UNIVERSITY OF GOTHENBURG Department of Earth Sciences Geovetarcentrum/Earth Science Centre Unconventional gas and oil - in the USA and Poland Jakub Leśniewicz ISSN 1400-3821 C90 Project Göteborg 2012 Mailing address Address Telephone Telefax Geovetarcentrum Geovetarcentrum Geovetarcentrum 031-786 19 56 031-786 19 86 Göteborg University S 405 30 Göteborg Guldhedsgatan 5A S-405 30 Göteborg SWEDEN Unconventional gas and oil – in the USA and Poland Jakub Leśniewicz, University of Gothenburg, Department of Earth Sciences; Geology, Box 460, SE-405 30 Göteborg Abstract Despite the fact that the exploitation of natural gas from unconventional deposits is much more difficult and less economically viable than from the conventional reservoirs, they are now a very attractive target. This is due to the gradual depletion of conventional resources, and large deposits of natural gas in unconventional reservoirs, which previously were not known or there was no technology that allows to explore them. Coalbed methane , tight gas and shale gas have been successfully developed in the United States over the past two decades. The initial increase in the production of unconventional gas, shale gas in particular, was then maintained through the use of horizontal drilling and hydraulic fracturing, as well as an increase in gas prices. Production of shale gas has a greater deposits potential, while lower productivity and higher cost of drilling, as compared to conventional gas, which is associated with a more cautious investment strategies. Shale gas exploration strategies are also different from those of conventional gas and, initially, require an extensive source rock analysis and a big land position to identify “sweet spots”. Searching for shale gas in Poland is focused on the formation of the Silurian- Ordovician age that are poorly diagnosed and thus characterized by a high exploration risk. Therefore, exploration companies have used a cautious approach which is reflected in planning of the concession activities divided in a few phases, with each successive phase contingent on the positive results of the preceding one. These phases include analysis of existing data, seismic surveys, exploratory drilling with an extended analysis of the cores prior to using horizontal drilling. On a technical level of shale gas exploration, the integration of many disciplines is required for commercial success. There are several obstacles to the exploration of shale gas in Poland, including: regulations which are in favor of the domestic service companies impeding competition, changeable and unclear environmental protection regulations, as well as insufficient liberalization of the domestic gas market. Keywords: Unconventional gas, unconventional oil, USA, Poland ISSN 1400-3821 C90 2012 5.2.9. Occupational Safety and Health Act (OSHA) ........................................................ 30 6. Environmental concerns ....................................................................................................... 31 6.1. Risk of shallow freshwater aquifer contamination, with fracture fluids ....................... 31 6.2. Risk of surface water contamination, from inadequate disposal of fluids returned to the surface from fracturing operations ....................................................................................... 31 6.3. Risk of surface and local community disturbance, due to drilling and fracturing activities ............................................................................................................................... 32 6.4. Risk of atmosphere contamination ................................................................................ 32 6.5. Earthquakes ................................................................................................................... 33 7. Shale gas in Europe .............................................................................................................. 34 7.1. Shale gas in Poland ....................................................................................................... 35 7.1.1. Geological condition .............................................................................................. 37 7.1.2. Risks and problems ................................................................................................ 40 8. Conclusions .......................................................................................................................... 43 9. Acknowledgements………………………………………………………………………...44 10. Figures and tables ............................................................................................................... 44 11. References .......................................................................................................................... 46 1. Introduction In view of diminishing stocks of hydrocarbons in Poland, as well as few new areas of exploration, a study of lesser known or ignored resources is called for. To diagnosis, and extract, these unconventional resources it is necessary to develop research methods and technology that will assist in their exploitation. Shale gas is natural gas contained in the organic diagenetic silt-clay rocks, with very low porosity and very low permeability. A characteristic feature of shale gas, that sets it apart from conventional natural gas accumulations, is a lack of spontaneous flow of gas to a drilled well in quantities in which exploitation would be economically justified. By the end of the 80s accumulations of this type have not been the object of particular interest to explorers. In the last two decades, the increase in oil prices and the invention of new technologies, with lower cost of horizontal drilling and treatments that stimulate the gas flows into the well, a steady growth in world natural gas production from such deposits is seen. The importance of unconventional reserves in the world is increasing constantly. In the United States - a country with the most developed oil industry, the focus on unconventional sources of hydrocarbons - shale gas resources constitute a significant part of the total recoverable natural gas resources. But, new discoveries is rapidly increasing this percentage. Shale gas production in 2006 was almost three times higher than in 1996. Besides American companies, only a few large international companies can today efficiently exploit these deposits. One obstacle is the high costs of drilling horizontal wells at great depths (often in excess of 3 km) and complicated and expensive hydraulic fracturing rock technologies (creating artificial cracks). This new “fracking” technique creates a network of fractures, spreading concentrically from the hole, even for a few hundred meters, in order to connect as big a volume as possible of the rock with the hole. 1 2. Hydrocarbons Hydrocarbons are organic compounds consisting of carbon and hydrogen atoms. The carbon atoms form a skeleton to which the hydrogen atoms are connected by bonds. Because of the differences in carbon skeleton we are able to distinguish several kinds of hydrocarbons. In petroleum, the most relevant ones are alkanes (CnH2n+2), naphthanes (CnH2n) and aromatics (CnH2n-6). The first two groups are called saturated because of the single bonding between carbon atoms hence there is no possibility to connect another atom. The third group comprise compounds which have multiple bonding between carbon atoms, therefore considered unsaturated, and other components can be joined. Under normal surface conditions hydrocarbons can occur in different physical states. It depends on the molecular weight of each compound. The lightest ones like methane or ethane always appear as gases. Some of the aromatic hydrocarbons may be liquids, while the heaviest among occur as solids. The light alkanes and nephthanes may change their physical state to liquid or even solid if subjected high pressure and temperature. Hydrocarbons originate from organic matter, subjected to anaerobic conditions and diagenetic temperatures for millions of years. 2.1. Fossil fuels There are three main types of fossil fuels: coal, crude oil and natural gas. Basically, the processes of creation are similar for all of them, though some factors indicates differences between them. All fossil fuels require extremely long periods of time to be created, under elevated pressure and temperature and absence of oxygen. Favorable geological conditions in turn are necessary so the fossil fuels may migrate and concentrate. All of the elements listed above together are called a petroleum system. It encompasses also geological processes like trap formation and generation-migration-accumulation of hydrocarbons (fig. 1.) [Magoon & Beaumount, 2003]. The organic remains are buried under sediment layers in sedimentation basin as a source rock. Then during millions of years the organic matter goes through numbers of chemical and physical processes and finally changes into hydrocarbons. After this happened hydrocarbons migrate using pores and openings in rock to a reservoir rock where they accumulate. 2 Fig. 1. Scheme of hydrocarbons reservoir creation [a] In order to prevent them from further migration there must exist a barrier or seal above and around them of impermeable rock. Shale, anhydrite, salt and mudstone are usual seal rocks. Hydrocarbons might be trapped also by structural traps (fig. 2.). These include such features as folds (e. g. anticlines), salt domes or tilted fault blocks. Fig. 2. Different types of structural traps [Wang & Economides,