Unconventional Oil and Gas Resources Exploitation And Development

Unconventional Oil and Gas Resources Exploitation And Development

This essay will discuss tight gas as an important hydrocarbon resource in the global energy mix today and in the future. It focuses on the estimates of technically recoverable resources (TRR) of tight gas around the world.

Unconventional Oil and Gas Resources Exploitation And DevelopmentNatural gas plays a very important role in the hydrocarbon value chain and represents 21% in the global primary energy mix in 2013. It is expected to rise to 22% in 2020 and 24% in 2040 (World Energy Council (WEC),2016, p.58).

The UN projects the world’s population to grow from the current 7.6 billion to reach 8.6 billion in 2030 and 9.8 billion in 2050 (United Nations, 2017). British Petroleum estimates global primary energy demand to increase by 30% in 2035 and natural gas to grow by 1.6% p.a. between 2015 and 2035 (British Petroleum, 2017).

Tight gas refers to natural gas contained in low-permeability sandstone and carbonate reservoirs rocks (Holditch, 2006, p. 86; Aguilra& Harding, 2012). According to Ma, Moore, Gomez, Clark & Zhang (2015, p.405), tight gas sandstones are “natural extensions of conventional sandstone reservoirs”.  Advance extraction technologies such as hydraulic fracturing and horizontal drilling are needed to develop tight gas to produce at an economic rate (Jidwa Investment, 2013; Kennedy, Knecht&Georgi, 2013). Known resources are found in the USA, Canada, Russia, UK and China (Alejando, 2012; Ahmed and Meehan, 2016; WEC 2013, P.70), with resources of about 210 Tcm, concentrated mainly in North America, Latin America and Asia-pacific regions (Zou, 2012, p.357). However, this appears to be largely speculative.

The International Energy Agency (2012, p.18) reports a recoverable estimate at 76 Tcm. McGlade, Speirs and Sorrell(2013) present a more detailed mean estimate of the remaining TRR of tight gas by utilizing data from a variety of sources. Their estimates of the remaining technically recoverable resources of tight gas sum to 54.2 Tcm. This is more realistic as it encompasses estimates from more regions compared to other sources.

The United States spearheaded the production of tight gas and is currently the world’s largest producer of tight gas (Islam, 2014, p.61; Aguilera and Harding, 2012, p.64). In 2012, tight gas represents 26% of the total US natural gas production (Energy Information Agency (EIA), 2012). A recent study shows that production from tight gas production will be the second-largest contributor to natural gas growth, accounting for about 20% of total U.S. production by 2040 (EIA, 2017, p.58). The Gas Technology Institute (GTI) estimates the TRR of tight gas from known US tight gas accumulations at about 5Tcm (Islam, 2014, p.62).

In Canada, tight gas production hascontributedsomewhattooffset declining conventional production.In 2014, tight gas accounted for 47% of total Canadian natural gas production (National Resources Canada, 2016 cited in:NationalEnergy Board (NEB), 2015) Natural gas production forecast shows that tight gas production will increase continuously and contribute majority of production growth, with production reaching 7.9 Bcf/d in 2040 (NEB, 2017, p. 42). In 2015, tight gas resources account for 48.5 percent (15Tcm) of the natural gas reserves (NEB, 2015)

China’s tight gas resources are mainly distributed in five basins: Ordos, Sichuan, Tarim, Songliao and Bohai Gulf basins. Tight gas production is becoming increasingly significant as the country shifts from a dominant coal-based energy to cleaner sources of energy (Lau and Yi, 2013). Philip (2015) reports that as production from tight gas reservoirs reached 31Bcm in 2014 (25% of total gas production). In 2010, 16.9% of the 95 Bcm of gas production came from tight gas.Wang, Mohr, Feng, Liu and Tverberg, (2016, p.392) provide estimates of China’s tight gas resources by tabulating estimates from a variety of sources. They estimate a GIP range from 8.4 Tcm to 110 Tcm and a TRR range from 3.0 – 28 Tcm. This range comes from a variety of sources, it is very hard to verify each source and say which estimate is reasonable.

To end, the US holds the largest of global TRR of tight gas, followed by China and Canada. Many other countries including Brazil, Algeria, Egypt, Australia and various European countries are also intensifying efforts to initiate development of tight gas reservoirs. The potential endowment of tight gas is a good indicator that their efforts should prove fruitful in the long run.


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