1. Scott W. Tinker, BEG, 2001 WTGS Symposium Midland, Texas October 25, 2001 Geoscience Technology for the Coming Gas Economy Scott W. Tinker & Eugene Kim Bureau of Economic Geology The University of Texas at Austin

2. Scott W. Tinker, BEG, 2001 Introduction Energy consumption in the U.S. and the world has shown a very predictable trend of “decarbonization.” Future U.S. energy consumption will be increasingly dominated by natural gas. Research and technology have been there all the way, responding as needed to the forces of supply, price, policy, and efficiency. Basic energy research should focus on advanced characterization for enhanced oil production and advanced fracture, salt, and seismic analysis for natural gas exploration and development.

3. Scott W. Tinker, BEG, 2001 QAc9841c After Hefner, 1993 Nonsustainable economic growth Sustainable economic growth Whale oil Petroleum oil Methane “City Gas” hydrogen Oil and natural gas liquids Coal Solids Gases Liquids Hydrogen Wood 100 80 60 40 20 0 Percentage of total market Year 185019001950200020502100 World Energy Consumption Civil War WW I WW II Arab Oil Embargo

4. Scott W. Tinker, BEG, 2001 QAc9841c EIA production data 100 80 60 40 20 0 Percentage of total market Year 185019001950200020502100 U.S. vs. World Energy Consumption Liquids Solids Gas, nuclear, renewables Natural gas

5. Scott W. Tinker, BEG, 2001 QAc9841c EIA production data 100 80 60 40 20 0 Percentage of total market Year 185019001950200020502100 Liquids Solids Gases, Nuclear, Renewables 1970 Forecast U.S. Energy Consumption Actual Gases, nuclear, renewables 1970

6. Scott W. Tinker, BEG, 2001 QAc9841c EIA Production Data 100 80 60 40 20 0 Percentage of total market Year 185019001950200020502100 Liquids Solids Gases, nuclear, renewables Supply Price Policy Technology U.S. Energy Consumption Oil price Gas price 1970

7. Scott W. Tinker, BEG, 2001 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 U.S. Energy Consumption

8. Scott W. Tinker, BEG, 2001 % of Total Market EIA historical production data U.S. Energy Consumption 50-Year Forecast 0.00 20.00 40.00 60.00 80.00 100.00 120.00 140.00 160.00 195019701990201020302050 Year U.S. consumption (Btu) Coal, wood, waste Oil Gas, nuclear, renewables Total consumption 0.00 2.00 4.00 6.00 8.00 Bbo 1 Quad ~ 1 Tcf Btu consumption EIA forecast Conservation

9. Scott W. Tinker, BEG, 2001 EIA historical production data U.S. Energy Consumption Drivers Solids Efficiency Poor Environmental Costs Oil Economic Impact of Price Fluctuations National Security Impact of Import Ratio Efficiency Less Than Gas Environmental Impact Moderate Methane, hydrogen, nuclear, renewables Efficiency high Economic stability improved National security risks lower Environmental impact lower Methane abundant Hydrogen sustainable Current cost/benefit is lower Practical limits (10%) Hidden environmental costs Coal, wood, waste Oil Gas, nuclear, renewables Total

10. Scott W. Tinker, BEG, 2001 Oil Exploration Access Assess Development Reservoir characterization Field management Environment

11. Scott W. Tinker, BEG, 2001 Impact of Oil Research

12. Scott W. Tinker, BEG, 2001 Multifield portfolio Technology wedge Production 0 Time (yr) 51015 Theoretical Impact on Long-Term Oil Decline

13. Scott W. Tinker, BEG, 2001 EIA (1949-1990) and NPC (1991-2015) 1949195319571961196519691973197719811985198919931997 Year 1000000 2000000 3000000 4000000 5000000 6000000 7000000 8000000 9000000 10000000 Average daily oil production (bbl) U.S. Oil Production 20012005200920132019 ~ 2,000,000,000 barrels over 20 years $50 billion gross oil value ($25 oil) Technology wedge

14. Scott W. Tinker, BEG, 2001 L48 Unconventional onshore Tight gas, shale gas, CBM EIA (1949-1990) and NPC (1991-2015) Deep-water+subsalt offshore 0 5,000 10,000 15,000 20,000 25,000 30,000 19491953195719611965196919731977198119851989199319972001200520092013 Year Annual natural gas production (Bcf) U.S. Natural Gas

15. Scott W. Tinker, BEG, 2001 “Unconventional” Gas Tight gas Shale gas Coalbed methane Deep gas Subsalt gas Gas hydrates Low-pressure gas

