What is Unconventional Oil and Gas?


What is Unconventional Oil and Gas?

Most of us are familiar with oil and natural gas “pools” that are found underground. Pools are located in rock with tiny connected pore spaces that contain oil or natural gas. One common example is sandstone.

Pools in which wells can be drilled so that oil and natural gas flows naturally or can be pumped to the surface are commonly referred to as “conventional” oil and natural gas. (Alberta’s natural gas, composed principally of methane, is the fuel used to heat many of our homes).

Decades of oil and natural gas production in North America and around the world have resulted in a decline of these conventional resources. Basically, most of the oil and natural gas that can be produced using traditional methods is already being accessed. As new technologies are introduced, oil and natural gas producers are able to produce “unconventional” oil and natural gas resources that were previously impossible to obtain. Unlike the conventional pools of oil and natural gas, unconventional oil and natural gas do not flow naturally through the rock, making them much more difficult to produce. Think of the difference between a sponge and a piece of clay: it’s easy to squeeze water out of a saturated sponge—that’s conventional oil and natural gas; squeezing water out of saturated clay is harder—that represents unconventional oil and natural gas, and the challenge forces producers to find new ways to release the oil and gas. Unconventional often refers to low permeability rock where the pores are poorly connected, making it difficult for oil and natural gas to move through the rock to the well.

Unconventional oil and natural gas—shale gas in particular—has been called the future of gas supply in North America. While its development is in the very early stages in Alberta, it has tremendous economic potential and we know that the interest in these considerable resources will increase. That’s why the AER is working now to meet that demand with effective requirements.

Regardless of how they are produced or the rock they come from, unconventional oil and natural gas are essentially the same as their conventional counterparts. The term “unconventional” simply refers to the methods that are used, as well as the types of rock from which the oil and natural gas are produced.

The AER refers to unconventional oil as

  • tight oil: oil found in low-permeability rock, including sandstone, siltstone, shale, and carbonates

Alberta’s oil sands resources are not considered unconventional. Information on how the AER regulates oil sands development is available at www.aer.ca.

The AER refers to unconventional natural gas as

  • tight gas: natural gas found in low-permeability rock, including sandstone, siltstones, and carbonates
  • shale gas: natural gas locked in fine-grained, organic-rich rock
  • coalbed methane (CBM): natural gas contained in coal

The first commercial CBM project was announced in Alberta in 2002. By the end of 2010, there were more than 15 300 CBM wells, which produced 24.4 million cubic metres per day in 2010 - that’s enough to heat all of the homes in Alberta for two years. When CBM development began, some Albertans expressed concerns that we would experience similar impacts to those occurring in some U.S. jurisdictions. We soon learned that our geology, which allows coalbed methane to be produced with little or no water, combined with world-class regulatory requirements would help us avoid these problems.