the pressure in the overlying oil, but also, as the water level rises, it helps “sweep” the oil from the edge of the field up towards the center. Thus, over time, the oil would pass the well at A, and a new well would be drilled closer to the crest of the field, while A would then become a water injection well.

Now there are two problems (this being a simple explanation) with this way of increasing production. The first is shown with a simple mathematical calculation. Let us say the original well at A was drilled through 100 ft on oil bearing rock. At a given differential pressure the well produced some 100 barrels a day. Now we inject water under the oil, and this replaces the oil as it is removed. So, after a while the bottom of the oil layer in the well has risen by, say 25 ft. With the layer under that now being water. If we maintain the same differential pressure across the well, we will see a 25% drop in production, because we are now only drawing oil from the 75 ft of rock that still has oil in it. We will also see additional water coming out of the well with the oil.

Initially this might not be much of a problem – but over time this “water cut” can become very significant. Here is that quote from John Grace:
Water cut also played a major role (in the collapse of Samotlor production). The water injected into the ground with such fervor in the seventies had to be pumped back to the surface in the eighties. Water climbed from 24% of the fluid lifted by Samotlor’s wells in 1980, to 68% by 1985 – an extraordinarily quick rise. The field was drowning in water, all of which required pumping, and processing to recover any oil.
The current water cut at Samotlor is around 90%.

Saudi Aramco, as I mentioned, also extensively uses water flood to assist production. Some of the most productive regions have been the Ain Dar/Shedgum portions, which are to the north end of the main field. These are the regions that have been producing at around 30% water cut, and are some of the oldest of the producing regions of the Kingdom, with a current water injection rate of 2 mbd It is thus interesting to see look at the new water pumping stations that are being installed. The new construction for the Qurayyah Seawater Treatment Plant to be used to supply seawater for the Khurais expansion that has been put in and will provide the fields with 4.5 million barrels of water, to help in pressure maintenance and production. The overall water capacity of the plant has, however, grown to 14 mbd . Of this flow some 2.5 million will now go to the Ain Dar/Shedgum fields.

(Note I will try and remember to update a sort of “worked example” of all this with Abqaiq that I have previously posted next time) to help make this perhaps a little more real.

Read more!

Friday, September 25, 2009

Technical Innovation - a gentle cough at Scientific American

There are certain snags to staying in foreign hotels where one does not understand the customs – internet access that is available, but only at the end of the corridor; rooms that get cleaned every other day – minor details that make it difficult to order the productive use of time. (And these are offered as an excuse for the irregular timing of these posts) But this trip is coming to an end, we will tour the mine in the morning and then move to Kracow and the flight back home.

I gave a second talk today amid others that also talked of the need that the mining industry now faces to make their machines and processes more efficient. Bear in mind that as the resources get harder to find, that one must look deeper (as in the deep water Gulf of Mexico to give but one example). And so it is with the minerals that come from the Earth. As the shallower deposits are mined out, so the mines must go deeper, and that imposes additional problems. First there is the heat – which is reaching temperatures (60+ deg C) that reduce effective working time, or call for air conditioning that becomes increasingly expensive as one moves from cooling only the cabs of mining machines, to the individuals working in small enclosable spaces, to cooling entire districts of the mine. One comment today was that it will take 7 tons of air to produce 1 ton of ore. Fan sizes start being quoted in the megawatt range, and it will only be the increasing price of these commodities that makes the entire mining operation feasible.

The Conference is, in part, directed at helping to identify the innovative ideas that the industry needs to remain viable into the future. This changing circumstance calls for new and innovative approaches to getting the valuable resources that we need, and yet, as I sat through the proceedings (“helped” by simultaneous translation) it was disappointing to hear ideas being proposed for new mining machines that were tried in an earlier generation. I suppose that none of us are willing to write about our failures, and so the experiments that were carried out with some of this technology, the last time it was tried, and that showed that the ideas would not work in the long term (for reasons such as that they induced early fatigue and massive failures within the machines) did not get into the scientific literature – it was only those that followed (or were involved in) the tests on an informal nature that heard why “the wonder machine” was not talked of any longer.

And so the concepts are resurrected – “technology will save the day.” I have written about the foolishness of this perception in the past (and yes it is again late enough that I beg the excuse of other business to forego references) and to refer back to the debate on he reality of Peak Oil, let me just answer the comment on Scientific American about “new technologies", that Gail referred to today. Some of these ideas are in areas where I have spent my professional life – some of them I may even be working on – but there is this perception that, once an idea has been formulated, that the technology transfer to a fully viable production tool will happen overnight.

Oh how I wish that were true. In one project that I am aware of, a relatively minor design concern (as was thought) has so far delayed progress for over a year as alternate approaches have failed to solve this “slight problem.” And sometimes (but not always) solving one problem only helps create another. Experimental results do not always follow predictable paths (as I am reminded on regular occasion, where theoretical predictions of performance prove wrong – in either direction). Stating that technology can produce more oil from a reservoir is true. But as I point out in the post on reservoir production there has to be a pressure difference between the oil in the surrounding ground and the well for the oil to move. Without that difference nothing happens – no oil or gas comes out of the well. And even when there is a pressure difference the well can draw in water or gas, rather than oil. Gail has explained some of the unreality of the current MSM comments and on the position that they have taken. But a quick review of the draft of the article makes me feel more resigned to the inanity (the writer is after all a Corporate VP for Planning for ENI – the Italian Energy Company).

Working on a technology, and seeing good results in the lab does not give an immediate pass to fantastic wealth. It takes time to prove and scale up the idea, through a series of stages, that become further apart and more expensive (often because of permitting and regulation) as the scale of an operation approached the level where it might have significant impact. So that, even if some of these ideas really do work well (and some really might) they won’t have significant impact in less than 5 years, and more likely will take at least ten, and that is just too late to have any impact on the coming shortage.

Well, enough dark thoughts – the morning trip to the mine will come earlier than I might like to think, so I'd better sign off for now.

Read more!

Thursday, September 24, 2009

The Future of Oil - or a gentle Cough at the NYT

The Mining Community is not a really large one, and in our meeting tonight I met folk that have worked on projects that were, for their time, world shattering. But we began the day by remembering, with a moment of silence, the miners that died this past week in Lower Silesia. In a small enough community there were those not present today because of that incident, and we paused to remember that supplying the world with the energy that it needs comes at a certain cost.

And then, after a day of presentations that ranged from presented material that will be in my lectures next week, to promotions that were little more than reading the Web adverts for company products, tonight we had, again, a miners picnic – only this time there was the European tradition of induction for us foreigners into the Brotherhood (except in that – as a ninth generation miner – I think I’m already there, and have done this before) – yet we were led into the assembly in green hoods, leapt the apron and were suitably entered into the community (each country has a slightly different tradition).

