Stripper wells provide a substantial portion of current US supplies of oil and natural gas.
These days there is much talk about drilling in the Arctic National Wildlife Refuge and offshore US on the Pacific and Atlantic coasts. According to Dr. David Greene, Oak Ridge National Laboratory, this is driven by the fact that petroleum provides more than 40% of the world’s primary energy and nearly all the fuel for the world’s transportation system. Even with all of the advanced diagnostic tools available, finding new oil has become harder and more expensive.
Often overlooked in energy discussions are the oil and natural gas wells that started their productive life producing greater volumes but are now on the low edge of profitability. The reservoirs feeding these wells are far from depleted. In fact, the Department of Energy (DOE) estimates that in many cases these reservoirs may still hold two-thirds of their potential value. These marginal wells serve as an important pre-existing resource. Characterized by long life and steady production, marginal wells provide a consistent amount of resources while staving off environmental impacts from drilling new wells.
A marginal or “stripper” well is characterized by a low rate of production, typically less than 10 b/d or 60,000 cf/d of natural gas. One out of every six barrels of crude oil produced in the US comes from such wells. The DOE estimates that approximately 84% (422,000) of onshore oil wells and 296,000 natural gas stripper wells in the Lower 48 states are classified as marginal.
These low-volume oil and natural gas wells contribute significantly to the nation’s energy supply. In 2006, stripper wells collectively produced about 18% of the onshore oil production in the US Lower 48 states and over 1.7 Tcf or 9% of natural gas produced onshore the contiguous US — nearly 1 million boe/d.
As productivity declines, these wells are often sold to independent operators who continue their production by deploying new technology advances and careful tending that keep the wells flowing. Generally, these independents are individual operators or smaller companies that do not have the resources to conduct research and development programs to apply to their operations, so any effort that maintains or prolongs the life of a marginal well has significant impact. The amount of production the country can expect from these wells is highly dependent on economics and improved technology.
One option for introducing new technologies is the Stripper Well Consortium (SWC). In September 2000, through a cooperative agreement between the DOE and Pennsylvania State University, the SWC was created. This industry-driven consortium focuses on the development, demonstration, and deployment of new technologies needed to improve the production performance of domestic natural gas and petroleum stripper wells. The SWC coordinates research projects in four broad areas: reservoir remediation, wellbore cleanup, surface system optimization, and environmental protection. Since its inception, more than $9.98 million has been invested to fund 95 projects.
Through the aid of SWC funding, more than a dozen projects have moved from the idea concept to the commercialization stage. In addition to technologies that have been commercialized, there have been methodologies developed to mitigate corrosion problems and identify underperforming wells and basic research studies on nitrogen-CO2. For the most part, research advances for this industry are minor step changes rather than breakthroughs that make an immediate impact. Nevertheless, when technological enhancements can address a problem to reduce operating costs and improve production of an oil field, they are part of the national solution to energy independence.
A marginal well is an existing energy resource. In charting the road to energy security, we must never underestimate the importance stripper wells bring to our economy and the immediate benefits provided by technology advances that enable continued production from marginal fields. The impact of marginal wells is highlighted by the fact that an increase in production of one barrel per month would result in more than 5 MMbbl of extra oil per year, or the equivalent of two super-tankers of imports. Once these wells are plugged and abandoned, it is simply cost-prohibitive to bring a stripper well back online. Hence, production is often lost forever.
The fact remains that for the foreseeable future, oil and natural gas will be an important energy source, and we must do all we can to maximize the resources we have.
Author’s Note: A portion of the statistics noted in this article was borrowed from the Interstate Oil & Gas Compact Commission’s 2007 Marginal Wells: Fuel for Economic Growth 2007 Report.
Sharon Elder works with the EMS Energy Institute, which is based at Pennsylvania State University in University Park, Penn. For a full description and a list of research projects funded by the Stripper Well Consortium, visit www.swc.psu.edu.