2024 Will Usher New Tech to Extract Natural Gas: Upwing Chief

Greater demand for natural gas in the United States is expected to drive the deployment of new technologies to recover otherwise inaccessible reserves in the country starting this year, according to the chief executive of Upwing Energy Inc.

“There is an increased demand for new sources of natural gas, along with potentially increased exports due to global gas market disruptions”, Herman Artinian told Rigzone recently. “Colliding with increased energy demand, recent geopolitical conflicts have destabilized some of our most reliable hydrocarbon producers”.

The US Energy Information Administration (EIA) has forecast lower oil supply during early 2024, “foreshadowing greater instability across the entire energy mix”, the Upwing president and chief executive said.

The EIA expects oil production in the first quarter to be lower compared to the corresponding period in 2023, before ramping up to outgrow 2023. “Although we forecast global oil production to grow next year, we expect ongoing cuts from OPEC+ will keep global production growth lower than global consumption growth and contribute to inventory draws and upward oil price pressure in the early part of 2024”, the EIA said in its “Short-Term Energy Outlook” report published November, referring to the Saudi Arabia- and Russia- led Organization of the Petroleum Exporting Countries Plus alliance. It maintained the same oil supply trajectory in its update of the report December, with lower projected volumes due to more OPEC+ production cuts and an expected weaker growth in US production.

Besides the expected oil supply decline in early 2024, sustained colder-than-normal temperatures in the Northern Hemisphere could lead to a hike in demand for natural gas and threaten energy security in the US, Artinian added.

And while clean hydrogen “continues to have high visibility as companies are attempting to decarbonize”, this alternative fuel is costly to produce. “In the interim, we’ll see the development and increased use of blue hydrogen (processed from natural gas)”, Artinian said.

In response to more appetite for natural gas, US producers will seek “new ways to ensure it has ample natural gas inventories and access to reserves to sustain the energy demands of its citizens”, Artinian said. “To address uncertainty in energy security, producers will more readily embrace technologies that help them reach previously inaccessible domestic reserves of natural gas”.

Upwing earlier said in a report that based on research it had conducted, over 123 trillion cubic feet of natural gas remain untapped in the country’s abandoned and non-economically viable conventional gas wells. That figure is enough to power the US for about four years, according to the Cerritos, California-based energy tech provider.

While producers could also turn to unconventional wells, these reserves offer a lower recovery rate at high costs and emissions, Upwing said.

Artinian expects 2024 to “see increased pricing of natural gas and the dawn of new technologies that can pull the remaining gas out of these partially extracted wells, simultaneously helping the nation meet increasing demand and boosting sustainable production by eliminating the need to drill and frack new wells”.

“The U.S. will continue to rely on natural gas as a core part of its energy mix for decades to come, so new tech solutions to produce, process, and distribute gas more efficiently will be necessary to support its ongoing use”, Artinian said.

Similar Challenges in Norway

In Norway, another major natural gas exporter, the majority of natural gas in offshore reserves also remains untapped due to the lack of technology to penetrate so-called tight reservoirs, according to the Nordic country’s oil regulator.

About 65 percent of gas resources on the Norwegian continental shelf have yet to be produced and may need new technology to be extracted, the Norwegian Petroleum Directorate (NPD) said in a pair of reports December.

The majority of proven gas resources without development plans sit in tight reservoirs, which are reservoirs with low permeability or flow, the NPD said. It also cited high pressure and temperature and gas quality as challenges in the subsurface that prevent companies from venturing into development.

Tight reservoirs “normally cannot be produced using conventional wells; profitable production can only be achieved by implementing measures to improve gas flow”, the NPD said. “So far, various forms of fracturing and multi-branch wells remain the most relevant methods for recovering resources in tight reservoirs.

“Slim-hole technology is also relevant in several places, where a large number of slim boreholes in the same well will increase the wells' contact surface with the reservoir (reservoir exposure) and make it easier for hydrocarbons to flow into the wells”.

Such methods have already been deployed in the Norwegian shelf but mainly for oil extraction. “Elsewhere in the world, such as in the Gulf of Mexico, the UK shelf and on certain onshore fields, the technologies have been used to produce gas”, it noted.

AI Momentum

Besides new extraction solutions, artificial intelligence (AI) is also expected to gain further momentum in the US oil and gas industry this year, according to Artinian. “In the year ahead, we’ll see more natural gas operators integrate AI across the gas production pipeline as they recognize its immense potential for streamlining operations and boosting production potential”, Artinian said.

Artinian expects AI to penetrate production management and well assessment processes. “In 2024, producers will shift from considering AI as a ‘nice to have’ to an essential tool to gain efficiency advantages while ensuring improved safety and reliability”, Artinian said.

To contact the author, email jov.onsat@rigzone.com