Colorado's New Oil Boom — the Niobrara

Volume 13, Number 1 C OLORADO G EOLOGICAL S URVEY Spring 2011 Colorado’s New Oil Boom — the Niobrara Introduction Note from the Director: Niobrara shale oil is an exciting new by EOG Resources in October 2009 and hydrocarbon prospect for Colorado. produced 50,000 barrels of oil in its first “New oil boom.” Our resource-rich state, while having 90 days. After a year, it is still produc- The words stir developed extensive natural gas reserves ing more than 2,500 barrels of oil per excitement in the over the past couple of decades, is now month. This is significant given that the hearts of landmen, in the process of ‘rediscovering’ its oil average oil well in the U.S. generates just landowners, geol- in organic-rich shale. The current eco- 300 barrels of oil per month. Another ogists, engineers, nomics of fossil fuels, combined with well, the Gemini well drilled by Noble regulators, envi- the development of new drilling and Energy in early 2010, produced over ronmentalists, tax stimulation technologies, is driving this 32,000 barrels of oil in 6 months. These collectors, the unemployed, and renaissance. early results are certainly promising, but charlatans. Although oil production The Niobrara Formation, one such for each of the more prolific wells, there from the Niobrara strata began early organic-rich shale, is a particularly hot are others that show little or no produc- in the 20th century; the new oil target here in Colorado. While a large tion. How quickly the flow of oil wells in Colorado are causing a land volume of natural gas (>700 billion cubic declines is very important for looking rush and drilling boom in many feet by one estimate) has already been towards future potential of the resource parts of the state. produced, it is now Niobrara oil that is as a whole. The application of creative think- the focus of everyone’s attention. Often So what is the Niobrara Formation? ing and technology to these long- mentioned for comparison purposes are Where does it occur in Colorado? Why producing layers of rock named the the Bakken Formation of North Dakota is there excitement about its develop- Niobrara Formation, has raised the or the Eagle Ford Shale of Texas. But, as ment? How might this affect the econ- hopes of thousands of Coloradans. producers are just beginning to ramp up omy and people of Colorado? This Many believe that the Niobrara, and drilling and production, the question of article will address some aspects of these associated formations, might provide how much oil is really available for important questions, providing a back- a sustained drilling and production exploitation over the long term remains ground on the geology, history of devel- boom that is akin to the Bakken- to be answered. opment, and current exploration activity shale, oil boom in North Dakota. One of the first Niobrara horizontal in the Niobrara Formation. Horizontal drilling and formation- wells, known as the Jake well, was drilled stimulation technology are the keys to both plays. Whereas some of the new horizon- Shale Oil (versus Oil Shale) tal wells have reported very high flows Shale oil should not be confused with the perhaps better known “oil shale” of oil, others have not been so pro- found in western Colorado. Shale oil and related shale gas occur in reservoirs ductive. It is still early in the play. The where oil already exists as a liquid in very small openings between grains of potential is large, but widespread suc- rock. Oil shale, on the other hand, is an inorganic rock reservoir containing cess remains to be proven. And, as in no liquid petroleum. It must be heated to high temperatures in order to con- all oil or gas plays, it always gets back vert solid organic material (kerogen) into a liquid or gas hydrocarbon. While to the basic geology of the formations. oil shale in Colorado contains a potentially immense amount of hydrocarbon This RockTalk is an effort to help cit- resources, producing the oil in economically, technologically, and environ- izens, the media, and policy makers mentally feasible ways is still very challenging. Shale oil reservoirs, however, understand what all of the fuss is about. are today being successfully produced in a number of places including several Vince Matthews Colorado basins. The Niobrara Formation is a great example. State Geologist of Colorado CGS ROCKTALK Vol. 13, No. 1 1 Geology Niobrara Distribution The Niobrara Formation was deposited beginning nearly 90 million years ago. At that time, an inland seaway extended from the present-day Gulf of Mexico to the Arctic Ocean (Fig- ure 1) submerging all of what is today Colorado in shallow (<100 feet), to moderately deep (>1500 feet), salt water. For the next six to seven million years, calcareous debris from algae and the remains of abundant marine life living in this seaway slowly