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At least 73 records · Page 4Linked to original sources

Volatility of bitumen prices and implications for the industry

Sustained crude oil price increases have led to increased investment in and production of Canadian bitumen to supplement North American oil supplies. For new projects, the evaluation of profitability is based on a prediction of the future price path of bitumen and ultimately light/medium crude oil. This article examines the relationship between the bitumen and light crude oil prices in the context of a simple error-correction economic-adjustment model. The analysis shows bitumen prices to be significantly more volatile than light crude prices. Also, the dominant effect of an oil price shock on bitumen prices is immediate and is amplified, both in absolute terms and percentage price changes. It is argued that the bitumen industry response to such market risks will likely be a realignment toward vertical integration via new downstream construction, mergers, or on a de facto basis by the establishment of alliances. ?? 2008 International Association for Mathematical Geology.

Natural Resources Research↗

A test and re-estimation of Taylor's empirical capacity-reserve relationship

In 1977, Taylor proposed a constant elasticity model relating capacity choice in mines to reserves. A test of this model using a very large (n = 1,195) dataset confirms its validity but obtains significantly different estimated values for the model coefficients. Capacity is somewhat inelastic with respect to reserves, with an elasticity of 0.65 estimated for open-pit plus block-cave underground mines and 0.56 for all other underground mines. These new estimates should be useful for capacity determinations as scoping studies and as a starting point for feasibility studies. The results are robust over a wide range of deposit types, deposit sizes, and time, consistent with physical constraints on mine capacity that are largely independent of technology. ?? 2009 International Association for Mathematical Geology.

Natural Resources Research↗

Coal-to-liquids: Potential impact on U.S. coal reserves

The production of liquid fuels from coal will very likely become an important part of the hydrocarbon energy mix of the future, provided that technical and environmental obstacles are overcome economically. The coal industry should be able to handle a coal-to-liquids (CTL) industry of modest size, using 60-70 million short tons or 54-64 million metric tonnes of coal per annum, without premature depletion of the country's coal reserves. However, attempts to use CTL technology to replace all petroleum imports would deplete the nation's coal reserves by the end of the century. ?? 2009 U.S. Government.

Natural Resources Research↗

Evaluation of procedures for prediction of unconventional gas in the presence of geologic trends

This study extends the application of local spatial nonparametric prediction models to the estimation of recoverable gas volumes in continuous-type gas plays to regimes where there is a single geologic trend. A transformation is presented, originally proposed by Tomczak, that offsets the distortions caused by the trend. This article reports on numerical experiments that compare predictive and classification performance of the local nonparametric prediction models based on the transformation with models based on Euclidean distance. The transformation offers improvement in average root mean square error when the trend is not severely misspecified. Because of the local nature of the models, even those based on Euclidean distance in the presence of trends are reasonably robust. The tests based on other model performance metrics such as prediction error associated with the high-grade tracts and the ability of the models to identify sites with the largest gas volumes also demonstrate the robustness of both local modeling approaches. ?? International Association for Mathematical Geology 2009.

Natural Resources Research↗

Quality of the log-geometric distribution extrapolation for smaller undiscovered oil and gas pool size

The U.S. Geological Survey procedure for the estimation of the general form of the parent distribution requires that the parameters of the log-geometric distribution be calculated and analyzed for the sensitivity of these parameters to different conditions. In this study, we derive the shape factor of a log-geometric distribution from the ratio of frequencies between adjacent bins. The shape factor has a log straight-line relationship with the ratio of frequencies. Additionally, the calculation equations of a ratio of the mean size to the lower size-class boundary are deduced. For a specific log-geometric distribution, we find that the ratio of the mean size to the lower size-class boundary is the same. We apply our analysis to simulations based on oil and gas pool distributions from four petroleum systems of Alberta, Canada and four generated distributions. Each petroleum system in Alberta has a different shape factor. Generally, the shape factors in the four petroleum systems stabilize with the increase of discovered pool numbers. For a log-geometric distribution, the shape factor becomes stable when discovered pool numbers exceed 50 and the shape factor is influenced by the exploration efficiency when the exploration efficiency is less than 1. The simulation results show that calculated shape factors increase with those of the parent distributions, and undiscovered oil and gas resources estimated through the log-geometric distribution extrapolation are smaller than the actual values. ?? 2010 International Association for Mathematical Geology.

