The Domestic Natural Gas Shortage in China

This thesis analyzes the domestic shortage in the Chinese natural gas market. Both the domestic supply and demand of natural gas are growing fast in China. However, the supply cannot catch up with the demand. Under the present pricing mechanism, the Chinese natural gas market cannot get the equilibrium by itself. Expensive imports are inadequate to fill the increasing gap between the domestic demand and supply. Therefore, the shortage problem occurs. Since the energy gap can result in the arrested development of economics, the shortage problem need to be solved. This thesis gives three suggestions to solve the problem: the use of Unconventional Gas, Natural Gas Storage and Pricing Reform.

Financial decision making about found oil and gas in Ghana : real options vs. traditional methods

This research is a study of the use of capital budgeting methods for investment decisions. It uses both the traditional methods and the newly introduced approach called the real options analysis to make a decision. The research elucidates how capital budgeting can be done when analysts encounter projects with high uncertainty and are capital intensive, for example oil and gas production. It then uses the oil and gas find in Ghana as a case study to support its argument. For a clear understanding a thorough literature review was done, which highlights the advantages and disadvantages of both methods. The revenue that the project will generate and the costs of production were obtained from the predictions by analysts from GNPC and compared to others experts’ opinion. It then applied both the traditional and real option valuation on the oil and gas find in Ghana to determine the project’s feasibility. Although, there are some short falls in real option analysis that are presented in this research, it is still helpful in valuing projects that are capital intensive with high volatility due to the strategic flexibility management possess in their decision making. It also suggests that traditional methods of evaluation should still be maintained and be used to value projects that have no options or those with options yet the options do not have significant impact on the project. The research points out the economic ripples the production of oil and gas will have on Ghana’s economy should the project be undertaken. These ripples include economic growth, massive job creation and reduction of the balance of trade deficit for the country. The long run effect is an eventually improvement of life of the citizens. It is also belief that the production of gas specifically can be used to generate electricity in Ghana which would enable the country to have a more stable and reliable power source necessary to attract more foreign direct investment.

Economic viability of shale gas production in the Marcellus Shale; indicated by production rates, costs and current natural gas prices

The U.S. natural gas industry has changed because of the recent ability to produce natural gas from unconventional shale deposits. One of the largest and most important deposits is the Marcellus Shale. Hydraulic fracturing and horizontal drilling have allowed for the technical feasibility of production, but concerns exist regarding the economics of shale gas production. These concerns are related to limited production and economic data for shale gas wells, declines in the rates of production, falling natural gas prices, oversupply issues coupled with slow growth in U.S. natural gas demand, and rising production costs. An attempt to determine profitability was done through the economic analysis of an average shale gas well using data that is representative of natural gas production from 2009 to 2011 in the Marcellus Shale. Despite the adverse conditions facing the shale gas industry it is concluded from the results of this analysis that a shale gas well in the Marcellus Shale is profitable based on NPV, IRR and breakeven price calculations.

IS THE U.S. SHALE GAS BOOM HAVING AN EFFECT ON THE EUROPEAN GAS MARKET?

This thesis focuses on the impact of the American shale gas boom on the European natural gas market. The study presents different tests in order to analyze the dynamics of natural gas prices in the U.S., U.K. and German natural gas market. The question of cointegration between these different markets are analyzed using several tests. More specifically, the ADF tests for the presence of a unit root. The error correction model test and the Johansen cointegration procedure are applied in order to accept or reject the hypothesis of an integrated market. The results suggest no evidence of cointegration between these markets. There currently is no evidence of an impact of the U.S. shale gas boom on the European market.

Application of well log tomography to the Dundee and Rogers City Limestones, Michigan Basin, USA

The Michigan Basin is located in the upper Midwest region of the United States and is centered geographically over the Lower Peninsula of Michigan. It is filled primarily with Paleozoic carbonates and clastics, overlying Precambrian basement rocks and covered by Pleistocene glacial drift. In Michigan, more than 46,000 wells have been drilled in the basin, many producing significant quantities of oil and gas since the 1920s in addition to providing a wealth of data for subsurface visualization. Well log tomography, formerly log-curve amplitude slicing, is a visualization method recently developed at Michigan Technological University to correlate subsurface data by utilizing the high vertical resolution of well log curves. The well log tomography method was first successfully applied to the Middle Devonian Traverse Group within the Michigan Basin using gamma ray log curves. The purpose of this study is to prepare a digital data set for the Middle Devonian Dundee and Rogers City Limestones, apply the well log tomography method to this data and from this application, interpret paleogeographic trends in the natural radioactivity. Both the Dundee and Rogers City intervals directly underlie the Traverse Group and combined are the most prolific reservoir within the Michigan Basin. Differences between this study and the Traverse Group include increased well control and “slicing” of a more uniform lithology. Gamma ray log curves for the Dundee and Rogers City Limestones were obtained from 295 vertical wells distributed over the Lower Peninsula of Michigan, converted to Log ASCII Standard files, and input into the well log tomography program. The “slicing” contour results indicate that during the formation of the Dundee and Rogers City intervals, carbonates and evaporites with low natural radioactive signatures on gamma ray logs were deposited. This contrasts the higher gamma ray amplitudes from siliciclastic deltas that cyclically entered the basin during Traverse Group deposition. Additionally, a subtle north-south, low natural radioactive trend in the center of the basin may correlate with previously published Dundee facies tracts. Prominent trends associated with the distribution of limestone and dolomite are not observed because the regional range of gamma ray values for both carbonates are equivalent in the Michigan Basin and additional log curves are needed to separate these lithologies.

