North American Oil Research Articles

Crude Oil-Bitumen Blends: A Resource and Potential for Refining and Petrochemical Applications.

This paper looks at the potential of bitumen blends for refinery and petrochemical applications. Bitumen mixed with diluents and synthetic oils have refinery applications but this process is expensive with current realities, hence the need for cheaper alternatives. In this study, Bitumen was mixed with crude oils, condensate oil and the transport and product properties compared to standard pipeline specification and refinery application evaluated. Bitumen/oil blend ratio of (50:50) was found to pass the North American oil transport pipeline specification of viscosity less than 350 cSt. The bitumen blends were further upgraded via catalytic processes to study the potential of the products. The gas analysis of the products confirmed it is rich in methane and with other components such as carbon monoxide and carbon dioxide, which are potential for energy and syngas production. This confirms the economic potential of bitumen blends with reservoir oils as a candidate material for cost-effective downstream feed/refinery and petrochemical applications.

The impact of climate litigation and activism on stock prices: the case of oil and gas majors

The issue of oil and gas companies’ contribution to climate change gained particular prominence on May 26, 2021. A Dutch court ordered Royal Dutch Shell to significantly reduce its greenhouse gas emissions, while shareholder votes at Exxon Mobile and Chevron succeeded in pushing for further emissions reductions. Together, these events signify a sudden increase in climate litigation and climate activism risk for global oil and gas companies. This study assesses investors' perception of these events by investigating oil and gas companies’ stock price reaction. The results show a significant negative impact on the stock prices for European and North American oil and gas firms, while firms located in other jurisdictions record slight gains. Higher environmental, social, and governance scores appear to mitigate the negative impact on European and North American oil and gas companies, primarily driven through better emissions related measures. The results highlight the adverse effect of increased climate litigation and climate activism risk on firm valuations.

Origins of pressure dependent permeability in unconventional hydrocarbon reservoirs

Unconventional hydrocarbon assets represent a rapidly expanding proportion of North American oil and gas production. Similar to the incipient phase of conventional oil production at the turn of the twentieth century, there are ample opportunities to improve production efficiency. In this work we demonstrate that pressure dependent permeability degradation exhibited by unconventional reservoir materials is due to the mechanical response of a few commonly encountered microstructural constituents. In particular, the mechanical response of unconventional reservoir materials may be conceptualized as the superposed deformation of matrix (or ~ cylindrical/spherical), and compliant (or slit) pores. The former are representative of pores in a granular medium or a cemented sandstone, while the latter represent pores in an aligned clay compact or a microcrack. As a result of this simplicity, we demonstrate that permeability degradation is accounted for through a weighted superposition of conventional permeability models for these pore architectures. This approach permits us to conclude that the most severe pressure dependence is due to imperceptible bedding parallel delamination cracks in the oil bearing argillaceous (clay-rich) mudstones. Finally, we demonstrate that these delaminations tend to populate layers that are enriched with organic carbon. These findings are a basis for improving recovery factors through the development of new completion techniques to exploit, then mitigate pressure dependent permeability in practice.

Carbon Storage Potential of North American Oil & Gas Produced Water Injection with Surface Dissolution

Carbon dioxide (CO2) geological storage traditionally involves capturing a CO2 stream from a point source such as a power station or from cement, steel, or natural gas processing plant, transporting it and compressing it, prior to injection as a supercritical phase into a suitable geological reservoir overlain by a cap-rock or seal. One of the main perceived risks in CO2 geological storage is migration or leakage of the buoyant CO2 stream through the seal, via faults or fractures, or other migration out of the storage complex. Injection of CO2 dissolved in water may be one solution to mitigate the leakage risk. This approach could take advantage of large volumes of wastewater already being reinjected into saline aquifers worldwide but particularly in North America, thus reducing costs. This study examines the potential to “piggyback” off the existing wastewater injection industry as a novel carbon storage option.

Understanding productivity effects of hydraulic fracturing in unconventional natural gas deposits and implications for adoption in the developing world

AbstractHydraulic fracturing (HF) has transformed the North American oil and gas industry, leading to increased consumer surplus and reduced carbon emissions. While HF may have similar potential for the developing world, adoption has been limited to date, plausibly because of perceptions of potential local costs and the need to develop technical proficiency. We empirically evaluate the incremental contribution of HF in the United States. We find considerable evidence of differences in application and productivity across operating firms and vertical pairings of firms, suggesting intellectual property and learning by doing may both play important roles. At the same time, secrecy regarding the chemical composition of fluids used in HF is a potential deterrent to its application for fear of local costs. Developing countries must accommodate these characteristics if adoption of HF is to help meet energy demands and achieve climate policy goals.

