Golden Rules for a Golden Age of Gas
Capella Festa
IEA
Paris, 8 April 2014
© OECD/IEA 2013
The engine of energy demand growth
moves to South Asia
Primary energy demand, 2035 (Mtoe)
Share of global growth
2012-2035
Eurasia
Latin
America
Europe
1 370
United
States
8%
China
1 710
4 060
2 240
Middle 1 050
East
Brazil
480
1 030
Africa
1 540
Eurasia OECD
1 000
Africa
440
Japan
Southeast
Asia
5% 4%
8%
Middle 10%
East
65%
India
Non-OECD
Asia
China is the main driver of increasing energy demand in the current decade,
but India takes over in the 2020s as the principal source of growth
© OECD/IEA 2013
A mix that is slow to change
Growth in total primary energy demand
1987-2011
Gas
2011-2035
Coal
Renewables
Oil
Nuclear
500
1 000
1 500
2 000
2 500
3 000
Mtoe
Today's share of fossil fuels in the global mix, at 82%, is the same as it was 25 years
ago; the strong rise of renewables only reduces this to around 75% in 2035
© OECD/IEA 2013
A new diversity in gas supply
Change in annual natural gas production
China
United States
Russia
2011-2020
2020-2035
Australia
Qatar
Iraq
Brazil
Turkmenistan
Iran
Algeria
-30
0
30
60
90
120
150
180
210
240
bcm
Natural gas production increases in every region of the world
between 2011 and 2035, with the exception of Europe
© OECD/IEA 2013
Unconventionals account for
half of gas output growth
Growth in unconventional gas production by type
Shale gas
Coalbed
methane
United States
China
Canada
Argentina
India
European Union
Algeria
Mexico
Indonesia
2011-2020
2020-2035
Australia
China
India
Canada
United States
0
20
40
60
80
100
120
140
160
bcm
Unconventional gas development spreads well beyond North America, notably
after 2020, with China & Australia major contributors to production growth
© OECD/IEA 2013
The difference is in the rocks
•
Conventional hydrocarbon reservoirs are made up of porous rock such as
sandstone or limestone which allows hydrocarbons to flow.
•
Shale rocks are of low porosity and permeability and need to be fractured
to produce the hydrocarbons they contain.
Sandstone
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Shale
Drilling for Shale Gas
 8 well pad
 92 stages pumped in 6
days
 15,000 tonnes of sand
(850 trucks)
 150,000 m3 of water
(5,000 trucks)
 30 pumps(80,000 HHP)
A huge task for industry and regulators
© OECD/IEA 2013
2011
Drilling for shale gas
© OECD/IEA 2013
Golden Rules for unconventional gas
 The “Golden Rules” can allow governments, industry & other
stakeholders to address the environmental and social impacts:







Measure, disclose & engage
Watch where you drill
Isolate well & prevent leaks
Treat water responsibly
Eliminate venting, minimise flaring & other emissions
Be ready to think big
Ensure a consistently high level of environmental performance
 They are “Golden Rules” because their application can ensure
operators have a “social license to operate”, paving the way for a
golden age of gas
© OECD/IEA 2013
Watch Where You Drill
 Community impact considerations
 Stay away from major faults
USA
 Monitor fracture jobs in high risk areas
 Small drill pads
Europe
© OECD/IEA 2013
Isolate Wells and Prevent Leaks
Hole quality
Execution
Cement design
Cement evaluation
RT geomechanics
Mud-cake removal
Flexible
Isolation scanner
RT measurements
Spacer design
Expandable
Segmented bond log
Mud weight
Flow rates
High solids content
Wellbore monitoring
New WBM/OBM/SBM
Centralized casing
Low porosity / perm
Pressure testing
Hole cleaning
Casing movement
Cement height
Surface monitors
© OECD/IEA 2013
Treat Water Responsibly
 Water Sourcing

Reduce amount of water used.

Use produced water, sea water
 Water Transportation

Piping water to reduce traffic &
cost
 Water Storage

Re-usable above ground storage
 Water Disposal

Reduce, Reuse, Recycle
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Reuse / water injection
Be Ready to Think Big
More Planning Less Footprint
Integrating it All Together
FDP
Reservoir Quality
‘sweet spots’
Culture data
Surface restrictions
Reservoir
Quality
Pad
Welldata
Design
Pad
Placement
Culture
Reservoir
Quality
Pad
Placement
Favorable reservoir
“sweet
spots”
Surface
restrictions
‘sweet
and
pad location
Favorable spots’
reservoir
and pad location
© OECD/IEA 2013
Pad Well Design
Conclusions
 Factors on both the supply & demand side pushing gas towards
a higher share in the global energy mix
 The “Golden Rules" can address the environmental & social impacts of
unconventional gas – making the golden age of gas a reality
 Continuous drive needed from governments & industry to demonstrate
performance if public confidence is to be earned or maintained
 Unconventional gas can transform energy markets by:
 putting downward pressure on prices
 broadening diversity & security of gas supply

Natural gas has a role to play in a low-carbon energy economy,
but increased use in itself is not sufficient to reach the 2°C goal
© OECD/IEA 2013