A coleague ready to "leap the apron"

I gave a keynote address before lunch today on the problems that the world will face as the economies of the nations resurrect. In a way the talk was “set up” by the CEO of the Polish company KGHM who are running this first Copper Congress here in Lubin. He pointed out that in running a company that uses some 3% of the energy demand for Poland, they have, as a company, to become energy independent since without that security they will become increasingly vulnerable to outside influence.

In the talk that I gave (which was written more for the local audience than as a global message) I tried to walk though the evolving energy changes, and what they would lead into.

Having tied my talk to some 23 slides, obviously I am not going to try and post the entire talk, but perhaps if I go through the theme, you might get the gist of what I was trying to say.

I began with a slide that shows the current top crude oil producers in the world (based in EIA May figures) and noted that, at the moment Russia is at the top. (Note please that since it is late and I still have my “answer” presentation to prepare for the morning, I am not going to give my references tonight). (And if you want to consider that this is a rebuttal to today’s optimistic report in the New York Times feel free to do so).

Then I showed a slide of a well in Samotlor and noted that the Russian historic large fields are running out. Samotlor has declined from 3.2 mbd to 750,000 bd and is pumping, in some wells, 90% water. The Russian strategy has been to find and produce a region until exhausted, and then move East to find the next major depost. That has worked fine as a strategy until now when they have reached Sakhalin Island – on the far East of the country – the next logical place to look is . . . . .

Alaska, and sorry folks, that is already in play, and in fact rather played out.
Which is a good point to introduce the Export Land Model and so I talked just a little about the fact that as a country’s oil peaks and starts to fall, domestic consumption becomes more important and exports suffer a much greater decline than the actual fall in production. Then I showed how this was already happening to Russia, and the impact that this would have on Poland.

To make life even more complicated in terms of those in Eastern Europe with a reliance on Russian oil, I put up a slide showing that the United States is now importing some 840,000 bd of Russian oil, in order to meet its needs, and thus Europe is now competing in the global market for that oil.

Why must America compete in that market – I used a graph showing the collapse of Cantarell (not to mention the other fields in Mexico) and the 100,000 bd fall every three months to show that America has to go to the world market to find the oil that it now needs.

Non-OPEC crude oil production has peaked and is in decline (I used a TOD graph showing the fall since 2004) and so when one looks at countries that have a surplus of production over current supply (comparing IEA and EIA data) the stand-out is Saudi Arabia at either 3.3 or 2.5 mbd (depending on who you believe) with the next largest being the UAE at somewhere between 0.3 and 0.6 mbd.

(And here let me briefly digress to point out that those who wave the NYT story have little clue of the time that it takes between discovery and full field production – nor do they understand oil field depletion, or that just because we have passed peak production does not mean that there is not a whole lot of oil out there that is still waiting to be discovered – only that it is going to be less than the huge volumes that we have already found and exploited).

The problem, as I pointed out, is that the Saudi number includes, among other fields, Manifa, and Yes! we know it is there; Yes! we know that it can produce 1 million bd; but we also have to recognize that until a refinery is built to process that oil (which will not now come on line until after 2013) the use of that production number is a fiction. And thus there is less than 4 mbd available as a current world reserve.

So what else do we need to worry about? Well it was time to introduce oilfield depletion and so I put up the two contrasting graphs that I use from TOD that show decline in current fields when you use 4.5% depletion and then 5.25% (the significant point I indicated was the transition of peak oil from 2011 to 2008).

I then showed a slide with the FT quote that the oilfields in the North Sea were depleting at 9%, and followed it with Dr Fatih Birol’s comment that the depletion rate is 6.7%.

I tied the whole issue together by showing the need that the Western world will have as their economies rebound (about 3 mbd) with the increases in demand from China and India (already 1 mbd and rising) to show that by 2011 we will need some 5 mbd of additional oil over today, but at best have only enough on line to get 4 mbd. (The first Oops Moment).

So now I turned to the second fuel – natural gas – (time was now running a bit tight so this got a little less intense treatment, but also focused on the Polish need).

I began with a slide showing that, over time, natural gas fields were lasting a shorter period of time before they ran out, but then followed this with a slide of Turkmenistan, who has been supplying some 40 bcm to Russia (or thereabouts) for transfer (at a profit) to Ukraine, Poland and Western Europe. To ensure that supply last year (and there were posts on this at the time) Gazprom signed an agreement to pay the prevailing Western price for natural gas to Turkmenistan. Since when there was a collapse in the world price of natural gas and an “accident” to the pipeline between Turkmenistan and Russia means that Russia has not had to accept expensive NG that it has to sell at a loss, since then.

However, just as Russia pressures Turkmenistan to accept a new agreement to sell the gas at a cheaper price, the new pipeline from Turkmenistan to China will open in a couple of months (and I showed the map) meaning that, as China has been willing to pay the higher price (about $8 per kcf as I posted earlier in the week) they have underwritten a cost increase for NG to Western Europe and beyond that is unlikely to go away.

I then quickly put up a map showing the gas shale deposits in the United States and commented that this might at first appear to indicate that we are entering the “Age of Natural gas”, but then I followed this with Swindell’s graph showing that the new wells suffer 60% decline in the first year, and commented that with the high cost of wells, and the current low cost of NG in America (I tried converting prices to zloty per thousand cu m., but may have got a number wrong – we passed a gas station that was selling NG at 2 zloty per liter) the new wells that we need for next year are not being built. Thus we may be competing with Poland for LNG from Qatar.

What is left? I turned to coal (Poland currently gets around 85% of its electrical energy from this source) and I put up my final slide, showing 5 micron coal – which when mixed with 50% water will run a diesel locomotive (and I added a picture of one) as GE have demonstrated.

Which barely gave me time to note that for many countries in the world coal is the only available, viable and economically practical fuel (vide Vietnam and Botswana) at a time when (with a map from “energy shortages”) - which I contrasted with comments from the G-20 Summit - the world is already having serious problems and it was time for me to conclude.

There were no questions (but I was later told that this was due to the format of the session) but I did field comments during the rest of the day.

And so, tomorrow, I have to explain one of the ways they should change to cope with this situation. Excuse me! But I need to put those slides together.

Read more!

Tuesday, September 22, 2009

Pick Points from Poland

Well, I’m back in Poland after a quick trip to Stavanger, where the price of things was notably different. I suppose that comes with some of the rig crews coming to town to spend some of their income. This is just going to be an assembly of small thoughts, given that the day job requires a fair amount of preparation each evening for the meetings the following day – plus some of the discussions are, naturally, not something I can write about.

One of the first things that our Norwegian host said as we walked over for the first lunch was to point out the irony that Norway, the great oil and gas producer, only makes one car – and it is the electric Buddy . The price seems to be in the $30,000 range – though it is hard to assess what it might be elsewhere given (as noted above) the high prices in Norway, and that I got charged 20% commission on changing my money at the Spar Bank in the airport (confusing my estimate of the real rate of exchange). You should be able to go 50 to 75 miles between charges, at speeds of up to 50 mph.

