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There's a hole in the bottom of the sea

IN A RECENT ARTICLE entitled Chevron Conquers the Rock," published Sept. 12, 2006, I discussed the recent announcement by Chevron Corp. that it successfully completed a record-setting production test on the Jack #2 well at Walker Ridge Block 758 in the U.S. Gulf of Mexico. I discussed the context of the Chevron announcement to include the timing of the announcement, the costs of drilling the well, the remoteness of the site, the depth of the well, and the oil itself and the difficulty of getting to it and lifting it from the Earth. I could not pass up the opportunity to discuss Peak Oil. And I even discussed good old Col. Edwin Drake.

Chevron has achieved a significant goal, and its success in the deep-water Gulf of Mexico is a very impressive accomplishment. Chevron's effort is illustrative of the future of the petroleum industry over the next decades, and I think that the effort is worth dissecting some more. In this article, I am going to discuss geology, because I believe that it is important to understand what is going on down there, far beneath the waves.

The Most Eagerly Watched Prospect in the Gulf

The Chevron well is quite a hole in the bottom of the sea. According to a Dow Jones news account, reposted prominently on the Web site of no less than the highly respected oil field service company Schlumberger, the Jack #2 development was the "most eagerly watched oil prospect in the deep-water U.S. Gulf of Mexico." The Chevron success with its test means, according to Dow Jones, that the Jack field "has passed a production test with flying colors, paving the way for development of an emerging geological play that could contain billions of barrels of hydrocarbon reserves."

And to where in the Earth, exactly, does Chevron's hole lead? Chevron's Jack #2 well penetrates into what geologists call the "lower Tertiary," an ancient rock layer that extends over many thousands of square miles beneath the rocks at the bottom of the deep waters of the Gulf of Mexico. The successful Chevron test well has elevated the profile of the lower Tertiary in the eyes of oil industry observers, and holds out the tantalizing prospect that these deep rock formations could significantly augment U.S. oil and gas production.

Oil and gas companies have exploited the hydrocarbon resources of the Gulf of Mexico for many decades. And the lower Tertiary formations of the deep-water Gulf are, in many respects, extensions of oil-bearing strata from onshore Texas and Louisiana. But it is only within the past five years that exploration efforts have managed to discover commercial amounts of oil and gas in lower Tertiary rocks under deep-water areas.

Geologic and Tectonic Setting

The Gulf of Mexico basin, south of the U.S. coastline along Texas and Louisiana, offers a challenging geologic and tectonic setting to the best of geoscientists and engineers. Far beneath the surface of the coastal areas, and extending far offshore, the underlying basement crust is part of the ancient Precambrian "continental" mass that is part of the North American tectonic plate. Farther to the south offshore, at the edge of the continental slope where the seafloor of the Gulf of Mexico begins to descend precipitously to depth, the underlying crust is composed of "oceanic" material, primarily basalt. These rock types are the foundation of the Earth's crust in the region, upon which all else rests.

Chevron's deep-water success began with its ability to capitalize on many decades of fundamental research into oceanography, bathymetry, and geophysics that has allowed researchers to gain some semblance of understanding of what lies beneath the waves, let alone the seafloor, of the Gulf of Mexico. Immense sums have been spent by both government and industry to map the ocean floor, to measure the force of gravity and chart gravitational anomalies, to measure the magnetic fields in the area, and to gauge myriad other physical parameters. This is just some of the cultural, social, and scientific foundation for Jack #2.

Jurassic Salt

There was another body of geological and geophysical knowledge that was also essential to Chevron's success. That is that the continental and oceanic crust of the Gulf of Mexico is overlain by sedimentary rocks of Mesozoic age and younger. There may even be some rocks of even older Paleozoic age, but I am not aware that any drill bit has ever cut into them.

Toward the bottom of the known stratigraphic sequence is the Louann salt of Triassic-Jurassic age, about 225-150 million years old. In the deep waters of the Gulf, this is also called the Sigsbee salt. Due to much deformation in the crust of the Earth over millions of years, the salt beds have developed into what are called "salt basins." These salt basins are key geologic controls over the structures in the sediments that have trapped and now hold oil and gas deposits. And it has taken quite a lot of research just to figure that out.

