What's new in production

	Vol. 224 No. 12
ROBERT E. SNYDER, EXECUTIVE ENGINEERING EDITOR

Natural gas storage, prices. US Secretary of Energy Spencer Abraham said, regarding natural gas storage levels, that the Energy Information Administration’s (EIA) weekly natural gas storage report of October 23 is encouraging for two important reasons. As we approach the beginning of the winter heating season, gas storage levels have surpassed 3 Tcf – a goal set in May when the National Petroleum Council was asked to address the issue of natural gas in the 21st century. And, while these numbers are encouraging, Abraham added, “We must continue to be cautious and practice smart energy use.”

A Lehman Brothers report in mid-October said a sustained period of high prices this summer appears to have had a negative impact on demand, allowing for gas storage refill rates 4 Bcf/d above five-year averages. If demand imbalance persists, storage inventories could approximate 1,400 Bcf at the end of March 2004. As a result, Lehman is lowering its full-year 2004 natural gas price forecast estimate by $0.50, to $3.75/MMBtu, from $4.25/MMBtu. It is also lowering long-term natural gas price forecasts (2005 and beyond) by $0.25, to $3.75/MMBtu from $4.00.

And, speaking for the Natural Gas Supply Association (NGSA), its President, Skip Horvath, said on November 6, “Today’s inventory estimate makes it official. The natural gas industry has put more gas into storage than during any previous injection season. This is a significant achievement and evidence that the market is working. However, if we have as severe a winter in parts of the country as last year, any accompanying downward pressure on wholesale prices could be short-lived as storage stocks deplete. Quick adoption of a comprehensive energy bill is an important first step toward a more balanced US energy policy. Further delay will only prolong our gas supply challenges.” 

Important CO₂ sequestration project. The Department of Energy’s (DOE) Teapot Dome oil field in Wyoming will undergo a pioneering scientific venture that ultimately could prove one option of large-scale, region-wide carbon sequestration, a critical step in support of emissions-free energy and the goals of President Bush’s Climate Initiative. The project will be managed by DOE’s Rocky Mountain Oilfield Testing Center (RMOTC), which operates the Teapot Dome oil field, also known as Naval Petroleum Reserve No. 3. In managing the project, RMOTC will link the concepts of carbon sequestration and enhanced oil recovery through underground injection of CO₂ into older fields to boost production that has declined. The research project also will involve a cooperating oil production company, Anadarko, plus several universities and national labs. 

Project participants have met to complete plans for the first phase of the three-phase proposal. The project could grow to be one of the three largest sequestration tests in the world. With a potential surface area spanning 50-mi², its test area encompasses Anadarko’s Salt Creek oil field.

Anadarko plans ultimately to inject about 7,200 t/day of CO₂ gas into the declining, century-old field, which will boost production to 35,000 bpd, from 5,300 bpd. It is building a 125-mi pipeline extension to move by-product gas there from its origin at the Shute Creek gas processing plant in Western Wyoming. A short spur will deliver CO₂ for injection at Teapot. In-kind contributions from Anadarko and others may total about two-thirds of the early costs, while the federal government would pay one-third. The venture could yield important dual assessments, including determination of optimal carbon sequestration levels in depleted oil/gas fields throughout the multi-state Rocky Mountain region, and the optimum combination of sequestration and enhanced oil recovery. 

Unocal testing underground oil spill cleanup. Unocal Corp. has embarked on an experiment in its Guadalupe oil field, in California, that may offer a new way to clean up underground oil spills. A system of propane-fired boilers and pipes is injecting steam deep beneath the oil field’s rolling brush-covered sand dunes in hopes of making oil pollution there easier to pump out of the ground. If successful, the $6-million experiment could give Unocal a way to clean up one of the nation’s worst oil spills without digging up most of the oil field and destroying its fragile environment. 

The test is an attempt to solve an environmental mishap that has posed a seemingly insurmountable problem for Unocal and environmental regulators for nearly a decade. The oil field, located near the town of Guadalupe, is polluted with a kerosene-like diluent that was used to thin the heavy oil as it was pumped out of the ground. Between 8.5 million and 20 million gallons of the substance were leaked at the field and settled into the sand in huge underground pools mixed with groundwater. The field was shut down in 1994. 

The only proven way to clean up the site is to dig it up and haul the polluted sand away. However, such an excavation project would damage the environment more than leaving the pollution in place. The heavy equipment could also emit large amounts of air pollution. Three university scientists examined less-damaging cleanup techniques and came up with the steam injection method; and Unocal agreed to pay for a test trial.

The test project involves injecting steam into a 70-ft by 70-ft test area within one of the field’s largest pollution pockets, a plume estimated to contain 3 MMgal of diluent. The steam will bring the groundwater there to the boiling point and vaporize the diluent. An extraction well will pump the hot, polluted water out of the ground and collect the vapors before they can escape into the atmosphere. The water and vapors will go through a recovery system; any pure diluent will be recycled, and diluent-tainted water will be injected 2,700 ft underground, back into the original oil deposit. 

Injection/extraction will proceed for four months; then the test area will be allowed to cool off and stabilize. The panel of scientists will evaluate the results to determine if the technique is feasible for large-scale application. Once the steam injection phase is complete, Unocal will test a follow-up technique by injecting air into the pollution to speed up natural decomposition of the diluent.