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Stripper Wells Keep On Pumping; Keep Tech Support

 June 23, 2010 13:46
DOE extends research program for consortium that helps develop technological advances for marginal wells—wells that produce 9-10% of the L-48 states’ oil and natural gas
A U.S. Department of Energy program that has successfully helped fund research yielding technological advances for small oil and gas operators has escaped the Obama administration’s chopping block and will be extended to 2015, DOE said in a June 23 press release. The industry-driven Stripper Well Consortium was started in 2000 to keep low-producing wells online in an environmentally safe manner, thereby maximizing the recovery of domestic oil and gas resources.

According to DOE, there are 396,500 of these wells in the country, representing more than 85 percent of total U.S. oil wells. Together these marginal wells produce more than 797,400 barrels of oil per day, or nearly 10 percent of lower-48 states production—and more than 322,000 marginal natural gas wells account for over 1.7 trillion cubic feet of annual natural gas production, or 9 percent of the natural gas produced in the lower 48.

Stripper wells are more common in older oil and gas producing regions, such as Appalachia, Texas and Oklahoma.

One out of every six barrels of crude oil produced in the United States comes from a stripper well, which is the common industry name for a marginal well whose production has slowed to 10 barrels a day or less. 

The consortium is managed and administered by The Pennsylvania State University on behalf of DOE; the Office of Fossil Energy’s National Energy Technology Laboratory, better known as NETL, and the New York State Energy Research and Development Authority. Together they provide base funding and technical guidance to the program.

Once a well is plugged and abandoned, the oil and gas reserves left behind are “lost forever” since it is typically uneconomical to drill another well to recover these abandoned reserves. Every dollar of stripper oil and natural gas production creates roughly one dollar of economic activity and nearly 10 jobs result from every million dollars of marginal well oil and natural gas produced, DOE said in its press release. 

Once a well is plugged oil is lost forever 
A common misperception, DOE said in a description of the program on its website, is that oil left behind remains readily available for production when, say, oil prices rise again. In most instances, this is not the case, the agency said, “leaving our nation more dependent on foreign oil imports.”

Why wouldn’t the oil be readily available in the future?

Because when marginal fields are abandoned, the surface infrastructure—the pumps, piping, storage vessels and other processing equipment—is removed and the lease forfeited. Since much of this equipment was probably installed over many years, replacing it over a short period is “enormously expensive,” DOE said.

“Oil prices would have to stay at today's elevated record levels for many years before there would be sufficient economic justification to bring many marginal fields back into production,” so once abandoned the oil in the ground is “often lost forever” … because “the costs of re-drilling a plugged well may be as much as or more than drilling a new well.”

From 1998 through 2007, on average each year over 3 percent of marginal wells were plugged and abandoned, DOE said. In total, this is more than 124,000 marginal wells, representing a number equal to 25 percent of all operating oil wells in 2007.

Although the situation is less severe for natural gas, there is nonetheless a growing concern about the premature abandonment of gas stripper wells. (A stripper gas well is defined by the Interstate Oil and Gas Compact Commission, which represents the governors of oil and natural gas producing states, as one that produces 60 thousand cubic feet or less of gas per day.)
One consortium project by Vortex Flow has developed downhole tools that reduce pressure drop thereby reducing the gas flow needed to lift liquids up the wellbore, DOE said. This novel technology received the Platts 2004 Newcomer of the Year Award, one of the most prestigious award programs in the industry. 

Consortium’s success led to extension 
Nearly 100 projects have been funded since the initiation of the Stripper Well Consortium, which is made up of small domestic oil and natural gas producers, as well as service and supply companies, trade associations, industry consultants, technology entrepreneurs and academia.
Per DOE, “the successful development and commercialization of many of these projects provided the incentive for DOE to continue program funding,” when almost all other oil and gas research programs have been cut.

Some of the programs other successes include a pump that removes fluids (hydrocarbons and water) from a well more consistently than currently available systems; a “vortex flow unit” that works like a tornado, using natural gas that has already been produced to accelerate water velocity, reduce friction, and assist in lifting and removing fluids, resulting in increased production while reducing the amount of down-time due to water in gas gathering lines; a new hydraulic diaphragm submersible pump that continuously cleans wells which, among other things, reduces electric costs; a low-cost, real-time, down-hole wireless gauge that measures temperature and pressure, eliminating the need for cables, clamps and splices in the well, thus significantly lowering cost and time; and a technology that captures information at the wellhead and transmits it wirelessly to a control room at a remote location, allowing the operator to monitor hundreds of wells from a single location. 

Freshwater for farmers, ranchers, communities 
In addition to backing projects related to its own goals, the consortium funded a project to use cost-effective technology for converting brine produced from oil and gas fields into a new source of fresh water for farmers, ranchers and communities near oil and gas producing wells.

The third phase of this Stripper Well Consortium-funded project is for a pilot desalination unit to convert water from brackish aquifers into purified water for community use, with the concentrated brine solution used in a nearby oil field’s water flood process to increase oil production.

This project has been approved by the Texas Commission on Environmental Quality in Andrews, Texas, and is the very first authorization of this type in the nation, DOE said. 

Check out the award-winning video 
A documentary video on marginal wells funded by the consortium, DOE's National Energy Technology Laboratory, and the New York State Energy Research and Development Authority received a bronze award at the 28th Annual Telly Awards for 2007. The video was called “Independent Oil: Rediscovering America's Forgotten Wells.”

The Telly Awards honor the best local, regional, and cable television commercials and programs, as well as video and film productions. The 28th Annual Telly Awards received more than 14,000 entries from all 50 states and five continents. Copies of the video are available by contacting the consortium. 

Ninety-seven members in 23 states 
The consortium currently has 97 members, which include companies and organizations from 23 states, plus the District of Columbia and Canada, with operations in several other states.
An executive council, appointed by the consortium’s members, selects proposed research projects that will lead to improving natural gas and petroleum production from marginal wells. DOE said that the process of having industry develop, review and select projects for funding ensures the consortium conducts research that is relevant and timely to the natural gas and petroleum industry.

Each approved project must receive at least 30 percent of its funding from its participants.
For the period 2001 through September 2010, the consortium committed over $ 9.7 million to co-fund 92 projects. That number includes five proposals totaling about $650,000 that were selected for co-funding in the current Oct. 1 to Sept. 30 funding cycle.