Subsurface Data in the Oil and Gas Industry

Probing beneath the Earth’s surface for exploration and hazard mitigation

Drilling for oil and gas is expensive. A single well generally costs $5-8 million onshore and $100-200 million or more in deep water.1 To maximize the chances of drilling a productive well, oil and gas companies collect and study large amounts of information about the Earth’s subsurface both before and during drilling. Data are collected at a variety of scales, from regional (tens to hundreds of miles) to microscopic (such as tiny grains and cracks in the rocks being drilled). This information, much of which will have been acquired in earlier exploration efforts and preserved in public or private repositories, helps companies to find and produce more oil and gas and avoid drilling unproductive wells, but can also help to identify potential hazards such as earthquake-prone zones or areas of potential land subsidence and sinkhole formation.

Mapping the Subsurface 1: Regional Data from Geophysics

In the 21st century, much is already known about the distribution of rocks on Earth. When looking for new resources, oil and gas producers will use existing maps and subsurface data to identify an area for more detailed exploration. A number of geophysical techniques are then used to obtain more information about what lies beneath the surface. These methods include measurements of variations in the Earth’s gravity and magnetic field, but the most common technique is seismic imaging.

Seismic images are like an ultrasound for the Earth and provide detailed regional information about the structure of the subsurface, including buried faults, folds, salt domes, and the size, shape, and orientation of rock layers. They are collected by using truck-mounted vibrators or dynamite (onshore), or air guns towed by ships (offshore), to generate sound waves; these waves travel into the Earth and are reflected by underground rock layers; instruments at the surface record these reflected waves; and the recorded waves are mathematically processed to produce 2-D or 3-D images of subsurface features. These images, which cover many square miles and have a resolution of tens to hundreds of feet, help to pinpoint the areas most likely to contain oil and/or gas.

A typical setup for offshore seismic imaging. Image Credit: U.S. Bureau of Ocean Energy Management.2

Mapping the Subsurface 2: Local Data from Well Logs, Samples, and Cores

Drilling a small number of exploratory holes or using data from previously drilled wells (common in areas of existing oil and gas production) allows geologists to develop a much more complete map of the subsurface using well logs and cores:

  • well log is produced by lowering geophysical devices into a wellbore, before (and sometimes after) the steel well casing is inserted, to record the rock’s response to electrical currents and sound waves and measure the radioactive and electromagnetic properties of the rocks and their contained fluids.3 Well logs have been used for almost 100 years4 and are recorded in essentially all modern wells.

  • core is a cylindrical column of rock, commonly 3-4 inches in diameter, that is cut and extracted as a well is drilled. A core provides a small cross-section of the sequence of rocks being drilled through, providing more comprehensive information than the measurements made by tools inside the wellbore.5 Core analysis gives the most detailed information about the rock layers, faults and fractures, rock and fluid compositions, and how easily fluids (especially oil and gas) can flow through the rock and thus into the well.

By comparing the depth, thickness, and composition of subsurface rock formations in nearby wells, geoscientists can predict the location and productive potential of oil and gas deposits before drilling a new well. As a new well is being drilled, well logs and cores also help geoscientists and petroleum engineers to predict whether the rocks can produce enough oil or natural gas to justify the cost of preparing the well for production.7

A box containing 9 feet of 4-inch diameter core from the National Petroleum Reserve, Alaska, showing the fine-scale structure and composition of the rock layers being drilled. Image Source: U.S. Geological Survey.6

Data Preservation

Preservation of subsurface data is an ongoing challenge, both because there is so much of it and because a lot of older data predate computer storage. A modern seismic survey produces a few to thousands of terabytes of data;8 state and federal repositories collectively hold hundreds of miles of core;9 and millions of digital and paper records are housed at state geological surveys. For example, the Kansas Geological Society library maintains over 2.5 million digitized well logs and associated records for the state.10 Oil companies also retain huge stores of their own data. Preserving these data, which cost many millions of dollars to collect, allows them to be used in the future for a variety of purposes, some of which may not have been anticipated when the data were originally collected. For example, the shale formations that are now yielding large volumes of oil and natural gas in the United States were known but not considered for development for decades while conventional oil and gas resources were being extracted in many of the same areas. Archived well logs from these areas have helped many oil and gas producers to focus in on these shale resources now that the combination of hydraulic fracturing and horizontal drilling allow for their development.

