by Vaclav Smil
Some histories of natural gas cite spurious claims of very early use in China, but properly documented exploitation in Sichuan, the country’s most populous landlocked province, goes back only to the Han dynasty at about 200 BCE (Needham, 1964). Percussion drills (heavy iron bits at the end of bamboo cables raised by men rhythmically jumping on levers) were used to dig relatively deep wells, and the gas, transported by bamboo pipes, was burned to evaporate brines in large metal pans, an ingenious way to produce salt in the landlocked province hundreds of km from the closest sea coast (Figure 3.1). Eventually, a small share of the gas was also used for lighting and cooking. This industry continued for more than two millennia, with the bores reaching a depth of 150 m by the tenth century, and the record Xinhai well was 1 km deep in 1835 (Vogel, 1993).
Figure 3.1 Chinese percussion rig.
Reproduced from Song 1673.
There are no other documented instances of such gas production, and even after substantial volumes of associated gas became available with the development of new oil fields during the latter half of the nineteenth century, most of the gas was simply flared, a wasteful (and environmentally undesirable) practice that (as I will explain in some detail in Chapter 7) has continued for too long in too many places in Asia and Africa and that is still taking place today even in North America. The first use of natural gas in the United States actually predates the first commercial exploitation of crude oil (in 1859 in Pennsylvania): the first shallow (only about 8 m) gas well was dug in order to expand the flow from a natural seepage in 1821 in New York (Fredonia near the Lake Erie) by William A. Hart (Castaneda, 2004). The town, and later a nearby lighthouse on Lake Erie, received gas through hollowed-out pine-log pipes.
Percussion drilling was speeded up in the age of steam, and Edwin L. Drake used a small engine to complete America’s first commercial oil well (just 21 m deep) at Oil Creek in Pennsylvania on August 27, 1859 (Brantly, 1971). But the great pioneering era of oil extraction during the late nineteenth century had no counterpart in large-scale development of gas industry. Three main factors explain this absence: ready supply of cheap coal and newly abundant refined liquid fuels; technical limits, above all the absence of inexpensive seamless pipes able to withstand higher pressure and reliable compressors to propel the gas over long distances (and hence decades of comments about large volumes of stranded gas and discovered but undeveloped resource because of no access to markets); and ubiquitous availability of coal (town) gas in all major and medium-sized cities.
The United States was the only country where a sizable natural gas industry began to be developed during the 1920s, but as with most other segments of the economy, the Great Depression slowed down (but did not reverse) the process. Demand for industrial production during WWII brought a nearly 50% increase in the American natural gas extraction between 1940 and 1945, but the greatest period of expansion came only after WWII. The industry was driven by the need to supply natural gas for expanding cities (and suburbia) and industries as natural gas became an essential energizer of new economic prosperity. The US natural gas production grew 2.3 times during the first postwar decade, and then it doubled between 1955 and 1970. Another sign of its rising importance was the fact that in the late 1950s its value (including natural gas liquids (NGLs)) surpassed the value of coal production (USCB [US Census Bureau], 1975).
Europe began to shift to natural gas slowly in the 1960s (following gas discoveries in the Netherlands and in the North Sea), and the consumption accelerated during the 1970s as the North Sea gas reached the continent’s markets in rising volumes and during the 1980s when the Soviet lines of unprecedented lengths and capacity brought the Western Siberian gas all the way to Venice, Vienna, and Berlin (for details see Chapter 5). Japan has to import all of its gas, and it began to do so in the late 1960s and has been increasing its dependence on imported LNG ever since (and at an even faster rate after the post-Fukushima closure of its nuclear reactors). China has seen the most recent period of substantial production increases and extensive construction of long-distance pipelines: since the year 2000, it has brought its own gas from its westernmost province (Xinjiang), and the imported gas from the former Soviet Central Asia, all the way to its large eastern coastal cities.