TIME LAPSE SEISMIC OBSERVATIONS AND EFFECTS OF RESERVOIR COMPRESSIBILITY AT TEAL SOUTH OIL FIELD

One of the original ocean-bottom time-lapse seismic studies was performed at the Teal South oil field in the Gulf of Mexico during the late 1990’s. This work reexamines some aspects of previous work using modern analysis techniques to provide improved quantitative interpretations. Using three-dimensional volume visualization of legacy data and the two phases of post-production time-lapse data, I provide additional insight into the fluid migration pathways and the pressure communication between different reservoirs, separated by faults. This work supports a conclusion from previous studies that production from one reservoir caused regional pressure decline that in turn resulted in liberation of gas from multiple surrounding unproduced reservoirs. I also provide an explanation for unusual time-lapse changes in amplitude-versus-offset (AVO) data related to the compaction of the producing reservoir which, in turn, changed an isotropic medium to an anisotropic medium. In the first part of this work, I examine regional changes in seismic response due to the production of oil and gas from one reservoir. The previous studies primarily used two post-production ocean-bottom surveys (Phase I and Phase II), and not the legacy streamer data, due to the unavailability of legacy prestack data and very different acquisition parameters. In order to incorporate the legacy data in the present study, all three poststack data sets were cross-equalized and examined using instantaneous amplitude and energy volumes. This approach appears quite effective and helps to suppress changes unrelated to production while emphasizing those large-amplitude changes that are related to production in this noisy (by current standards) suite of data. I examine the multiple data sets first by using the instantaneous amplitude and energy attributes, and then also examine specific apparent time-lapse changes through direct comparisons of seismic traces. In so doing, I identify time-delays that, when corrected for, indicate water encroachment at the base of the producing reservoir. I also identify specific sites of leakage from various unproduced reservoirs, the result of regional pressure blowdown as explained in previous studies; those earlier studies, however, were unable to identify direct evidence of fluid movement. Of particular interest is the identification of one site where oil apparently leaked from one reservoir into a “new” reservoir that did not originally contain oil, but was ideally suited as a trap for fluids leaking from the neighboring spill-point. With continued pressure drop, oil in the new reservoir increased as more oil entered into the reservoir and expanded, liberating gas from solution. Because of the limited volume available for oil and gas in that temporary trap, oil and gas also escaped from it into the surrounding formation. I also note that some of the reservoirs demonstrate time-lapse changes only in the “gas cap” and not in the oil zone, even though gas must be coming out of solution everywhere in the reservoir. This is explained by interplay between pore-fluid modulus reduction by gas saturation decrease and dry-frame modulus increase by frame stiffening. In the second part of this work, I examine various rock-physics models in an attempt to quantitatively account for frame-stiffening that results from reduced pore-fluid pressure in the producing reservoir, searching for a model that would predict the unusual AVO features observed in the time-lapse prestack and stacked data at Teal South. While several rock-physics models are successful at predicting the time-lapse response for initial production, most fail to match the observations for continued production between Phase I and Phase II. Because the reservoir was initially overpressured and unconsolidated, reservoir compaction was likely significant, and is probably accomplished largely by uniaxial strain in the vertical direction; this implies that an anisotropic model may be required. Using Walton’s model for anisotropic unconsolidated sand, I successfully model the time-lapse changes for all phases of production. This observation may be of interest for application to other unconsolidated overpressured reservoirs under production.

