Unconventional Resources

Undeveloped US oil resources: A big target for enhanced oil recovery

Four EOR oil production technologies beyond primary/ secondary methods could recover an additional 210 billion barrels.

Vello Kuuskraa, Advanced Resources International, Arlington, Virginia

US oil resources are far from being depleted. Large volumes, in excess of 1,000 billion barrels (Bbbl) of "stranded," unconventional and undiscovered oil remain in the ground, awaiting new extraction concepts and development initiatives. It is important that a portion of this resource is extractable with the best of technology available, when combined with supporting policies and incentives. Additional significant volumes could be produced with further advances in technology and knowledge.

The following article summarizes a report prepared by the author’s firm for the US Department of Energy, Office of Fossil Energy. It documents that the remaining undeveloped technically recoverable domestic oil resource is large, on the order of 400 Bbbl, with 210 Bbbl available from Enhanced Oil Recovery (EOR). It also outlines what set of actions would convert these resources into economically recoverable reserves and, most important, into increased oil production.

BACKGROUND/ INTRODUCTION

Information has been provided that could lessen US dependence on foreign energy and reduce the increasing "energy tax" that imports impose on consumers and the economy. Large volumes of technically recoverable oil resources remain undeveloped, estimated at 400 Bbbl, from a remaining oil in-place (OIP) of over a trillion (1,124 B) barrels.

While pursuing this remaining oil resource poses considerable economic risk and technical challenge, EOR, an emerging industry, already provides 660,000 bpd of oil not otherwise recoverable.¹

US oil, while in the midst of transformation, provides about 7 million bpd of petroleum production. In 2004, this made the US the world’s third largest oil producer, behind Saudi Arabia (10.6 million bpd) and the Russian Federation (9.3 million bpd). While US oil production has declined somewhat in the past five years, with timely implementation of policies and actions noted in this report, this decline can be reversed.

While a mature hydrocarbon province, the US still has large volumes of undeveloped US oil resources in-place, totaling 1,124 Bbbl. Of this, 190 Bbbl is estimated to be technically recoverable with conventional technology, and 210 Bbbl using EOR, Table 1. This resource includes undiscovered oil, stranded light oil amenable to CO₂-EOR technologies, unconventional oil (deep heavy oil and oil sands) and new petroleum concepts (residual oil in reservoir transition zones below the traditional oil-water contact).

TABLE 1     Original, developed and undeveloped domestic oil resources Click image for enlarged view

Table 1 provides summary information on the size and nature of the original, developed and undeveloped US oil resource. Note that the oil resources addressed by this report do not include shale oil.

Of the 582 Bbbl OIP in discovered fields, 208 Bbbl has been already produced or proven, leaving behind 374 Bbbl, a significant portion of which is immobile or residual oil left behind (stranded) after application of conventional (primary/ secondary) recovery technology. With thermal, CO₂ and chemical EOR technologies, 100 Bbbl of this stranded resource may become technically recoverable from already discovered fields.

Undiscovered US oil is estimated to be 360 Bbbl in-place, with 119 Bbbl (43 Bbbl onshore, 76 Bbbl offshore) recoverable with primary/ secondary operations, based on USGS and MMS data. Application of EOR could add another 60 Bbbl of technically recoverable resources from this category.

Future reserve growth in discovered oil fields holding 210 Bbbl OIP, could provide 71 Bbbl (60 Bbbl onshore, 11 Bbbl offshore) with primary/ secondary recovery. Application of EOR could raise this technically recoverable volume by 40 Bbbl.

And with advances in thermal EOR technology, US oil sands, previously called "tar sands", holding 80 Bbbl in-place, could provide up to 10 Bbbl of future technically recoverable oil.

