58
curves to forecast the performance of oil and gas wells (Poston and Poe 2008). The
production of hydrocarbons declines in different wells at different rates. DCA is a
graphical procedure that fits a line through the performance history of a well (i.e.
production rate vs. time), and assumes that this same trend will continue into the
future. It requires stable production trends to provide reliable results.
Production declines are not linear, or this would be a very simple exercise. The
rate at which most wells decline changes over time in a curve, and understanding the
shape of the curve is essential to making a prediction. The DCA technique is based
on empirical observations of production declines, and the basic assumption is that
whatever factors controlled the trend of a curve in the past will continue to govern
it in the future in a predictable manner. Three types of decline curves have been
identified: exponential, harmonic, and hyperbolic. Exponential decline occurs when
the decline rate changes by a constant amount over time. Harmonic decline occurs
when the decline rate varies by a predictable amount over time, and hyperbolic
decline occurs when the variation in the decline rate is itself variable (Fetkovich
et al. 1996). Mathematical equations to define the factors controlling decline curves
were developed by Arps (1945) and include things like back pressure, loss of reservoir pressure, changing relative volumes of the produced fluids, and fluid flow
through porous media under boundary-dominated conditions.
The decline curves all show that no oil or gas well will produce forever. Most
flow for a decade or two, some produce for many decades, and a few have even
produced for more than a century. But in the end, they all decline, some gradually
and others more abruptly. The concept of “peak oil,” described in more detail in
Chap. 11 was developed by a Shell geophysicist named M. King Hubbert. He concluded that the amount of petroleum produced from any given oilfield over time
followed a bell-shaped curve, peaking as the field was fully developed, and then
declining as pressures dropped and the residual oil became an immobile phase and
stopped flowing (Hubbert 1956). This meant that new oil reserves would constantly
need to be discovered to keep up with demand. If not, the world would run out of oil
sooner or later.
The development of oil and gas in the United States during the latter half of the
nineteenth century was ahead of most of the rest of the world, and this had a number
of consequences with respect to the energy supply a century later. Per capita use of
oil and gas in the U.S. began rising steeply with the introduction of the automobile
in the 1920s and 30s, and then shot up once restrictions were lifted at the end of the
Second World War. Pent-up consumer demand for automobiles, appliances and
other goods substantially increased petroleum consumption. Post-war vehicles were
designed for comfort and stability, not high fuel mileage.
The construction of better roads and the new interstate highway system gave
people more reasons to drive. Institutions that catered to the automobile, such as
drive-in restaurants, drive-in theaters, drive-up bank tellers and so forth meant that
people used vehicles more often and burned more fuel. People who had migrated
from the cities to the suburbs required vehicles to get around, and many families had
more than one car. The invention of plastics and other materials derived from petrochemicals placed significant new demands on the petroleum supply.
3 The History of Oil & Gas Development in the U.S.
curves to forecast the performance of oil and gas wells (Poston and Poe 2008). The
production of hydrocarbons declines in different wells at different rates. DCA is a
graphical procedure that fits a line through the performance history of a well (i.e.
production rate vs. time), and assumes that this same trend will continue into the
future. It requires stable production trends to provide reliable results.
Production declines are not linear, or this would be a very simple exercise. The
rate at which most wells decline changes over time in a curve, and understanding the
shape of the curve is essential to making a prediction. The DCA technique is based
on empirical observations of production declines, and the basic assumption is that
whatever factors controlled the trend of a curve in the past will continue to govern
it in the future in a predictable manner. Three types of decline curves have been
identified: exponential, harmonic, and hyperbolic. Exponential decline occurs when
the decline rate changes by a constant amount over time. Harmonic decline occurs
when the decline rate varies by a predictable amount over time, and hyperbolic
decline occurs when the variation in the decline rate is itself variable (Fetkovich
et al. 1996). Mathematical equations to define the factors controlling decline curves
were developed by Arps (1945) and include things like back pressure, loss of reservoir pressure, changing relative volumes of the produced fluids, and fluid flow
through porous media under boundary-dominated conditions.
The decline curves all show that no oil or gas well will produce forever. Most
flow for a decade or two, some produce for many decades, and a few have even
produced for more than a century. But in the end, they all decline, some gradually
and others more abruptly. The concept of “peak oil,” described in more detail in
Chap. 11 was developed by a Shell geophysicist named M. King Hubbert. He concluded that the amount of petroleum produced from any given oilfield over time
followed a bell-shaped curve, peaking as the field was fully developed, and then
declining as pressures dropped and the residual oil became an immobile phase and
stopped flowing (Hubbert 1956). This meant that new oil reserves would constantly
need to be discovered to keep up with demand. If not, the world would run out of oil
sooner or later.
The development of oil and gas in the United States during the latter half of the
nineteenth century was ahead of most of the rest of the world, and this had a number
of consequences with respect to the energy supply a century later. Per capita use of
oil and gas in the U.S. began rising steeply with the introduction of the automobile
in the 1920s and 30s, and then shot up once restrictions were lifted at the end of the
Second World War. Pent-up consumer demand for automobiles, appliances and
other goods substantially increased petroleum consumption. Post-war vehicles were
designed for comfort and stability, not high fuel mileage.
The construction of better roads and the new interstate highway system gave
people more reasons to drive. Institutions that catered to the automobile, such as
drive-in restaurants, drive-in theaters, drive-up bank tellers and so forth meant that
people used vehicles more often and burned more fuel. People who had migrated
from the cities to the suburbs required vehicles to get around, and many families had
more than one car. The invention of plastics and other materials derived from petrochemicals placed significant new demands on the petroleum supply.
3 The History of Oil & Gas Development in the U.S.