Both in Norway and Poland I was impressed with the amount of granite that is now being used in the city centers for roads and pedestrian walkways (in Poland in places this just means removing the overlying asphalt). It should be a local industry given the local rock in both countries – yet the crates waiting to be unloaded in Stavanger had Chinese routing labels. Both countries also encourage bicycles with wide cycle paths as part of the walk way – but informative signs for illiterate (in the local language) tourists might have helped those of us who initially walked in the wrong part of the street.

I am currently in Wroclaw and it is after dinner, so I am a little too lazy to check the number, but our host at dinner mentioned that the town will see an influx of 140,000 students next week as the new term begins. They will bring with them, or soon buy, some 30,000 vehicles. Apart from other, social benefits, there are simple financial reasons to do so. Living out of the heart of down town can reduce living costs by about two-thirds, and so the expense of the car can be written off in just a few months, faster if you provide chauffeur service to a couple of like-minded friends, who can also share the accommodation.

Now this doesn’t disparage the local public trams, electrically powered, that are still very popular, and have both old and new versions running very regularly – but in the rush hour these are packed. (We actually walked the 25-minute route that my colleague followed every day he was an undergraduate from the dorm to the campus – it is now a strange mixture of contrasts with many of the old buildings restored and repainted, or replaced with modern construction. Only the odd building remains as it was during Soviet times – still dirty and dilapidated. (I need to dig out my slides from back then, when I first came here).

The papers and talk shows remain focused on the tragedy in the coal mine that happened last week with some commentators talking about changing to purchase of cheaper Chinese coal, rather than using the more expensive (since it is deeper) Polish coal. Our discussion at dinner went through that topic in about two sentences, since the Chinese need most of their own, and Poland has to (for a variety of reasons) have some reliable domestic energy resource, and they have concluded that coal is (for the next generation) pretty much it.

A minor note of amusement, since it getting rather late here, the stories that I hear from locals about what the new Japanese Prime Minister actually said about climate change and the new Japanese Government response don’t seem to equate to the reports in the western press, but the conversations are very second hand this falls more under the heading of general gossip.


Read more!

Sunday, September 20, 2009

An Oil Museum, some old and new Gas Fields

View of Stavanger from the Oil Museum

It has been a beautiful day in Stavanger and so naturally I wandered over to the Oil Museum on the quayside to see what it had to show.

The Oil Museum, Stavanger

Going in past the world’s largest drill bit ( 90 cm (35 inch) diameter) the first exhibit showed how the earth changed as the algae first created the oil and gas beds, and where (with a loud bang) the meteorite strike in the Gulf wiped out the dinosaurs even as coal was being laid out. I might mischievously mention that the Secretary of Energy might want to watch this to correct his ignorance of geology but will save that until I can scan in some of the pictures from the guide. (One of my beefs from the visit was that there were no DVDs or good literature at the Museum that you could take away, but this is ameliorated by the amount of material available at the web site, if you drill down into some of the pages).

I was particularly interested in some of the drilling platform models, since I plan to use the pictures I took, when I write about this on one Sunday in the future. Since some of the platforms were built before the days of 3-D modeling in engineering the models were accurate enough to ensure that there would be no geometrical problems as the real platforms were build (right across the harbor).

There were three significant exhibitions that were particularly interesting – the first being the Frigg natural gas field.

Frigg gas field location (Total)

The field was brought into production in September 1977 and ceased operations on 26th October, 2004. (Though they have recently found a new small field nearby). At its peak between 1978 and 1987 it produced 16.5 billion cubic m of natural gas a year that supplied a third of the UK demand, producing in total 192 billion cu m of gas. Peak daily flow reached 80 million cubic meters/day (2.8 bcf/day).

The exhibition also described life on the rig. Interestingly, as time went on, the working arrangements changed.
The length of an offshore tour compared with time spent on land varied during Frigg's history, but the trend has been towards increasing leisure. When the field began production in 1977-78, most people worked eight days on Frigg and then had eight days off ashore. That changed to two weeks at work and two weeks free, and then two weeks on, three weeks off. Towards the end of the production period, time on land had risen to four weeks with 14 days offshore.
The production history of the field was shown, and the facilities are now decommissioned as the field production has been completed.

The main website also gives access to a web site on the Ekofisk production facilities.

The latest video showed a visit to the new gas facilities as Ormen Lange just before the field was developed and connections made to bring this gas to the UK, where it comes ashore at Easington.

Ormen Lange location (Rigzone)

The video shown, The Traveller, has won Hollywood Awards, and a shortened version of it seems to be available, though not at the web sites listed. I found the short version on UTOG - (because of Ian Wright’s accent the film has sub-titles). The film shows some of the problems, first in drilling through the templates to establish the field, then the need to add anti-freeze to stop methane hydrates forming in the line in the cold of the bottom of the North Sea (up to 3,600 ft deep) as the gas travels to land, and then the problems of making a path for the pipeline over rough and dangerous seabed sections.

Ormen Lange (Long Serpent) is operated by Shell and is Europe’s third largest gas field, stretching some 25 miles long, by about 5.6 miles wide. The reservoir is some 9,000 ft below the surface, and the gas is found in a sandstone deposit that is 165 ft thick. (The original was a Viking Longship).

Computer model of the field (Shell)

The field will produce 20 billion cu m/year the equivalent of Norway’s total energy demand but will supply only 20% of the gas needed by the UK. (Note that the associated revenues from fossil fuel production pay for 31% of the Norwegian government budget). There are estimated to be 315 bcm in place so that the field will last in total some 40 years, though there will be declining production and the gas will need to be compressed before being put into the pipeline after the first 10 years. Full production (2.4 bcf/day) is expected before the end of this year, after four new wells are completed. Production statistics can be found at the Norwegian Petroleum Directorate.

The exhibition also addresses some of the problems with diving around the platforms and although there is a video of one of the diving operations (done with avatars and a very good animation) the display notes that much of the work is now carried out remotely without the need for individuals to work in these conditions.

There was also a section showing the precautions that need to be followed if you are going to visit a rig (and which Robert Rapier has described in personal detail).

In short it was worth the visit (we stayed and had a good lunch) and you’ll likely see more of the photographs that I took in later posts. For example there was recently a question as to how the Kelly was rotated, well they had a plastic cover over the drive section so that you could see the gearing and chain drive from the motor on the full-sized model of the rig floor. They had to do away with some of the other features to show it however.

Kelly drive mechanism (Oil Museum)

They also showed what the bits look like when they are brought back out of the hole.

Worn bit (and bit teeth)

Well that was about it for the day - we had a good lunch, as I mentioned, and then this evening it was time to sit down and prepare for the real reason for our trip.

Read more!

Permeability and Initial Oil Production

This is Sunday techie talk again, where we explain a little of the ins and outs involved in getting oil out of the ground. Please remember that this is a fairly simple description, and that there a lot of complexities that refine this basic explanation. Some of them I will post about in later parts of this series, since there is a certain underlying understanding needed before I can get into more details.

