New oil from old wells may bolster notion's energy supply in future
The nation's enery concerns are mirrored in the wind-blown oil fields of west Texas. Long a prolific source of domestic oil production, these aging fields now are yielding less. And they are helping motivate the nation's scramble for new supplies.
However, those same oil fields are beginning to reflect new hope that with more sophisticated recovery techniques, old wells can produce significant new supplies.
In Texas and in other parts of the Country there has been a burst of activity recently in enhanced, or tertiary, oil-recovery projects which help resuscitate depleted fields. Analysts see it as the result of several developments: a federal price incentive program established about one year ago; higher world oil prices that are lifting domestic prices under the lifting domestic prices under the decontrol program; and advances in recovery technology.
"WE were a doubting Thomas" through most of the 1970s about enhanced oil recovery, says Ron Barnett of Amoco Production Company, a subsidiary of Standard Oil Company (Indiana). After a decade of laboratory and field research, "we know it works and the economics look good," he says.
Amoco has announced plans for the world's largest tertiary recovery project in the rich oil fields of the Permian Basin that extends from west texas into New Mexico. Amoco will inject carbon dioxide, the gas used in carbonated drinks and in the manufacture of dry ice, into the fields to increase by over 10 percent the amount of oil that can ultimately be recovered. New production of several hundred million barrels of oil is expected.
The industry on average only recovers about one-third of the oil from existing wells, using conventional primary and secondary recovery techniques. Effective tertiary recovery, which washes out or displaces oil from wells that no longer have enough natural pressure to produce on their own, can reap another 10 to 18 percent of the crude. That could add close to 30 billion barrels of new domestic oil supplies, nearly doubling the nation's crude reserves.
Still, no great amount of oil production from tertiary recovery is expected in the near future. These projects involve considerable risk because they employ technologies that are still being developed, and they required a high initial investment, industry analysts point out.
The Department of Energy (DOE) estimates enhanced oil recovery is yielding about 400,000 barrels daily in the US, out of a total domestic daily oil production of 8.6 million barrels.
However, DOE analysts specializing in tertiary recovery expect production from enhanced recovery projects to jump sharply in 1981, the result of a rush new projects over the past year.
Last October an incentive program was begun that allows oil producers to recoup 75 percent of the cost of a tertiary project by charging the world price for oil from other domestic wells that would otherwise be subject to price controls.
Over 250 new tertiary projects have qualified for the program in the past year, according to DOE. New projects were coming on stream at the rate of about 25 per year before the incentive program.
"This program has created a good incentive for industry to accelerate tertiary projects. It reduces the risk to only 25 percent of the initial cost," says F. D. Covey, president of the oil and gas division of mitchell Energy and Development Corporation. Mitchell is planning a tertiary project in north Texas , also using the carbon dioxide injection method.
Other enhanced recovery techniques include injecting steam, hydrocarbons, and chemicals to force more oil out of the ground. The characteristics of the oil reservoir determine the technique used.
Carbon dioxide is gaining popularity fast for tertiary recovery in the US Southwest, partly because there are ample natural supplies relatively close to major producing oil fields. A study sponsored by the Department of Energy identified ample natural reserves of carbon dioxide in parts of Arizona, New Mexico, and Colorado. "It's a surprisingly good match of natural supplies where we need them . . . near the oil fields of west Texas," says Eugene Cover, an official with Pullman Kellogg who supervised the study.
Amoco's project also includes plans to produce carbon dioxide from a field in northeast New Mexico, and then possibly transport it by pipeline to Texas. Atlantic Richfield Company and Shell Oil Company are planning separate projects to produce carbon dioxide in Colorado for what they see as a growing tertiary recovery market in Texas.