Common Determinants of Credit Default Swap Premia in the North American Oil and Gas Industry. A Panel BMA Approach

This study discovered market determinants of credit default swap (CDS) spreads in the North American oil and gas industry. Due to the limited theoretical background on market sources of CDS price fluctuations, we chose to alleviate model uncertainty and possible misspecification issues using Bayesian model averaging. This robust framework allowed us to aggregate results from a vast number of linear panel models estimated over the 2017–2020 period. We identified oil price volatility, major shifts in the OPEC+ supply policy, natural gas prices and industrial metal prices as the most robust determinants of CDS spreads. We show that following the onset of the COVID-19 pandemic, oil prices ceased to be a notably important determinant of credit risk, as factors indirectly related to oil prices, such as global and sectoral uncertainty, financial conditions and the macroeconomic stance became more influential. Additionally, we show that the CDS spreads of shale companies are determined by similar common factors, but they are more sensitive to the OPEC+ decisions on the global supply and are less affected by the domestic activity. Finally, we also prove that our modelling approach may help investors and risk officers to identify robust determinants behind the dynamics of credit risk.

Mining remains resilient for Weir

The Weir Group plc says mining markets have stayed robust during the second quarter of 2020 but that it has experienced a “significant step-down” in North American oil & gas activity levels.

Thermal maturity evaluation using Raman spectroscopy for oil shale samples of USA: comparisons with vitrinite reflectance and pyrolysis methods

Thermal maturity is commonly assessed by various geochemical screening methods (e.g., pyrolysis and organic petrology). In this contribution, we attempt to establish an alternative approach to estimating thermal maturity with Raman spectroscopy, using 24 North American oil shale samples with thermal maturity data generated by vitrinite reflectance (VRo%) and pyrolysis (Tmax)-based maturity calculation (VRe%). The representative shale samples are from the Haynesville (East Texas), Woodford (West Texas), Eagle Ford and Pearsall (South Texas) Formations, as well as Gothic, Mancos, and Niobrara Formation shales (all from Colorado). The Raman spectra of disordered carbonaceous matter (D1 and G bands separation) of these samples were directly obtained from the rock chips without prior sample preparation. Using the Gaussian and Lorentzian distribution approach, thermal maturities from VR were correlated with carbon G and D1. We found that the Raman band separation (RBS) displayed a better correlation for equivalent VRe% than vitrinite reflectance VRo%. The RBS (D1–G) distance versus total organic carbon, free hydrocarbons from thermal extraction (S1), and the remaining hydrocarbon generating potential (S2) indicate that the RBS (D1–G) distance is also related to kerogen type. Data presented here from three methods of maturity determination of shale demonstrate that Raman spectroscopy is a quick and valid approach to thermal maturity assessment.

Forks in the Road: Energy Policies in Canada and the US since the Shale Revolution

ABSTRACT This article examines policy responses in Canada and the US to the shale revolution and changing North American oil and gas markets. We outline the effect of the shale revolution on North American oil and gas markets, and how the subsequent energy policy choices in each country changed the relationship between Canada and the US. In the US, increasing production, combined with the policy imperative of maintaining energy security, led to less support for Canadian supply and the subsequent on-off-on saga of the Keystone XL pipeline. In Canada, growing concern about the balance between the environment and the economy led to stalled pipeline development and reform of regulatory systems, problems exacerbated by the new policy direction in the US.

Indigenous-Washing and the Petro-Hero in Genre Fictions of the North American Oil Boom

Indigenous-Washing and the Petro-Hero in Genre Fictions of the North American Oil Boom

Influence of Gas and Oil State on Oil Mobility and Sweet-Spot Distribution in Tight Oil Reservoirs from the Perspective of Capillary Force

Summary The coexisting free gas, solution gas, and oil in a tight oil reservoir, constrained by the capillary force of the micrometer/nanometer pore/pore-throat system, are of crucial importance to the sweet spot of a tight oil reservoir. Equations of modified total capillary force for the liquid phase are proposed to indicate the tight oil mobility in situ, and are derived from the Kelvin capillary force equation, the Peng-Robinson (PR) equation of state (EOS) (Robinson et al. 1977), and the Van-Laar (VL) equation (Renon and Prausnitz 1968). In addition, relationships between the vapor/liquid state, phase-flow state for production, and gas/oil ratio (GOR) are established in correspondence with the production data of North American and Chinese (Yanchang) tight oil plays. The following conclusions can be drawn. We proposed a modified total capillary force function to indicate the tight oil mobility in situ, using the PR EOS method and the EOS+λ (VL equation) method. We identified five phase stages according to the gas volume ratio ( yi) in situ: the single-phase oil flow stage, the multiphase transient-flow stage, the multiphase stable-flow stage, the multiphase supercritical-flow stage, and the single-phase gas flow stage. Tight oils are more mobile in three stages: near the critical point of yi-critical(1), such as in the Yanchang and Bakken tight oils; at the transition zone between oil and wet-gas zones before yi-critical(2), such as in the Eagle Ford tight oil; and between the yi-critical(2) and yi-critical(3) in a gas-condensate state, which is at the transition zone between wet-gas and dry-gas zones.