We got oil! We have put together the drill, mounted it on the derrick, circulated mud and drilled a well and used casing to line it, and a Christmas Tree to control it, and we found a layer of rock with the right porosity, and it has oil in it. Hell-lo, Beverley Hills!

Ah, but hold on a moment gentle folk, aren't we forgetting that to get the oil out of the ground, it first has to get to the well. The basics of this aren't particularly complex, but within this topic of oil well production lies a scientific reason that production goes down in an oil field as the field gets older.

I'm going to begin by making a slight correction. Last time while I talked about sandstones and carbonates, I did not explain the second group very well. And because the structure of a carbonate field is often quite different from one that occurs in sandstone, I am going to put the more generic post on production from carbonates off another week. Save only to say that the carbonates are usually limestones (including chalks) and dolomite, and that because these are very fine grained rocks, but easier to dissolve, the oil is more often found in the joints and cracks and dissolved holes in these rocks, than it is evenly spread through the rock. In contrast, with sandstone, the oil is often in the pore spaces that are spread throughout the rock, and so let's assume for now that we've got oil within a sandstone layer.

Different types of holes (porosity) in which oil green) might be found near an oil well (grey).

The sketch shows three different layers of oil lying next to a well. In the top case none of the little pockets of oil connects to another, nor do any reach the well. (Like the holes in a swiss cheese they can be large, but are not connected one to another). If the entire rock were like this, even though it had porosity, and a fair bit of oil, none of it could be extracted, since none of it could flow to the well. Now we can make a path such oil to get to the well, but this artificial stimulation of the well (through hydrofracing (and its variants) is a secondary process that we will also leave until later. What we need is a clear path that connects all the oil that sits between the grains of sand to have a path to the well, similar, perhaps, to that shown by the second layer of green (for oil) in the sketch.

The existence of flow paths in the rock is known as the permeability of the rock. It is a measure of how easy it is for oil to move through the passageways that it finds in the rock. These are the interconnected spaces, and the fractures and breaks that occur in the rock.

The law describing the flow of fluid through rock is known as Darcy's Law. (I’m not actually putting the equation in the post – but it can be found at the citation, together with the terms that go into it). However, in simple terms it says that the volume of liquid flowing through a rock is going to be a function of the area of the rock through which the flow occurs, multiplied by the pressure difference between the two faces at each end of the flow path, multiplied by a constant which is related to the ease with which the oil can flow through the rock, and divided by the length of the rock path. We’ll assume that the volume that the rock will flow through is a constant (it's the side of the well), so the area over which the flow will take place is also a constant.

When we had reached the rock just above the oil reservoir we had a break while we discussed the difference in pressure between the fluid in the well and the fluid in the rock. At the time we set the well pressure at 3,000 psi and the pore pressure, the pressure of the oil in the rock, at 5,000 psi. The difference in pressures, that 2,000 psi is the driving pressure that will push/pull the oil to move it to the well. This is the pressure drop that exists in the rock from the background pressure to the well. (As the oil flows the pressure along the path that it flows will start to drop). The hydraulic conductivity is a phrase used to describe the resistance that the rock gives to the oil moving through it. (You might think of it as a reverse friction, in other words the higher the number the less resistance there is to flow). A wide crack in the rock, with almost smooth sides (the third row above) has a higher conductivity than the second where the gap is narrower and more tortuous. And let us just say for now that the length is the distance from the well to the point that the oil pressure is equal to the original pressure when the drill reached the rock. (We call that the original pore pressure).

Now you might think that with the original 2,000 psi difference, that I used above, between the pore pressure and the well pressure that the oil would really gush from the well. And yes it might - but we don't want that and so we tighten the choke to reduce the difference in pressure between the well and the pore pressure, and the flow slows down.

However, as the flow of oil starts to move towards the well, it does not flow evenly through the rock. Think of watching rain hit a pile of freshly dumped earth. At first, as the rain falls it runs evenly over the surface. But as it does it finds some layers of soil are weaker, and others have been compacted a bit more. And so the water erodes the softer, less compacted soil, and the water near those channels finds it easier to flow into them. And so after a while the water coming off the pile is no longer evenly flowing but is cutting grooves in the soil and all the water is coming out of those channels.

Rain on a tilled field in Iowa - note that the rain is already starting to cut channels.

In many ways the rock carrying the oil acts the same way. The two channels in the top picture are in the same rock, with the same oil, but it is much easier for oil to flow through the bigger channel, and it will be at much less pressure drop than it takes to get oil to flow out of the thinner crack. And with the flow of the oil the channels in which it does flow well get bigger, reducing further the flow through the narrow channels, and trapping, or stranding the oil that is left in them.

Piece of sandstone, showing the grains

Now you might think that this has, initially to be a great difference. Well here is a picture of a piece of sandstone I had in my office. It is at first glance made up of grains of about the same size and were it full of oil you might think that oil would flow evenly through it. (It has no oil in it - oily rock looks black and it is hard to make out the features I am talking about due to lack of contrast)

But if you look more closely (and I have zoomed in a bit on one area above the 6-inch marker) you might see a thin connected path wandering through the sandstone. (I have marked it with arrows).

That line is one of higher permeability. I have been on a site where the ground was supposed to be as evenly sized and permeable as this sandstone, if not more. A test was being run in which my hosts had pumped some fluid into the rock. Since they did not get the result they wanted, they dyed the next batch of water a bright color and pumped it into the ground. They then dug a hole over the site, and looked down the side to see the thick colored layer that they expected to find. They needed a magnifying glass, all the fluid (hundreds of gallons) had gone into a single flaw, about the size of the one shown in the two pictures, and none anywhere else.

For those who can’t see it very well, here is a picture of a block of sandstone outside the Oil Museum in Stavanger that I took this afternoon, and you should be able to see a number of larger fractures that have been naturally recemented running through the block)

However, while we were injecting fluid in the case just above, the opposite can happen if one is not careful in drawing the oil from a well. The initial production can create flow paths through the rock, leaving isolated patches of oil that are not recovered on either side.

But hold-on you say surely if we just keep dropping the pressure (by opening the choke) then eventually we will have enough difference to move even that oil. Well, No! (You may have noticed I am becoming a relatively negative person).

I was reading "The Color of Oil" by Michael Economides and Ronald Oligney when I first drafted this post. It is a very fast (even more so than this) spin around the world of oil, but I am going to use their numbers (page 32-33) for this next bit.

