-16

Western Tight Sands: Gas-bearing tight sands occur in the form of blanket-type and lenticular formations. In both types, the effects of a variety of interdependent parameters are still unknown, and consequently, the gas recovery rate and active reservoir life for a given field remain uncertain. To permit low-cost exploitation of the full potential of the tight sands resource base, the following specific technological issues need to be addressed:

Further characterize tight sands gas reservoirs and improve resource estimates;

Identify the parameters critical to formation evaluation and gas
production;

Understand more clearly the mechanisms of hydraulic fracture
propagation and control;

Diagnose fracture shape and downhole conditions using surface
parameters;

Provide real-time fracture treatment design changes; and

Apply advanced technologies to presently noncommercial areas.

Coalbed Methane: The geologic process of coal formation generates methane, which commonly remains stored within the coal. This methane becomes adsorbed on the coal surfaces. The total U.S. coal bed methane resource is estimated to range from 300 to 400 Tcf of gas-in-place. Resource estimates vary due to uncertainties regarding gas content and recoverability from deep western coal deposits that form a major portion of the resource base. In the West, the Piceance, San Juan, and Raton basins, for example, contain an estimated total of up to 186 Tcf of gas-in-place (an incremental 27 Tcf of which is estimated to be recoverable with advanced technology at costs below $3/MMBtu [1988$]). More than 400 coalbed methane wells in these two basins were producing coalbed methane gas as of July 1989. In the East, as of July 1989, over 700 wells tapped gas from Black Warrior Basin coal fields in Alabama, which contain an estimated 20 Tcf of gas-in-place (with costs below $3/MMBtu [1988$]). As of the end of 1989, methane from Appalachian coal seams had not yet been commercially produced except for "accidental" production when drilling to other targets.

In many cases, current practices are adequate for producing gas from shallow, single-seam coal beds; however, advances are required in well-completion and fracturing procedures, dewatering techniques, and delineation of reservoir mechanics to economically produce gas simultaneously from shallow, multiple seams or from coal seams deeper than 2500 feet. The principal constraint is the limited ability to effectively stimulate the wells to increase reservoir productivity. Better understanding of coal bed formation damage due to completion techniques and the effects of natural fracturing is also critical to economically recover methane from coal seams. Other incompletely resolved R&D issues include

-17

coalbed methane formation evaluation methods, coal fines production, coal seam dewatering, well design and spacing, well interactions, and multi-zone completion techniques. From an environmental and operating cost viewpoint, improved (lower-cost) techniques for the disposal of water produced concurrently with the gas also need to be considered.

Geopressured/Water-Drive Reservoirs: One approach for significantly extending the gas resource base is to target gas not normally recovered through primary production practices. For example, an estimated 44 Tcf of technically recoverable natural gas, 3 Tcf of which is estimated to be recoverable at costs below $3/MMBtu (1988$), is trapped in Gulf Coast onshore water-drive reservoirs. The gas became trapped as a result of water encroachment into production wells and the inability to further reduce reservoir pressure due to high water influx into the reservoirs. As water production reaches high levels, the traditional practice is to plug and abandon the affected wells and ultimately the entire gas field. Recent data indicate that the recovery efficiencies for the prolific water-drive gas reservoirs along the Texas-Louisiana Gulf Coast may be as low as 60 percent or less.

Improving the efficiencies of gas recovery from water-drive reservoirs depends on developing and applying advanced approaches based on the coproduction theory for recovering trapped gas. This theory suggests that a major portion of trapped gas can be remobilized and made to flow to the wellbore if a large amount of water or brine is produced concurrently, thereby significantly reducing the reservoir pressure. GRI-funded R&D (since the early 1980s) addressing these water-drive reservoirs has made progress, including field validation of the coproduction theory. However, widespread additional gas recovery from water-drive reservoirs based on the coproduction theory requires further development of analytical tools, especially verified capability to predict reservoir performance, and field research under varied conditions. A DOE budget of $10 million per year for the next three years is required.

3. Surface Coal Gasification.

Supplemental gas supplies are projected to play an increasingly important role in meeting demand by the early twenty-first century as the marginal cost of natural gas and competing energy forms increases. Synthetic natural gas (SNG) from coal can substantially extend gaseous fuel supplies; however, converting coal into gaseous fuels that are cost competitive with gas and other energy sources is not easy to achieve. Coal gasification represents a hedge technology that could contribute to the U.S. energy picture in the long term. Since the early 1900s, numerous organizations around the world have devoted substantial effort to coal gasification systems and have developed several processes. The prices of SNG produced from these processes cannot compete in today's depressed market. Fundamental research on advanced gasification processes is necessary to overcome present technical limitations, focusing on lower-temperature processes that could reduce gas production costs. the very long term, the magnitude of the nation's coal resource establishes the desirability of finding economical, environmentally acceptable technologies for coal gasification. An annual DOE budget of

Over

-18

4. Biofuels.

In the early 1980s, GRI addressed the issue of producing methane from biomass and waste materials. Interest in such technology continues because net CO2 outputs are small relative to fossil fuels, but it is generally thought that this synthetic natural gas option is not likely to be significant until well after the year 2000. Recent research has shifted toward understanding the ways microbes affect natural gas operations or could be used to bioremediate gas-industry-related wastes. Research is needed to (1) achieve a low net-CO2 output relative to fossil fuels, (2) deliver high-purity methane from the bioreactor, and (3) improve selection for plant genetics which favor methane synthesis. A fundamental research program in DOE of $8 million per year is required.

SUMMARY

An expanded cooperative R&D program requiring the partnership of DOE and the gas industry is required if natural gas is to fulfill its potential to help solve the nation's environmental problems and reduce insecure oil imports. The current DOE FY 1992 budget request does not provide adequate funding for such a joint program. As indicated in the attached exhibits, the DOE R&D budget request is extremely biased toward electricity and recommends spending only 3 percent of the FY 1992 R&D budget for gas-related research.

GRI urges the Committee to address this funding imbalance by authorizing an adequate funding level of $100 million for gas end-use technologies and $50 million for natural gas supply R&D. This funding is required to implement a sound, balanced national energy research program.