Photo credit: WPX Energy
Posted on 07/30/2014 6:51:03 PM PDT by ckilmer
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July 30, 2014 | Comments (0)
Photo credit: WPX Energy
If I had told you five or six years ago that America would be producing more oil than ever before and potentially becoming an exporter of crude within a decade, you probably would have had me institutionalized. Yet thanks to the advancements in drilling techniques, we have been able to access one of the most abundant resources we didn't think were possible: shale and tight oil. Today, oil production from these sources total 4.6 million barrels per day and represent about half of our oil output.
What makes this story even more compelling, though, is the future ahead. Core Laboratories, a provider of oil and gas production technology, believes that some of the advancements it is working on could unlock hundreds of billions of barrels of more oil from shale. How is this possible? Let's take a look at how Core's work in shale could potentially lead to America becoming the worlds largest source of oil.
Going that extra 2% goes a long, long way
One of the things that many people don't understand about shale resources is that they are very, very hard to access. Despite the immense success that we have had extracting these resources over the past several years, we are only scratching the surface of these resources. According to Schlumberger research scientist Robert Kleinberg, we are only presently able to access 5% of the oil and gas available in these new resources, and based on the estimates from several companies working in some of America's top shale plays, even getting to a 5% recovery factor would be huge.
| Shale play | Estimated recoverable oil (barrels of oil) | Current oil recovery factor in region |
| Permian Basin (multiple formations) | 75 billion barrels | 3.5% |
| Bakken/Three Forks | 31.5 billion barrels | 3.5% |
| Eagle Ford | 26 billion barrels | 6% |
| Niobrara | 7 billion barrels | 1.4% |
Sources: Pioneer Natural Resources, Approach Resources, EOG Resources, and Continental Resources investor presentations, Oil & Gas Journal
Think about that for a second. The amount of oil these companies are estimating are absolutely massive, but they assume that we leave upward of 95% of the oil from these resources still in the ground. Using these recoverable resources and recovery factors as a rough guide, that means that the total oil in the ground in shale looks something like this:
| Shale Play | Estimated Oil-in-Place (barrels of oil) |
| Permian Basin (multiple formations) | 2,142 billion |
| Bakken/ Three Forks | 900 billion |
| Eagle Ford | 530 billion |
| Niobrara | 500 billion |
Source: Continental Resources & Pioneer Natural Resources Investor Presentations, and Oil & Gas Journal
There are multiple reasons why that oil recovery factors are so low for shale, but one simple reason is that we haven't been working with them very long to completely figure them out. Shale and tight oil have been a commercial success for less than a decade, while we have had over a hundred years to figure out conventional oil reservoirs. This is where Core Labs comes in. On the company's most recent conference call, CEO David Demshur said that the company is looking at ways of increasing oil recovery factors in the Eagle Ford and Bakken shale formations into the low teens. Based on where oil recovery is today for these formations, that is an additional 94 billion barrels of oil from just those two formations alone.
More importantly, though, is the potential impact that a move like this could have on all shale formations across the U.S. If oil recovery factors in shale could be increased to greater than 10%, then several prospective areas not currently economical could be attainable. For example, the Monterey shale in California is estimated to have 500 billion barrels of oil in place, but the geology is so complex that only a small portion of the oil in place -- about 0.12% -- is considered recoverable. If we could increase recovery factors. Increasing oil recovery there may not make all of it attainable, but it could certainly make a larger portion of that oil in place accessible.
Just to give you an idea of this level of potential, lets use the four major shale plays from above. If we were to increase oil recovery factors to just 10%, then the estimated recoverable resources would look a little something like this:
| Shale Play | Estimated recoverable resource using current recovery factors above (barrels of oil) | Estimated recoverable resource using 10% oil recovery rate (barrels of oil) |
| Permian Basin (multiple formations) | 75 billion | 214.2 billion |
| Bakken/ Three Forks | 31.5 billion | 90 billion |
| Eagle Ford | 26 billion | 53 billion |
| Niobrara | 7 billion | 50 billion |
| Total | 139.5 billion | 407.2 billion |
That's more than 267 billion barrels from just these four formations alone! If the economic conditions were right and these barrels of oil were to become proven reserves, we would have more reserves than Saudi Arabia.