Molecular Simulation Study on the Volume Swelling and the Viscosity Reduction of n-Alkane/CO2 Systems

Carbon dioxide (CO2) injection is a successful enhanced oil recovery (EOR) technology that is being widely applied in North American oil fields. Studies have suggested CO2-based EOR is technically ...

E&P Notes (April 2019)

E&P Notes (April 2019)

Creditworthiness of North American Oil Companies and Minsky Financing Categories: Assessment of Shifts Due to the 2014-2016 Oil Price Shock

Our study provides a unique and comprehensive analysis of oil and gas companies' performance over the latest oil price crisis of 2014-2016. The oil price declined under the pressure of global oil oversupply instigated by OPEC under the strategic leadership of Saudi Arabia, in an effort to retain market share by diminishing the production growth of shale oil and oil from oil sands in North America. The financial performance of 45 North American oil companies was assessed over the 2014-2016 period of decreased oil prices, distinguishing six peer groups based on market capitalization, of which 11 representative companies were selected for further in-depth analysis. For each selected company, a forensic financial analysis was performed on the three principal accounts of corporate financial performance: profit-loss account, cash flow account and balance sheet. Financial accounts were consolidated in annualized graphs for 2010-2015. Next, the historic production output and operational income from the existing assets (2010-2015) were projected forward to stress test future liquidity positions (2016-2020). These projections incorporated known maturation dates of corporate debt and any announced divestments and/or acquisitions. The majority of the companies are classified in Minsky's speculative financing category, which is riskier than hedge financing and less risky than Ponzi financing. The oil price collapse pushed numerous companies into Ponzi financing and led to a record number of bankruptcies. Lessons learned and recommendations are formulated for company management, shareholders and lenders, based on the corporate financial performance of the analyzed companies during the decade (2010-20120) spanning the 2014-2016 oil price shock.

“They're treating us like Indians!”: Political Ecologies of Property and Race in North American Pipeline Populism

AbstractWhile political ecologists have analysed the role of private property in creating and sustaining ecological inequalities, this approach does not often take property as a foundational element of racial capitalism. I argue that the defence of private property in contestation of North American oil pipelines demonstrates the centrality of property not only to the structural reproduction of capital, but also to its Euro‐American subject. Emphasising their affective attachments to land and resentment at dispossession, landowners and populist environmental organisations in the Great Plains frequently compared individual, white experiences of eminent domain to the historic and ongoing dispossession of Native Nations by suggesting “they're treating us like Indians”. In order to account for the reproduction of white supremacy in environmentalism, I argue that we must understand how its oppositional politics are linked to economic interests‐in‐land and affective desires‐for‐land that maintain landed private property.

Experimental Investigation of NOx Formation in a Dual Fuel Engine

The North American oil and gas industry has experienced a market pull for dual fuel (DF) engines that can run on any ratio of fuels ranging from 100% diesel to a high proportion of field gas relative to diesel, while also meeting the U.S. Tier 4 Nonroad emissions standards. A DF engine must meet complex and at times competing requirements in terms of performance, fuel tolerance, and emissions. The challenges faced in designing a DF engine to meet all of the performance and emissions requirements require a detailed understanding of the trade-offs for each pollutant. This paper will focus on the details of NOx formation for high substitution DF engines. Experimental results have demonstrated that NOx emission trends (as a function of lambda) for DF engines differ from both traditional diesel engines and lean burn natural gas (NG) engines. For high energy substitution (>70%) conditions, NOx emissions are a function of the premixed gas lambda (λng) and contain a local minimum, with NOx increasing as lambda is either leaned or richened beyond the local minimum which occurs from approximately λng = 1.7 – 1.85. It is hypothesized that at richer conditions (λng < 1.7), NOx formed in the burning of gaseous fuel results in increased total NOx emissions. At leaner conditions (λng > 1.85), the NOx formed in the diesel post flame regions, as a result of increased oxygen availability, results in increased total NOx emissions. Between these two regions there are competing effects which result in relatively constant NOx.

