November 1998 Vol.219 No. 11  Production

Perry A. Fischer,  Engineering Editor

We blew it up real good

It’s been a while since this engineer brought in a well. Keeping abreast of what’s new is a job requirement; so, an invitation to tour Baker Hughes’ perforating manufacturing center at Pine Island, Texas, was eagerly accepted. The company continually tweaks the seemingly minute parameters in shaped-charge design and pushes the perforating envelope deeper, inch by inch. Staring at 36-in., 48-in. and longer, perforations makes one wonder if someday they will be measured in feet instead of inches.

One unusual discussion was the impact terrorist attacks have had on explosives and shaped-charge handling. With each new terrorist bomb, "the regulatory screw gets turned a little tighter," said one manager. One example involved a descriptive difference between 20 "cartons" and 20 "containers" on a bill of lading that caused fines and considerable grief.

Quality control is a constant obsession. Every hour, samples are pulled from the run and fired into test cylinders, some of which measure 6 ft in diameter. If they did not regularly haul them away for recycling, there would be enough rubble to build a fine artificial reef in the Gulf.

Gun casings are often ordered in non-standard steel, and then overloaded just to see what happens when fired. It was a fun day of pyrotechnic bliss for this former wireline engineer.

Perforating guns are sometimes overloaded to the point of failure.

Natural gas storage. According to SolomonSmithBarney, as well as the U.S. Energy Information Agency, the U.S. is awash in natural gas. A demand / supply imbalance currently exists with little hope for improvement. Working inventory levels are roughly 500 Bcf higher than in the last two years.

Storage injection rates would need to fall by a huge amount — from the 11.3 Bcfd currently experienced to 4.9 Bcfd — and stay there for the remainder of the refill season for storage to equal year-ago levels. Simply put, injections would have to slow by 10% of the entire U.S. gas market to end the refill season at last year’s levels.

The needed decrease of 6.4 Bcfd would dwarf typical seasonal injection-rate declines of 0.8 Bcfd, and such a decline would likely decimate gas prices. SolomonSmithBarney goes on to say that "We’ll need a 7 to 9% colder-than-normal winter just to get back to the relatively high storage levels at the end of the previous heating season." Expected imports from Canada this winter will only exacerbate the problem. Pray for a blizzard?

Bright future for gas. Although the near-term supply / demand picture is spooky, long-term, the future for gas has never been brighter. In a report issued by the Gas Research Institute (GRI), Baseline Projection of U.S. Supply and Demand, gas demand should grow 2% annually for the next 16 years.

GRI cites two major challenges that will shape the future of energy:

1. ensuring the required gas supplies are available to meet the anticipated 9 Tcf growth, and
2. successfully addressing the impact of the proposed 1997 Kyoto Protocols.

Other highlights from the report are:

• The report finds the challenges achievable, with definable and less-than-heroic steps, including continued investments, significant increases in drilling activity and continuous improvements in gas supply technology.
• In the low-priced moderate-growth environment projected, technology acts as a substitute for price.
• Between 2000 and 2005, the projected growth in gas demand, combined with slack domestic oil production and low prices, will cause natural gas to become the domestic producers’ dominant revenue source.
• Many of the Kyoto proposals are already being fostered as a result of increased competition. The trends in the transportation and industrial sectors, and others in the electric generation sector, such as increased use of high-efficiency combined-cycle gas generating units, and increased interest in distributed generation, raise the question of whether market forces are themselves creating the changes needed to address global warming.

The report is due for release in November 1998. Information can be obtained from Val Megginson at: vmeggins@gri.org, or 703/526-7808.

CO₂ to boost production. Shell CO₂ Company told about 50 independent operators and other interested persons, whom Shell believes to be responsible for about 60% of Kansas’ oil production, that Shell plans to inject CO₂ in the Morrow formation as soon as possible. This is based on Mobil’s successful CO₂ flood in nearby Postle field.

"There are three producing formations in the Southwest Kansas and Central Kansas Uplift regions where we believe CO₂ flooding could recover from 100 to 400 million bbl of incremental oil," said Larry Schoeling, Shell’s Kansas project leader. The Central Kansas area will take longer because there are no previous CO₂ floods there and a demonstration is required.

The company will design a demonstration program next year and hopes to start injecting CO₂ in 2000. "The Kansas University Energy Research Council (KUERC) has submitted a funding proposal to Kansas Technology Enterprise Corp. to assist with our initial study of the Central Kansas Uplift," said Schoeling.

Copyright © 1999 World Oil
Copyright © 1999 Gulf Publishing Company