RPSEA Outlines Oil & Gas Research Needs for the Next Decade

The nonprofit research Partnership to Secure Energy for America (RPSEAhas unveiled a comprehensive 10-year plan for advancing research into sustainable oil and gas technology that aims to help cement the status of the U.S. as a leading global producer well into the future.

The wish list of research needs addresses a diverse roster of topics that ranges widely from studies on streamlining the development of offshore reservoirs to improving well recovery in shale plays and advancing environmentally sensitive practices.

“No one knows what the energy industry will look like in the next 10 years, but we do know in order to maintain our leadership position, the United States must compete on a global basis, (and) take full advantage of rapidly evolving technology and address the variety of challenges we will face,” RPSEA President Tom Williams said in a press release.

The Research & Development Plan (R&D Plan) is being released at a critical point in the history of the U.S. oil industry.

Fueled by the shale revolution and development of complex deepwater reservoirs, U.S. oil production surged to a 37-year high of 10 million barrels per day in November and output is expected to continue climbing to a fresh all-time record this year, according to the federal Environmental Information Administration.

U.S. oil production hit a 37-year high of 10 million b/d in November 2017. Source: EIA

With output pushing higher and an oil-friendly administration in the White House, the need to focus on sustainable, environmentally conscious development practices is more apparent than ever.

The R&D Plan draws heavily on input from industry stakeholders and RPSEA’s network of subject matter experts, including universities, national laboratories, as well as large and small energy producers and consumers. It also builds on the foundation of RPSEA’s successful program in the past decade working with the industry, academia, and the Department of Energy National Energy Technology Laboratory (NETL).

Onshore Research Needs

Included in the research needs outlined in the R&D Plan are calls for studies into the most effective strategies and technologies for developing unconventional reservoirs, such as the Marcellus Shale in Appalachia, the Bakken Shale in North Dakota and the Eagle Ford Shale in Texas.

The report notes that the average U.S. shale well currently recovers less than 10% for oil production and 15% for gas production, making the enhancement of reservoir recovery an issue of great interest for all stakeholders. It suggests research into better reservoir characterization to improve the well design and wellbore placement to boost recovery.

As shale development increases, the R&D Plan also recommends examining of issues surrounding flowlines, pipelines, and stray gas especially in areas where population growth has occurred on top of old and sometimes abandoned flowlines that were not mapped or identified.

This need was highlighted last year by an incident in Firestone, Colorado. A home in relatively new Front Range neighborhood was destroyed in an explosion linked to an old flowline that was thought to be out of service. The accident led to two deaths and prompted state regulators to call for the inspection of wells and flowlines across the state.

“The domestic unconventional gas resource has dramatically altered the energy picture in the U.S.,” the report said. “As attention turns toward shale gas resources around the world, the technologies developed through this program and applied to the environmentally responsible development of domestic resources will keep U.S. companies and universities in the forefront of global unconventional resource development.”

The R&D Plan also included a call for documenting the impact of shale gas production on regional air and water quality, with proposed projects on environmental baseline monitoring, fugitive methane emissions and fracturing flow back water characterization.

Water management was highlighted as a universal issue, with the cost of recycling being an important factor. Though the report noted that advances are somewhat restricted by regulations, liability, risks, transportation, sourcing, and disposal. It also highlighted a need for research and better technologies to monitor and manage water disposal related to induced seismicity.

Offshore Research Needs

Offshore production research needs were also a subject of significance in the R&D plan. In recent years, several big deepwater developments have come online that pushed the technological boundaries of the industry to new limits and helped to propel production from the federal Gulf of Mexico to a record 1.7 million b/d in November, EIA data show.

Deepwater reservoirs are particularly challenging and costly to develop. They require years of advance planning and pose unique operating challenges and risks.  The R&D plan recommends further research into a variety of issues associated with this output to find ways to streamline the process of bringing new wells online while minimizing environmental impacts.

“The goal of Offshore Program is to develop environmentally sensitive, cost-effective technologies to identify and develop resources in increasingly challenging conditions and ensure that the understanding of the risks associated with deepwater operations keeps pace with the technologies that industry has developed,” the R&D Plan said.

Becoming a Safety Leader

The research model RPSEA has developed includes actively engaging stakeholders across the entire community of energy producers, researchers, technology providers, regulators and environmental groups.

And while the R&D Program was primarily developed to promote the safe delivery of energy resources to U.S. citizens, any discoveries could also be extended to oil and gas production in other countries across the world.

“While the U.S. is currently a leader in terms of the development of oil and gas (in particular, the onshore unconventional shale resources), other nations are beginning to see these resources as an important component of a plan to move toward a lower-carbon, sustainable energy mix,” Williams said.

Environmental Concerns Hinder Plans to Increase Development of US Offshore

The Trump administration’s early January announcement that it planned to open up 90 percent of federal waters to offshore oil and gas development was met by much fanfare, but what ultimately winds up on the final leasing block is likely to be far less than what is on the ambitious draft plan.

“By proposing to open up nearly the entire OCS for potential oil and gas exploration, the United States can advance the goal of moving from aspiring for energy independence to attaining energy dominance,” Vincent DeVito, Counselor for Energy Policy at the US Department of the Interior said in a press release announcing the new draft plan.

