Richardson Tells Industry that DOE Will Extend Successful Gas Recovery Program to Gulf of Mexico

Program has Already Help Revitalize Natural Gas Production in South Texas, Portions of Midcontinent

Energy Secretary Bill Richardson today told oil and gas producers in San Antonio, TX, that the Department of Energy will extend a successful natural gas recovery program to the northern Gulf of Mexico.

Speaking to the newly renamed US Oil & Gas Association - the organization was formerly known as the Mid-Continent Oil & Gas Association - Richardson said that the Energy Department and the Bureau of Economic Geology (BEG) at the University of Texas at Austin will join with gas producers in a $9 million, 4-year effort to identify advanced technologies and methods for recovering natural gas that has been bypassed or left behind in known Gulf of Mexico gas fields.

According to Richardson, the techniques identified by this program in the past have "helped rewrite the book" on how natural gas is produced in many areas of the country. In the last decade, production strategies and methods identified in the program have added more than a billion dollars in new gas reserves in south Texas and have helped revitalize gas production elsewhere in the Nation's midcontinent region.

"The Energy Department is proud to join with the University of Texas and gas producers on this effort," said Secretary Richardson. "Through such partnerships we are developing technology pathways that will increase our access to domestic fossil fuel resources, helping producers while strengthening our nation's energy security."

Before the program began in 1988, the traditional approach was to drill production wells at widely spaced, equal distances from each other and assume that the gas would drain through the subsurface rock formations in a generally uniform manner. The BEG studies, however, showed that this practice left behind large amounts of natural gas. Gas would remain trapped in portions of the formation, isolated from the main gas-bearing zones, or in deeper formations unreached by production wells.

Employing a wide variety of new technological innovations -- for example, technologies that use seismic signals to produce 3-dimensional images of the subsurface formations or that communicate with surface equipment using seismic devices inside the wellbore (a concept called "vertical seismic profiling") - petroleum engineers at BEG and its industry partners learned that targeting new wells between existing wells could often strike so-called "secondary gas"deposits that had been missed.

When the techniques were applied in the Gulf Coast region of south Texas, successful gas well completions jumped 24 percent from 1993 to 1996. The increased success rate is likely to add as much as $1.3 billion in new gas production revenues through the year 2000.

In the midcontinent's Ft. Worth Basin, producers have completed wells in gas fields discovered over 50 years ago that are today flowing at a healthy 2 million cubic feet of gas per day, a rate comparable to many new gas fields.

Some studies have estimated that the United States might recover more than 500 trillion cubic feet of natural gas - more than triple the current estimates of proven gas reserves -- by employing techniques identified in this program.

The new project will extend the effort to one of the world's most prolific gas producing regions. The Gulf of Mexico basin accounts for nearly 10 percent of the planet's known production of natural gas and more than a quarter of the gas produced in the United States.

The offshore northern portion of this basin - the target area for the new program - has nearly 10,000 gas and oil producing reservoirs in more than 1,000 fields. But the sub-surface region is geologically complex. The make-up of gas-bearing formations varies widely, depending upon where in the formation or how deep gas producers drill. Producing natural gas in this region is an expensive undertaking, yet largely because of the complexity, there is potential for enormous gas resources to have been bypassed even in well-produced, mature fields.

The Energy Department's involvement in the project will be overseen by the Federal Energy Technology Center in Pittsburgh.

-End of TechLine-