The oil inside the pores of the rock is initially assumed, for now, to be at the same pressure as the burial depth of the rock (due to geological movement this is a very very simplifying assumption, but let's make it). But as we let the oil flow out of the rock this pressure, which is caused by the oil and rock compression will get less. While the oil can expand and flow, the rock does not, and so after a while there is no pressure difference between the oil and the fluid in the well. The oil stops moving because the differential pressure has gone away. Professor Economides
"Recovery of 3 percent or less of the initial oil in place can make the reservoir pressure equal to the pressure at the bottom of the hole. When this occurs, fluids are no linger driven into the well and 97% of the original oil is left "in place" in the reservoir. This defines primary recovery, the most elemental but generally unacceptable ending point in petroleum exploitation."
What else can we use as a driving force? Well, some posts back I mentioned the analogy of a bottle of champagne. Shake it, pop the cork, and the dissolved gas in the wine will fountain it out over the happy celebrants. But after the fizz is gone, there will still be some wine in the bottle. It is the same sort of thing that happens with the oil. Oil usually contains gas dissolved within it. As the pressure within the oil drops, this gas begins to come out of the liquid. (Slowly release the cap on a bottle of soda water and you will see the same thing). (Note that this does not change the pressure in the well, and thus reduces the difference or driving pressure moving the fluid to the well).

Professor Economides continues
"A specific (lower) pressure level called the "bubble-point" pressure marks the onset of natural gas evolution, known as the solution gas. When this level is reached (the point at which this occurs depends on the specific crude), recovery can increase substantially to 15% or more."
Now let's go back to our example of the two bottom layers of oil in the top sketch. The bottom one will flow oil faster and draw oil from further out, than the upper one. As the pressure in the larger channel drops, as it empties, the remaining oil in the channel will start emitting gas. While the gas will rise, overall, to give a gas layer above the oil, it will also flow more easily into the well than the oil in thinner channels. If the reservoir engineer is not careful at this point, all of a sudden he may find that all he is getting out of the well is gas. (Take a drinking straw and sucking gently move it down onto the top of water in a glass. Note that the straw has to be in the water before you can drink any. If you had machine strength suction and you don't so DO NOT TRY, you would find that if the straw was within half an inch of the water you might start to get a little, but effectively you won't get much). So it is with the oil well. You need to be drawing from the oil zone only to keep oil production happening.

However, going back to Darcy's Law (in itself an application of Newton's Law) as the well has produced the oil and the compression has come off the oil as some of it left, the pore pressure in the rock has gone down, and thus the difference in pressure between the well and the rock is less. With less of a “push” the flow of oil from the well will also get less, and with no further stimulus, the oil flow will gradually stop as the difference between the pressure in the rock and in the well reached the same level, and if this were all that happened then it would leave about 85% of the well in the ground, and sometimes that does occur.

However, if you remember from the first post where I talked about rock pressure there can often be water under the oil.

Simplified sketch of an oil bearing layer in the ground.

This water can provide some pressure on the oil above it, and as the oil flows up into the well, the water can rise up into the pore spaces that the oil has left, and keep some of the pressure on the oil a little longer.

Professor Economides
"If a large water aquifer is in contact with the petroleum reservoir, a natural drive mechanism can be provided by natural water influx. The larger the aquifer, the more effective and the more long-lived this drive mechanism tends to be. If a strong water drive is in effect, 10 to 25% of the oil in place can be recovered."
Once that is over, and with 25 - 40% of the oil recovered, then in a conventional well the oil is at the same pressure as the fluid in the bottom of the well, and no more oil will flow. To get the rest out will require some form of pumping.

And yes, one of the ways to increase the production is to pump water, under pressure, below the oil level to keep the pressure up. But to discuss that, and other steps in enhanced oil recovery are topics for another day.

But for now remember, it is not the oil in the reservoir that has been depleted, at this point, it is the force (the differential pressure between the oil and the well) that has been reduced, and finally gone away, and with it the oil production.

Unfortunately because driving pressure and permeability are so inter-twined this has been a long post. And yet I still may have glossed over some points too rapidly. So as usual if there are questions or discussion or correction, please comment.

Read more!

Wednesday, September 16, 2009

Coal, water and an Afghan problem of reality

It has been the first full day of the conference on innovations in coal production, and by the evening we delegates were ready for our evening meal. The papers today included the one from Vietnam that concluded that by 2020 the country would produce around 75 million tons of coal a year, but would still need to import another 120 million tons to meet the needs that are already predictable to meet future power needs.

It was another delegate that pointed out that by far the majority of folk were over 40, and so it was no surprise that in the evening, in a field above the village, we sat in an open wooden pavilion, and after bigos, beer, sausage, and other Polish food, sat around the fire and sang.

Around the fire

The photo does not do the group justice, since with a 3-man folk band playing trumpet, accordion and bass, the density of folk was soon about 3-times that shown, and even those of us with no Polish were singing along, as someone else said, “in French” (la, la la!)

But for a little while I, and the sole Afghan delegate, sat in a relatively quiet corner and chatted over (at least for me) a beer. And I came to an appreciation of one of the problems that I had not thought about for that country, and that I will, as a result share.

We went through the usual talk of Afghanistan being an unconquerable country (vide Alexander the Great, the British and the Russians to name but three). But then we talked about what could, realistically, be done to help the country.

I have just ( in Tuesday’s post) quoted figures on electricity availability in the country – at around 10 – 12% percent. “No”, he said sadly,”it’s about eight.”

One of the reasons that I write the Tech Talks on Sundays is that unless you understand some of the “behind the scenes” ways in which things work, you can’t understand why certain “logical” answers actually won’t.

So it is in Afghanistan. With so little available electric power (and this is not the place to explain why that is a critical rung in the ladder of progress) the thing that would cement the local affection for any “invader” would be the provision of power to the populace.

But there is a rather large snag – the operation of a significant sized power station requires a lot of water. (And the TT on that will explain why). But the one thing that Afghanistan does not have is copious amounts of water. It is not part of the world that sees the seasonal rains of the monsoon. Rather it relies on the melting of the snows that fell in the winter and the storage of water in underground tanks and cisterns. (See, among others, Kipling).

Such provision works well for individual homes, it can – under the right circumstances – store enough water for a 40-acre farm that will keep the family alive (different world - different agriculture) – but it can’t meet the needs of a 100 MW coal-fired power generating plant without a whole lot of changes.

(Oh, and a brief aside to Jerome – wind turbines are, in their place, a great alternative source of needed electricity, but in Afghanistan the winds bring the sands from the surrounding desert and in the abrasion of surfaces under wind, sand and rain attack is where I can raise a knowledgeable question of reality).

The coal in the country is found in the North and swings around the edge of the country on the East.

Coal deposits in Afghanistan (USGS)

Because of the growth of the Himalayan mountains the seams are now left in a steep (about 45 degree) incline that makes it more difficult to extract the coal. The immediately logical method of mining in such conditions is to use hydraulic monitors, as they do in New Zealand, but one gets back to the water availability problem.

Water is much more a right that is owned in Afghanistan than it is, in many other parts of the rest of the world. It is a topic that already is capable of stirring riots and anger – even in the United States, where water provision in California is now becoming a major problem.

