NGI The Weekly Gas Market Report / NGI All News Access

DOE Awards $3.3M for Deep Gas R&D

The Department of Energy awarded $3.3 million to seven cost-shared research and development (R&D) projects targeting new technologies that can help producers tap the 169-187 Tcf of deep gas deposits (greater than 15,000-20,000 feet beneath the earth's surface) located in the United States.

To date, less than 1% of all wells drilled in the United States have penetrated below 15,000 feet, yet their production accounts for nearly 7% of domestic production. The National Petroleum Council in 2003 estimated that this share must rise to 12% by 2010 if the nation's growing gas demand is to be met. DOE's Deep Trek R&D funding project focuses on developing an integrated deep-drilling and deep-imaging system that will enable the economic recovery of an additional 100 Tcf of natural gas through 2020.

To date, DOE has awarded 12 Deep Trek projects totaling more than $31 million (with $10 million contributed by research partners) and is currently managing another seven projects focused on resource assessment and improved imaging technology for deep reservoirs.

At 20,000 feet, drillers encounter temperatures greater than 400 degrees F and pressures greater than 15,000 psi, as well as extremely hard rock and corrosive environments. The combination of such conditions stretches the limits of technical capabilities, often leading to increased risks and excessive equipment wear and failures. This also means sharp increases in well costs.

With an ultra-deep well, the last 10% of the bore hole can account for 50% of the wells cost, according to DOE. As a result, only the biggest and most promising of the deep gas prospects have been drilled to date.

But as America's shallower-depth conventional gas production continues a steady decline, the nation must turn increasingly to other gas sources to meet domestic demand. Given the amount of deep gas estimated to be in the U.S. -- as much as 97% of the nation's current total proven conventional natural gas reserves (192 Tcf) -- it could be a very rewarding target.

The seven new projects selected include the following:

©Copyright 2006 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

Comments powered by Disqus