3.1 EXPLORATION, EXTRACTION, AND PROCESSING
Combination of a large amount of practical field experience (accumulated during more than 150 years of hydrocarbon industries) and considerable scientific and engineering research (in areas ranging from fundamental tectonic geology and 3D, even 4D, simulations of oil and gas reservoirs to tools and procedures for remote sensing, horizontal drilling, and gas processing) has transformed every step of modern natural gas development into a highly complex and invariably computerized endeavor aimed at minimizing risks and maximizing financial returns. This has created a massive supply of clean and flexible fuel at affordable prices, but the almost universal presence of computer controls and high levels of mechanization and automation have resulted in only limited labor opportunities.
Detailed US labor statistics divide the total employment in oil and gas industry (there is no separate accounting just for natural gas extraction) into three categories—drilling, extraction, and support, and at the end of 2012, drilling employed more than 90,000 people, and extraction 193,000, and there were 286,000 support jobs, altogether about 570,000 people or an equivalent of 0.5% of total US private sector employment (USEIA [US Energy Information Administration], 2013a). And even the most liberally calculated total of new direct and indirect jobs created by the recent rapid expansion of oil and gas production from shales is, unfortunately, just a small fraction of jobs lost in the US manufacturing since the year 2000 (Smil, 2013a).
3.1.1 Exploration and Drilling
Seismic surveys rely on sound waves (generated at the surface by truck-mounted vibration pads or dynamite charges, in the ocean by firing compressed air from air guns towed behind a vessel) reflected from rock formations and intercepted by sensitive receivers (geophones or hydrophones) spaced along receiver lines that are usually 300–600 m apart (Li, 2014). In 1928, John C. Karcher’s Geophysical Research Corporation drilled the first oil-producing well pinpointed by reflection seismography (in 1940, Karcher’s company was renamed Texas Instruments, and after WWII, it emerged as one of the leaders in microelectronic revolution).
3D seismic imaging was invented by Humble Oil in 1963, developed by Exxon in the Friendswood oil field near Houston during the late 1960s, and it had rapidly replaced 2D seismic reflection as a key tool for decision-making in hydrocarbon drilling (Ortwein, 2013). This advance, requiring large amount of collected data, would have been impossible without processing capacities made available by the development of semiconductors and, starting in the early 1970s, of microprocessors. Acquired data are processed by computers to generate 3D visualizations (including large-scale immersive displays where people can walk inside imagery) of subsurface formations that help to envisage the best way of drilling and reservoir exploitation.
The need for ever better exploratory techniques is made clear by the cost of drilling. Large rigs are commonly leased at daily rates of $200,000–$700,000, and the average onshore exploratory well in North America costs $4–5 million. US historical data show the average cost of natural gas wells increasing from about $500,000 in the mid-1980s to $1 million by 2002 and then rising rapidly to $1.5 million by 2005 and $3.9 million by 2007 when the series ends (USEIA, 2014a). Drilling, fracking, and completing a Marcellus shale gas well averaged $7.65 million in 2011, with high-volume hydraulic fracturing ($2.5 million) and land acquisition ($2.2 million) being the two highest expenses, followed by horizontal and vertical drilling at, respectively, $1.21 million and $663,000 (Hefley et al., 2011). Wells in the interior of South American, African, and Asian countries (in some cases without road access, necessitating transport by helicopters) could be easily two or three times as expensive, offshore wells usually require on the order of $20–40 million, and those in deepwaters n
eed up to $100 million.
All early drilling was done by the ancient percussion method widely used in premodern China. The method appeared primitive: as already noted, heavy iron bits, fastened to bamboo cables attached to derricks and levers (also made of bamboo), were repeatedly raised and dropped (originally powered by men jumping on the levers) to the bottom of a hole, but the process could eventually produce surprisingly deep wells. Early development of US and Russian hydrocarbon industries used sturdy wooden derricks and manila ropes and it was powered by steam engines; steel cables and diesel engines came later, and cable tool rigs were still in common use by the middle of the twentieth century, 50 years after the introduction of rotary drills (Smil, 2006).
