Thursday, June 9, 2016

Bombshell -- Stick With Me -- Read This Closely -- The Piceance In Colorado May Rival The Marcellus In The Northeast -- USGS

Updates


June 10, 2016: Seeking Alpha:
  • Western Colorado has 40x more natural gas than previously thought, potentially making it the second-largest formation in the U.S., according to a new estimate from the U.S. Geological Survey.
  • The Mancos Shale formation in Colorado’s Piceance Basin holds ~66.3T cf of gas, up from just 1.6T estimated in 2003, the USGS says, and the revision puts the basin second only to the Marcellus Shale in terms of the largest total gas reserves in the U.S.
June 10, 2016: Utica and Marcellus numbers are updated here

Later, 8:54 p.m. Central Time: see first comment. 

Later, 1:58 p.m. Central Time: the BizJournals are also reporting this story. The stories begin:
Colorado is home to the second-biggest field of recoverable natural gas in the United States, according to a new assessment by the U.S. Geological Survey.
It's hard to get pass some paywalls, but the story is appearing everywhere, for example from The AP, and as expected, the article emphasizes the difficulty and expense of getting to this natural gas. It doesn't matter: this is the bottom line -- the US is going to have inexpensive, almost inexhaustible, relatively accessible energy for a long, long time to come.

Once you start adding up "total recoverable reserves" across the US: the Marcellus, the Barnett, the Utica, the Piceance ... after awhile one gets to some serious reserves.

Original Post
 
A huge "thank you" to a reader for alerting me to this.

This defies .... I am "blocking" on the word ... this defies ... I don't know what it defies but it defies something.... maybe "my imagination."

The story was posted 22 hours ago. I follow energy news pretty closely. I have a fair number of folks who send me notes on energy, and yet, this story seems to have been missed by almost everyone.

The only reason I think it is not getting national attention is because the numbers are just too hard to believe. Maybe I'm missing something, or misreading something. Maybe I'm being inappropriately exuberant.  This is what makes these stories confusing:
  • the numbers are huge to begin with (trillions)
  • crude oil and natural gas are measured in different units (bbls vs cubic feet)
  • combining both crude oil and natural gas, there is still a different unit: bbls of equivalent oil (boe)
  • original oil in place (OOIP) vs technically recoverable oil (and same for natural gas)
But this seems incredible. Almost beyond one's imagination.

To bring you up to speed, read about the Piceance Basin in western Colorado at this post

Twenty-two hours ago, this USGS headline. USGS Estimates 66 Trillion Cubic Feet of Natural Gas in Colorado’s Mancos Shale Formation.

The headline fails to note that the previous USGS assessment was less than 2 trillion cubic feet of natural gas

The report begins: This is the second-largest assessment of potential shale & tight gas resources that the USGS has ever conducted. [Natural gas: Marcellus was probably the largest?]

Then this bombshell:
The Mancos Shale in the Piceance Basin of Colorado contains an estimated mean of 66 trillion cubic feet of shale natural gas, 74 million barrels of shale oil and 45 million barrels of natural gas liquids, according to an updated assessment by the U.S. Geological Survey.
This estimate is for undiscovered, technically recoverable resources.
The previous USGS assessment of the Mancos Shale in the Piceance Basin was completed in 2003 as part of a comprehensive assessment of the greater Uinta-Piceance Province, and estimated 1.6 trillion cubic feet of shale natural gas.
This is extraordinary by any standard. Natural gas:
  • In 2003, the USGS estimated the Piceance to hold 1.6 trillion cubic feet of natural gas.
  • Now, in 2016, the USGS revises that estimate to 66 trillion cubic feet of natural gas.
  • If I'm reading this correctly, this is not original natural gas-in-place but what is considered technically recoverable
This is extraordinary by any standard. Oil:
  • Seventy-four million bbls of shale oil doesn't seem to be trivial either. 
  • Original oil in place (OOIP) in the Bakken is estimated to be around 500 million bbls of oil. At 5% primary recovery rate, that works out to 25 million bbls of oil.   
  • So, 75 million bbls of recoverable oil in this basin seems to be a pretty big story.
The Bakken / Three Forks: probably less than 150 feet thick including all the non-pay zones. What about the Piceance? Back to wiki:

For natural gas:
The basin has come to increasing public attention in recent years because of widespread drilling to extract natural gas. The primary target of gas development has been the Williams Fork Formation of the Mesaverde Group, of Cretaceous age. The Williams Fork is a several-thousand-foot thick section of shale, sandstone and coal deposited in a coastal plain environment. 
Not one thousand feet thick; not two thousand feet thick; not three thousand feet thick, but "several thousand feet thick."