But in the drier places of the world, such as Afghanistan (but also neighboring Pakistan) the lack of water comes at the same time as the maturing of a great increase in population ( from 24 milion in 2003 to 35.5 million in Afghanistan in 2015) and some attempt to bring industry to the country – both greatly increase water demand, while supply remains relatively flat.

It is a very difficult problem, there is coal for power, not really enough firewood for the future population demand for fuel, and there is not a lot of alternative choice. But other than burning the coal for domestic heating and cooking, how can they use it? How do they find the way to generate the electrical needs that the country has, and without which the future of the country is going to be as restricted as it might have been in the times of Alexander. The need for water is almost ubiquitous to the provision of so many forms of power, and so how do we circumvent it? Or can we?

Read more!

Tuesday, September 15, 2009

An international shortage

I am currently at a meeting in the Carpathian Mountains along with some 160 mining engineers from various parts of the world, and they are talking about what must be done in the future to ensure that coal can be mined effectively and efficiently to meet the coming demands for energy as other fuels pass their peak, and alternate sources of energy likely fail to meet the needs that society has for energy.

Most of the attendees are from Poland – a country that has one of the more detailed programs for educating the engineers that the industry needs. Within the comprehensive group of disciplines defined as mining, but including mining machines, robotics, geological engineering etc this country produces a significant part of the total number of global mining engineers that graduate each year. Yet even here academia is struggling to meet the needs that industry has for new engineers. We heard tonight that one company alone would like to hire 300 new engineers – which equates to more than the total graduating class in the country. But to also put that in context it is about equivalent to the total number of mining engineers that are graduated in most of the Western countries including Australia that also produce mining engineers. (The numbers do vary somewhat, however, depending on definition, since in Eastern Europe there are a sufficient number of sub-specialties that accurate counts between countries become more difficult because of problems of cross-discipline identification).

Why do they need these engineers – well consider that, apropos my post from last night on the gas from Turkmenistan, Poland is going to be one of those countries hurt if Russia cannot provide enough gas to meet the levels of import the country needs to meet demand. With little choice Poland must fall back on the resource that allows it to help itself.
Sitting on an estimated 140 years' worth of coal reserves, Poland . . . . which has a population of 38 million, generates 96 percent of its electricity in power stations fired by coal, much of it from the country's still-plentiful Silesian reserves in the south.

In contrast, the proportion in neighbouring Germany is 60 percent, and in France, 10 percent.
. . . . "Poland won't be in a position by 2020 to make significant changes to this dominant technology," said Wladyslaw Mielczarski, an expert from the European Energy Institute think-tank

So what can the country do? Like so much of the rest of the world it is hard to attract students into this discipline, which still has the image of primitive force – despite the introduction of a variety of technological developments that have considerably “modernized” the field. Those that graduate are still finding enough job offers to go around – within the global market place.
But with demand for new engineers at about twice the supply rate the prospects for dramatic modernization and change are limited at best. Why ? Because there is not enough of a trained workforce with enough time to do the research. And mining is not a major research area of interest in many countries (The United States, for example, closed the Bureau of Mines and the support for research that the agency had, until then, provided).

Is the industry concerned about the problems of carbon dioxide? Well consider that it just sold a large quantity of carbon credits to Japan.
The European Union's largest coal miner Kompania Weglowa will sell carbon dioxide offsets to Japanese utility Chugoku Electric Power, Kompania Weglowa's chief executive said on Tuesday.

Kompania Weglowa will sell 944,000 tonnes of offsets, called Emissions Reduction Units (ERUs), over three years for about 8 million euros ($11.71 million), Miroslaw Kugiel told a news conference.
Yes the industry has problems, and this, one of at least three meetings on Mining Technology in Poland in the next ten days, is trying to bring together those that have chosen to address those problems with technical advances. But in much the same way as in other countries it is much more fashionable, at least publically, to talk about the risks of climate change, than it is to be concerned that the policies that are being put in place will deny the world the energy supplies that are available and that it needs in the short term to sustain society until realistic alternatives can be developed.

There seems to be, from conversations with participants, less money available for research to answer the problems that the industry has to solve. Even with enough reserves, Poland must mine thinner seams at greater depths, and the most productive technologies of today should perhaps be replaced since there may be better alternative methods for those changing conditions. But where is the money to fund those developments?

And who will there be to work on them, when the industrial demand for graduates exceeds (even today) the supply and so salaries rise, graduate student numbers fall, and replacements for faculty become much harder to find.

I suspect that very few, if any, commentators are aware, let alone care about these issues. But these are the problems that will control the fuel bills of the next two decades – and so commentators should be aware at least of the current damage being done to that future.

Read more!

Monday, September 14, 2009

More on Turkmenistan and gas sales

A couple of days ago I was writing of the promise inherent in a meeting between the Turkmen President, Gerbanguly Berdymukhamedov and President Medvedev of Russsia. Well the meeting has now taken place, and there was a story in the Moscow Times that the meeting had not gone well. However, before writing this post I went to dinner, and now it seems that story has quietly disappeared. Instead there is now a story in The Daily Star that reports that the meeting went well, and that the two leaders “clinked champagne glasses.”

As I mentioned in Friday’s post the meeting included the end of the Silk Way Race, which is now over. The dispute may not be, since, although stories talked of the dispute being resolved:
There were also signs that the sides had reached a breakthrough on the export row that would allow stalled talks to go forward. Berdymukhamedov said all technical problems relating to the blast had been fixed, and a top Kremlin aide said that Turkmenistan and Gazprom would hold a meeting within days to discuss “further cooperation in the gas sphere,” Russia’s Interfax news agency reported.
It appears that the agreement is only to continue talks, and not to resume gas shipments.

Now at the moment Turkmenistan is extracting gas and storing it, since the Russians aren’t accepting it into their pipelines, but that may be a bit of a dangerous game for Gazprom, given that the Chinese pipeline may be ready to receive shipments before the end of the year. At the continuation of discussions, but now in Kenderly, Kazakhstan, the Turkmen President mentioned all the commitments, but the one to Russia.
Berdimuhamedov noted his country would begin operating a gas pipeline to China by the end of 2009 with the capacity to pump some 1.6 trillion cubic feet of gas per year. Meanwhile, he emphasized the importance of the proposed Turkmenistan-Afghanistan-Pakistan-India (TAPI) while a rival project from Iran moves forward in the region.

On Nabucco, the natural gas project for Europe, Berdimuhamedov said his country was ready to make pledges in support of the $10.3 billion pipeline.
Now of these the Nabucco continues on life support since there is not yet enough gas committed to be supplied to justify construction, despite an agreed market for sales into Western Europe. There is already a crude oil pipeline in place, the Baku-Tbilisi- Ceyhan pipeline, and the West would like a similar natural gas equivalent, but it keeps running into obstacles. Azerbaijan has doubled its commitment to the line, with supplies proposed from the Shah Deniz field.
Production at Azerbaijan’s giant Shah Deniz natural gas field has risen to 24 million cubic meters (847 million cu ft) daily, Azerbaijani and Russian news sources reported May 4. In 2008, the daily output averaged 22 million cubic meters (777 million cu ft).

