Problems at the Monterey

The Wall Street Journal reports that it is proving very hard to get at the shale-oil reserves being held in California’s Monterey Shale formation, which is estimated to hold as much as two-thirds of the recoverable onshore shale-oil reserves in the US’s lower 48 states.

The Monterey holds an estimated 15.4 billion barrels of recoverable shale oil, or as much as five times the amount in North Dakota’s Bakken Field, according to 2011 estimates by the Department of Energy. However, getting to the oil is tricky. The problem is twofold: the first is that the oil is tucked into layers of rock which is seemingly impenetrable. The second is California’s rigid regulatory climate.

California has become one of the U.S.’s top oil-producing states over the past century, largely by tapping into the easier-to-get oil that has seeped out of the Monterey. However, production has been in general decline since the 1980s, which has led to oil producers trying a wide range of techniques to tap the reserves. So far, there have been no production breakthroughs.

 

Here are some of the technologies being used by oil companies to tap that hard-to-get oil:

Fracking:

  • Fracking entails injecting water, often mixed with chemicals, into a well to fracture rock formations and unlock trapped oil and natural gas.
  • Widely used in North Dakota and other big fields, fracking is less common in California, where only 560 of 50,000 producing wells were fracked in 2012.
  • Fracking is more difficult to do in the Monterey because the formation is so jumbled, which makes it hard to find large amounts of shale to frack, and more expensive.
  • Fracking is criticised by environmentalists and others for potentially causing harm, such as lowering water quality. Gov. Jerry Brown has signed a bill requiring more disclosures on fracking, which producers have been reporting to the state on a voluntary basis. The law takes effect at the start of 2014.

 Steam Injection:

  • There are two main steam-injection techniques that companies are using to help coax trapped oil to the surface: steam drive and cyclic steaming.
  • With steam drive, large amounts of water are heated and the resulting steam is injected down separate drilling holes to heat up a large area of oil deposits. The heat loosens the oil, allowing it to flow toward wells that have been drilled for production.
  • One drawback of steam drive is that the process requires a large amount of water.
  • The cyclic method uses much less water because the steam is injected down only one well.
  • With this technique, which is also known as the “huff and puff” method, the steam is left underground for a few days to soak the shale, freeing up oil that is then pumped back out the same well.
  • There have been calls for more study on concerns raised by environmentalists about greenhouse-gas emission that results from steam injection techniques.

 Carbon-Dioxide Injection:

  • The method involves injecting liquefied carbon dioxide into the rock so that it displaces the trapped oil, allowing it to flow more freely to wells. A newer technique, it has been widely adopted in recent years in Texas and New Mexico.
  • But tests in the Monterey—including a joint study around 2000 by Chevron Corp. and the Department of Energy—have produced mixed results, the main problem being that the carbon dioxide didn’t increase production as much as hoped.
  • That could be because the rock formation is so jumbled up, it’s hard to find the right spot in which to inject the carbon dioxide.

 

Read the full article at: http://online.wsj.com/article/SB10001424127887323932604579052933974060844.html

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