TY - GEN
T1 - Understanding shale resource production
T2 - SPE/IAEE Hydrocarbon Economics and Evaluation Symposium 2016
AU - Ikonnikova, Svetlana
AU - Vankov, Emilian
AU - Gülen, Gürcan
AU - Browning, John
N1 - Funding Information:
This research was conducted within the Bureau of Economic Geology (BEG), Jackson School of Geosciences, at the University of Texas at Austin. This study is part of a program funded by the Alfred P. Sloan Foundation called "Role of Shale Gas in the U.S. Energy Transition: Recoverable Resources, Production Rates, and Implications." The research team includes Scott W. Tinker (Principal Investigator), Svetlana A. Ikonnikova (Co-Principal Investigator), John Browning, Guin McDaid, Gürcan Gülen, Frank Male, Tad Patzek, Eric Potter, Katie Smye, and Emilian Vankov. We also thankful to Bridget Scanlon, Robert Reedy, and Zachary Petrou for their help in processing data on fluids used in hydraulic fracturing. For individual potential conflicts see http://www.beg.utexas.edu/info/shale-rsrvs-prod.php. Access to production data has been generously provided by IHS and DrillingInfo databases. We also thankful to a number of operating companies for their communication and data sharing.
PY - 2016
Y1 - 2016
N2 - Gradually increasing production of natural gas from shale formations has surpassed the production from all other sources, including conventional, coal-bed, and tight formations in the U.S. (EIA, Monthly Energy Review, Jan. 2016). In fact, thanks to shale, natural gas production in the U.S. increased much faster than demand growth. Lower gas prices since 2010-11 owing to excess supply, has been encouraging more natural gas utilization in power generation and industrial sector, and exports via pipelines to Mexico and the rest of the world via liquefaction facilities. Many of these facilities are still under construction; and demand growth may not be fully felt until 2018 or later. In the meantime, shale drilling has slowed down considerably owing to low oil (and NGL) prices in addition to low natural gas prices. This situation raises concerns about the shale gas resource potential and future production capabilities. To address these concerns, the understanding of the two key resource characteristics is essential: (1) the total resource-in-place, and (2) the extractability of the resource under the given technological and economic conditions. The Marcellus play is the largest shale gas play in the U.S.; gas production from the play continued to increase despite declining prices and drilling activity. In this study, we focus on the Marcellus play to study these two characteristics. The resource base estimate for the Marcellus has been provided by geologic studies (e.g. Smye et al., in review). The recovery remains a subject of discussion in numerous engineering studies (Malpani et al., 2015; Xie and Li, 2014; Arogundade and Sohrabi, 2012). These studies, however, are mostly focused on the best drilling and completion practices, rather than looking at changes in productivity over time or comparison of marginal contribution of different inputs to productivity, which is more relevant for economic studies of the resource extraction. The present paper attempts to fill this gap, preparing the base for further economic viability analyses.
AB - Gradually increasing production of natural gas from shale formations has surpassed the production from all other sources, including conventional, coal-bed, and tight formations in the U.S. (EIA, Monthly Energy Review, Jan. 2016). In fact, thanks to shale, natural gas production in the U.S. increased much faster than demand growth. Lower gas prices since 2010-11 owing to excess supply, has been encouraging more natural gas utilization in power generation and industrial sector, and exports via pipelines to Mexico and the rest of the world via liquefaction facilities. Many of these facilities are still under construction; and demand growth may not be fully felt until 2018 or later. In the meantime, shale drilling has slowed down considerably owing to low oil (and NGL) prices in addition to low natural gas prices. This situation raises concerns about the shale gas resource potential and future production capabilities. To address these concerns, the understanding of the two key resource characteristics is essential: (1) the total resource-in-place, and (2) the extractability of the resource under the given technological and economic conditions. The Marcellus play is the largest shale gas play in the U.S.; gas production from the play continued to increase despite declining prices and drilling activity. In this study, we focus on the Marcellus play to study these two characteristics. The resource base estimate for the Marcellus has been provided by geologic studies (e.g. Smye et al., in review). The recovery remains a subject of discussion in numerous engineering studies (Malpani et al., 2015; Xie and Li, 2014; Arogundade and Sohrabi, 2012). These studies, however, are mostly focused on the best drilling and completion practices, rather than looking at changes in productivity over time or comparison of marginal contribution of different inputs to productivity, which is more relevant for economic studies of the resource extraction. The present paper attempts to fill this gap, preparing the base for further economic viability analyses.
UR - http://www.scopus.com/inward/record.url?scp=84977269400&partnerID=8YFLogxK
U2 - 10.2118/179984-ms
DO - 10.2118/179984-ms
M3 - Conference contribution
AN - SCOPUS:84977269400
T3 - SPE Hydrocarbon Economics and Evaluation Symposium
BT - Society of Petroleum Engineers - SPE/IAEE Hydrocarbon Economics and Evaluation Symposium
PB - Society of Petroleum Engineers (SPE)
Y2 - 17 May 2016 through 18 May 2016
ER -