When we first started getting economic production from shales, it was a thing. The essential concept was almost unthinkable, and the term "unconventional" fit in an understated kind of way. Over the years, as we talked more and more about "unconventionals," it seemed that every presentation needed to justify talking about this oddball phenomenon, the small but growing slice of supply. Now, however, the world has changed and "unconventionals" are no longer unconventional.
The graphic below from the EIA traces the growth of oil production from unconventionals, as measured by the need for hydraulic fracturing. For years, the large majority of oil and gas investment in the US has been dedicated to these ultra-low permeability reservoirs and now those investments have come to maturity. Unconventional production now accounts for more than half of domestic US oil production and the proportion of supply of gas is even more progressed. Unconventionals can no longer be considered "unconventional." They are, instead, the new norm in the US and we now are in need of a new name as well as a new mindset.
Fig. 1: US oil production by source, fractured or non-fractured.
When I started my career, most all reservoirs we worked had permeability measured in millidarcies. The exceptionally good rock we called “darcy” rock, and a few reservoirs fell off the tight end of the spectrum. With the advent of shale production, we seemed to make a step change to much lower permeabilities, but on-going development has filled in the gap. Our industry has now established production over 10 orders of magnitude of permeability.
The graphic below formalizes terms into a more explicit taxonomy using terms already in use. We can classify most reservoirs according to matrix permeability with different labels for groups of log cycles. (Some hydrocarbon sources don't belong on this continuum and can simply be named, such as coalbed methane, oil sands and hydrates.)
Fig. 2: Proposed taxonomy of reservoirs based upon matrix permeability.
As we have often said in the past, we can characterize any reservoir having 1000 md or more as "darcy rock." The more historically common reservoirs, which have been called "conventional,” can more precisely be called “millidarcy” reservoirs. Since the 1980s, “tight” has legally referred to reservoirs with less than 0.1 md of perm, i.e. less than 100 microdarcies. I propose that the term “tight” refer a little more broadly to any reservoir from 1 to 1000 microdarcies. Lastly, of course, shales occupy the last three decades of the scale, 1 to 1000 nanodarcies.
Perhaps adopting a new mindset as well can help us to approach our development more appropriately. The entire range is now open for development with established technology, and the reservoir dynamics are, indeed, a continuum. The far right side of the scale is no longer a step change in technology. We have progressed passed the early part of the business cycle with a rush and bubble and into a new world of slower and more deliberate investment. This next step of the business cycle requires a different strategy for success, it is predicated on better analysis. The need for excellence of analysis will not go away, since shales are the new normal.
Then, if we ever figure out how to produce from metamorphic rocks, then maybe we can call that unconventional. And maybe next time we will do a better job of learning from previous experience.
See this post on my LinkedIn page.