These superior tools, patented in 1909 by Howard Robard Hughes, consisted of two rollers arranged at an angle to each other as they rotated on stationary spindles while the entire bit rotated at the end of tubular drilling string and advance through rocks 10 times as fast as the percussion tools. Hughes Tool Company (now operating as Hughes Christensen, belonging to Baker Hughes) further strengthened its leading position by patenting its tricone bit in 1933, still the dominant tool in modern drilling. Rotary drills have either embedded industrial diamonds or synthetic diamonds bonded to tungsten carbide. Above the drill bits advancing into rock formation is a massive, complex structure of supports and prime movers needed to bear the weight of a drill string and to impart the rotary motion.
First wells in previously unexplored areas are called wildcats, a reference to possible mishaps while encountering unexpected high reservoir pressures that can result in blowouts. Once the presence of hydrocarbons is confirmed by exploratory drilling, the same type of equipment and the same procedures are used to drill production wells that are appropriately spaced in order to optimize field productivity, and in the later stage of exploitation, also injection wells are used to introduce water or gases into a reservoir: these secondary recovery methods can significantly boost the shares of oil and gas eventually recovered from a reservoir. I will note only the essentials of the drilling process that combines power and control but remains challenging and risky: detailed descriptions of evolving techniques and operating modes are available in Lewis (1961), Brantly (1971), Davis (1995), Horton (1995), Selley (1997), Smil (2006, 2008), and Devold (2013).
Once a site is pinpointed by geophysical exploration, it is prepared for drilling: if need be, vegetation is cleared and topsoil is removed, surface hole is drilled and surface casing is inserted and cemented into position (it isolates the bore from its surroundings and prevents groundwater contamination), and a blowout preventer (safety valves able to withstand high pressure and prevent any sudden eruption of hydrocarbons from the bore) is installed. Drilling rigs are visible from afar as steep, narrow conical steel structures. These derricks are topped with the crown block consisting of pulleys and traveling blocks able to add and remove drill pipe sections (about 10 m long) and support mass of the suspended drill string, connected drill pipes, and bottom-hole assembly with conical drill bit (Figure 3.2).
Figure 3.2 Modern drilling rig.
© Corbis.
Diesel engines are used to power a rotary table that turns the drill string clockwise. As a well goes deeper, the weight of drill string would quickly surpass the total of 6.5–9 t, typically the mass that produces the fastest rate of rock penetration: fewer than 50 sections (reaching to 300 m below the surface) would weigh that much, and that is why the crown block assembly at the top of the derrick (whose mechanical advantage enables it to support several hundreds of tons) is needed to keep only the optimum mass pressing down on a bit. Powerful pumps are also needed to force down the drilling fluid into the well and then to remove it.
Pressurized drilling fluids are commonly called drilling muds, a misnomer for a complex mixture of liquids, solids, and gases designed to remove suspended cuttings as they are drawn upward through the space between drill string and wellbore walls; muds also clean and cool the rotating bit, inhibit its corrosion, and help to prevent cave-ins. Blowout prevention (subsurface safety valve) and an arrangement for monitoring the progress of drilling are also essential. Drilling progress depends on the hardness of the rock, ranging from no more than 1 m/h in granite to about 20 m/h in chalks and soft sandstones; daily advance on the order of 100 m is common. Deepest hydrocarbon wells were about 1.5 km during the 1920s, more than 4 km by the late 1930s, and 6 km by 1950, and 9 km wells were drilled in Oklahoma’s Anadarko Basin during the 1970s. But average depths of US natural gas wells rose from just over 1 km in the early 1950s to about 2 km by 2010, although in some basins depths of 3–4 km are common.
As the drilling proceeds, new casing sections (threaded steel pipes) are inserted and cemented into position, and the progress of a wellbore is monitored (logged) to ensure that it proceeds in the planned direction and that its integrity is safe. Both cementing and logging of wells became common after WWI, and the two innovating companies still dominate their respective fields nearly a century later. In 1922, Erle P. Halliburton patented a cement jet mixer, and his Oklahoma company grew into a leading worldwide provider of oil field services including not just cementing but also drill bits, well completion, pipe perforation, well testing, and control of accidental blowouts.