Field operator BP said that production increased despite ongoing drilling, the Regnum news agency reported. BP is preparing for a second production phase when annual output is expected to reach 12 billion cubic meters (423 billion cu ft) and, later, 20 billion cubic meters (706 billion cu ft)
Yet this is still not enough to make the pipeline work – it needs the gas from Turkmenistan.

The TAPI pipeline on the other hand would feed natural gas into downstream economies that are desperate for natural gas supplies. Afghanistan is the first of these, and energy shortages are rarely discussed as one of the problems of their economy, but with only 10 - 12% of the populace having access to electricity and with only limited natural gas resources (perhaps enough for a 100 megawatt power station), the country needs to import natural gas in large volumes. The question is, as always, from where? Turkmenistan is a logical place.

Proposed pipeline from Turkmenistan to India

But the route of the pipeline, while agreed, does not end up delivering gas without a pipeline being installed, and though the project has been nearly ready to start since 2003, with a projected construction time of 3-years, there has yet to be a significant physical start.

Pakistan, while getting help for construction of hydro-electrical projects is still desperate for help with natural gas and other energy fuels. But so far there is no pipeline to help.

Looking at it from Turkmenistan’s point of view the pipeline to China will soon open and revenues can come from thus new customer. The price will be at double the price China has been paying for its own gas.
Chinese wellhead prices at $3.5 to $4 per million British thermal units (mmBtu) are now comparable with US onshore gas prices and spot LNG cargoes, but still half of term LNG supplies signed last year for delivery beyond 2012, estimated at $8-$10.

While the cheapness of gas has made it a favoured choice for power plants compared to fuel oil, it has done little to encourage import deals or drilling during a near four-fold rise in demand in the last decade. By raising prices, Beijing will provide an incentive to increase supplies while gradually getting industries used to paying the market rate for raw materials, part of Beijing’s drive for a greener economy and prominent role in global climate talks.

. . . . . Turkmenistan gas will be priced at 2 yuan per cubic metre ($8 per kcf) at the border point in Khorgos, sharply above the average 0.79 yuan for local gas flowing in China’s flagship West-East pipeline, China’s leading financial magazine Caijing reported in March.
Chinese demand is anticipated to grow from a current 7.3 bcf/day to 18 bcf/day by 2020, with 2.9 bcf coming from the new pipeline by 2011.

While this may be an expensive price for China to pay, it will certainly relieve Turkmenistan of the old option that was to either provide natural gas to Russia, or starve, and will give it more income until other options (such as TAPI or selling natural gas to Iran) become a reality.

Read more!

Sunday, September 13, 2009

Old and new thoughts on energy and transport in Poland

The first part of my travel is now complete, and I have reached a place with a slightly slower pace of life, and one that is a little cooler than Missouri.

Market Square in Krakowa with the carriage horses lined up (and being kept working if not really busy).

We arrived this morning and came down here for a gentle lunch, the horses’ hooves are now shod with a rubber pad to lower the sound as the clop around the square.

Polish carriage horses with pads on the horseshoes

For those with less time, or perhaps romance in their souls, the taxis that go on tours have been changed so that small electric carts that now can carry you around (very similar to golf carts) are available.

Tourist transport – Kracowa (Cracow)
For the general populace electric street cars are ubiquitous and of a variety of vintages – this is one of the more modern.

Polish street car

The busses seemed relatively full – even for a Sunday afternoon, and ran very regularly – however we are located where we can walk to all the places we need to be, which gives an excuse to enjoy local food a little more.

The availability of public transport on a widely available basis in the centers of the cities in Europe and the ease with which you can move around the countries on such transport contrasts with some experiences in the Midwest, where one of us had just travelled by Greyhound bus and had discovered the hard way that having a bus ticket does not guarantee that you will get a seat on the bus – or even on it – and even first come doesn’t always help get a seat, since luggage can be moved to push you back down the line.

It will be interesting to hear what the current attitudes to the coming shortage of oil is currently. Certainly in our short walk to the square the motor traffic on the streets seemed denser, and moved faster than it used to, and there did not appear to be a concern with energy availability.

Their current priorities are:
Improving energy efficiency, increasing security of supply and developing competitive markets for fuels and energy, introducing nuclear power, increasing the use of renewable sources and reducing the impact of energy on the environment.
This is a broad enough set of goals not to offend anyone, I would have thought, but there is perhaps controversy in the details.

There is a plan to provide “white certificates” with financial value, to those who save the most energy, in a country where the plan is to maintain zero energy growth.

The country will aggressively pursue high-efficiency co-generation of power and heat , and promote more energy efficient appliances.

Increasing energy security involves:
Poland's energy security will be based on domestic fuel and energy resources, especially hard coal and lignite. This will ensure independence from the production of electricity and, in large part, heat from external sources of supply.
In the area of oil, gas and liquid fuels the document assumes diversification, which now applies not only to supply sources, but also to production technologies. Support will be given to develop technologies whereby it will be possible to acquire liquid and gaseous fuels from domestic resources.

The current forecasts on the possibility of covering future demand for electricity in Poland indicate the need to increase capacity. Commitments for the reduction of greenhouse gas emissions force Poland to look for low-emission solutions in the production of electricity. All available technologies to produce energy from coal will be utilized, provided that they reduce air pollution (including a substantial cut in CO2 emissions)
The plans for nuclear power at the moment are more focused on putting the necessary resources in place to be able to reach this objective.

To meet the targets for renewable energy a target of 15% share of consumption by 2020, and 20% by 2030. By 2020 there should also be 10% of the liquid fuel provided by biodiesel.

A ceiling will be introduced to cap levels of emissions of gases such as carbon dioxide, with limits on the amount that different industries can generate, while encouraging the use of CO2 for enhanced oil recovery and for other industrial uses.
At the present time the government feels that the nation is energy secure .
Pawlak (the deputy prime minister) said that Poland’s energy security is based on domestic black coal deposits. ‘The structure of primary energy use consists in 48% of black coal, 12% brown coal, 23% oil, 12% gas and 5% renewable energy sources’.
To maintain such security, however, will need more research on clean coal technologies and on renewable energy sources.

Read more!

Friday, September 11, 2009

Completing and Perforating a well

This is another in the technical series in which I talk about the different aspects of getting fossil fuels out of the ground, Earlier posts are listed to the right. They normally run on Sundays, but since I am travelling over the weekend, this has been put up a little early. Since I will be at Conferences for the next two weeks, posts will also be a little more sparse, since I am not sure whether I will always have internet access - but when I can, I'll add more.