Natural Resources Research↗

A methodology for the assessment of unconventional (continuous) resources with an application to the Greater Natural Buttes gas field, Utah

The Greater Natural Buttes tight natural gas field is an unconventional (continuous) accumulation in the Uinta Basin, Utah, that began production in the early 1950s from the Upper Cretaceous Mesaverde Group. Three years later, production was extended to the Eocene Wasatch Formation. With the exclusion of 1100 non-productive (“dry”) wells, we estimate that the final recovery from the 2500 producing wells existing in 2007 will be about 1.7 trillion standard cubic feet (TSCF) (48.2 billion cubic meters (BCM)). The use of estimated ultimate recovery (EUR) per well is common in assessments of unconventional resources, and it is one of the main sources of information to forecast undiscovered resources. Each calculated recovery value has an associated drainage area that generally varies from well to well and that can be mathematically subdivided into elemental subareas of constant size and shape called cells. Recovery per 5-acre cells at Greater Natural Buttes shows spatial correlation; hence, statistical approaches that ignore this correlation when inferring EUR values for untested cells do not take full advantage of all the information contained in the data. More critically, resulting models do not match the style of spatial EUR fluctuations observed in nature. This study takes a new approach by applying spatial statistics to model geographical variation of cell EUR taking into account spatial correlation and the influence of fractures. We applied sequential indicator simulation to model non-productive cells, while spatial mapping of cell EUR was obtained by applying sequential Gaussian simulation to provide multiple versions of reality (realizations) having equal chances of being the correct model. For each realization, summation of EUR in cells not drained by the existing wells allowed preparation of a stochastic prediction of undiscovered resources, which range between 2.6 and 3.4 TSCF (73.6 and 96.3 BCM) with a mean of 2.9 TSCF (82.1 BCM) for Greater Natural Buttes. A second approach illustrates the application of multiple-point simulation to assess a hypothetical frontier area for which there is no production information but which is regarded as being similar to Greater Natural Buttes.

Utah↗

Probabilistic estimates of number of undiscovered deposits and their total tonnages in permissive tracts using deposit densities

Empirical evidence indicates that processes affecting number and quantity of resources in geologic settings are very general across deposit types. Sizes of permissive tracts that geologically could contain the deposits are excellent predictors of numbers of deposits. In addition, total ore tonnage of mineral deposits of a particular type in a tract is proportional to the type’s median tonnage in a tract. Regressions using size of permissive tracts and median tonnage allow estimation of number of deposits and of total tonnage of mineralization. These powerful estimators, based on 10 different deposit types from 109 permissive worldwide control tracts, generalize across deposit types. Estimates of number of deposits and of total tonnage of mineral deposits are made by regressing permissive area, and mean (in logs) tons in deposits of the type, against number of deposits and total tonnage of deposits in the tract for the 50th percentile estimates. The regression equations ( R 2 = 0.91 and 0.95) can be used for all deposit types just by inserting logarithmic values of permissive area in square kilometers, and mean tons in deposits in millions of metric tons. The regression equations provide estimates at the 50th percentile, and other equations are provided for 90% confidence limits for lower estimates and 10% confidence limits for upper estimates of number of deposits and total tonnage. Equations for these percentile estimates along with expected value estimates are presented here along with comparisons with independent expert estimates. Also provided are the equations for correcting for the known well-explored deposits in a tract. These deposit-density models require internally consistent grade and tonnage models and delineations for arriving at unbiased estimates.