Electric well logging, pioneered by Conrad Schlumberger (at the French École des Mines) in 1911, became an essential part of exploratory drilling. In 1927, Schlumberger’s company introduced the first electrical resistivity log to record successive resistivity readings; in 1931, it began to exploit the spontaneous potential that arises between an electrode in the borehole fluid and water in permeable beds through which the bore advances; and in 1949, it introduced induction logging to measure resistivity after sending alternating current through rock formations. Blowout preventer is yet another key innovation going back to the 1920s: James S. Abercrombie and Harry S. Cameron introduce it in 1922, and their first designs could control pressures of up to 20 MPa, while today’s devices can contain up to 100 MPa in wellbores tapping deep formations.
Combination of these techniques could distinguish between permeable and impermeable layers and between hydrocarbon-bearing and water-bearing substrates. Schlumberger has remained a well-logging leader even as new techniques and microelectronics transformed the well monitoring process. Small, slim tools at the end of flexible wires that are lowered into boreholes now log different gamma-ray signatures of sandstones and shales, while neutron logs help to assess rock porosity. Logging used to be done after a well was completed, but new sensors embedded in bottom-hole assembly allow for logging while drilling. Horizontal drilling—whose obvious advantage is the ability to penetrate a much large volume of reservoir rock—used to be highly demanding and expensive, but technical advances have turned it into widely affordable and routinely accomplished operation: I will describe its progress in Chapter 6 when dealing with the expansion of the US shale gas extraction.
A new beginning in the history of oil and gas exploration came in November 1947 when the first drilling rig operating out of sight of land discovered oil 16 km off the Louisiana coast. Onshore production can come from wells with low or marginal productivity whose operation would not be justified in offshore wells whose cost is considerably higher. Production in shallow waters (up to about 100 m) can be done from fixed platform with seabed foundations; in deeper waters, options include gravity bases (giant concrete structure resting on sea bottom and supporting operating deck), tension-leg platforms (held in place by tensioned cables), semisubmersible platforms or floating production, storage, and off-loading structures. Advances in deep-sea construction made it possible to build complex subsea production systems on the seabed with multiple wellheads tied to a pipeline to a shore.
3.1.2 Well Completion and Production
When the drilling is completed, different types of steel casing are installed and cemented in place: they are designed to support years of accident-free production by insuring free flow of
gas and by preventing ingress of other gases or liquids as well as seepage of gas and condensates into overburden rocks and, a most unwelcome occurrence, into aquifers used to supply drinking water. The uppermost segment is the widest but relatively short (10–15 m) conductor casing followed by narrower surface casing that usually goes down a few hundred meters through the aquifer(s) zone. Intermediate casing fills most of the wellbore penetrating through the overburden rocks, and the production casing running through the reservoir rock completes the installation.
When the casing is in place, a smaller pipe, production tubing with diameters of mostly 5–25 cm, is inserted into it and packed in position. At that point, no gas or liquid could flow through the production tubing as it is separated from the reservoir rock by its wall, casing wall, and cement. Bullet perforators were used to make holes in casing and in cement, but now the entry is achieved by jet perforation with electrically ignited charges making small holes through the casing and cement and into the surrounding rock to allow the entry of natural gas. In formations containing loose sand, these perforations must be protected by screen, or else the tubing would fill with sand.
Wells are completed by installing permanent wellheads designed to control and monitor the gas flows, and in order to prevent leakage and blowouts, they are designed to withstand pressures of up to 140 MPa, or about 1,400 times higher than the normal atmospheric pressure of 101.3 kPa. This is done by a complex assembly of casing and tubing heads and a series of valves (commonly called Christmas tree). This structure is usually about 1.8 m tall, and it houses tubes and valves used to monitor the product flow; master gate valve matches the diameter of production tubing and is normally left open; pressure gauge is placed right above it, followed by wing valve, swab valve, and variable choke valve.
