the energy water nexus: a dynamic spatial case study of the san juan basin, nm katie zemlick,...
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THE ENERGY WATER NEXUS: A Dynamic Spatial Case Study of the San Juan Basin, NM
KATIE ZEMLICK, PRESENTER
University of New MexicoElmira Kalhor
Janie Chermak, PhDBruce M. Thomson, PhD
Sandia National LaboratoriesVincent C. Tidwel l , PhD
US ASSOCIAT ION FOR ENERGY ECONOMICSNORTH AMERICAN CONFERENCE
OCTOBER 25-28 , 2015
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Chermak, 2015
Objective Develop an integrated approach to understanding the tradeoffs between water and energy development in New Mexico to aid in future decision making.
◦ Quantify resources present, distribution◦ Well-level analysis of gas production
◦ Resource type ◦ Formation◦ Well age
◦ Drivers of gas production◦ Economic◦ Regulatory◦ Supply/Demand
◦ Systems-level analysis
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Chermak, 2015
Objective Develop an integrated approach to understanding the tradeoffs between water and energy development in New Mexico to aid in future decision making.
◦ Quantify resources present, distribution◦ Well-level analysis of gas production
◦ Resource type ◦ Formation◦ Well age
◦ Drivers of gas production◦ Economic◦ Regulatory◦ Supply/Demand
◦ Systems-level analysis
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Geology & Hydrology
Technology: Conventional vs. Unconventional
EconomicsIntroduction Growth in natural gas reserve estimates
◦ Global: 40% increase since 2010 (USGS, 2010)◦ Domestic: 90% increase since 2000 (US EIA, 2015)
◦ Population in American Southwest is growing◦ Economic benefits of energy development
◦ Oil and gas contributed $2.44 billion to the state’s $70.5 billion economy in 2011
2000 2002 2004 2006 2008 2010 2012 2014150
200
250
300
350
400Series1; 354
Series1; 187
Total US Proved Natural Gas Reserves2000-2013
trilli
on cu
bic f
eet
Source: US EIA, 2015
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Energy Water Nexus
Source: New York State Water Resources Institute. http://wri.cals.cornell.edu/research-topics/shale-gas
Water required at nearly every step in energy life cycle: extraction, refining, production
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Energy Water Nexus
Source: New York State Water Resources Institute. http://wri.cals.cornell.edu/research-topics/shale-gas
Water for gas production and produced water
Injection: 2-7 MgalProduction: 6-70 Mgal
Gallegos et al., 2015
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San Juan Basin• The San Juan Basin contains natural gas reserves
• Conventional: 59-165 BCFG• Unconventional: ~50 TCFG
• Water scarcity• Precipitation: 8-40 in./yr.• Evaporation: 40-60 in./yr.
Source: Sullivan Graham, 2015
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San Juan BasinFragmented land ownership presents unique issues
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Historic Data
New Spuds vs. Henry Hub Gas Spot Price
Predominantly Conventional Production
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Historic Data
New Spuds vs. Henry Hub Gas Spot Price
Predominantly Conventional Production
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Historic Data
New Spuds vs. Henry Hub Gas Spot Price
Predominantly Conventional Production
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Historic Data
New Spuds vs. Henry Hub Gas Spot Price
Predominantly Conventional Production
1975 – 2015~28,000 gas producing wells
Monthly observations ~13 million data points
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Data Sources and SoftwareEnergy and Water
Geology and hydrology (Kernodle, 1996; Kelley et al., 2014)
Natural gas resources (USGS TPS Assessment, 2002)
Natural gas well production logs (NM OCD, 2015)
Economics (US EIA, 2015)
Spot Prices
Production costs
Price and demand projections through 2040
Software:ArcGIS, Pandas, R, Powersim
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Conceptual ModelEconometrics and System Dynamics Framework
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Subsurface Model
8 formations, 425 Township Range Boundaries Account for geologic variability
Volume-weighted approach to resource distribution
Generalized geologic cross section of the San Juan Basin
Source: New Mexico Bureau of Geology and Mineral Resources
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Results Historic gas and water production, water injection data
◦ ~28,000 wells◦ Monthly data points, ~13 million◦ SQL for managing, querying, mining of Big Data◦ Lots of challenges with Big Data
◦ Missing data◦ Erroneous data◦ Interpretation
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Preliminary Results
J an 1, 1995 J an 1, 2005 J an 1, 20150
2
4
6
8
10
gas-t
o-w
ate
r ra
tio -
Kir
tland F
ruit
land
Non-commercial use only!