Natural Resources Research↗

On the use of the beta distribution in probabilistic resource assessments

The triangular distribution is a popular choice when it comes to modeling bounded continuous random variables. Its wide acceptance derives mostly from its simple analytic properties and the ease with which modelers can specify its three parameters through the extremes and the mode. On the negative side, hardly any real process follows a triangular distribution, which from the outset puts at a disadvantage any model employing triangular distributions. At a time when numerical techniques such as the Monte Carlo method are displacing analytic approaches in stochastic resource assessments, easy specification remains the most attractive characteristic of the triangular distribution. The beta distribution is another continuous distribution defined within a finite interval offering wider flexibility in style of variation, thus allowing consideration of models in which the random variables closely follow the observed or expected styles of variation. Despite its more complex definition, generation of values following a beta distribution is as straightforward as generating values following a triangular distribution, leaving the selection of parameters as the main impediment to practically considering beta distributions. This contribution intends to promote the acceptance of the beta distribution by explaining its properties and offering several suggestions to facilitate the specification of its two shape parameters. In general, given the same distributional parameters, use of the beta distributions in stochastic modeling may yield significantly different results, yet better estimates, than the triangular distribution.

Natural Resources Research↗

An Analysis of the Published Mineral Resource Estimates of the Haji-Gak Iron Deposit, Afghanistan

The Haji-Gak iron deposit of eastern Bamyan Province, eastern Afghanistan, was studied extensively and resource calculations were made in the 1960s by Afghan and Russian geologists. Recalculation of the resource estimates verifies the original estimates for categories A (in-place resources known in detail), B (in-place resources known in moderate detail), and C 1 (in-place resources estimated on sparse data), totaling 110.8 Mt, or about 6% of the resources as being supportable for the methods used in the 1960s. C 2 (based on a loose exploration grid with little data) resources are based on one ore grade from one drill hole, and P 2 (prognosis) resources are based on field observations, field measurements, and an ore grade derived from averaging grades from three better sampled ore bodies. C 2 and P 2 resources are 1,659.1 Mt or about 94% of the total resources in the deposit. The vast P 2 resources have not been drilled or sampled to confirm their extent or quality. The purpose of this article is to independently evaluate the resources of the Haji-Gak iron deposit by using the available geologic and mineral resource information including geologic maps and cross sections, sampling data, and the analog-estimating techniques of the 1960s to determine the size and tenor of the deposit.

Haji-Gak iron deposit in Eastern Afghanistan↗

Kansas Energy Sources: A Geological Review

Kansas produces both conventional energy (oil, gas, and coal) and nonconventional (coalbed gas, wind, hydropower, nuclear, geothermal, solar, and biofuels) and ranks the 22nd in state energy production in the U.S. Nonrenewable conventional petroleum is the most important energy source with nonrenewable, nonconventional coalbed methane gas becoming increasingly important. Many stratigraphic units produce oil and/or gas somewhere in the state with the exception of the Salina Basin in north-central Kansas. Coalbed methane is produced from shallow wells drilled into the thin coal units in southeastern Kansas. At present, only two surface coal mines are active in southeastern Kansas. Although Kansas has been a major exporter of energy in the past (it ranked first in oil production in 1916), now, it is an energy importer.

Kansas↗

Role of stranded gas from Central Asia and Russia in meeting Europe’s future import demand for gas

Stranded gas is natural gas in discovered fields that is currently not commercially producible for either physical or economic reasons. This study examines stranded gas from Russia and Central Asia and the role it can play in addressing Europe’s growing demand for imported natural gas requiring additional volumes of gas in excess of 130 trillion cubic feet. We find sufficient volumes of stranded gas in fields in the Central Asian state of Turkmenistan in the Amu-Darya Basin and in Russian fields in the West Siberian Basin. The analysis focused on the estimated cost of extraction and delivery to a single market location for various concentrations of gas in stranded gas fields in Central Asia and Russia. At import prices of $10 per million British thermal units (MMBTU), there are sufficient gas resources in stranded fields that can be commercially developed and delivered to the European market. If, however, imported gas prices fall below $7 per MMBTU, most of the stranded gas evaluated from West Siberia will not be commercial. The costs of delivering gas from the largest stranded gas fields in Turkmenistan and Azerbaijan were calculated to be greater than 30% below the costs of delivering gas from the largest stranded gas fields in Russia, which are located in the Yamal Peninsula. Central Asian gas producers, particularly those east of the Caspian Sea, have limited market options due to the near monopoly position that Gazprom holds in transporting pipeline gas from east of Europe. This study examines several additional options to supply gas to Europe by reviewing expected delivered costs from North African and Atlantic basin suppliers.