It would nice, once the drill hits the oil-bearing rock, to say that you were done. That having connected the feed line from the well through a choke valve (that controls the outflow from the well), we could proceed to tie the outflow into some kind of collection network, and then we could sit back and count the money as it flowed by.

Well not quite. There are a number of different steps that we have yet to go through before we can finish what is commonly called, the completion, of the well. At this point in the process the bottom of the well is still an open hole. And one of the first things that we do is to flush out the drilling fluid, and then clean the walls of the well – firstly be washing the remaining mud from the well down in the production zone. That means that the rock wall is exposed, just as it was drilled. There are several issues that can come about as a result of this. The first is that the rock we have drilled into can be fairly weak. This is one of the peculiarities of geology. To a degree the richer in oil the rock is, the weaker the rock will be. (And that also holds true for oil shale - of which more at a later date). Why is that?

Well let's talk a little about the rock structure, particularly in this post the porosity that it has. (I’ll talk about permeability next time). There are, simplistically, two types of rock, that oil is usually found in and for now, to make a simple generalization, I am going to call them sandstone and carbonate (as I said holding shale until a later time). Sandstone rock is made up of relatively large grains that are glued together at the edges with various different types of natural cement. The grains do not fit that well together (think apples filling up a room, and connected where they touch). We call the gaps between the grains, the pore space of the rock, and it is these gaps that the oil fills up to form the reservoir. And so we can calculate the "free volume", as it were, of the rock as the (relative amount of free space in the rock, you can get this by subtracting the weight of the rock from the weight of the same sized piece cut from solid quartz and it will tell you how much empty space there is in the rock, and thus, how much oil there could be in that volume.

Section of sand with oil in the pores –this is actually an oil sand, so the grains aren’t that well cemented together. (Syncrude)

So say we had a core that weighed 144 lb/cu ft and the weight of solid quartz (flint) is 220 lb/cu ft. Then only 65% of the rock (144/220) is solid rock and the remainder is what is known as pore space. Now these holes can be connected or totally separated, with each pore surrounded by a solid piece of rock. Normally the percentage given is reversed, i.e porosity = proportion of void space to total volume, or in this case 35% of the total volume is not rock. (Another picture showing porosity of a sandstone can be found here. Now in the reservoir rock this space is going to be filled with a fluid, either gas, oil or water. For now let us assume that it is filled with oil.

What I have described so far is known as primary porosity,i.e. that which is created by this initial structure of the rock. With carbonates more than sandstone there is a secondary porosity, and this is the porosity induced by rock movement and the dissolving of channels and holes in the rock by the movement of fluid over the rock through the millennia. Again put simply the oil found in a sandstone will occur between the grains of the rock. In the case of the carbonates, which normally have a much smaller individual particle size, the oil is more often usefully found in the cracks and joints formed were the rock bedding planes were created (and which can be seen in exposed rock in a lot of road cuts along the highway).

The voids and spaces in the rock are also formed from the spaces from what might have been old coral reefs, or where water dissolved holes through the rock. But sometimes the two methods of formation mix, and I would like to quote from Kenneth Deffeyes book "Hubbert's Peak" (my favorite text as an explanation of the geological case).
Fine grained calcium carbonate mud usually gets consolidated into massive limestones, usually with little or no porosity. . . . . . . .About 10 percent of ancient limestones do have porosity. . . . . . .Most massive and nonporous limestones contain textures made by invertebrate animals that ingest sediment and turn out fecal pellets. Usually the pellets get squished into the mud. Rarely do the fecal pellets themselves form a porous sedimentary rock. . . .I twisted Aramco's collective arm for samples from the supergiant Ghawar field. . . . .Examining the reservoir rock of the world's biggest oil field . . .a small part of the reservoir was dolomite, but most of it turned out to be fecal pellet limestone. I had to go home that evening and explain to my family that the reservoir rock in the world's biggest oil field was made of shit.
So there you have it. And the reason for the quote is that the rock at the bottom of our well can be very weak, and may be left in poor shape by the oil drilling bit that just passed it by. Now remember it is this wall around the hole that is the barrier through which all the oil in that rock must pass to get into the well. So before we leave it we have to ensure that it is in as good a condition to allow that flow as possible. (Hence the reason for the removal of the mud and the cleaning of the wall). We also have to isolate the production zone from the rest of the well, and we do this with what is known as a completion or production packer.

Production packer (B.J. Services ) - the three rings swell out and fill the gap (pack it) between the tool and the rock wall of the hole acting as a seal to separate the well below, from the well above – note the internal pipe to allow flow from the underlying part of the well.

One of the problems is that the drill bit may have overly crushed the rock, so that fine carbonate particles are pushed into the cracks and pores of the rock, right around the bore. These can block the passages that will allow the oil to enter the well. And so, in order to get rid of these particles, a strong acid can be poured into the bottom of the well. This acidizing dissolves these fine particles and opens up the cracks leading out into the surrounding rock, so that the oil can flow into the well bore more easily.

Process of isolating and acidizing the formation.

Another problem is that the rock may be very weak, since a lot of its strength comes from the oil that fills the holes within it. This oil only provides strength as long as the rock is totally confined on all sides, but when the pressure is removed on one side (think of popping a champagne cork) then the oil can flow away, taking the support for the surrounding rock with it. If the rock bridges that are left are weak then they can crush. This will cause the crushed rock (sand) to mix with the oil, which will require a de-sanding process at the surface, but it will also close some of the passages through which the oil is flowing to the well. A well operator that speeds the flow of oil out from the rock around the well, can reduce the support that the oil gives to the surrounding rock to the point that it crushes, and permanently reduces oil flow into the well. We can put in a screen that will hold the rock in place, but allow the oil to seep through slots in the screen wall.

Completion screen

Or, to stop that rock crushing from happening and to reinforce the rock , we can pump a layer of concrete into the bottom of the well, cementing a steel liner into the rock, just as we cased the well higher up the well. The steel liner, or production casing, has, however, one problem. Once it is cemented into place, there is this hollow tube all the way to the surface, but there is no way that the oil can get through the cement and the steel into that passage.

And this is where Her Majesty's Explosive comes in. Small, specially designed, explosive charges, known as shaped charges are now put together into specifically designed charge packages, and lowered down into the well into the completion zone.

Arrangement of shaped charges (the yellow cylinders) – when the explosive goes off the cones collapse and small liquid metal jets shoot out of the open end, through the casing, concrete and into the rock, creating a channel. (Core Labs)

Here they are detonated, sending small jets of metal against the wall of the casing and perforating the steel and concrete into the surrounding rock. There is an animation that shows the jet being produced (see also information here) .

Representation of shaped charges firing and penetrating the casing, cement and wall (OSHA

This gives the passage for the well to flow out of the rock and into the well bore. We have finally completed the first stage of our oil production.

Again this is a very simplified explanation of a quite complex process, but it moves us along to consider some of the other issues relating to how the oil now flows to the well, that will be next.

Since this is simplified additional comments and questions are welcome.

Read more!