PARTIAL U.S. OIL, GAS RESOURCE VOLUMES TERMED 'ASTONISHING'

March 6, 1995
G. Alan Petzet Exploration Editor Land and state waters of the U.S. contain technically recoverable volumes of 112.6 billion bbl of oil and 1,073.8 tcf of conventional and unconventional gas, the U.S. Geological Survey estimated. The figures include proved reserves, expected future additions to reserves in existing fields, and undiscovered resources (Table 1) (31684 bytes) . Donald L. Gautier of Denver, project chief for the USGS study, called the volumes "astonishing."
G. Alan Petzet
Exploration Editor

Land and state waters of the U.S. contain technically recoverable volumes of 112.6 billion bbl of oil and 1,073.8 tcf of conventional and unconventional gas, the U.S. Geological Survey estimated.

The figures include proved reserves, expected future additions to reserves in existing fields, and undiscovered resources (Table 1) (31684 bytes). Donald L. Gautier of Denver, project chief for the USGS study, called the volumes "astonishing."

The oil figure is 44% higher than the USGS assessed in its last study, released in 1989. The assessed 715 tcf of technically recoverable conventional gas reserves, expected reserve growth, and undiscovered accumulations is nearly 42% higher than the 1989 assessment.

Moreover, the USGS for the first time assessed a further 300 tcf of technically recoverable gas in continuous-type, largely unconventional deposits in sandstones, shales, and chalks, and almost another 50 tcf in coalbeds.

USGS estimated that 60 billion bbl will be added to the oil reserves and 322 tcf to the gas reserves of existing fields by way of revisions, extensions, and new pool discoveries during the 80 years following 1991.

The estimates, released in mid-February 1995, reflect USGS understanding as of Jan. 1, 1994. They resulted from a 3 year study, assume use of existing technology, and ignore barriers to leasing of onshore federal lands.

USGS estimated that about 28% of the undiscovered conventional oil resources and 26% of the undiscovered conventional gas resources exist in Alaska; 13% of oil and 5% of gas exist in California and the rest of the Pacific Coast; and 18% of oil and 38% of gas exist in the Gulf Coast.

The study dealt with crude oil, natural gas, and NGLs that can be expected to be produced through wells. Most heavy oil deposits were assessed as conventional resources.

Excluded were gas dissolved in geopressured brines and resources in tar deposits and oil shales. Gas in clathrate structures-gas hydrates-were not assessed; however, a chapter concerning these in-place volumes of gas is included on a CD-ROM disk that contains all USGS estimates, more than 570 maps, and other details.

The study was completed by a team of USGS scientists in cooperation with their colleagues in the American Association of Petroleum Geologists, state geological organizations, industry, and academia.

The U.S. Minerals Management Service is separately assessing technically recoverable resources in the federal offshore and plans to release results as early as mid-1995.

ESTIMATES, COMPARISONS

Overall estimates of undiscovered conventional oil and gas resources are similar to those in the 1989 USGS assessment, but estimates of future reserve growth in existing oil and gas fields are significantly larger, mainly because more detailed field data were used.

USGS estimated the undiscovered technically recoverable conventional oil resource at a mean of 30.25 billion bbl (Table 2) (155749 bytes), about 10% lower than reported in the 1989 assessment. Of that amount, about 6.4 billion bbl exists in accumulations smaller than 1 million bbl.

Since the 1989 report, more than 2 billion bbl of oil has been discovered in new fields, thereby reducing the previous undiscovered quantities by that amount.

Proved oil reserves are about 20 billion bbl, down from 24 billion in 1989.

Undiscovered technically recoverable conventional gas resources, including nonassociated gas and associated dissolved gas, are estimated at a mean of 258.69 tcf (Table 2) (Table 2) (155749 bytes), compared with 254 tcf in 1989. The newer figure includes 45.2 tcf in accumulations smaller than 6 bcf.

Undiscovered technically recoverable natural gas liquids resources in conventional accumulations are estimated at a mean 7.2 billion bbl.

ALASKA EFFECTS

The change in estimated conventional oil resources is also due to a reduction in the USGS estimate of undiscovered oil resources in part of northern Alaska.

USGS said its understanding of the thermal history and geochemical makeup of the rocks of northern Alaska leads it to expect more natural gas and less oil in the foothills region, an area that includes most of the Arctic National Wildlife Refuge as well as the southern part of the National Petroleum Reserve in Alaska.

This information comes from results of drilling of the Tenneco Aurora well just offshore from ANWR; results of a major USGS study that summarized all thermal data in Alaska; and USGS studies in the foothills region that combine thermal-history information with that of the time of origin of rock structure and reveal an unfavorable relationship for the development of hydrocarbon traps. The unfavorable relation has resulted in the downgrading of oil resource potential in the foothills region but not in the coastal plain to the north.

Small increases in several other U.S. regions partly offset the reduction in Alaska. The estimates of undiscovered conventional oil resources for most other regions are in general similar to those published in the past, but they differ somewhat in detail, USGS said in its over-view report.

INFERRED RESERVES

Estimates of anticipated inferred reserves are 60 billion bbl, significantly greater than the 21 billion bbl reported in 1989.