But barely a week after the announcement, the plan hit the first in a series of snags when Interior Secretary Ryan Zinke announced the removal of Florida from proposed list of planned lease sales following a conversation with Republican Governor Rick Scott.  Since then, legislators from more states along the eastern and western seaboards have lined up to request exemptions citing concerns about the environment and tourism.

Among the states asking to be left off the draft five-year offshore leasing plan are California, Oregon, Washington, New York, New Jersey and South Carolina. (source) So far, only Alaska and Maine have applauded the plan.

Henry McMaster, the Republican governor of South Carolina, told the press “we cannot afford to take a chance with the beauty, the majesty and the economic value and vitality of our wonderful coastline,” the Post and Courier newspaper reported.

The draft National Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2019-2024 proposed the largest number of lease sales in US history. It called for including 47 potential lease sales – 19 sales off the coast of Alaska, 7 in the Pacific Region, 12 in the Gulf of Mexico, and 9 in the Atlantic Region.

If implemented in its draft form, it would bring unprecedented access to US offshore oil and gas resources at a time when the OCS is already a substantial contributor to US production. The US Energy Information Administration reported that the Gulf of Mexico alone was expected to produce a record 1.7 million barrels per day in 2017.

The blowback to this plan highlights a broader public anxiety about the extraction of oil and gas resources that are essential to powering modern life. It creates a complex conundrum for the oil and gas industry; The public wants affordable energy and the economic stimulus generated by oil and gas production, but it balks at the prospect of drilling for these resources in their own back yards.

This atmosphere of concern highlights the need for the oil and gas industry to emphasize the use of ecologically conscious practices wherever possible. Several majors and independent producers are already heeding this call with the adoption of sustainability practices. Among the companies leading the way are BHP, Chevron, Shell, Statoil and Hess  which each release their own annual sustainability reports.

Adopting safe and environmentally conscious practices are an important part of maintaining the industry’s social license to operate. The ongoing kerfuffle over the draft OCS lease plan shows that even the most industry-friendly White House in recent memory cannot ease public anxieties about the potential for accidents and spills in ecologically sensitive areas. Only the industry can do this by demonstrating a good faith effort to promote sustainable practices.

History Can’t Repeat Itself

Memories of the 2010 Deepwater Horizon oil spill still linger on the minds of many coastal residents. The spill was kicked off by a cascading chain of missteps and equipment malfunctions that led to a blowout at the BP-operated Macondo field in the deepwater Gulf of Mexico. The ensuing explosion caused 11 fatalities and set into motion the largest oil spill in US history.

In response to the spill, the Obama administration overhauled the federal agency responsible for overseeing offshore production and implemented a host of new rules aimed at reducing the potential for another accident.

Today, the Trump administration is quietly working to roll back some of those regulations to bring new investment into the US offshore.

In December, the Bureau of Safety and Environmental Enforcement begin moving forward with a proposal to adjust some of these rules as part of a wider Trump administration effort to reduce undue burden on industry. This signal from regulators indicates that the US government is willing to make compromises in exchange for promises of investment and eventual production royalties.

Regardless, the resistance to new offshore exploration by many coastal states highlights the fact that the public mood has not changed and demonstrating concern for the environment remains a prudent business practice. Doing so will help to ensure that areas that are already open to development stay open and states that favor like more exploration, like Alaska, will be able to see more leasing within their borders.

Offshore, oil, gas, drilling

Petroleum Engineers Play an Important Role in Sustainability

Some people balk at the idea that oil and gas has a role to play in a sustainable future, but the reality on the ground suggests otherwise.

“Supplying energy for the world is a monumental task. There continue to be improvements in renewable energy sources; however, reasonable forecasts of growth in renewables suggest fossil fuels will remain the primary source of the world’s energy for decades to come,” Nathan Meehan, president of the Society of Petroleum Engineers, wrote in an article published by SPE in March 2016.

Even with the increasing adoption of renewable energy resources, Meehan notes that fossil fuels still play an important role in meeting today’s energy needs and using them prudently is the best way to make sure that our generation does not compromise the ability of future generations to meet their own needs.

The drive toward renewables is evident in the US where last year nearly half of utility-scale capacity additions on the power grid came from renewable sources like solar and wind, according to the US Energy Information Administration.

But even with the recent gains, renewables only account for a minority of total US power production and their intermittent nature creates the need for energy storage or backup generation that can be brought online quickly – like natural gas fired power plants – to stabilize the grid. The bulk of heavy lifting in the US power generation sector is still done by natural gas (34%), coal (30%) and nuclear (20%), according to EIA data.

This data suggests that fossil fuels will still be needed for decades to come in the power generation sector, and that’s only the tip of the iceberg. A myriad of other industries count on energy and products derived from oil and natural gas.

Considering this, SPE takes seriously the need to extract these resources sustainably.

Though many people may not realize it, there are many things that petroleum engineers can do to help ensure that oil and gas is part of a sustainable energy solution. Meehan says these areas include:

  • Minimizing methane emissions
  • Reducing or eliminating flaring
  • Supporting energy efficiency and conservation
  • Ensuring wellbore integrity
  • Reducing the surface footprint of wells
  • Eliminating spills
  • Optimizing field development and management

SPE offers its members opportunities to train, share knowledge and advance practices to further these goals.

SPE’s efforts supplement work being done by a number of producers, several of which voluntarily release sustainability reports that highlight their unique measures – like Statoil, Shell, and Hess. To learn more about what petroleum engineers can do, visit SPE’s website or read Meehan’s full article on the subject here.

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