OGPSS - The heavier oils of California's Kern Valley

The Kern River field was first found by a wood cutter and his son, after being asked to drill a well on the Means property, who began digging with a 3-inch auger, below a seep on the Kern River shore; they found oil at a depth of 13-ft. They then dug out a larger hole, using a pick and shovel to create a larger access from higher up the river bank down to that oil level, and then drilled down an additional 30-ft after having fixed the auger to the end of a section of connected pipes. (This was done by manually turning the auger). The well then started flowing, filling the excavation at around three bd. That oil was then taken and used as boiler fuel to power a more conventional drill that, nineteen days later, reached another producing horizon at a depth of 256 ft. and became the first commercial well in the field. By 1904 the field was producing 17.5 million bbl/a year, at which it peaked.

It is important to distinguish the different fields in the region, since there are many fields around Bakersfield, each having different histories and projections for the future. The Kern River field, for example, has produced roughly 2 billion barrels of oil since that first well, with about 476 million barrels estimated as being still available.

Oil Fields in the Kern Valley around Bakersfield, CA with the Kern River field (the first) and the Midway- Sunset (the largest) further identified. (CA Conservation )

The Kern Valley as a region rapidly became the largest oil producing region in the state, particularly since the arrival of the railroad in 1902 made it possible to develop the adjacent Midway-Sunset field, which remains the largest oilfield in the State. As a result of this, by 1904, California was producing more oil than Texas. Times have changed a bit since then, and while the Midway-Sunset claims to remain the largest oil producing field within the lower 48 states (not that this doesn’t include the offshore Gulf), the largest operator in the field now only produces some 29,000 bd.

Gail Tverberg visited the production facilities at the Kern River field back in February 2009 and gave a more detailed description of the field and the work Chevron is doing than I plan to cover today. (There is no point in trying to compete with her excellent report, though the reference to the video of the tour is now here, and the API picture record of her visit seems to have vanished. The oil in the field is heavy, and so steam has been injected through one set of wells, in an increasingly refined operation, to heat the oil in place, so that it will flow more easily to other collection wells where it can be pumped to the surface.

Kern River production process (from Chevron via Gail Tverberg )

The impact of the steam flood on production was dramatic, and has become the main method of production since it was introduced

Impact of steam flood on oilfield performance (Chevron via Gail Tverberg )

Gail also then posted a comment by Jean Laherrère on his estimate of future production from the field, showing its future decline, even with an increased number of wells , to a final estimate of production for the field.

Cumulative oil production estimate (Jean Laherrere )

My own visit to Bakersfield looked at a different way of producing the oil. The Bureau of Mines (as then was) brought large borehole mining equipment to Bakersfield and used pressurized jets of water to mine the oil and sand from around a well in the McKittrick field at a depth of 350 ft, bringing the mix to the surface, where the oil was removed, and the sand then re-injected back into the cavity. (This process was also successfully applied in mining small pods of uranium ore in Wyoming). The method has the advantage of getting all the oil from the formation section that was mined, with relatively little environmental impact, but the closure of the Bureau shut down this program. (Though I retain slides of the operation).

Some of the sand is even closer to the surface, as the initial well showed, so that strip mining of the region to produce the oil in the same way as in Alberta may be economic for the upper layers of some of the fields, were it not from the emissions that would come from the exposed oil and have a negative impact on local air quality.

The continued search for more efficient methods to extract a greater proportion of the remaining oil in place continue through the present. Methods have been proposed where the steam is generated using solar power to heat the steam. A small pilot plant was opened at the beginning of this year to demonstrate the feasibility of the technique, though as yet on too small a scale to produce a significant amount of oil. Higher temperature steam has been generated at other power plants using the same technological concept and so there may be a path forward for this development.