16. Scott W. Tinker, BEG, 2001 Impact of Natural Gas Research Tight Gas 0.0 500.0 1,000.0 1,500.0 2,000.0 2,500.0 3,000.0 3,500.0 4,000.0 197019751980198519901995 Bcf GRI, 1999, GRI’s Gas Resource Database. DOE personal communication. *Advanced stimulation technology *Greater Green River Basin shale gas *Piceance Basin DOE GRI Federal alternative fuels production credit for unconventional gas State of Texas tight gas incentives

17. Scott W. Tinker, BEG, 2001 600 km0 400 mi0 N QAc9715c Bureau of Economic Geology MAJOR PRODUCTIVE TIGHT GAS BASINS (technically recoverable resources) Data: NPC (2000); * based on estimates of NPC (1993); San Juan Basin tight gas resource included with oil field reserve appreciation and new fields in NPC (2000). Rocky Mountain Foreland (13.7 Tcf) Midcontinent (16.9 Tcf) Arkla-Tex (29.8 Tcf) Appalachian (18.3 Tcf) Permian Basin (19.5 Tcf) Texas Gulf Onshore (9.1 Tcf) San Juan (5.6 Tcf) *

18. Scott W. Tinker, BEG, 2001 0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 1980198519901995 Bcf Impact of Natural Gas Research Shale Gas GRI, 1999, GRI’s Gas Resource Database; DOE personal communication. Antrim Shale research Appalachian Basin shales DOE (1976-1992) GRI

19. Scott W. Tinker, BEG, 2001 600 km0 400 mi0 N QAc9712c Ft. Worth Barnett Shale (7.2 Tcf) Illinois New Albany (2.9 Tcf) Cincinnati Arch (2.2 Tcf) Appalachian (23.4 Tcf) Data: NPC (2000) Bureau of Economic Geology Michigan Antrim (16.9 Tcf) MAJOR PRODUCTIVE DEVONIAN SHALE BASINS (technically recoverable resources)

20. Scott W. Tinker, BEG, 2001 0.0 200.0 400.0 600.0 800.0 1,000.0 1,200.0 1980198519901995 Bcf Impact of Natural Gas Research Coalbed Methane DOE GRI GRI, 1999, GRI’s Gas Resource Database; DOE personal communication. $2 $1$1 Wellhead price ($/Mcf) Federal alternative fuels production credit for unconventional gas

21. Scott W. Tinker, BEG, 2001 600 km0 400 mi0 N QAc9714c Bureau of Economic Geology Powder River (24.0 Tcf) Hanna-Carbon (4.4 Tcf) Uinta & Piceance (5.5 Tcf) San Juan (10.2 Tcf) Northern Appalachian and PA Anthracite (10.6 Tcf) Black Warrior (4.4 Tcf) Raton-Mesa (3.7 Tcf) Alaska (Bering River, North Slope, Chignik and Herendeen Bay) (57.0 Tcf) SW Coal Region (5.8 Tcf) Data: PGC (2001) MAJOR PRODUCTIVE COALBED METHANE BASINS (total most likely resources)

22. Scott W. Tinker, BEG, 2001 600 km0 400 mi0 N QAc9716c Bureau of Economic Geology MAJOR PRODUCTIVE DEEP-WATER GAS BASINS (total most likely resources) Data: PGC (2001) Pacific Slope (8.9 Tcf) Louisiana Slope (12.4 Tcf) Texas Slope (4.3 Tcf) Eastern Gulf Slope (7.6 Tcf) Gulf of Mexico OCS (47.7 Tcf)

23. Scott W. Tinker, BEG, 2001 600 km0 400 mi0 N QAc9713c Data: PGC (2001) Bureau of Economic Geology Montana Folded Belt (5.2 Tcf) Wind River (5.0 Tcf) Greater Green River (8.4 Tcf) San Joaquin (9.0 Tcf) Anadarko, Palo Duro (17.7 Tcf) Permian (12.9 Tcf) Appalachian (5.0 Tcf) LA, MS, AL Salt (15.8 Tcf) Louisiana Gulf Coast (14.5 Tcf) Texas Gulf Coast (14.3 Tcf) MAJOR PRODUCTIVE DEEP (>15,000 ft) GAS BASINS (total most likely resources)

24. Scott W. Tinker, BEG, 2001 Bureau of Economic Geology Natural Gas Resources 0 200 400 600 800 1,000 1,200 1,400 Cumulative production Proven reserves Unproven Technically recoverable (Tcf) Lower 48 total Canada total SW