accumulated. Additionally, sediment was shed from an ancient mountain range growing to the west in what today would be Utah. When the sea finally withdrew, thick layers of clay, mixed clay and limestone, chalk, and smaller amounts of silt and sand were left behind to form some of the sedimentary rocks we observe today on, and beneath, the surface of Colorado. A geologic cross-section provides a useful tool for visualizing what the basin may have looked like at the end of the seaway’s existence (Figure 2). In places, more than 10,000 vertical feet of sedimentary rock would have accumulated. Studying the rock layers that make-up the Niobrara For- mation helps geologists piece together the climate and envi- ronmental conditions at the time of the inland seaway. From Figure 1. Paleogeographic reconstruction of an inland seaway during the late Cretaceous period (85 million years ago) in North America. Present-day analyses of the limestones, for example, it is thought that Colorado was submerged under salty water. Deposition of limestone, silt, the seaway water was typically warm and the climate tropi- and sand were occurring across most of the state. Green line shows location cal. Further, models have suggested that common water cir- of Figure 2 cross section below. (Map modified from Ron Blakey, Colorado culation patterns involved cooler water flowing south along Plateau Geosystems, Inc.) the western edges of the seaway, while warmer waters flowed SW NE Utah Colorado Kansas and Nebraska Iowa Site of Wasatch Site of Cordilleran Site of Great Plains Mountains and western Front Range edge of Colorado Plateau Fox Hills ss 0 Lewis sh Pierre sh Greenhorn ls Niobrara Fm Dakota ss Vertical scale 5,000 Mancos sh Benton sh in feet 10,000 Aspen sh Fall River ss EXPLANATION Continental deposits Continental deposits Marine shaleLimestone and chalk Boundary between (coarse-grained (fine-grained Lower and Upper piedmont facies) coal-bearing facies) Cretaceous (Adapted from Kauffman, 1977) Figure 2. Regional cross section across area of the inland seaway of the late Cretaceous (see Figure 1 for location). A cross section is like taking a giant cake knife and cutting straight down into the earth. In removing a slice, we would expose what the rock strata beneath the surface look like in the third dimen- sion. This cross section shows the accumulated sediments at about 60 million years ago. Toward the west, the Niobrara Formation is part of the Mancos Shale rocks; in the east it is usually identified as a distinct rock unit. Note that this cross section reconstructs areas that have been eroded by the present-day Rocky Mountains in Colorado. 2 CGS ROCKTALK Vol. 13, No. 1 3 1200 1500 Oil & gas zone 600 WY Organic-rich 1500 source 1200 1500 300300 TThinhin Pierre Shale 40° ThickT 40° NB 0 900909 0 60060 Smoky Hill 38° 38°3 Niobrara Thin ~200’-400’ Member UTT KSK Fort Hays Limestone Member NM TX Codell Sandstone 3 300 600 Figure 4. Total thickness of the Niobrara Formation and its equivalents in feet. Each contour represents 300 feet of thickness. Blue shows thinnest areas of Niobrara deposition. Note that throughout much of central Colo- rado the Niobrara has been eroded away during uplift of the present-day Rocky Mountains. This is shown as gray shaded areas on map. (Modified Dakota from Longman et al., 1998) Group (Figure 3). Today, in the eastern basins of Colorado, deposits Modified from PTTC Niobrara Field Trip Guide, 2010 include chalk (made predominantly from algae-derived carbonate plates known as coccoliths), carbonate mud, shale, Figure 3. Generalized Niobrara Formation stratigraphy for northeastern and silt. In the western basins, less chalk is present, with Colorado. Shales (gray) usually act as source rock and fractured limestones instead more shale, silt, and sand that was shed from the (blue) act as reservoirs. In places, the limestones can also act as lesser source rocks. In rock units below the Niobrara interval, the sandstones (yellow) can rising mountains to the west. Here the Niobrara is often be good hydrocarbon reservoirs as well. grouped as part of the Mancos Shale Formation. The overall thickness of the Niobrara Formation varies north into the central and eastern portions of the seaway. between 200 and 400 feet in northeastern Colorado (Figure 3 The interaction of these cooler and warmer waters occurred and 4). In northwestern Colorado, however, thicknesses can around the latitude of present day Colorado and Wyoming. be much greater—in places more than 1500 feet (Figure 4). When combined with overall fluctuations of sea level, this The Niobrara Formation was originally deposited over the can explain much about the distribution of different rock entire state and surrounding area (as shown in the Figure 4 types found in the Niobrara Formation today.

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