In the same way there are some experiments to use the injection of oxygen and steam as a way of increasing production. The process is claimed to be able to work below the 2,000 ft limitation of conventional steam flooding to a depth of perhaps 3,500 ft. The claim is also that the costs are down at $4/bbl capital cost and $15/bbl operating cost to achieve this enhanced recovery. The process sounds a little too good to be true in the simple form in which it has been presented to date, but it illustrates the possible potential for improving absolute recovery levels above those

Unfortunately the research budgets for finding enhanced ways of producing fossil fuels are not seen as having the critical importance that they may well have. The greater emphasis on advancing renewable forms of energy, and Washington power struggles have meant that energy research is not the hot topic it once was and the interest in developing new techniques to obtain more oil from existing fields is often subsumed by the desire in companies to grow reserves, even if only by purchase instead of discovery or development.

The debate over energy supply and the environmental impact of different sources of power continues to make it difficult to find satisfactory ways to supply California with the energy that its population needs. With the confines within which the oil and gas industry currently work in the state it is hard to see any future gains in production over the levels of today, and the greater likelihood of declining production.

P39. Pick Points

Half-a-dozen or so stories of interest:

China is going to need a lot of oil, and to ensure it gets it, it has just loaned the Russian oil companies Rosneft and Transneft (who runs the pipelines) $25 billion, and for this they get an annual delivery of 15 million tons of oil (300,000 bd) for 20 years. Of the sum Rosneft will get $15 billion. The first pipeline heading that way will carry up to 0.6 mbd, but needs a spur to carry the oil to China. The oil will likely come from the Vankor field in the Tyumen region of Siberia, with the pipeline running from Taishet in Siberia to Skovorodino, a town of about 10,000 people, on the border, and in Amur province. Overflying part of the route on Google Earth, it doesn’t look quite as uncivilized as the articles make out. There is a Youtube video of the town of Tynda, for example.

Despite the problems that they are having with the California budget, customers of the Southern California Gas Company are getting a 20% drop in their heating bill. The average winter bill of 75 therms per month is expected to be in the $70-80 range. However there is a drive to change the gas hot water heaters to solar heating, given that about 38% of the home power goes to heating water. Unfortunately I suspect that the $250 million price tag will be too much for the state right now, even though it would be through rebates. Oddly Government support for such a move in Australia is meeting some opposition from Greenpeace, on the odd argument that they don’t generate electricity. It was only last week that tentative agreements were signed for solar-thermal power for Southern California Edison, with Brightsource Energy building 7 plants for a total of 1,300 megawatts over the next seven years. though the first 100 MW unit, in the Mojave Desert won’t be ready until 2013. SCE states that it now gets 16% of its energy from renewables. (Though by next year the state target is 20%).

BrightSource CEO John Woolard said the 400-MW Ivanpah project will create about 1,700 full-time jobs in construction and another 3,500 jobs to last the 40-year life of the plants.

The technology uses the tower approach rather than the trough shaped collector idea used by Acciona in Nevada. Israel contrarily has just approved the connection of a photo-voltaic power station to their national grid, though it will take 4 years to install the connection.

Perhaps the money put into the stimulus package for high-speed rail might head toward maglev. China is looking to start a new project next month although there is already one system in operation in Shanghai, that uses German technology. Plans for high speed rail systems in California are being debated even though no-one knows where the stimulus money is going yet.

While recent talk has focused on a gas pipeline from Iran to Pakistan and on to India, and recent reports have been either favorable or discouraging, Bangladesh remains strapped for energy, and so there is now talk of a pipeline from Myanmar, through Bangladesh to India.. However economic reality, and the fact that coal is indigenous to many in the region is causing the countries of South Asia to seriously consider switching to coal. India, for example, is now seeing a gap of some 5.7% between available supply and demand and needed the pipelines that had been planned, since even now gas can only meet 60% of industrial demand.

There have been concerns in the past over the ability of wind turbines to operate in cold climates, but with turbines now working successfully in Alaska those days may be over. It may still take about 17 years to pay for the installation, however, on an expected life of 20-25 years. Yet with that promise there is still uncertainty over the future of wind in Canada. In the UK permission was given to install ten new wind farms around Scotland. Britain currently generates some 3 GW from wind, and these farms may add double that amount.

And the EU has just released the Market Observatory for Energy report looking at energy generation in the EU. However since the range of oil prices assumed go from $61 to $100 per barrel for oil in 2020 it may still be a little unrealistic – but I will take a look!