Cold-Start Emissions testing of Snowmobiles Using Ethanol and Gasoline

Increasing prices for fuel with depletion and instability in foreign oil imports has driven the importance for using alternative and renewable fuels. The alternative fuels such as ethanol, methanol, butyl alcohol, and natural gas are of interest to be used to relieve some of the dependence on oil for transportation. The renewable fuel, ethanol which is made from the sugars of corn, has been used widely in fuel for vehicles in the United States because of its unique qualities. As with any renewable fuel, ethanol has many advantages but also has disadvantages. Cold startability of engines is one area of concern when using ethanol blended fuel. This research was focused on the cold startability of snowmobiles at ambient temperatures of 20 °F, 0 °F, and -20 °F. The tests were performed in a modified 48 foot refrigerated trailer which was retrofitted for the purpose of cold-start tests. Pure gasoline (E0) was used as a baseline test. A splash blended ethanol and gasoline mixture (E15, 15% ethanol and 85% gasoline by volume) was then tested and compared to the E0 fuel. Four different types of snowmobiles were used for the testing including a Yamaha FX Nytro RTX four-stroke, Ski-doo MX Z TNT 600 E-TEC direct injected two stroke, Polaris 800 Rush semi-direct injected two-stroke, and an Arctic Cat F570 carbureted two-stroke. All of the snowmobiles operate on open loop systems which means there was no compensation for the change in fuel properties. Emissions were sampled using a Sensors Inc. Semtech DS five gas emissions analyzer and engine data was recoded using AIM Racing Data Power EVO3 Pro and EVO4 systems. The recorded raw exhaust emissions included carbon monoxide (CO), carbon dioxide (CO2), total hydrocarbons (THC), and oxygen (O2). To help explain the trends in the emissions data, engine parameters were also recorded. The EVO equipment was installed on each vehicle to record the following parameters: engine speed, exhaust gas temperature, head temperature, coolant temperature, and test cell air temperature. At least three consistent tests to ensure repeatability were taken at each fuel and temperature combination so a total of 18 valid tests were taken on each snowmobile. The snowmobiles were run at operating temperature to clear any excess fuel in the engine crankcase before each cold-start test. The trends from switching from E0 to E15 were different for each snowmobile as they all employ different engine technologies. The Yamaha snowmobile (four-stroke EFI) achieved higher levels of CO2 with lower CO and THC emissions on E15. Engine speeds were fairly consistent between fuels but the average engine speeds were increased as the temperatures decreased. The average exhaust gas temperature increased from 1.3-1.8% for the E15 compared to E0 due to enleanment. For the Ski-doo snowmobile (direct injected two-stroke) only slight differences were noted when switching from E0 to E15. This could possibly be due to the lean of stoichiometric operation of the engine at idle. The CO2 emissions decreased slightly at 20 °F and 0 °F for E15 fuel with a small difference at -20 °F. Almost no change in CO or THC emissions was noted for all temperatures. The only significant difference in the engine data observed was the exhaust gas temperature which decreased with E15. The Polaris snowmobile (semi-direct injected two-stroke) had similar raw exhaust emissions for each of the two fuels. This was probably due to changing a resistor when using E15 which changed the fuel map for an ethanol mixture (E10 vs. E0). This snowmobile operates at a rich condition which caused the engine to emit higher values of CO than CO2 along with exceeding the THC analyzer range at idle. The engine parameters and emissions did not increase or decrease significantly with decreasing temperature. The average idle engine speed did increase as the ambient temperature decreased. The Arctic Cat snowmobile (carbureted two-stroke) was equipped with a choke lever to assist cold-starts. The choke was operated in the same manor for both fuels. Lower levels of CO emissions with E15 fuel were observed yet the THC emissions exceeded the analyzer range. The engine had a slightly lower speed with E15.

THE HYDROSOCIAL COSTS OF HIGH-VOLUME HYDRAULIC FRACTURING: A TALE OF TWO COUNTIES IN MICHIGAN

Although natural gas has been praised as a clean and abundant energy source, the varying impacts and uncertainties surrounding the process of extracting natural gas from unconventional sources, known as horizontal high-volume hydraulic fracturing (HVHF) or “fracking,” have raised important concerns. The practice of HVHF is expanding so quickly that the full impacts are not yet known. This thesis project, using a grounded theory methodological approach, explores the risks and benefits associated with HVHF as recognized by the residents of two Michigan counties, one that currently produces natural gas by HVHF (Crawford County) and one that does not (Barry County). Through an analysis of media content related to HVHF in each case study site and interviews with stakeholders in both counties, this study examines perceptions of risks and benefits by comparing two communities that differ in their level of experience with HVHF operations, contributing to our understanding of how perceptions of risks and benefits are shaped by natural gas development. The comparative analysis of the case study counties revealed similarities and differences between the case study counties. Overall, Barry County residents identified fewer benefits and more risks, and had stronger negative perceptions than Crawford County residents. This study contributes to the social science literature by developing a richer theoretical frame for understanding perceptions of HVHF and also shares recommendations for industry, organizations, regulators, and government leaders interested in effectively communicating with community stakeholders about the benefits and risks of HVHF.