Return transmission and asymmetric volatility spillovers between oil futures and oil equities: New DCC-MEGARCH analyses

Applying our newly extended vector autoregressive (VAR) dynamic conditional correlation (DCC) asymmetric spillover (AS) multivariate exponential generalized autoregressive conditional heteroscedasticity (MEGARCH) model with skew-t errors, this paper investigates return transmission and volatility spillovers between oil futures and international oil and gas sector equity returns. Employing a global perspective, and using six international oil and gas sector equity index returns for North America, Latin America, Developed Europe, Emerging Europe, the Far East, and BRIC alongside the WTI oil futures return, we obtain the following findings. First, we reveal unidirectional return transmission from oil futures to oil equities for Developed Europe, Emerging Europe, the Far East, and BRIC. Second, we find unidirectional return transmission from North American oil equities to oil futures, and mostly bidirectional return transmission between oil futures and Latin American oil equities. Moreover, we reveal unidirectional asymmetric volatility spillover effects from all the six oil equities to oil futures except for the Far East, where we observe mostly bidirectional asymmetric volatility spillovers. Furthermore, using the conditional variances and covariances from our new model, we also compute more precise time-varying optimal hedge ratios and optimal portfolio weights, and clarify that in international markets, hedging oil equities with oil is cheaper than vice versa.

Statistical Detection of Flow Regime Changes in Horizontal Hydraulically Fractured Bakken Oil Wells

The application of horizontal and hydraulically fractured wells for producing oil from low permeability formations has changed the face of the North American oil industry. One feature of the production profile of many such wells is a transition from transient linear oil flow to boundary-dominated flow. The identification of the time of this transition is important for the calibration of models that forecast the well’s future production and the expected ultimate recovery. It is preferable that such models generally use data from the boundary-dominated flow regime for parameter calibration. Accurate well production forecasts are needed for operational decisions, long-term planning, commercial transactions, regulatory proceedings, and asset valuation. Petroleum engineers frequently make the call on the transition point based on subjective visual interpretations of log–log plots for individual wells. This is time-consuming and is generally not repeatable by other analysts. This note evaluates statistical approaches that can serve as alternatives to the subjective visual interpretations. Specifically, the predictive performance of production models calibrated with boundary-dominated data based on transition dates calculated with constrained nonlinear least squares and Bayesian regressions was very close to that obtained using the visual method, suggesting that statistical approaches may indeed be constructed to replace less objective visual approaches without loss of accuracy.

Reducing fugitive methane emissions from the North American oil and gas sector: a proposed science-policy framework

ABSTRACTThe shale gas boom in the United States spurred a shift in electricity generation from coal to natural gas. Natural gas combined cycle units emit half of the CO2 to produce the same energy as a coal unit; therefore, the market trend is credited for a reduction in GHG emissions from the US power sector. However, methane that escapes the natural gas supply chain may undercut these relative climate benefits. In 2016, Canada, the United States and Mexico pledged to reduce methane emissions from the oil and natural gas sector 40–45% from 2012 levels by 2025. This article reviews the science-policy landscape of methane measurement and mitigation relevant for meeting this pledge, including changes in US policy following the 2016 presidential election. Considerable policy incoherence exists in all three countries. Reliable inventories remain elusive; despite government and private sector research efforts, the magnitude of methane emissions remains in dispute. Meanwhile, mitigation efforts vary significantly. A framework that integrates science and policy would enable actors to more effectively inform, leverage and pursue advances in methane measurement and mitigation. The framework is applied to North America, but could apply to other geographic contexts.Key policy insightsThe oil and gas sector’s contribution to atmospheric methane concentrations is becoming an increasingly prominent issue in climate policy.Efforts to measure and control fugitive methane emissions do not presently proceed within a coherent framework that integrates science and policy.In 2016, the governments of Canada, Mexico and the United States pledged to reduce methane emissions from the oil and natural gas sector 40–45% from 2012 levels by 2025.The 2016 presidential election in the United States has halted American progress at the federal level, suggesting a heavier reliance on industry and subnational efforts in that country.Collectively or individually, the countries, individual agencies, or private stakeholders could use the proposed North American Methane Reduction framework to direct research, enhance monitoring and evaluate mitigation efforts, and improve the chances that continental methane reduction targets will be achieved.

What Can Art Do about Pipeline Politics?

This text explores the consequences of the massive flow of Canadian heavy crude oil from the Alberta Tar Sands to the Chicago metropolitan area. The boom in North American oil extraction has literally strained petroleum infrastructure to its bursting point. How do urban populations react to the intensifying pressure of “pipeline politics” on their daily lives? In the Chicago case, at least some of them have responded with grassroots mobilization, cultural engagement, and the timid beginnings of institutional transformation. The interplay between community activists threatened by a refinery by-product (petroleum coke, or petcoke) and experimental artists seeking to engage both immediate environmental justice issues and long-term problems of climate change offers insights into the complex social formations that may someday shift the present suicidal course of advanced industrial economies, if voluntary blindness, managed oblivion, and pervasive institutional paralysis can be overcome through the exercise of what I call a “politics of perception.”