Policies and incentives that promote development and use of more efficient EOR technologies could help convert these resources into reserves and production. Eight specific actions that would be of highest value include:

1. Reducing financial and investment barriers associated with EOR could be accomplished by undertaking various risk mitigation actions available to federal and state governments.
2. Reducing geological and technical risk barriers of EOR could be accomplished through an aggressive program of research and field tests.
3. Encouraging the production and productive use of CO₂ from natural sources and especially industrial emissions would greatly increase supplies of EOR-ready CO₂.
4. Promoting integrated energy systems would reduce the energy penalty associated with producing heavy oil and capturing EOR-ready CO₂. Demonstrating an integrated zero-emissions heat, hydrogen and electricity generation system, that provides steam for heavy oil recovery and EOR-ready CO₂ from gasifying residue products of heavy oil, and oil sand upgrading/ refining, would provide an improved, energy efficient pathway for oil recovery.
5. Engaging in collaborative efforts with Canada, such as sharing technology and conducting jointly-funded field R&D on oil sands and heavy oil, would also help develop oil recovery technologies for these resources.
6. Conducting in-depth evaluation of geologic settings and the economic feasibility of undiscovered oil resources could help formulate supportive policies.
7. Improving the information base on already discovered large oil fields would accelerate the pace of reserve growth.
8. Increasing investments in technology development and transfer would lead to higher domestic oil recovery efficiencies. New models of public-private partnerships, plus field projects demonstrating optimum recovery of oil resources would help foster high oil recovery practices. An expanded program of technology transfer would help address barriers that currently inhibit full development/ production of oil by independent producers.

A new public/ private effort targeted at maximizing recovery of oil resources would have large benefits. For example: 1) The ultimate trade balance would improve by $8 trillion, cumulatively, assuming one-half of the future technically recoverable resource (200 Bbbl) becomes economically recoverable and oil prices average $40/bbl; 2) State and local treasuries would gain $700 billion of revenues from future royalties, severance taxes, and state income taxes on oil production. The federal budget would gain $1.4 trillion of revenues from future royalties from production on federal lands and corporate income taxes; and 3) The decline in domestic oil production would be reversed, creating new, well-paying direct and indirect jobs.

STRANDED OIL DETAILS

For the domestic stranded oil resource, the referenced study set forth seven major findings:

1. To date, 582 billion barrels of original oil in place (OOIP) has been discovered. However, because of limitations inherent in conventional primary/ secondary oil recovery technology, only about one-third of this OOIP is recoverable. As such, the remaining (stranded) US oil resource in already discovered fields is massive, amounting to 374 Bbbl OIP and includes the stranded heavy oil resource discussed later, Fig. 1.
2. Six domestic oil basins/ areas, holding 309 Bbbl of OOIP and 205 Bbbl of stranded oil in already discovered fields, were assessed to examine how much of this stranded oil could be recovered with EOR. This work involves assembling an oilfield database containing 895 reservoirs (in California, Gulf Coast, Oklahoma, Illinois, Alaska and Louisiana offshore), Fig. 2.
3. With state-of-the-art CO₂-EOR, up to 43 Bbbl of stranded oil (in the six basins and areas) could become technically recoverable. Of the 895 reservoirs in the database, 533 large reservoirs screen favorably for CO₂-EOR. When CO₂-EOR potential in these large favorable reservoirs is extrapolated to the stranded oil resources in each of the six state/ areas, the CO₂-EOR potential becomes 43.3 Bbbl of technical recoverable resource, Table 2. Application of "next generation" thermal and other EOR technologies to the stranded oil in these six basins/ areas would add to the technically recoverable resources set forth in Table 2.
4. Applying EOR technology to stranded light (and heavy) oil resources, in the remaining oil basins/ areas yet to be assessed, could provide an additional 53 Bbbl, raising the national potential of EOR to 100 Bbbl of domestic oil from already discovered oil fields, Table 1. Such widespread application of CO₂ and other EOR technologies could raise the average national oil recovery efficiency to nearly 50%.
       More advanced CO₂-EOR and other EOR technologies, such as gravity stable CO₂ injection and horizontal wells, could improve the recovery efficiency of stranded oil from domestic reservoirs.
       Miscibility enhancers, conformance control agents and advanced immiscible CO₂-EOR technology could extend the application of CO₂-EOR to reservoir and basin settings now excluded from further development. Extending these technologies to recovery of Residual Oil in the transition Zone (ROZ) would add additional volumes of recoverable oil. Successful pursuit of advanced EOR technology will be central to achieving the 60%+ national oil recovery efficiency goal established by DOE/ FE for its oil technology R&D program.
5. An additional 110 Bbbl domestic oil could become recoverable from application of EOR to undiscovered oil fields, to expanded portions of discovered oil fields, and to domestic oil sands. The USGS and MMS estimate that 190 Bbbl oil remains to be discovered or further developed from domestic oil fields using conventional oil recovery technology, Table 1. With recovery efficiency of conventional technology at only about one-third of the OIP, this means that total OOIP in future and expanded domestic oil fields would be 570 Bbbl, i.e., 190 Bbbl ÷ 0.33 = 570 Bbbl. Application of EOR technology to the remaining oil in-place in future and expanded oil fields could raise recovery efficiency to 50% of OOIP, adding 100 Bbbl of domestic oil recovery.
6. Application of EOR technology already provides an important volume of domestic oil production. CO₂-EOR is being applied to selected, geologically favorable oil reservoirs with access to affordably priced natural and industrial sources of CO₂. About 206,000 bpd is produced domestically from application of CO₂-EOR, with the bulk of this coming from the Permian basin.¹ Another 102,000 bpd is produced using hydrocarbon miscible and flue gas immiscible enhanced oil recovery from fields that would be amenable to CO₂-EOR should affordable supplies of CO₂ become available. Finally, application of thermal EOR technology, primarily in the large heavy oil fields of California, provides about 340,000 bpd.¹ To date, EOR has provided about 14 Bbbl of production and reserves, Table 1.
7. The keys to converting the large technical potential from enhanced oil recovery to economic reserves are three: accelerated development of improved EOR technology; risk mitigation policies and actions; and large affordable EOR-ready supplies of CO₂.