For oil:
The Piceance Basin contains one of the thickest and richest oil shale deposits in the world and is the focus of most on-going oil shale research and development extraction projects in the U.S. The Piceance Basin has an estimated 1.525 trillion barrels of in-place oil shale resources. 
The 1.525 trillion bbls of original oil in place (OOIP) almost seems to be a typographical error, but Leigh Price estimated the Bakken to hold 500 billion bbls OOIP and the Bakken is less than a hundred feet thick.

But 75 million bbls recoverable oil from 1525 trillion bbls OOIP does not compute. At 3% primary recovery rate, 1.525 trillion bbls OOIP works out to ... well, a whole lot more.

Back to the USGS results posted yesterday:
The Mancos Shale is a significant potential source of natural gas. For comparison, the assessed mean resources in the Mancos Shale of the Piceance Basin are the second-largest assessment of potential continuous gas resources that the USGS has ever conducted.
Since the last USGS assessment, more than 2,000 wells were drilled and completed in one or more intervals within the Mancos Shale of the Piceance Basin. In addition, the USGS Energy Resources Program drilled a research well in the southern Piceance Basin that provided significant new geologic and geochemical data that were used to refine the 2003 assessment.
The Mancos Shale is more than 4000 feet thick in the Piceance Basin, and contains intervals that act as the source rock for shale gas and oil, meaning that the petroleum was generated in the formation.
Some of the oil and gas migrated out of the source rock and into tight (low permeability) reservoirs within the Mancos, as well as into conventional reservoirs both above and below the formation. Oil and gas also remained in continuous shale gas and shale oil reservoirs within the Mancos.
Additional links from the USGS story posted yesterday:
The Mancos Shale is not the only formation that USGS has reassessed as technology and geologic understanding have advanced. 
The Marcellus according to the 2011 USGS survey:
The Marcellus Shale contains about 84 trillion cubic feet of undiscovered, technically recoverable natural gas and 3.4 billion barrels of undiscovered, technically recoverable natural gas liquids according to a new assessment by the U. S. Geological Survey (USGS).
The Barnett according to the 2015 USGS survey:
The Barnett Shale contains estimated mean volumes of 53 trillion cubic feet of shale natural gas, 172 million barrels of shale oil and 176 million barrels of natural gas liquids, according to an updated assessment by the U.S. Geological Survey. This estimate is for undiscovered, technically recoverable resources.
The Bakken/Three Forks according to the 2013 USGS survey:
The United States Geological Survey (USGS) today released an updated oil and gas resource assessment for the Bakken Formation and a new assessment for the Three Forks Formation in North Dakota, South Dakota and Montana.
The assessments found that the formations contain an estimated mean of 7.4 billion barrels (BBO) of undiscovered, technically recoverable oil. The updated assessment for the Bakken and Three Forks represents a twofold increase over what has previously been thought.
The USGS assessment found that the Bakken Formation has an estimated mean oil resource of 3.65 BBO and the Three Forks Formation has an estimated mean resource of 3.73 BBO, for a total of 7.38 BBO, with a range of 4.42 (95 percent chance) to 11.43 BBO (5 percent chance). This assessment of both formations represents a significant increase over the estimated mean resource of 3.65 billion barrels of undiscovered oil in the Bakken Formation that was estimated in the 2008 assessment.
When you go back through this post, and check out the USGS links, remember a couple of other points:
  • the USGS is very, very conservative in its estimates
  • estimates never seem to be revised downward
  • the surge in estimates is due to US ingenuity, technology, entrepreneurial, free-market capitalism

4 comments:

  1. i'd seen that earlier, but didn't have the context...ie, i dont know gas numbers well enough to understand the size...you know if it had said trillion about some economic data set i'd get it...

    one comment, on "the second-largest assessment of potential shale & tight gas resources that the USGS has ever conducted"...i dont know if the USGS ever did a comparison study, but most sources i know of have the Utica as the largest:
    http://bakken.com/news/id/241274/utica-bigger-than-marcellus/
    here's the EIA on the Utica three weeks ago, saying that's the gas play of the future:
    http://www.eia.gov/todayinenergy/detail.cfm?id=26052#

    ReplyDelete
    Replies
    1. Thank you; I'll correct that. Much appreciated.

      Delete
  2. Mr. Oksol
    Regarding size of formations, Picesnce, Marcellus, Utica ...

    This recent USGS assessment is significant for many reasons. To compare the 66 Tcf Piceance with the 80+ Tcf Marcellus could be misleading. The Marcellus study came from 2011 ... ancient.

    The Utica assessment is even earlier, I believe.

    The most authoritative, recent analysis of the Utica csme a few months ago from West Virginia University.
    They said the Utica recoverable was about 800 Tcf ... comparable to the Marcellus.

    ReplyDelete
  3. You are correct. For others, see this post:

    http://themilliondollarway.blogspot.com/2012/10/marcellus-pipelines-and-ticking-time.html

    I will have to update this post when I get a chance, later today. Thank you.

    ReplyDelete