Unconventional resources

Alberta’s 3 main types of unconventional resources

• Tight gas and oil: natural gas and oil found in sandstone, siltstones and carbonates
• Shale gas and oil: natural gas and oil locked in fine-grained, organic rich rock
• Coalbed methane (CBM): natural gas contained in coal

Unconventional oil and natural gas require special development considerations because they do not flow naturally through rock. 

Revenue from non-renewable resources accounts for almost a third of the Government of Alberta's budget and is the largest contributor to the province's Gross Domestic Product (GDP), exports and capital investments. An estimated one in 12 people in Alberta are employed in the upstream energy industry.

Unconventional resource potential

Tight gas and oil

Decades of oil and gas production has resulted in a decline in Alberta's conventional oil and gas reserves. The Alberta Energy Regulator (AER) estimates a reserve outlook each June. The Summary of Alberta's Shale- and Siltstone-Hosted Hydrocarbon Resource Potential (2012 AGS) estimates:

In 2013, the National Energy Board prepared a briefing note on the potential for unconventional petroleum from the Montney formation.

Shale gas potential

Shale is one of the most common sedimentary rocks in the world and it is primarily composed of clay and fragments of other minerals such as quartz and calcite. Shale can be the source, reservoir and the seal for natural gas. Shale formations normally have low permeability (limited ability for gas or fluids to flow easily through the shale formation) and normally require stimulation techniques (such as fracturing) to economically produce shale gas. Shale gas is natural gas that is attached to, or "adsorbed" onto, organic matter or is contained in thin, porous silt or sand beds interbedded in the shale.

The AER, is evaluating the shale gas resource potential of all prospective shale gas formations in Alberta. As many as 15 prospective shale gas formations have been identified, five of these formations (Duvernay, Muskwa, Basal Banff/Exshaw, North Nordegg, and the Wilrich) may contain up 1,291 trillion cubic feet (TcF) of gas-in-place.

The Alberta Shale Data report contains estimates of the volumes, more time is required to prove the viability of shale gas. The Alberta Geological Survey under the AER reported on Shale gas potential.

CBM formation and potential

Through the coalification process, plant materials decompose in wet areas to become peat deposits. As the peat is buried deeper, under layers of sand and mud, it forms coal, the three stages of coal are brown coal, bituminous coal, and hard, anthracite coal. As the coal is formed, the decomposing organic material produces methane gas, as well as nitrogen, carbon dioxide, and other gases. The burial process puts pressure on the coal, which keeps much of the gas in the coal. Like natural gas from conventional sources, CBM is “sweet” not “sour” as it doesn’t contain hydrogen sulphide.

CBM is extracted by drilling a well into a coal seam applying similar techniques used for other natural gas wells. The sides of the well are "cased" with cemented steel pipe. Usually, small holes, called perforations, are then made in the wall of the casing to let the CBM flow through into the well bore and up the casing to the surface. In some cases the wells are drilled horizontally and the coal seams are often stimulated or "fractured" with Hydraulic fracturing to make the CBM flow more freely.

The Alberta Geological Survey estimates there may be up to 500 Trillion cubic feet of natural gas in Alberta's coals , see the CBM potential reports on open government or the Alberta Energy Regulator for more CBM information.

In 2012, nearly all coalbed methane wells drilled vertically in Alberta had targeted the thinner coal seams in the Horseshoe Canyon (ultimate gas in place 179 Tcf) and Belly River coal zones along the Calgary-Red Deer corridor. Wells targeting these seams tend to produce gas with little or no water, with production referred to as "dry CBM". The first commercial production of CBM in Alberta was from these coals, and they constitute the majority of CBM reserves booked. The depth range of these coals is 200 to 800 m.

The remaining CBM wells drilled horizontally have targeted the deeper Mannville coals (ultimate gas in place 321 Tcf). These coals tend to be thicker, deeper, and more continuous with substantial saline (salt) water production. The depth range of these coals is 900 to 1,500 m.