More stories can be found at The Energy Bulletin and Drumbeat at The Oil Drum.

P32 Pick Points

Half-a-dozen or so stories of interest:

In what appears to be a win-win situation New York is learning what those of us who live in more rural parts have been doing for a while – adding used cooking oil to fuel . while the oil is usually transesterified to give a biodiesel, in NY they are using the vegetable oil “as is,” saving the restaurant up to $22 for 5-gallons in disposal, and the county runs vehicles for almost free. Mythbusters shows that it works, even with no change, other than filtering, of the oil which is straight from the fast food shop. On a word of caution you need to check that your engine is designed for this before trying it, since there is a world of difference between running a liter of the stuff through your engine once, and running nothing but vegetable oil all the time. Not to mention the fact that EPA considers it illegal.

Ausra is changing from producing solar power to selling equipment to industry so that they can generate it themselves, either as solar thermal or steam. This is not long after the company opened the first solar thermal plant in California and is a reflection of the times. The speed with which such plants can be built is shown by a company in Israel that expects that they will be generating power in March from the new domestic size (100 kW of electricity and 170 kW of heat) plant. Power comes from the heated air running a gas turbine. Often these quite small projects are being undertaken by students from American universities who travel to poorer countries to help with such projects.

And speaking of small subjects, drying clothes can take 6% of the nations energy, thus a move has started to overturn rules against clothes lines. There is a promise of subsidies for renewable fuels, as they scale upwards from the small, in remarks made by the new Secretary of Energy though I'm not sure that a clothes line will count.

As Britain suffers under more bad weather the price of salt for the roads has risen from 25 to 100 British pounds per ton. However, once the sun comes back, up to a quarter of British homes may be eligible for energy efficiency makeovers – though it appears the government may only pay for insulation, while encouraging investment in more efficient appliances – including wood-burning boilers. (Did I hear a mutter from Edward I’s tomb?) If you are thinking about it, there is a friendly web site to help with wood burning issues. And yet, even as they encourage wood in the UK, Montreal is thinking of banning wood-burning stoves because of pollution problems.

The question as to whether or not to build a new coal-fired power station is difficult, given the uncertainty about regulation, but in Europe the fluctuating price of carbon credits is also making it difficult to determine the balance between cost and profit, whether for the coal-plants or for wind farms on the other side of the exchange. Finland, meanwhile, is planning on starting a new nuclear power station (they currently have four and would like six). Russia is selling nuclear fuel to India, the first after the international ban was lifted. (Though Australia is still debating whether to lift it. They may need the money, since even Gazprom is talking delays in the South Stream pipeline because of money worries. They are anticipating that gas sales to Europe may fall 5% this year, with a drop in price to $280 per mcm.

I may feel the urge for a new Tech Talk (sorry about today – just swamped with requests for information at work) since Bangladesh is talking about starting “Longwall Top Coal Caving” as a way of improving the extraction ratio in their mines. It is usually used in seams above 20 ft thick, so Americans and Europeans should not get too excited. The need for energy is critical in Bangladesh, since reduced supplies of natural gas are causing increased power shortages and load shedding of up to 480 MW in January, today (Sunday) it was 1000 MW. It translates into several hours without power, and is expected to get worse in the short term. India, meanwhile, is looking to hasten the move to solar power by creating 60 “solar cities” in the next five years, dropping power needs by 10%. The first city in this program began its planning last April China also has a “solar city” and is planning for the 2010 Solar cities convention there. The focus remains on solar water heaters at present. Meanwhile in the US utility companies such as Ameren have started encouraging consumers to consider using power from renewable sources, albeit at a premium. It is an idea that is spreading into the South-East.

Those of us who have concerns about the long-term prospect for fuel supply from fossil fuels have often seen our arguments disputed by Cambridge Energy Research Associates (CERA) which is headed by Daniel Yergin. It often seems we are on the opposite sides of everything. Well this is their big week in Houston, and it will be interesting to see what news their meeting makes. The title is “Risk and the Rebuilding of Confidence.”

For more stories visit The Energy Bulletin and Drumbeat at The Oil Drum.