Inferred reserves include those expected to be added to reserves as a consequence of extension of known fields, through revisions of reserve estimates, and by additions of new pools in discovered fields. Also included in this category are resources expected to be added to reserves through application of improved recovery techniques (Table 3) (13602 bytes).

The large increase in the inferred reserves estimate reflects the use of an entirely different and newer set of field level reserves figures in the 1995 assessment. These figures came from the last 15 years of data collected by the Energy Information Administration in its Oil and Gas Integrated Field File (Ogiff), while the 1989 assessment relied on American Petroleum Institute-American Gas Association data collected during 1969-79.

"The Ogiff file was collected during a period of extraordinary variations of activity in the U.S. oil and gas industry, including significant changes in oil and gas prices, drilling activity, and development efficiency," the USGS said.

GAS UP SHARPLY

The technically recoverable conventional resource of natural gas from both growth of reserves in existing fields and from undiscovered accumulations onshore and in state waters is about 580 tcf, up from 347 tcf in the 1989 assessment.

Proved gas reserves stand at about 135 tcf, down from 157 tcf in 1989.

Gas production rose in the intervening years to about 17.8 tcf in 1993 from 17 tcf in 1989.

The estimated mean amounts of undiscovered technically recoverable conventional gas resources onshore and in state waters are 259 tcf, near the 254 tcf reported in 1989.

Estimates of conventional gas have been reduced in a few areas, such as the Anadarko basin, but estimates have been raised in a number of others (Table 2) (155749 bytes). The overall change probably reflects the discovery of about 26 tcf of gas during the past 7 years and movement of certain resources previously estimated under conventional categories to plays in continuous-type deposits for the 1995 assessment.

Estimates of future growth of gas reserves in known fields are up significantly to 322 tcf from about 93 tcf in 1989. As with oil, this reflects more than any other factor the use of the EIA Ogiff data rather than API-AGA data.

"UNCONVENTIONAL" RESOURCES

Regions, Provinces in U.S.G.S. Resource Assessment (88082 bytes)

For the first time the USGS assessed technically recoverable oil and gas resources in continuous-type (unconventional) accumulations. It assessed 34 continuous gas plays and 13 oil plays, of which 32 plays are in sandstone, 20 plays in shale, and nine plays in carbonates. None is in Alaska or state waters.

This category includes resources that exist as geographically extensive accumulations that generally lack well-defined oil/water or gas/water contacts. The category avoids regulatory criteria such as specific permeability cutoffs. Included in the category are coalbed gas, gas in many of the so-called "tight sandstone" reservoirs, and auto-sourced oil- and gas-shale reservoirs (Table 4) (51327 bytes).

Common geologic characteristics of a continuous-type accumulation include occurrence downdip from water-saturated rocks, lack of obvious trap and seal, crosscutting of lithologic boundaries, large areal extent, relatively low matrix permeability, abnormal pressure (high or low), and close association with source rocks.

USGS included about 2 billion bbl of oil in continuous-type deposits, mostly in fractured shale reservoirs of the Bakken, Niobrara, Austin, and similar formations. These resources in unconventional reservoirs may have been partially accounted for as undiscovered resources in the 1989 assessment.

The resources in these accumulations historically have contributed little to the national energy supply and weren't assessed previously because of difficulties in developing adequate methodologies and data.

The mean estimates of 308 tcf in sandstones, shales, and chalks plus almost 50 tcf in coal beds make these resources comparable in magnitude to conventional resources, although their anticipated deliverability and development economics will be very different than gas in conventional accumulations, USGS said.

EXTRACTION DIFFICULT

Significant extraction effort will be required to obtain the unconventional gas supply, USGS said.

Based on existing technology, the assessment indicates that approximately 960,000 productive wells will be required to recover potential reserve additions of 300 tcf, based on the distribution of estimated ultimate recoveries.

Furthermore, extrapolation of present day success ratios implies that roughly 570,000 dry holes would have to be drilled along with the productive wells. By way of perspective, the most oil and gas wells of all kinds drilled in the U.S. in 1 year is about 92,000, and from 1986 to the present the total has been less than 40,000 wells/year.

In the case of discrete (conventional) fields, most resources have been recovered from relatively few large fields. Analogously, in the case of continuous-type gas accumulations, most gas is expected to be recovered from a relatively small subset of productive wells.

The assessment data show that one half of the mean potential recoverable resources of 300 tcf will be produced by about 100,000 wells, 25% will be produced by an additional 150,000 wells, and the remaining 25% will require some 700,000 producing wells.

COALBED GAS RESOURCE

USGS based its first-time assessment of potential additions to reserves of coalbed gas on the estimation of the number and estimated ultimate recoveries of untested cells within each assessed coalbed gas play (Table 5) (40021 bytes).

This assessment is similar to that used on continuous-type accumulations except that for coalbed gas it relies heavily on production forecasting using a reservoir simulator.

A range of estimated ultimate recoveries and production rates of gas and water were projected on a per well and per foot of coal basis for each of 39 plays.

The reservoir simulator was used (1) because coalbed gas accumulations are in early stages of development, and long-term production histories are generally not available, and (2) other methods such as decline curve analysis and material balance are not adequate for expressing the complex movement of gas and water in coal.

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