Fig. 1. Stranded US oil resources in existing oil fields.

Fig. 2. Stranded US oil resources in six areas assessed.

TABLE 2     Technically recoverable oil resource fom CO2-EOR, six areas assessed to date Click image for enlarged view

A preliminary look at how much of the large CO₂-enhanced oil recovery technical potential could be converted to economic reserves shows that "state-of-the-art" technology, combined with risk mitigation and low-cost supplies of CO₂, would enable 25 Bbbl of the domestic stranded oil (in the six areas/ basins studied) to become economically recoverable. However, with traditional application of CO₂-EOR technology (small volume CO₂ injection and high CO₂ costs), only a modest portion of the resource is technically and economically recoverable.

As part of the background work for this report, the author examined the performance of many of the past and ongoing CO₂-EOR projects, both successful and unsuccessful. Particular attention was given to CO₂-EOR projects that are achieving high oil-recovery efficiency to assemble a set of attributes for defining "state-of-the-art" technology. Included in these attributes are: 1) significant front-end (and continuing) characterization of the oil reservoir and its flow paths; 2) design of well patterns (including closer well spacing) and reservoir interval completions that promote high reservoir contact by the injected CO₂; 3) injection of much higher volumes of CO₂, up to 1 HCPV (hydrocarbon pore volume) versus the traditional 0.4 to 0.5 HCPV injected in older project designs; 4) rigorous monitoring and maintenance of reservoir pressure to assure field-wide miscibility; and 5) prompt remediation of wells and reorientation of patterns to mitigate high CO₂ breakthrough from small reservoir intervals and selected wells.

Financial risk-mitigation policies would provide an important first step. Financial policies – such as royalty relief, reduced state production taxes and increased federal EOR tax credits – when applied with improved CO₂-EOR technology and affordable supplies of CO₂, are central to enabling industry to pursue this high-risk, higher cost resource.

Two complementary actions, in addition to the risk mitigation policies discussed, that would help overcome barriers to large implementation of EOR for recovering domestic stranded oil are:

1. A series of basin-opening pilot field projects, significant size field demonstrations of state-of-the-art technologies and appropriate investments in advanced EOR technology would help reduce technical and geological risks of applying EOR in new basins and settings.
2. Incentives for producing EOR-ready CO₂ would help provide increased supplies of affordable CO₂ from industrial sources, such as natural gas treating facilities and new hydrogen production plants at domestic oil refineries. Market aggregation and integrated collection of high-concentration CO₂ from cement plants, fertilizer complexes, ethanol plants, oxygen-fired combustion processes and coal gasification facilities would add to the total. Finally, capture of CO₂ from the next generation of low-emission power plants could provide sufficient EOR-ready CO₂ to fully meet the CO₂-EOR requirements set forth herein.