Natural Resources Research↗

Sequential simulation approach to modeling of multi-seam coal deposits with an application to the assessment of a Louisiana lignite

There are multiple ways to characterize uncertainty in the assessment of coal resources, but not all of them are equally satisfactory. Increasingly, the tendency is toward borrowing from the statistical tools developed in the last 50 years for the quantitative assessment of other mineral commodities. Here, we briefly review the most recent of such methods and formulate a procedure for the systematic assessment of multi-seam coal deposits taking into account several geological factors, such as fluctuations in thickness, erosion, oxidation, and bed boundaries. A lignite deposit explored in three stages is used for validating models based on comparing a first set of drill holes against data from infill and development drilling. Results were fully consistent with reality, providing a variety of maps, histograms, and scatterplots characterizing the deposit and associated uncertainty in the assessments. The geostatistical approach was particularly informative in providing a probability distribution modeling deposit wide uncertainty about total resources and a cumulative distribution of coal tonnage as a function of local uncertainty.

Louisiana↗

Review of the NURE assessment of the U.S. Gulf Coast Uranium Province

Historic exploration and development were used to evaluate the reliability of domestic uranium reserves and potential resources estimated by the U.S. Department of Energy national uranium resource evaluation (NURE) program in the U.S. Gulf Coast Uranium Province. NURE estimated 87 million pounds of reserves in the $30/lb U 3 O 8 cost category in the Coast Plain uranium resource region, most in the Gulf Coast Uranium Province. Since NURE, 40 million pounds of reserves have been mined, and 38 million pounds are estimated to remain in place as of 2012, accounting for all but 9 million pounds of U 3 O 8 in the reserve or production categories in the NURE estimate. Considering the complexities and uncertainties of the analysis, this study indicates that the NURE reserve estimates for the province were accurate. An unconditional potential resource of 1.4 billion pounds of U 3 O 8 , 600 million pounds of U 3 O 8 in the forward cost category of $30/lb U 3 O 8 (1980 prices), was estimated in 106 favorable areas by the NURE program in the province. Removing potential resources from the non-productive Houston embayment, and those reserves estimated below historic and current mining depths reduces the unconditional potential resource 33% to about 930 million pounds of U 3 O 8 , and that in the $30/lb cost category 34% to 399 million pounds of U 3 O 8 . Based on production records and reserve estimates tabulated for the region, most of the production since 1980 is likely from the reserves identified by NURE. The potential resource predicted by NURE has not been developed, likely due to a variety of factors related to the low uranium prices that have prevailed since 1980.

Gulf Coast Uranium Province↗

Monte Carlo simulations of product distributions and contained metal estimates

Estimation of product distributions of two factors was simulated by conventional Monte Carlo techniques using factor distributions that were independent (uncorrelated). Several simulations using uniform distributions of factors show that the product distribution has a central peak approximately centered at the product of the medians of the factor distributions. Factor distributions that are peaked, such as Gaussian (normal) produce an even more peaked product distribution. Piecewise analytic solutions can be obtained for independent factor distributions and yield insight into the properties of the product distribution. As an example, porphyry copper grades and tonnages are now available in at least one public database and their distributions were analyzed. Although both grade and tonnage can be approximated with lognormal distributions, they are not exactly fit by them. The grade shows some nonlinear correlation with tonnage for the published database. Sampling by deposit from available databases of grade, tonnage, and geological details of each deposit specifies both grade and tonnage for that deposit. Any correlation between grade and tonnage is then preserved and the observed distribution of grades and tonnages can be used with no assumption of distribution form.

Natural Resources Research↗

A framework for quantitative assessment of impacts related to energy and mineral resource development

Natural resource planning at all scales demands methods for assessing the impacts of resource development and use, and in particular it requires standardized methods that yield robust and unbiased results. Building from existing probabilistic methods for assessing the volumes of energy and mineral resources, we provide an algorithm for consistent, reproducible, quantitative assessment of resource development impacts. The approach combines probabilistic input data with Monte Carlo statistical methods to determine probabilistic outputs that convey the uncertainties inherent in the data. For example, one can utilize our algorithm to combine data from a natural gas resource assessment with maps of sage grouse leks and piñon-juniper woodlands in the same area to estimate possible future habitat impacts due to possible future gas development. As another example: one could combine geochemical data and maps of lynx habitat with data from a mineral deposit assessment in the same area to determine possible future mining impacts on water resources and lynx habitat. The approach can be applied to a broad range of positive and negative resource development impacts, such as water quantity or quality, economic benefits, or air quality, limited only by the availability of necessary input data and quantified relationships among geologic resources, development alternatives, and impacts. The framework enables quantitative evaluation of the trade-offs inherent in resource management decision-making, including cumulative impacts, to address societal concerns and policy aspects of resource development.

