LOGCC CALLS FOR MORE R&D ON U.S. OIL RECOVERY

U.S. Crude Oil Resource Base (44397 bytes)

The Interstate Oil & Gas Compact Commission has urged the U.S. to increase research and development efforts to recover a greater share of its crude oil resource.

logcc warned that well abandonments threaten to leave much of the nation's known resource of 351 billion bbl of oil in place.

Christine Hansen, logcc executive director, said, "Economic incentives for recovering these known reserves are compelling. The opportunity exists to create quality jobs, generate revenue, and ensure this resource is not wasted.

"The push for R&D is supported by industry, environmental organizations, and state governments. Now it's time to act."

The report said the number of U.S. oil wells has declined substantially. Many wells will soon reach a point that is not economically viable to continue their operation.

"As of 1991, wells accessing 35-45% of the nation's known oil reserves had been abandoned," logcc said. "If oil prices remain in the $16-20/bbl range and current losses continue, as much as 85% of our remaining oil could be abandoned by 2020."

U.S. producers traditionally have relied on large oil companies to develop and field test technology. With major companies concentrating on non-U.S. opportunities, R&D of advanced production techniques has slowed. "Small operators with limited resources cannot fill this void in technological advance," logcc said.

WHAT'S AT STAKE

The commission estimated the transfer of currently available technology could yield 9-14 billion bbl of additional production at oil prices of $2028/bbl, and advanced technology from R&D could add 8-14 billion bbl.

"This research driven production increase could generate $21-47 billion in incremental state revenues and $130350 billion in incremental gross domestic product over the life of production," an logcc report said.

"Wide application of advanced oil recovery technology resulting from focused R&D would substantially increase reserves and directly impact the U.S. economy Research and technology transfer program costs could be recovered many times over through direct benefits generated to the state and federal treasuries in the form of additional tax revenues from increased oil recovery"

The commission pegged original oil in place (OOIP) at 533 billion bbl in the U.S. About 157 bbl of that had been Produced by yearend 1991. That left only 25 billion bbl, the smallest volume since the late 1940s, producible at today's economics and 351 billion bbl as the tar-get for new production methods.

OOIP falls into two general categories: mobile or immobile.

Mobile oil remains in reservoirs because it is bypassed by waterflooding. However, such oil can be produced if contacted by primary and secondary techniques. Unrecovered mobile oil in the U.S. is estimated at 113 billion bbl. This resource offers the best opportunity for future recovery efforts such as infill drilling, well recompletions, and polymer flooding.

Immobile oil is held in reservoirs by viscous and capillary forces. Only a very small volume can be produced by conventional primary and secondary methods. Instead, this 238 billion resource is the target for enhanced recovery methods such as gas miscible, chemical, and thermal programs.

logcc said the first logical step in maximizing production of U.S. oil resources is to make sure proven technology is made available to operators, while increasing R&D into improved and new production techniques.

"With sound planning and clear, attainable goals, state policies can be effectively integrated with federal and private programs to dramatically increase production, generate public revenues, create jobs, and stimulate the economy."