Data for Hazard Mitigation

Oil and gas exploration is a major source of information about the subsurface that can be used to help identify geologic hazards:

  • Since 2013, the oil and gas industry has provided more than 2,500 square miles of seismic data to Louisiana universities to assist with research into the causes and effects of subsidence in coastal wetlands. For example, seismic and well data have been used to link faults to historic subsidence and wetland loss near Lake Boudreaux.11

  • To improve earthquake risk assessment and mitigation in metropolitan Los Angeles, scientists have used seismic and well data from the oil and gas industry to map out previously unidentified faults. This work was motivated by the 1994 Northridge earthquake, which occurred on an unknown fault that was not visible at the Earth’s surface.12

More Resources

U.S. Geological Survey – National Geological and Geophysical Data Preservation Program.

References

1 U.S. Energy Information Administration (2016). Trends in U.S. Oil and Natural Gas Upstream Costs.
2 Bureau of Ocean Energy Management – Record of Decision, Atlantic OCS Region Geological and Geophysical Activities.
3 Varhaug, M. (2016). Basic Well Log Interpretation. The Defining Series, Oilfield Review.
4 Schlumberger – 1920s: The First Well Log.
5 AAPGWiki – Overview of Routine Core Analysis.
6 Zihlman, F.N. et al. (2000). Selected Data from Fourteen Wildcat Wells in the National Petroleum Reserve in Alaska. USGS Open-File Report 00-200. Core from the well “East Simpson 2”, Image no. 0462077.
7 Society of Petroleum Engineers PetroWiki – Petrophysics.
8 “Big Data Growth Continues in Seismic Surveys.” K. Boman, Rigzone, September 2, 2015.
9 U.S. Geological Survey Core Research Center – Frequently Asked Questions.
10 Kansas Geological Society & Library – Oil and Gas Well Data.
11 Akintomide, A.O. and Dawers, N.H. (2016). Structure of the Northern Margin of the Terrebonne Trough, Southeastern Louisiana: Implications for Salt Withdrawal and Miocene to Holocene Fault Activity. Geological Society of America Abstracts with Programs, 48(7), Paper No. 244-2.
12 Shaw, J. and Shearer, P. (1999). An Elusive Blind-Thrust Fault Beneath Metropolitan Los Angeles. Science, 283, 1516-1518.

Date updated: 2018-06-01
Petroleum and the Environment, Part 23/24
Written by E. Allison and B. Mandler for AGI, 2018

While politicians court Google and Uber, fracking industry offers a different sort of high-tech job

CANNONSBURG, Pa. — If there is mud on the floor, they say in the shale industry, that means cash is coming in the door. That is, when workers are out in the field and the boots are getting dirty, money is being made.

Thanks to an infusion of high technology driving the natural gas industry, it’s not just about dirty boots anymore – and it’s a good story. It’s a marriage of advanced technologies and dirt-under-your-nails hard work rarely told, because extracting shale is not a popular business politically.

Fracking, it turns out, is the one high-tech industry not embraced by politicians in Pittsburgh who are rushing to embrace the likes of Uber and Google. Why? Because local progressive Democrats, very vocal climate activists, and the burgeoning Democratic Socialists of America party demand a wholesale repudiation of the natural gas industry. Local Democratic officials thus have to oppose fracking or risk losing in a Democratic primary.

Vice President of Engineering and Development of CNX Resources Corporation Andrea Passman stands in a control room that is used for predicting drilling locations at CNX's headquarters on July 30 in Cannonsburg, Pa.

Vice President of Engineering and Development of CNX Resources Corporation Andrea Passman stands in a control room that is used for predicting drilling locations at CNX’s headquarters on July 30 in Cannonsburg, Pa.

(Justin Merriman for the Washington Examiner)

Today’s natural gas industry isn’t the same petroleum job your grandfather or your father would have applied for. It not only attracts computer scientists, software engineers, mathematicians, and geologists to relocate to Western Pennsylvania from around the country, but it also provides careers for locals who thought those good jobs left for good when the coal mines and steel mills closed a generation ago.

Plenty of locals, who perhaps were not cut out for college, just wanted an opportunity to work hard in an industry with a future. All the better if that industry utilized the resources of the land while conserving it — nobody wants to spoil the places for hunting, fishing, climbing, hiking, and camping. Even better, a local job would allow them to live near family.

Mike May is one such guy.