HEAVY OIL DETAILS

Heavy oil is an asphaltic, dense, viscous type of crude oil that has an API gravity between 10° and 20° (920 to 1,000 kg/cm). Generally, this oil has a viscosity between 100 and 10,000 cp, and does not flow readily in the reservoir without dilution (with solvent) and/or introduction of heat. For domestic heavy oil resources, the study sets forth seven findings:

1. The domestic heavy oil resource is large, on the order of 100 Bbbl of OOIP. This resource is concentrated in 248 large, heavy oil reservoirs, holding 80 Bbbl of OOIP. While the resource is primarily located in: California (42 Bbbl), Alaska (25 Bbbl) and Wyoming (5 Bbbl), numerous other states, such as Arkansas, Louisiana, Mississippi and Texas, also contain significant volumes of heavy oil. Extrapolating the large heavy oil reservoir database to all domestic heavy oil resources leads to an estimate of 100 Bbbl OOIP.²
2. Application of thermal EOR has enabled industry to recover a significant portion of the shallow heavy oil resource base. Widespread use of steam flooding and, to a lesser extent, in-situ combustion and cyclic steam injection, have enabled industry to economically produce heavy oil in shallow (less than 3,000-ft) reservoirs, particularly in California. These technologies have generally been applied to large fields, to reduce the capital expense per barrel of incremental oil recovered. Data from the California Department of Conservation show that production of heavy oil in California using thermal EOR, waterflooding and primary depletion, while significant at 510,000 bpd, has been declining. Of this, about 344,000 bpd is from thermal EOR.¹ Approximately 18 billion barrels of domestic heavy oil has already been developed and another 20 billion barrels may become recoverable with advanced thermal and other EOR, Table 1.
3. Advances in heavy oil recovery technology, particularly steam-based EOR, provide an example of how higher recovery efficiencies are being achieved in the shallow portions of the heavy oil resource. The giant Kern River shallow field, with 3,900 million bbl of OOIP has produced and proved 2,450 million bbl of heavy oil, far exceeding the 350 million bbl judged to be recoverable with conventional methods. Thus, with efficient thermal EOR, nearly two-thirds of the OOIP may become recoverable from favorable shallow fields, much more than the 9% recoverable with primary/ secondary recovery.
4. However, a significant portion of the domestic heavy oil resource is in reservoirs that are too deep for efficient thermal EOR application. For example, of the 80 Bbbl OOIP in the 248 large domestic heavy oil reservoirs, about 45 Bbbl of OOIP is too deep for efficiently using today’s steam-based EOR. Because of depth limits with today’s thermal EOR technology, a significant volume of the resource remains stranded.
5. Further advances in heavy oil recovery technology will be required to efficiently and economically recover this large volume of deep stranded heavy oil. Development of more advanced technologies involving horizontal wells, low-cost immiscible CO₂, and advanced thermal EOR technology could significantly increase recovery of this otherwise stranded oil. Joint US and Canadian efforts targeted at developing more effective technologies for producing deep heavy oil would be valuable to both countries.
6. Particular emphasis needs to be placed on evaluating technologies that could help recover more of the underdeveloped heavy oil resource in Alaska. Advanced oil recovery technologies, such as miscibility-enhanced CO₂-EOR and CO₂-philic mobility control agents, will be essential for recovering more from the largely undeveloped 25 Bbbl heavy oil resource in Alaska, in the Schrader Bluff, West Sak and other formations, without disturbing the permafrost.
7. Finally, there is an urgent need to update data and information on heavy oil. A more up-to-date, in-depth assessment of domestic heavy oil would be of high value to energy policy makers and industry. The primary study on US heavy oil (and one still used by Congress and others) was authored by Kuuskraa and Godec² in 1987 for US DOE under a subcontract with the Interstate Oil and Gas Compact Commission. This study was built on and expanded on earlier work by Meyer and Schenk.³ And, an update of the US heavy oil resource was conducted in the late 1980s and early 1990s by the National Institute for Petroleum and Energy Research (NIPER).