What a Fool Believes
So far, the U.S. shale revolution has been a revelation. We are on the verge of producing more oil per day than in any other time in our history, and we are at a point where exporting oil to the world is a very real prospect. What is even more amazing, as these numbers show above, is that we barely have tapped the full potential of shale oil. It's highly unlikely that we will ever be able to recover shale and tight oil at the rate we can in conventional reservoirs -- about 50% today -- because of the specific nature of these geological formations, but even getting to 10% like Core Labs believes is possible would be a massive development for every company involved in oil and gas exploration and production and could drastically improve America's position in the global oil market.
Loosen that tight oil
The genesis of this article is that in Core Labs earnings conference call they talked about new work in their labs that will result in recovery rates that are double or triple current rates.
Their work in the baaken and eagle ford has declined in the last couple quarters so in the very least it looks like they want more work there.
As well this may mean that they’ll enable companies in the Tuscaloosa marine shale — where they are currently getting more work — to get more oil. Same goes with the permian basin where they’re also getting more work.
May be that they learned something new recently by doing more stuff in these very different formations.
Obama will build the pipeline if he has to to support his illegal aliens...
for the veterans...Butkis...
Oh no, don’t!
That would annoy our muzzie “friends” in the ME.
Ten years ago I would have said that these figures are wildly inflated and nowhere near reality, and do not represent economically recoverable reserves.
I’m not saying that today.
Ping.
But but but Peak Oil and Global Warming and stuff!!! /libidiot
Would have to clean house in DC first.
Nope...the enviro-weenies would NEVER agree to it.
Which is why they need to have a shoot-on-sight rule for protesters who show up to picket. We need a leader who will look out for the interests of the US FIRST and give these libtards the big middle finger.
Just my .02
Damnocrats will fight against any improvements in Oil recovery. We must make certain they get to minority status, and kept down.
Ten years ago I would have said that these figures are wildly inflated and nowhere near reality, and do not represent economically recoverable reserves.
I’m not saying that today.
...........
From looking at old production numbers going back decades and correlating them with other parts of the USA econonmic and political activity...I think that a lot of the vigor went out of the USA when oil production peaked in 1970. What most people don’t realize is that oil production had been going up almost steadily since before the turn of the century.
Anyhow that vigor is returning.
The Green River Formation weighs in a 3 TRILLION Barrels of oil with 1 trillion recoverable with todays technology...
An American Oil Find That Holds More Than All of OPEC Nov. 13, 2012 By ALAN FARNHAM via World News
Drillers in Utah and Colorado are poking into a massive shale deposit trying to find a way to unlock oil reserves that are so vast they would swamp OPEC.
A recent report by the U.S. Government Accountability Office estimated that if half of the oil bound up in the rock of the Green River Formation could be recovered it would be "equal to the entire world's proven oil reserves."
Both the GAO and private industry estimate the amount of oil recoverable to be 3 trillion barrels.
"In the past 100 years — in all of human history -- we have consumed 1 trillion barrels of oil. There are several times that much here," said Roger Day, vice president for operations for American Shale Oil (AMSO).
The Green River drilling is beginning as shale mining is booming in the U.S. and a report by the International Energy Agency predicts that the U.S. will become the world's largest oil producer by 2020. That flood of oil can have major implications for the U.S. economy as well as the country's foreign policy which has been based on a growing scarcity of oil
yeah, I love that story too. But its not going to happen anytime soon. There’s easier picking in shale oil—which is a very different animal from oil shale which is the hard rock of the green river basin. That oil shale has to be melted before its oil—which is a process that’s currently more expensive than expensive fracking techniques—and requires lots of electricity and water in places where there is little available—especially water.
Remember when Bush said “drill baby drill” and Obama said it would never work?
The TMS ain’t working. Too much clay and too little TOC.
there is something just a bit off in that
Yup. And drilling is the only thing keeping us of a deeper Great Depression.
So obastard of course hates it. Well, that, and a lot of the money is flowing to Texas.
The BLM controls most the Green River Lands. That is a major problem.
If we had a Congress and President with half a brain, we could be exporting oil in 5 years.
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