25. Scott W. Tinker, BEG, 2001 Bureau of Economic Geology SW Natural Gas Resources Gas Reserves by Region 0 20,000 40,000 60,000 80,000 Permian Basin San Juan Basin Texas Gulf Coast Onshore Arkla-East Texas

26. Scott W. Tinker, BEG, 2001 Bureau of Economic Geology SW Natural Gas Resources Unconventional versus Conventional Gas Reserves 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 1991199319951997199920012003200520072009201120132015 Reserve reserves (Bcf) Conventional Unconventional

27. Scott W. Tinker, BEG, 2001 Bureau of Economic Geology SW Natural Gas Resources Unconventional Gas Production in Permian Basin 0 100 200 300 400 500 1991199319951997199920012003200520072009201120132015 Production (Bcf) Tight gas

28. Scott W. Tinker, BEG, 2001 Oil and Gas Geoscience Research High-frequency stratigraphy: seismic & outcrops 4-C 3-D, 4-D, and 9-C 3-D seismic data Rock physics 3-D matrix and fracture modeling & simulation Salt modeling and characterization Deep-water sedimentation High-level basin and play analysis Visualization to achieve integration Advanced technology transfer

29. Scott W. Tinker, BEG, 2001 High-Frequency Stratigraphy 3-D Seismic Attributes

30. Scott W. Tinker, BEG, 2001 High-Frequency Stratigraphy

31. Scott W. Tinker, BEG, 2001 High-Frequency Stratigraphy Ortho-Photo Draped on DEM

32. Scott W. Tinker, BEG, 2001 High-Frequency Stratigraphy ILRIS Laser Image

33. Scott W. Tinker, BEG, 2001 Rock Physics BEG Austin Core Warehouse

34. Scott W. Tinker, BEG, 2001 QAb9145(b)c Direction of wave propagation SH X Z SV A P A A X Z X Z X Z X Z X Z Reflected ray path Particle displacement vector 9-C 3-D Seismic Data P, SV, and SH

35. Scott W. Tinker, BEG, 2001 0° 30° 60° 90° QAc8431c N C1 270°90° 0° 180° ° 20 10 07°9 0° 8° Interval 1 Interval 2 WE N S WE N S 0 0300 m 1000 f t FMI log fracture azimuths SV maximum reflectivity Vertical wel l Azimuth direction Superbin 9-C 3-D Seismic Data Fracture Azimuth

36. Scott W. Tinker, BEG, 2001 Fractures Weber Sandstone Plan View Fracture Traces CL F2 F1 Frontier Sandstone, Wyoming Plan View Fracture Traces Air Photograph 10 m

37. Scott W. Tinker, BEG, 2001 Fracture Strike Mapping Microfractures Predict Large Fractures Fracture Strike Laubach et al., 2000, The Leading Edge Laubach, 1997, AAPG Bulletin East Texas, Travis Peak Formation

38. Scott W. Tinker, BEG, 2001 Previously Invisible Microfractures Transmitted Light CL Outcrop sample, Poland. Conventional CL. Fracture Match point

39. Scott W. Tinker, BEG, 2001 Fracture Intensity Quantitative Data for Mapping and Flow Modeling Fracture Intensity Marrett et al., 1999, Geology. Stowell, 2000, SPE. West Texas, Ozona Canyon

40. Scott W. Tinker, BEG, 2001 Salt Research Field Studies Seismic Studies Numerical Models Physical Models Martin Jackson, AGL, BEG

41. Scott W. Tinker, BEG, 2001 0 13,000 Time (ms) 02 mi 02 km QAc8574c Tiger Shoal Target 5 Shale Target 4 Target 3 Target 3 Seismic Deep-Water Analysis RMS Amplitude

42. Scott W. Tinker, BEG, 2001 L1700 L1600 L1500 L1400 L1300 L1200 L1100 T100T300T500T700T900T1100T1300 Relic delta Relic delta Targets IVF Bright spots Target 3 IVF Incised valley fill - + Amplitude QAc6999c Seismic Deep-Water Analysis Stratal Slicing Exposed shelf

43. Scott W. Tinker, BEG, 2001 Summary Resources Supply, economics, efficiency, and technology have driven U.S. policy and consumption trends. U.S. consumption will be increasingly dominated by natural gas and hydrogen. Research Advanced characterization for enhanced oil recovery Fracture, salt, and seismic analysis for gas exploration and field development Improved basin and play assessment for oil and gas access and field acquisition CO 2 sequestration and enhanced oil recovery Visualization for improved integration High-impact technology transfer

44. Scott W. Tinker, BEG, 2001 Happy hunting…. And, as always, thanks!