Recent actions by the administration of US President George W. Bush raise industry concerns about the future of federal funding for oil and gas research and development. The administration has repeatedly excluded from its annual budget proposals funding for oil and gas R&D by the Department of Energy’s Office of Fossil Energy (OFE). Yet OFE continues to participate in such projects, although at decreased funding levels.
In fact, OFE’s National Energy Technology Laboratory and Texas A&M University recently completed a 3-year, $890,000 research project that developed a computerized method for rapidly interpreting field tracer tests. OFE funded $630,000 of the project’s cost, and the university provided the rest.
OFE, A&M project
The new method integrates computer simulations with history-matching techniques, allowing scientists to design tracer tests and use PC-based software to interpret the data. This process, DOE said, is much faster than conventional history-matching.
DOE explained that the new software uses “generalized travel time inversion” technology to adapt sophisticated computer modeling to the personal computer. The cost and time savings, coupled with the streamlined model and accessible PC-based tools, make the technology feasible for small independent producers.
The system enhances reservoir characterization, enabling its users to identify unswept regions in mature fields with high oil or gas saturation. It uses computer models to characterize a productive oil reservoir. History-matching then calibrates the model by correlating its predictions of oil and gas production to a reservoir’s actual production history.
A key input to history-matching is data from tracer tests, in which traceable gases or liquids are injected into a well to determine the paths and velocities of fluids as they move through the reservoir. This information helps reservoir engineers calculate how much oil remains in the reservoir and determine the most efficient way to sweep the residual oil from the reservoir.
Application
The new computer-modeling tool promises to quickly and economically estimate the amounts of oil remaining in reservoir compartments of mature fields and thus to improve planning for its recovery.
According to DOE, more than two thirds of all the oil discovered in the US remains in place in the subsurface and is economically unrecoverable with current technology. About 218 billion bbl of this oil, categorized as bypassed oil, lies at depths of less than 5,000 ft.
Bypassed oil represents a huge target for the roughly 7,000 independent producers active in thousands of mature US fields, and it could account for a large share of the country’s oil supply, DOE said in a statement on its web site.
DOE added that much bypassed oil lies in difficult-to-access pockets and that predicting the location and size of these elusive, compartmentalized deposits is costly because it often requires complex computing.
Many independent producers, the agency said, aren’t able to commit the labor or buy the expensive supercomputer time required to create and operate the models needed to access bypassed oil.
With federal R&D funding uncertain, Texas A&M researchers have responded to interest in their new technology by assembling an industry R&D consortium funded by eight production and service companies. The consortium has won a grant from the National Science Foundation, and its technology has been adopted by two companies.
Future funding
Federal funding of oil and gas R&D projects has been addressed by several industry organizations, including the Independent Petroleum Association of America and Independent Petroleum Association of Mountain States (OGJ, Mar. 19, 2007, p. 30; OGJ Online, Apr. 13, 2007).
In the past, Congress has passed budgets that included such funding even when the Bush administration didn’t request it. In fiscal 2006, however, it funded the government with continuing resolutions without passing a budget, leaving oil and gas R&D at 2005 funding levels. The practice of funding government with continuing resolutions has continued in the current fiscal year so Congress can concentrate on the budget for 2008.
Funding for OFE’s R&D programs, however, remains in doubt because the entire DOE budget is under review.