Natural Resources Research↗

Commercial possibilities for stranded conventional gas from Alaska's North Slope

Stranded gas resources are defined for this study as gas resources in discrete accumulations that are not currently commercially producible, or producible at full potential, for either physical or economic reasons. Approximately 35 trillion cubic feet (TCF) of stranded gas was identified on Alaska’s North Slope. The commercialization of this resource requires facilities to transport gas to markets where sales revenue will be sufficient to offset the cost of constructing and operating a gas delivery system. With the advent of the shale gas revolution, plans for a gas pipeline to the conterminous US have been shelved (at least temporarily) and the State and resource owners are considering a liquefied natural gas (LNG) export project that targets Asian markets. This paper focuses on competitive conditions for Asian gas import markets by estimating delivered costs of competing supplies from central Asia, Russia, Indonesia, Malaysia, and Australia in the context of a range of import gas demand projections for the period from 2020 to 2040. These suppliers’ costs are based on the cost of developing, producing, and delivering to markets tranches of the nearly 600 TCF of recoverable gas from their own conventional stranded gas fields. The results of these analyses imply that Alaska’s gas exports to Asia will likely encounter substantial competitive challenges. The sustainability of Asia’s oil-indexed LNG pricing is also discussed in light of a potentially intense level of competition.

Alaska↗

Fertilizer consumption and energy input for 16 crops in the United States

Fertilizer use by U.S. agriculture has increased over the past few decades. The production and transportation of fertilizers (nitrogen, N; phosphorus, P; potassium, K) are energy intensive. In general, about a third of the total energy input to crop production goes to the production of fertilizers, one-third to mechanization, and one-third to other inputs including labor, transportation, pesticides, and electricity. For some crops, fertilizer is the largest proportion of total energy inputs. Energy required for the production and transportation of fertilizers, as a percentage of total energy input, was determined for 16 crops in the U.S. to be: 19–60% for seven grains, 10–41% for two oilseeds, 25% for potatoes, 12–30% for three vegetables, 2–23% for two fruits, and 3% for dry beans. The harvested-area weighted-average of the fraction of crop fertilizer energy to the total input energy was 28%. The current sources of fertilizers for U.S. agriculture are dependent on imports, availability of natural gas, or limited mineral resources. Given these dependencies plus the high energy costs for fertilizers, an integrated approach for their efficient and sustainable use is needed that will simultaneously maintain or increase crop yields and food quality while decreasing adverse impacts on the environment.

Natural Resources Research↗

Shale-gas assessment: Comparison of gas-in-place versus performance-based approaches

The recent interest in exploration for shale gas increases the demand for a reliable, compatible resource assessment. Many different assessment methods are used, commonly depending on types and quantity of data available, which may lead to significantly divergent results for the same shale-gas play. This study compares results obtained using performance-based and gas-in-place methodologies to assess a well-developed and active shale-gas play (Woodford Shale, Arkoma Basin, USA) and two untested, hypothetical shale-gas plays (Shublik and Brookian, Alaska North Slope, USA). Results show that the two assessment methods produce comparable results when assessment units are identically defined and similar geological constraints are used as input parameters. Inherent uncertainties are associated with both assessment methods, and these are related to aspects of shale-gas production that are not well understood. The performance-based method relies on decline trend analysis to generate distributions of estimated ultimate recovery (EUR), and uncertainty increases in cases of short production history. The gas-in-place method requires the application of a recovery factor to estimate technically recoverable resources, and both absolute values of recovery factors and their spatial variability are poorly documented, and therefore a source of uncertainty.

Natural Resources Research↗