Since these studies, much has been learned about the heavy oil resource base and heavy oil extraction technology. An up-to-date study of heavy oil could provide valuable insights on formulating policies, initiatives and technology for more efficiently developing this large resource.

US OIL SANDS DETAILS

Oil sands (also called "tar sands") contain bitumen and extra heavy oil, with an API gravity of less than 10° or a viscosity greater than 10,000 cp. Recovering this resource requires the introduction of heat, solvents or the use of mining to extract the hydrocarbon. Four findings from the report are described here.

1. The domestic oil sand resource is substantial, on the order of 60 to 80 Bbbl of OOIP. While it is distributed widely, the bulk is concentrated in five states – Utah (19 – 32 Bbbl), Alaska (19 Bbbl), Alabama (6 Bbbl), California (5 Bbbl) and Texas (5 Bbbl). Uncertainty exists about the quality of the oil sand in Utah, reflected in the wide range of estimates.
2. Very little of the large domestic oil sand resource has been developed to date. Except for a limited number of in-situ oil sand recovery efforts in California, and past mining of oil sand for road asphalt, essentially all of the original oil sand resource is still in-place. Improvements in the energy balance and efficiency of oil sand recovery technology will be required to produce significant volumes.
3. Advanced technologies being pursued for in-situ oil sand development in Canada could provide valuable options for recovering domestic oil sands. Work in Canada on SAGD (Steam Assisted Gravity Drainage) and VAPEX (Combination of solvent and heat) could be applicable to the geologically challenging domestic oil sand resource. Joint US and Canadian R&D would be of great value. Up to 10 Bbbl of domestic oil sands could become technically recoverable, Table 1.
4. An integrated zero-emissions oil sand recovery, upgrading and refining system appears essential for achieving a positive energy balance and for economically producing domestic oil sands. Such a system, involving gasification of oil sand residues to produce steam, hydrogen and electricity, while productively using the by-product CO₂ for deep heavy oil and stranded oil recovery would be an important part of an integrated domestic oil sands recovery system.

UNDISCOVERED OIL, RESERVE GROWTH AND NEW CONCEPTS

The volume of remaining undeveloped domestic oil set forth in this report is not a static value. Rather, it grows with increases in knowledge and discovery in future years from the following sources: 1) Additional reserves and resources from discovery of new fields, and future growth of reserves in already discovered fields (due to additional delineation drilling and new pool discoveries); and 2) New oil resource concepts, such as the residual oil in the "transition zone" of an oil field called the Residual Oil Zone (ROZ).

Undiscovered oil and reserve growth could provide 190 Bbbl of future technically recoverable domestic oil resources. Even though the US is a mature hydrocarbon province, significant volumes of oil remain undiscovered. In addition, the size of already discovered oil fields continues to grow with development drilling, a phenomenon called "reserve growth."

The USGS, MMS and EIA provide estimates for technically recoverable volumes of undiscovered oil (119 Bbbl) and for reserve growth (71 Bbbl), Table 1. The recently completed assessment of the Central North Slope of Alaska by the USGS add an estimated 4 Bbbl to the undiscovered oil volumes in Table 1.

It should be noted that this undiscovered and reserve growth oil is the conventionally recoverable portion of a much larger in-place resource, given that only about one-third of the OOIP is recoverable with current primary and secondary oil recovery technology.

Using the conventional oil recovery factor of one-third, three times as much oil in-place, or 570 Bbbl, would be added to the domestic oil resource warehouse, with 380 Bbbl becoming stranded and the target for future enhanced oil recovery technology.

As a very major new concept, residual oil in the transition zone (ROZ) is a new oil resource being further investigated. Detailed examination of well logs drilled below the traditional water-oil contact zone (below the oil leg) of an oil reservoir is beginning to reveal important new information on domestic oil resources. The presence of oil does not terminate sharply at the oil-water contact at the base of the oil reservoir. Rather, the well logs show that an extensive transition and residual oil zone exists below the oil-water contact for many reservoirs.

