November 3, 2014
Although the share of renewable energy sources is growing, fossil fuels, supplying more than 80% of global primary energy demand, play the dominant role. In 2011, fossil fuels, which include crude oil, coal and natural gas, met respectively 32%, 27% and 22% of global energy demand. In the power sector, proportions are different, with coal accounting for 41% and natural gas for 22% of electricity generation, and a meagre 5% attributable to crude oil, which has been effectively eliminated as a means of producing electrical energy in the wake of the oil crises of the 1970s and 1980s. Crude oil has a lower share in electricity generation than nuclear power (9%), hydropower (6%) and other renewable energy sources (16%). Until the inception of the revolutionary (unconventional) technology allowing natural gas to be extracted directly from source rock, fossil fuel production did not attract much interest. Today, these unconventional technologies are successfully applied in crude oil extraction as well. We have no reason to believe that coal, whose natural deposits could supply the energy sector for a few thousand years, will escape the technological revolution. However, before the coal revolution unfolds, let us have a look at how hard coal is extracted around the world. Are lignite and hard coal mined differently? How is natural gas produced? What technology is used to extract the gas trapped in unconventional deposits?
How is hard coal produced around the world?
70% of coal is mined underground, while 30% is extracted in open-pit mines.
Open-pit mining is less expensive, with the average production cost (translated into the złoty) in the region of PLN 20–24 per tonne, compared to as much as PLN 680 per tonne for underground mining. The open-pit method is suitable for exploiting coal strata located at relatively shallow depths. Since the disadvantage of surface mining is its highly destructive environmental impact, once environmental costs and site reclamation expenses are taken into account, the cost of production goes up significantly.
The advantage of underground coal mines is that they can carry out extraction activities even in highly urbanised areas, as they do not occupy a lot of space on the surface. Naturally, mining in urban areas gives rise to various problems, mining damage being the most serious. The necessity to protect urban areas from mining damage entails choosing more expensive extraction methods, which adds to production costs. Sometimes a mine has to refrain from exploiting a deposit and leave it as a special protective pillar ensuring the safety of surface structures.
Underground mines can reach deposits located as deep as over one kilometre below the surface.
High hopes are currently pinned on technologies for tapping the energy from coal without extracting the material to the surface (deep borehole mining), which allow reaching deposits located at the depth of several kilometres subsurface.
Are lignite and hard coal mined differently?
No, they are not. In both cases, the production process is similar, except that lignite is produced predominantly in open-pit mines (some 97%) rather than underground mines (about 3%).
Natural gas is extracted through wells drilled in subsurface rock formations. This method, known as borehole mining, dates back to the mid-19th century. Although we have seen consistent technological progress since then, natural gas is still extracted using the same method (Canada’s oil sands are an exception). Natural gas occurs in reservoir rock, which have different physical and chemical characteristics. According to a recent typology, crude oil and gas can accumulate in formations characterised by good reservoir quality (conventional reservoirs), medium reservoir quality (tight oil and gas) or poor reservoir quality (shale). The last two categories are known as unconventional reservoirs. Shale is also a reservoir rock, which means that it contains organic matter and is able to generate and expel, as well as accumulate, large amounts of hydrocarbons. As such, shale is a hydrocarbon generator and collector at the same time.
What technology is used to extract the gas trapped in unconventional deposits?
There are three stages involved in the production of natural gas: exploration – geological surveying and drilling; appraisal – appraisal well drilling; and development – production wells are drilled and surface infrastructure for producing, processing, storing and transporting natural gas is erected.
Finding ‘sweet spots’
Critical to any shale gas production project’s profitability is the accurate identification of ‘sweet spots’ – areas where the concentration of hydrocarbons guarantees profitable production. American and Canadian operators, engaged in unconventional hydrocarbon production, have the most extensive experience in this respect. However, given that significant differences exist between Polish and North American shale, this expertise cannot be easily transferred onto the Polish ground. Among Polish companies, it is licence operators, such as ORLEN Upstream, that have access to the best know-how.
Some facts about wells:
- Vertical drilling is used in unconventional projects in the same way it is traditionally used to produce crude oil and natural gas from conventional deposits.
- In the central part of the drilling rig, there is a drill string (lengths of coiled steel tubing) with a mobile drilling bit attached at the end. During the drilling operation, special drilling fluid is fed into the drill string and bit nozzles to accelerate the drilling process, cool the drill bit, stabilise the well, maintain appropriate pressure, and carry out drill cuttings. Drilling fluid is a mixture of water and additional substances (which may, for example, increase fluid weight and density).
- As drilling progresses, steel casing is inserted into the space between the drill pipe and the rock wall, and then cemented to provide stability and strengthen the well, as well as to seal the borehole off from aquifers and other rock formations. Well casing and cement also prevent the contamination of water intakes with the drilling fluid and, at the later stage, with the fracturing fluid.
- The latest technologies enable vertical wells to be drilled to depths ranging from a few thousand to more than a dozen thousand metres in extreme cases. Shale deposits in Poland can be found at depths from about 2,000 metres in the east of the country, to above 5,000 in the west.
- Once the vertical well has reached its target depth, a directional well (which may be horizontal or slanted) is drilled into the gas-bearing shale formation, whose thickness typically ranges from several to several dozen metres. With the available technology, the maximum length of directional boreholes permitting economically viable production can be in excess of 3,000 metres.
- Given their substantially larger contact with the field, horizontal wells enable more efficient production from unconventional gas deposits than vertical wells. Approximately 8 directional/horizontal wells branching off from a single drill site are enough to access a field which would normally require several dozen vertical wells to begin production. Horizontal wells have been drilled in Poland since the 1980s, and the longest horizontal sections, dating back to the 1990s and reaching in excess of 2,400 metres, were also used to stimulate wells (through fracturing). The work was carried out by Polish engineers aided by a few specialist foreign companies.
well cementing and perforation
- Once the horizontal sections have been drilled, casing is again inserted and cemented to ensure well impermeability, which is verified through pressure testing.
- Subsequent well sections are then perforated to enable hydraulic fracturing treatment.
- During the hydraulic fracturing procedure, fracturing fluid (mostly a mixture of water and sand) is injected into the wellbore under pressures often exceeding 600 bar (more than 300 times that in a car tyre). When a sufficient number of fractures appear in the treatment zone, a mixture of appropriately-grained sand and water is introduced into the cracks, keeping them open and enabling gas flow into the well. There exist many variants of the hydraulic fracturing technology. To ensure that the procedure is successful, the fracturing fluid is mixed with small amounts (0.5–1%) of chemical additives, which are able to regulate certain fluid parameters, including its viscosity, water content and specific weight. Other proppants may be used instead of sand, such as ceramic materials or polymer fluids, which create networks of interlacing fibres.