J an 1, 1995 J an 1, 2005 J an 1, 20150
500,000
1,000,000
mcf
gas p
roducti
on
mancos
Non-commercial use only!
J an 1, 1995 J an 1, 2005 J an 1, 20150
2
4
6
8
10
gas-t
o-w
ate
r ra
tio -
Mancos
Non-commercial use only!
J an 1, 1995 J an 1, 2005 J an 1, 20150
500,000
1,000,000
mcf
gas p
roducti
on
kir
tland f
ruit
land
Non-commercial use only!Barrel/mcf Barrel/mcf
Sandstone vs. Shale
GA
S P
RO
DU
CT
ION
WA
TE
R-T
O-G
AS
RA
TIO
Kir
tlan
d F
ruit
land
S
ands
tone
Kir
tlan
d F
ruit
land
S
ands
tone
Man
cos
Sha
leM
anco
s S
hale
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Kirtland Fruitland SandstoneProduction distribution 1970-2010
1970
20001990 2010
1980
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Mancos ShaleProduction distribution 1970-2010
1970
20001990 2010
1980
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Conclusions Future natural gas production will likely be from shale
Conventional Wisdom vs. Historic Data◦ Shale does not produce significantly less water than
sandstone◦ Injection data is difficult to interpret◦ Factors other than geology influencing water production◦ Disposal of produced water will be significant◦ New development influenced by land ownership
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Future Work◦ Incorporate econometrics results into system dynamics
model◦ Treatment, reuse, and/or disposal options for produced
water as a function of quality◦ Develop future scenarios based on:
◦ Changes/fluctuations in the price of gas ◦ Regulatory changes◦ Land use changes◦ Climate factors influencing water availability
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Acknowledgements Funding for this research was provided by:
◦ The UNM Center for Water and the Environment, an NSF funded Center for Research Excellence in Science and Technology (CREST), NSF Award #1345169
◦ New Mexico’s Experimental Program to Stimulate Competitive Research (EPSCoR), NSF Award #IIA1301346
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ReferencesKelley, S. E. (2014). Hydrologic Assessment of Oil and Gas Resource Development in the Mancos Shale
in the San Juan Basin, New Mexico. Socorro: New Mexico Bureau of Geology and Mineral Resources.
Kernodle, J. M. (1996). Hydrogeology and Steady-State Simulation of Ground-Water Flow in the San Juan Basin, New Mexico, Colorado, Arizona, and Utah. Albuquerque: U.S. Geological Survey.
McLemore, V. T., & Chenoweth, W. L. (2003). Uranium Resources in the San Juan Basin, New Mexico. New Mexico Geological Society Guidebook, 54th Field Conference, Geology of the Zuni Plateau, (pp. 165-177).
Roach, J., & Tidwell, V. (2009). A Compartmental–Spatial System Dynamics Approach to Ground Water Modeling. Groundwater, 47(5), 686-698.
US Energy Information Administration. (2015, April 2). U.S. Crude Oil and Natural Gas Proved Reserves. Retrieved from US Energy Information Administration: www.eia.gov
U.S. Environmental Protection Agency. (2015, May 7). EPA Analysis of Frac Focus 1 Data. Retrieved from EPA Web site: http://www.epa.gov
US Geological Survey. (2013). Total Petroleum Systems and Geologic Assessment of Undiscovered Oil and Gas Resources in the San Juan Basin, Province, Exclusive of Paleozoic Rocks, New Mexico and Colorado. Denver: US Geological Survey.