How the Oil and Gas Industry Operates
Exploration
Petroleum geologists study a variety of information—ranging from seismic survey data to records of past drilling activity—to determine the best prospects for new wells. Land agents contact property owners to purchase or lease underground mineral rights in the areas of interest. Once the location of a well is determined, the oil and gas producer files the necessary permit applications with state regulatory agencies—outlining the company’s plan for the well.
Drilling
Next the drilling contractor arrives on the scene. Drilling is a 24-hours per day operation that uses what is called a rotary rig. A drill bit is attached to the end of a pipe, and as the spinning bit chews its way down through the underlying rock, more sections of pipe are added to create what is known as the drill string.
At a specified depth the drill string is pulled out of the hole and replaced with casing pipe. A service company pumps concrete into the casing to protect groundwater from contamination by oil and gas. Drilling then resumes with a smaller bit to bore down through the hardened concrete to the target formations below.
Well Logging
At what is known as the total depth—which may be as much as several thousand feet below the surface—the drill string is removed again. A well logging company lowers measurement instruments into the hole to determine the presence of oil and gas. Engineers and geologists study graphs of the readings—called well logs—to decide if there are enough hydrocarbons present for the well to be productive. If not, the well is plugged with cement and abandoned.
Well Completion
A well that looks as though it will produce marketable volumes of oil or gas is “completed.” Pipe—called the production string—is lowered into the hole and cemented into place. At depths determined by the well logs, explosive charges are lowered into the pipe and perforations are made in the casing. These holes provide a tunnel for the hydrocarbons to flow out of the underground reservoir and into the pipe.
Most wells in Pennsylvania must be fractured before they are productive. Sand and water or chemicals are pumped into the well at high pressure. The pressure creates cracks to more easily allow the oil and gas to flow out of the formation. The liquids are pumped back out, and the sand remains behind to keep the fractures propped open.
Production
The well is now ready to be put into production with the installation of the surface equipment. If it’s an oil well,
a familiar-looking rocking pumpjack is used to draw the crude
oil up to the surface. A natural gas well is often less obvious; it requires some piping and other fairly inconspicuous equipment. A tank is also typically installed to collect the salty water that comes up from the underground
formation along with the oil and gas. This water is collected and disposed
of in an environmentally sound manner.
Production Monitoring and enhancement
Depending on many factors, a well can produce for several years or even decades. Production engineers and field employees keep busy monitoring the well’s performance and making adjustments to the production schedule to optimize the well’s useful life. Occasionally the well is cleaned out or treated with chemicals to keep it efficient. “Enhanced recovery” technologies are continually being developed to increase production life and to extract more of the hydrocarbons from the reservoir.
End of production
Once a well is unable to produce any longer, it is plugged. The surface equipment and production casing is removed, then the well bore is filled with concrete to prevent any contamination of groundwater or leakage of any remaining hydrocarbons.
Marketing/Refining
Oil
After being pumped from the well, crude oil is collected in tanks. These tanks can either be located at the well site itself, or connected to other tanks by a network of pipelines called gathering lines. The oil flows through the gathering lines to a central location called a tank battery. The oil is then pumped into a tank truck and transported to a refinery that has purchased the product from the oil and gas producer. The refinery uses a variety of processes to create products such as gasoline, diesel fuel, kerosene, motor oil, and other lubricants, along with what are known as petroleum feedstocks that are used to create other products.
Gas
Natural gas wells are also connected via gathering lines. A compressor increases the pressure of the gas at the point where it is delivered into a larger pipeline. Equipment also removes excess moisture from the gas. Gas marketers work with pipeline companies as well factories, businesses, schools, hospitals, and other large “end users” to sell the gas.