The 33-year-old grew up in Imperial, Pa., along the Lincoln Highway. After graduating from West Allegheny High School, May joined the Marines. When he left the service, he wanted to come back home to Western Pennsylvania and work his way up in the world, but he just didn’t know if he had the career skills.

Mike May, 33, of Oakdale, Pa., works in the control room of CNX Resources Corporation on July 30 at their headquarters in Cannonsburg, Pa. The control room is able to monitor and adjust well sites throughout several states.

Mike May, 33, of Oakdale, Pa., works in the control room of CNX Resources Corporation on July 30 at their headquarters in Cannonsburg, Pa. The control room is able to monitor and adjust well sites throughout several states.

(Justin Merriman for the Washington Examiner)

“So, I started in the gas and oil fields literally working with my hands; I have worked in the industry from the bottom up,” he says as he stands in front of three monitors doing the same thing he did in the field.

No dirt under the nails. No weather dictating field conditions. No mud on the boots. Just precision automation that does the job a team of workers used to do in the field. Now, May does it inside the offices of CNX, a fracking company that broke off of energy giant CONSOL.

“Basically, I was a production operator,” explains May, “I ran all the physical operations, manual chokes, fixing anything that would break or go down; adjusting water dumps to increase the efficiency of the separators, water, and tank levels out there,” he says of the drilling sites.

Now, he does almost all of that remotely.

“See, this is the digital twin of the well site,” he says, pointing to one of several screens he is monitoring in a highly secure floor of the complex. “So, over here, we have all of our physical assets. This is the data surveillance side of the house. We’re also able to control and push parameters out to the field level. So, things I used have to do at the site and make physical changes I can do using technology,” he says.

Twenty miles north of this office, in Pittsburgh, several dozen young climate activists — about May’s age — protested last week in front of the mayor’s office. They pressed Democratic city and county leaders to stop the expansion of fracking in the county and to speak out against the Shell cracker plant under construction in the region.

Twenty miles in the opposite direction, public high schools are offering vocational training for their students that prepare them to walk off the high school football field on graduation day with their diplomas and into jobs that start at $129,000 a year.

Compared to the kids closer to Pittsburgh, these kids from rural high schools won’t have an inside track for jobs at the likes of Google, Uber, and others whom the Democratic mayor celebrates as part of the “new Pittsburgh.”

And the Shell cracker plant the climate activists were protesting? It doesn’t make really make crackers — cracking is the process that converts natural gas products into ethylene and then into plastics. The $6 billion dollar plant began construction last year, with construction employment expected to exceed 6,000 workers over the next ten years and provide 600 permanent positions once the plant is complete.

Since the 1920s, technology and automation have been disrupting the manufacturing world — eliminating jobs and growth opportunities throughout the different regions in the country. Here, technology is creating jobs. For May, automation and high technology didn’t take his job; it enriched it.

“Correct. I kinda evolved with the times. I am truly living the American Dream.”

Video

The Reality of Digital in Oil & Gas

What does digitization mean for the oil and gas industry?

Digital has been the big buzz word in the industry for some time now – but what exactly does it mean. McKinsey & Company Senior Partner Matt Rogers sat down with the Financial Times US Industry and Energy Editor, Ed Crooks in the first of the Digital Dialogues in Oil & Gas series to discuss the impact of digital in the industry.

Ed Crooks

Ed Crooks

US Industry and Energy Editor

FINANCIAL TIMES

See bio 

Matt Rogers

Matt Rogers

Senior Partner

MCKINSEY & COMPANY

The Financial Times is one of the world’s leading business news organizations, recognized internationally for its authority, integrity, and accuracy. In 2016 the FT passed a significant milestone in its digital transformation as digital and services revenues overtook print revenues for the first time. The FT has a combined paid print and digital circulation of more than 910,000 and makes 60% of revenues from its journalism.

The McKinsey Center for Future Mobility was created to help business leaders and policymakers come to terms with a future that is increasingly autonomous, connected, electrified, and shared. Based in four global hubs (Beijing, Detroit, Munich, and Silicon Valley), our forward-thinking and integrated perspective, industry expertise, proprietary research, and global convening power give us a unique combination of assets to help clients navigate the mobility revolution.

www.mckinsey.com

August 2018, McKinsey & Company, www.mckinsey.com. Copyright (c) 2018 McKinsey & Company. All rights reserved. Reprinted by permission.

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