In the ROZ, subsurface conditions exist relatively broadly in oil fields with an aquifer base, as indicated by an on-going study of oil reservoirs in the Permian and other basins. As such, the US may have another large, previously undefined, source of undeveloped stranded oil.

While estimates of the size of the ROZ are highly speculative at this time, a preliminary estimate of an additional 100 Bbbl of stranded OOIP would not be unreasonable. With full understanding of the hydrodynamics of alternative geological settings favorable to ROZ and development of appropriate enhanced oil recovery methods involving horizontal wells and advanced CO₂-EOR, a portion of the stranded oil in the ROZ could become recoverable.

Oil produced from the ROZ would likely be associated with a high-water-to-oil ratio, resulting in increased lifting costs, water management and disposal considerations, similar to introducing CO₂-EOR to the "watered-out" portion of the main oil reservoir. Minimizing water management costs, such as avoiding water coning, would be a priority goal for economically producing oil from the ROZ.

ADDENDUM

Since the preparation and publication of the above cited report on which this article has been based, considerable additional work has been completed by the author’s firm that further confirms the estimates of undeveloped US oil resources.

A total of 10 oil basins/ areas have now been assessed (up from the original six). These 10 studies report that the technically recoverable oil resource from application of "state-of-the-art" CO₂-EOR is 89 Bbbl. This provides support to the 80 Bbbl estimate of applying EOR to the stranded light oil resource, shown in Table 1.

New work on the TZ/ ROZ resource documents the presence of 31 Bbbl of this category of oil in-place in just three oil basins (Permian, Big Horn and Williston). Detailed reservoir simulation assessment shows that 12 Bbbl of this OIP could become technically recoverable by applying CO₂-EOR. This work provides support to the transition/ residual oil zone resource estimate of 100 Bbbl in Table 1 and indicates that an important portion of this resource may become recoverable.

Finally, the author and his firm took an in-depth look at the additional oil recovery from applying "next generation" CO₂-EOR technology. This work shows that combining: 1) advanced, high reservoir contact well design; 2) mobility and miscibility enhancement; 3) large volumes of CO₂ injection; and 4) real-time performance feedback and process control technology could bring about "game changer" levels of improvement in oil recovery efficiency. This work provides support that a 60%+ oil recovery efficiency target could become realistic, assuming a successful program of advanced technology development, affordable supplies of CO₂ and other EOR injectants, and appropriate risk mitigation policies. 

ACKNOWLEDGEMENT

This article derives from the report, Undeveloped domestic oil resources: The foundation for increasing oil production and a viable domestic oil industry. The report was prepared by Advanced Resources International for the US Department of Energy, Office of Fossil Energy – Office of Oil and Natural Gas. The views and opinions expressed herein do not necessarily state or reflect those of the United States government or any agency thereof.

LITERATURE CITED

¹ "Special Report: 2004 Worldwide EOR Survey," Oil and Gas Journal, April 12, 2004.
² Kuuskraa, V. A. and Godec, M. L., Lewin and Associates, Inc., (now Advanced Resources International), "A technical and economic assessment of domestic heavy oil," US Department of Energy, under subcontract to the Interstate Oil Compact Commission, April 1987.
³ Myer, R. F. and C. J. Schenk, "Estimate of world heavy crude oil and natural bitumen," Third International Conference on Heavy Crude and Tar Sands, Long Beach, California, July 22 – 23, 1985.

THE AUTHOR
	Vello A. Kuuskraa, is President of Advanced Resources International. With has over 30 years of experience in energy resources development, technology and economics, his focus has been on the technologies of coalbed methane recovery and enhanced oil recovery and their adaptation for CO2 sequestration. Mr. Kuuskraa earned an MBA in operations research/ industrial management from the University of Pennsylvania, The Wharton Graduate School, in 1965, and a BS in applied mathematics/ economics from North Carolina State University in 1963. He was the 1986/ 87 SPE Distinguished Lecturer and served as lead expert on natural gas and coalbed methane on the Secretary of Energy’s Trade Missions to China, India and South Africa. He has published over 150 technical papers, reports and presentations on energy resources. He is a recent recipient of the Ellis Island Medal of Honor.