Heavy Oil: A Solution to
Dwindling Domestic Oil Supplies
By E. Hunter Herron, Ph.D.
President, Petroleum Equities Inc.
September 2000
Pursuing technology to increase heavy oil production is a
promising solution to the developing shortages of conventional oil supplies.
|
Although the significance of the pending peak in global production is not yet widely appreciated, the threats posed to the economic well-being and national security of the United States by the nation's increasing reliance on imported oil are generally recognized. Of special concern is the United States' dependence on crude oil supplies from politically unstable areas outside the Western Hemisphere. If the nation's source of petroleum products continues to be limited to conventional crude oil, this situation is certain to become worse. Widely acknowledged estimates of remaining recoverable reserves of conventional crude oil worldwide total 1 trillion barrels, of which just 15 percent are in the Western Hemisphere and only 2 percent in the United States. (3) However, vast unconventional resources of petroleum remain untapped, and most of these deposits are in the Western Hemisphere.
As depicted in Figure 1, when petroleum sources are expanded to include heavy hydrocarbons, which include both heavy crude oil and natural bitumen, the outlook for domestic oil supplies is much improved. 
Worldwide deposits of heavy hydrocarbons are estimated to total almost 5½ trillion barrels, and four-fifths of these deposits are in the Western Hemisphere. In the United States, heavy hydrocarbon deposits are estimated to be more than eight times that of the nation's remaining reserves of conventional crude oil. (4), (5) Clearly, production of heavy crude oil and natural bitumen on a commercial basis would be of enormous benefit to the United States, restoring energy independence in the intermediate term and providing secure energy supplies from the Western Hemisphere for the foreseeable future.
Heavy crude oils and natural bitumens are difficult to produce economically because their low gravities — and correspondingly high viscosities — retard their ability to flow within a reservoir.
In Canada, which has vast deposits of heavy oil and bitumen, the government pragmatically defines a hydrocarbon as heavy when it is “not recoverable in its natural state through a well by ordinary production methods.” Commercial Production of Heavy Hydrocarbons Advances in oil production technology are making the production of heavy hydrocarbons a commercial reality. At present, most of the commercial production of heavy oil and bitumen employ some variation of steam injection. Injecting steam into a heavy-hydrocarbon deposit can be effective in two ways:
The most advanced production technology using steam is steam-assisted gravity drainage, commonly termed SAGD (pronounced “sag-dee”). In its most sophisticated configuration, SAGD utilizes multilateral horizontal wells, as illustrated in Figure 2. 
One set of wells is used to inject steam, which rises through the heavy oil or bitumen in the reservoir. The steam heats the heavy hydrocarbon, reducing its viscosity so it drains under the influence of gravity into a second set of production wells that are situated below the injection wells near the bottom of the hydrocarbon-bearing formation. At present, the vast majority of SAGD projects are in Canada.
The in situ conversion process requires special equipment installed downhole in each injection well to generate the high steam temperatures required to initiate conversion. Although still under development, the process appears to be very promising, particularly when applied to the recovery of highly viscous bitumens. Computer simulations of in situ conversion based on laboratory data show bitumen with an original viscosity in excess of 1 million centipoise can be produced successfully. (6) After conversion, the raw production has a viscosity of 55 centipoise or less. The lighter components in the raw production can be separated at the surface and marketed as a synthetic crude oil, which can be refined into transportation fuels, heating oils, and other petroleum products. Review our report on in situ conversion for further information on this technology. For additional information on heavy oil and other heavy hydrocarbons, search the web or the following specific web sites.
1. Campbell, C.J.: "Depletion Patterns Show Change Due for Production of Conventional Oil," Oil & Gas Journal, December 29, 1997. 2. Laherrere, J.H.: "World Oil Supply--What goes up must come down, but when will it peak?," Oil & Gas Journal, February 1, 1999. 3. International Petroleum Encyclopedia: "Worldwide Look at Reserves and Production," PennWell Publishing Co., 2000. 4. Meyer, R.F. and C.J. Schenk: "An Estimate of World Resources of Heavy Crude Oil and Natural Bitumen," Proceedings of the Third UNITAR/UNDP International Conference of HC&TS, Alberta Oil Sands Technology and Research Authority, July 1988. 5. Meyer, R.F. and W. deWitt Jr.: "Definition and World Resources of Natural Bitumens," U.S. Geological Survey Bulletin, 1990. 6. Graue, D.J. et al: "Production of Synthetic Crude Oil from Heavy Hydrocarbons Recovered by In Situ Hydrovisbreaking," U.S. Patent Serial No. 09/103,590, issued to World Energy Systems Incorporated, October 1999.
|
hile oil supplies in the absence of political disruptions are presently adequate to satisfy global demand, recent assessments of remaining oil reserves show the world will soon face a relentless oil-supply crisis. Within the next fifteen years, worldwide production of conventional crude oil is
projected to peak and decline irreversibly .