Unconventional oil and gas is differentiated from conventional hydrocarbon resources based on the state of the hydrocarbon, nature of the geologic reservoirs and the types of technologies required to extract the hydrocarbon. Conventional oil and gas deposits have a well-defined areal extent, the reservoirs are porous and permeable, the hydrocarbon is produced easily through a wellbore, and reservoirs generally do not require extensive well stimulation to produce. Unconventional hydrocarbon deposits are very diverse and difficult to characterize overall, but in general are often lower in resource concentration, dispersed over large areas, and require well stimulation or additional extraction or conversion technology. They also are often more expensive to develop per unit of energy and require a higher price to be economic.
Research and investment into unconventional resources has increased significantly over the last two decades due to the higher price environment for oil and natural gas. In several cases, the technologies for economic production have already been developed, while in other cases, the resources are still in the research stage. What has qualified as "unconventional" is a complex and changing interplay of resource characteristics, the available exploration and production technologies and the current economic environment. For example through the use of technology, oil resources such as the Bakken have been converted from previously uneconomic unconventional oil into proved reserves and production. The resources of the Bakken Formation are defined by the United States Geological Survey (USGS) as unconventional "continuous-type" oil resources. The USGS estimates that there are 3 to 4.3 billion barrels of technically recoverable oil in the US Bakken accumulation (USGS, 2008). In 2008, the Bakken produced 27 million barrels of oil an increase of 269% as opposed to the 7 million barrels in 2007 (Rocky Mountain Oil Journal, 2009). Other unconventional liquid hydrocarbons include production from oil sands, ultra-heavy oils, gas-to-liquids technologies, coal-to-liquids technologies, biofuel technologies, and shale oil.
Unconventional natural gas can be of several types. Today, tight gas, coalbed methane, and shale gas contribute significantly to U.S. natural gas production. Offshore and gas hydrates, ice-like solids in which water molecules form a cage-like molecular structure that traps methane represent an extremely large natural gas resource that requires additional research and technology development to be economically produced. Unconventional natural gas resources represent an extremely large gas-in-place volume, and the U.S. has produced only a small fraction of their ultimate potential.
With the addition of 46.1 trillion cubic feet (Tcf), the U.S. had record-high dry natural gas proved reserves in 2007 totaling 237.7 Tcf (EIA, 2009). The reserves additions record reflects rapid development of unconventional gas resources such as coalbed methane and those resources that require advanced technologies like horizontal drilling with hydraulic fracturing, including shale and low permeability (tight) formations. Coalbed methane and shale now represent percent a significant and growing percentage of US natural gas production (15%) and reserves (18%). Total U.S. dry natural gas reserves additions replaced 237 percent of 2007 dry gas production (19.5 Tcf).
Beginning about 1976, groundbreaking research directed by the Department of Energy catalyzed several innovative industry "firsts" that later became commercial technologies, and also resulted in the acquisition, analysis and wide dissemination of an enormous quantity of data on a topic that at the time generated little interest: unconventional sources of natural gas. At the time, less than 7 percent of the natural gas produced from gas wells came from unconventional sources. Today, more than 40 percent of the natural gas produced from gas wells in the United States-7.5 trillion cubic feet (Tcf) per year-comes from unconventional sources: fractured gas shales, tight gas sands and coal seams.
The growth in unconventional gas production over the past thirty years has been driven by several factors, but the rapid growth in new technologies for finding and producing unconventional gas have played an important role. Tax credits that began in 1980, and higher natural gas prices driven by rapidly growing demand have played a part in supporting economics, but the tools for tapping into these resources when economics began to make sense would not have been there, or would not have been adapted as quickly, if the groundwork had not been laid by research carried out through the DOE's Unconventional Gas Research (UGR) Programs.
For example, the first use of nitrogen foam to effectively stimulate production of gas from shale wells, the discovery of how natural gas is stored in coal seams and fractured shales, recognition of the importance of interconnected natural fractures in the production of gas from such reservoirs, the first use of directional drilling in shale reservoirs to improve productivity by intersecting fractures, the creation of advanced tools and methods for measuring the properties of unconventional reservoir rocks, and the early development of micro-seismic monitoring techniques for mapping hydraulically-created fractures; are just a few of the advances initiated by DOE-funded research. The pay-offs from these early investments are reflected in the commercial technologies that are making the current expansion of unconventional gas production possible.
Today, for example, micro-seismic fracture mapping is playing a key role in optimizing the way gas wells are hydraulically stimulated in the Barnett Shale Play in North-Central Texas. The play has been proven to contain at least 2.1 Tcf of natural gas, and some industry experts believe it to be the largest onshore natural gas field in the United States. But the first systematic application of microseismic fracture mapping was a project funded by DOE and carried out by Los Alamos National Labs in the 1970s. Subsequent research performed at the DOE's Multiwell Experiment (MWX) site in Colorado during the 1980s helped refine the process. Although it took two decades to make this technology workable for normal oil and gas activities, DOE's long-term support was critical in the development of commercial tools for microseismic monitoring of fracturing procedures.
As well, many wells in the Barnett play are drilled horizontally to intersect fractures and maximize the flow rate of gas. DOE-industry collaborative efforts in the 1970s resulted in the first directionally-drilled wells designed to intersect fractures in the Appalachian Basin's Devonian shale play. These cost-shared demonstrations and the lessons learned from them set the stage for the technological advancements leading to what is today a widely applied practice in fractured shale plays like the Barnett and other reservoirs.
The largest portion of the unconventional gas produced today comes from the low permeability (tight) sandstone reservoirs of the Rocky Mountains. In the Rulison Field of the southern Piceance Basin of Colorado, carefully chosen well locations and technically advanced well completion designs are dramatically increasing the volumes of gas that can be extracted from these tight sands. However, the knowledge base and fundamental science behind these advanced practices are rooted in work carried out by DOE at its MWX Site in the Rulison Field during the 1980s. This research provided key insights that convinced industry new technologies could be economical. Many of the same lessons are now being applied in the tight sand reservoirs of Wyoming as well.
An estimate of the benefits resulting from DOE's unconventional gas research programs was prepared and reported on in the National Research Council report titled "Energy Research at DOE: Was It Worth It? Energy Efficiency and Fossil Energy Research 1978 to 2000" published in 2001. The Council reported benefits of several billions of dollars in incremental state and federal tax revenues, trillions of cubic feet of incremental gas supply, and billions in consumer savings due to lower natural gas prices accompanying the supply increase.
The unconventional hydrocarbon resources map of North America provides an overview of major sedimentary basins, plays and active production areas that are targets of gas and liquid extraction. The map has been created from datasets compiled from various sources by the West Virginia GIS Technical Center, Dept. of Geology and Geography, West Virginia University (WVU). This project is a partnership between the National Energy Technology Laboratory (NETL), the US Department of Energy (DOE), and WVU.
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The unconventional hydrocarbon resources map of South America provides an overview of major sedimentary basins and plays that are targets of or have potential for gas and liquid extraction. The map has been created from datasets compiled from various sources by the West Virginia GIS Technical Center, Dept. of Geology and Geography, West Virginia University (WVU). This project is a partnership between the National Energy Technology Laboratory (NETL), the US Department of Energy (DOE), and WVU.
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The unconventional hydrocarbon resources map of the world provides an overview of major sedimentary basins and plays that are targets of or have potential for gas and liquid extraction. The map has been created from datasets compiled from various sources by the West Virginia GIS Technical Center, Dept. of Geology and Geography, West Virginia University (WVU). This project is a partnership between the World Resources Institute (WRI), National Energy Technology Laboratory (NETL), the US Department of Energy (DOE), and WVU.
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