Session 2 History and Markets History of Production pg 1-17 Homework: Current Events discussion Homework: 3 Quiz questions

History of Oil and Gas: Antiquity More than 4000 years ago, asphalt and pitch used in Babylon Persian tablets indicate the medicinal and lighting uses of petroleum in the upper levels of their society. Words for asphalt exist in ancient Sumerian, Sanskrit, Assyrian, Greek, etc.  References in the Bible in Genesis and Exodus Asphalt used to caulk boats by 3800 BC 347 AD oil from bamboo-drilled wells in China

History of Oil and Gas http://www.pipeline101.com/history/timeline.html

History of Oil http://www.youtube.com/watch?v=D4sykoUWZ8g http://www.youtube.com/watch?v=9TfRH-atfLQ http://www.youtube.com/watch?v=WDkvhPGHwkk http://www.youtube.com/watch?v=nJDacQbRL_k http://www.youtube.com/watch?v=WtNtlQ2Gso0

History of Natural Gas http://www.youtube.com/watch?v=sbRV19rszko

Fossil Fuel Use in the US Crude oil became the dominant energy source in 1951 (chemical engineers discovered how to use to make plastics, petrochemicals, gasoline, etc.) .  

World Energy Usage Today

Organization of Petroleum Exporting Countries (OPEC) OPEC = cartel to regulate the production and cost of oil. Official definition: “OPEC’s mission is to coordinate & unify the petroleum policies of Member Countries & ensure the stabilization of oil prices in order to secure an efficient, economic & regular supply of petroleum to consumers, a steady income to producers & a fair return on capital to those investing in the petroleum industry.” (www.opec.org)

OPEC

US Oil Infrastructure

What do we use oil and gas for? Direct and indirect power such as electricity generation http://www.msnbc.com/news/2027856.jpg http://www.irri.org/irrc/nutrients/images/g)%20Fertilizer%202ok.jpg http://www.illinois.gov/gasprices/images/gasprices3.jpg http://www.rrtenviro.com/images/Plastics%20Recycling.JPG http://www.eere.energy.gov/states/alternatives/images/photo_10926.jpg http://www.energy.gov.ab.ca/photos/coal/Coal_startPage2.jpg

History of Oil & Gas in Colorado Florence Second oil field to be drilled in the US Located near the town of Florence in south-central Colorado Discovered in 1881 At the turn of the century, Florence had grown to 10,000 people and had 25 oil companies and 3 refineries Most production occurred from 1890 to 1920 but some wells still produce today Produces from the Pierre Shale from fractures at the structural bottom of the Canon City Embayment

Florence

Boulder Discovered in 1901 with a dowsing rod by one of the drillers who worked on the Florence field discovery Home of one of the oldest producing wells in the WestThe McKenzie No. 1-21 was the first commercial well in the field and is still producing today (1/2 bbl/day in 2004) Peak production of 85,000 bbls in 1909 and has declined steadily since then Also produces from the Pierre Shale from fractured rock at the top of an anticline

Rangely Oil Field Located in NW Colorado surrounding the Town of Rangely First discovery occurred in 1901 Large-scale development began in the 1940’s Has produced over 800 million bbls of oil Produces from the Rangely Anticline on the NE flank of the Uintah Basin 98% of production comes from the Pennsylvanian-Permian Weber sandstone

Rangely Secondary production via water flooding began in 1957 Tertiary production via CO2injection began in 1986 and is ongoingTertiary recovery is generally the last stage in a field’s evolutionReduces viscosity Swelling of the crude oil forcing it out of the rock and into the recovery well Increases gas pressure which pushes gas to the well Chevron has approximately 375 producing wells and 250 injector wells in the field

Piceance Basin The Piceance Basin occupies approximately 6,000 square miles in northwestern ColoradoAsymmetrical structural basin that trends NW-SE with a steeply dipping eastern flank and a gently dipping western flank Elevation change in formations from the axis of the basin to the east edge of the basin is 8,000 -10,000 feet The Piceance Basin is also the location of the oil shale deposits found in the Green River Formation