Tight gas and gas development solutions

Horizontal drilling

A steerable drill-bit to drill around rock, has been around for decades but recently has it been paired with multi-stage hydraulic fracturing. More than half of western Canada's oil and natural gas wells are being drilled horizontally, and since 2013, an estimated 80% of all oil wells placed on production use the same technique. Horizontal drilling reduced surface impacts, a single well can do the work of several vertical wells. These techniques have the advantage of being able to increase resource recovery while reducing surface impacts. Multiple wells from a pad further help reduce surface impacts with less roads and pipelines required. Early landowner engagement is required when multiple industrial activities are planned.

Multiple wells from a pad

Drilling multiple wellbores, or drill holes, from a single surface location, further help reduce surface impacts with less roads and pipelines required. Early landowner engagement is required when multiple industrial activities are planned.

Hydraulic fracturing

Hydraulic fracturing sometimes referred to by the non-technical term "fracking", involves pumping fluids, typically water, into a formation at a high enough pressure to crack, or fracture, the rock layer. The fluid also contains proppant, such as sand, that helps keep the fractures open so that oil and gas can flow to the surface. Instead of water, some fracture operations use liquefied propane, nitrogen, liquefied carbon dioxide, diesel or other fluids. Hydraulic fracturing has been safely used in Alberta on more than 180,000 wells since the technology was introduced in the 1950s, the Hydraulic fracturing in Alberta fact sheet explains the benefits and safeguards.

Shale gas production, regulation and development solutions

Shale gas can be produced from conventional shallow gas vertical and directional wells. However, due to the low permeability that is characteristic of shale formations, horizontal drilling and stimulation techniques such as multi-stage hydraulic fracturing are often required to achieve economic production. Vertical and directional shale wells are commonly commingled with other production zones to yield higher production. To date the majority of Alberta's production has been achieved using vertical wells along with a few horizontal wells. In recent years, the use of horizontal drilling combined with multi-stage fracturing have resulted in some of the most attractive shale gas formations in North America.

Figure 1. Illustration – multi-stage vs. conventional

Thermogenic shale gas, normally formed during deep burial where heat and pressure cook the organic matter releasing natural gas, is often developed using horizontal drilling and multi-stage hydraulic fracturing. These techniques can be combined with multi-well pad drilling to reduce the number of well sites per section that are needed. The production from one horizontal wellbore with 10 fracture stages may in some cases be equivalent to drilling 10 vertical wells with a single fracture each, spacing and development is regulated by the AER.

Most aspects of the oil and gas industry are regulated by the AER including;

• Setting requirements for drilling and production operations.
• Protecting our fresh water aquifers (groundwater) with strict regulations that are designed to ensure that gas cannot migrate up a well bore to contaminate groundwater sources. Well bores are required to have cemented casings in place that meet stringent requirements and which are also set to depths far below any fresh water aquifers. This ensures there is an impenetrable barrier between the shale gas formation and the well bore so that gas and fluids are unable to use the well bore as a pathway to contaminate groundwater.

Alberta has strict requirements in place to manage the safe disposal of produced fluids (fluids that return to the well head as part of the hydraulic fracturing process) and does not allow produced fluids to be sent to municipal waste water treatment systems. Fluids that cannot be treated and recycled must be disposed of in approved disposal wells where the fluids are injected deep underground for permanent disposal.

Shale gas is regulated under the same legislation as conventional natural gas. Alberta has considerable experience with hydraulic fracturing, more than 179,000 wells have been fractured in Alberta since the 1950s. Shale gas is recognized as a valuable resource in Canada and the United States; please see the Primer for Understanding Canadian Shale Gas and the U.S. Department of Energy: Modern Shale Gas Development in the U.S. for more information.

Responsible development

The departments of the Government of Alberta provide policy direction to the AER; the AER directives guide the regulation of all natural resource development in the province.

Some standards include:

• water for life
• groundwater protection (AER directive 059)
• wellbore integrity (AER directives 008, 009 and 083)
• air quality (AER directive 060)
• noise and light (AER directives 056 and 038)
• induced seismicity

Reports

• Summary of Alberta's Shale- and Siltstone-Hosted Hydrocarbon Resource Potential: Alberta Geological Survey under the AER
• ST59: Alberta Drilling Activity Monthly Statistics: annual reports (AER)