The People of America's Oil and Natural Gas Indusry

Oil Industry Rocket Science

Jane Van Ryan

Jane Van Ryan
Posted March 8, 2011

A major milestone was reached in the Permian Basin a few days ago. Chevron Corp. produced its 5 billionth barrel of oil from this U.S. formation. Overall, nearly 40 billion barrels of oil equivalent (oil, natural gas and natural gas liquids) have been produced by several companies in the basin since the 1920s, and it's still going strong.

The Permian Basin is a large depression in the Earth's crust stretching about 300 miles from western Texas to New Mexico. One out of every five barrels of domestic oil comes from the basin, which has been estimated to hold a total of about 100 billion barrels of oil equivalent. That's U.S. energy that can be used to produce products such as gasoline for American consumers.

permian basin.jpg

Image Source: Search and Discovery

Matt Insley of Daily Resource Hunter recently visited the oilfield and described what he learned:

"The one take-away that I had is that there are a lot of misconceptions about domestic oil. For starters, the U.S. does NOT lack oil to produce. With oil prices north of $90 a barrel, things are humming along. Indeed, as you drive through the desert landscape of New Mexico and West Texas, you may be surprised to find the smell of petroleum frequently fills the air...Yep, these oil fields are up and running. The oil pumps - 'horse heads' or 'nodding donkeys' -- are working day and night."

As the Permian Basin field has matured, new drilling technologies, including hydraulic fracturing, have been used to enhance the field's production. Geologist, lawyer and blogger Byron King wrote about the modern drilling processes he observed in the basin for Agora Financial:

"Geologically, the earlier wells barely tapped the first fractions of the oil resource. That is, the early wells drilled into porous, permeable formations where the existing, natural reservoir pressure could push the oil into the wells...But let's think through a project for going back to an 'old' field and finding some new oil.

"Let's say there's an old oil field, producing since the 1940s or so. There are old wells drilled into one or two main formations, with a bunch of pump jacks cranking away on the surface. Most of what comes up is just oil-stained water. There are thousands of fields just like this, across North America. [Geologists] re-map the field, using modern computer-assisted drafting tools. Then they review the production history from each well, again using modern statistical analysis. It's astonishing what you can see, when you do some serious, 3-D modeling. Just this effort alone almost always makes you smarter and pays for the effort.

"Now, perhaps the engineers want to refine their data. So...they shoot a series of 3-D seismic lines to refine the underground picture. With this new data set, they see some intriguing prospects for new oil finds. Maybe there's a bypassed structure, or a stratigraphic trap that nobody ever hit. With new tools, there are almost always new ways of interpreting the old ideas, and for figuring out how the oil-bearing rocks are put together.

"Now at this stage, the project managers decide that it may be worthwhile to re-enter an old well, and do what's called a 'recompletion'...[They] will lower tools down to an old producing level of the well, or even to a section of the old well that has never before yielded oil. They'll tap into the rock beds of that section, and possibly apply pressurized fluids or chemicals. Bottom line is that this 'old' oil well may wind up yielding an entirely new production, if not production from new horizons.

"Or perhaps...[they] will bring in a contractor to drill an entirely new series of wells, right next to the old wells from 50 years ago or more. The modern drill bits and drilling fluids...can create a different type of well than was drilled in the past. In short, it's just a better well, with less formation damage. And with modern well-stimulation techniques, this new well can yield 'old' oil that no one was able to recover in the past...

"This last aspect opens up entirely new ways of recovering oil. There's fracking, but consider also how modern, directional drilling can 'steer' a bit to within a few inches of an intended target. I've spoken with drillers who tell me that they can 'hit a coffee can at 20,000 feet.' Wow."

Byron describes today's U.S. oil production as "rocket science without the rockets." There's a lot of truth to that--advanced technologies are helping to develop energy resources safely, cleanly and reliably for American consumers, while extending the life of domestic energy supplies, creating jobs, generating government revenues, and improving U.S. energy security.