These salt beds are the remnant of an ancient series of shallow seas that were, from time to time over a 75-million-year period, isolated or cut off from the main circulation of the world's oceans. How does this occur? Imagine, for example, that the Mediterranean Sea was shut off at the Straits of Gibraltar on the west and that the Bosporus Straits farther east were also closed. While you are at it, imagine that the Black Sea was isolated from main currents of ocean circulation.

Now imagine that over time and under millions of years of a hot, dry climate, evaporation exceeded the amount of water entering into the Mediterranean and Black Sea basins from precipitation and river flow. Thus, over time, the sea levels in both bodies of water would fall. The waters would become brackish from the dissolved salts (think of the Great Salt Lake or the Dead Sea), and eventually, the brackish water would begin to precipitate out salt crystals. These salts are mostly what you would expect: sodium chloride (called "halite" in mineralogical terms), as well as other minerals like gypsum, anhydrite, and other exotic chemical forms of dissolved minerals contained in seawater.

So under such conditions, the Mediterranean, and farther east the Black Sea, would shrink in area and the shorelines would be caked with salt layers on top of what had formerly been seafloor. But then, on occasion, the pathway to the main oceanic seas would be opened due to tectonic activity (regional uplift, for example), or perhaps a rise in sea level (say, ice sheets melting). When sea levels rose relative to the landmasses closing the Gibraltar and Bosporus Straits, great, cascading waterfalls of ocean water would re-enter the Mediterranean and Black Sea Basins to refill the seas and start the evaporative process all over again. This is believed to be what occurred in the Black Sea region about 10,000 years ago (perhaps giving rise to the Flood stories of many cultures, including that of the Old Testament's Noah).

Keep in mind that this is a geological process occurring over millions of years. It is a cycle of structural isolation, climatic evaporation, chemical deposition, and eventual oceanic recharge. Suppose that this occurs again and again, because the story of geology is nothing if not the story of things occurring and recurring over long periods of time. The Earth, when you think about it, is nothing but the story of time. The salt layers could form up to many thousands of feet thick. This is, in fact, exactly what has occurred in both the Mediterranean and Black Sea basins over many periods of geologic time.

Now imagine this same evaporation and recharge processes occurring in ancient Triassic and Jurassic time, above the area that is now the southern Gulf coast of the U.S. and farther out into the deep Gulf of Mexico. During the periods when the shallow, Triassic-Jurassic seas were cut off from recharge by oceanic waters, the seas evaporated and left behind extensive bodies of salt evaporates. These deposits are the Louann and Sigsbee salts, and form the related salt basins. Understanding these formations is one of the keys to appreciating what Chevron and others have been doing in the deep-water Gulf of Mexico. Needless to say, Chevron did not figure out all of this by itself. This is part of the cultural and scientific legacy of our time.

Mesozoic and Tertiary Sediments

Late in Jurassic time and early into the Cretaceous, the North American tectonic plate was moving relatively westward, due to seafloor spreading at what is now the Mid-Atlantic Ridge. By mid- to late-Cretaceous time (about 100-65 million years ago) and into the early Tertiary Period, the western regions of what is now North America began a long process of uplift and deformation called the "Laramide orogeny." The Laramide orogeny led directly to water and sediments draining east and southeast, from the interior of the North American continent toward the proto-Gulf of Mexico basin.

That is, by late Cretaceous time, the earlier, Jurassic-Age Louann and Sigsbee salt beds were submerged and began to be buried under the sands and clays that were eroding down from the north and west from what eventually became the Rocky Mountains. What developed in the proto-Gulf of Mexico were a series of what are called "prograding sedimentary wedges," meaning sedimentary formations that accumulated outward ("prograded") from the shore and into the ocean basin. By way of modern comparison, think in terms of the Mississippi River delta building itself up by depositing sediment southward into the Gulf over a time frame of millions of years. Now think of it in terms of sedimentary wedges accumulating south and east from the interior of the North American continent for 100 million years. All of this was occurring along what you might consider the "Texas-Louisiana" coastline, except that what we see today is just a snapshot of where the coastline is located during the geologic time in which we live.

Each of these sedimentary wedges consists of river-type sands located nearer to what were, way back then, the coastal regions, with more and more delta-type sand (finer sand, usually composed of smaller grains) and mud farther away from the shoreline. As you progress farther into what was the deep water of the proto-Gulf basin, there are fewer delta-type muds and more and more of what are characterized as turbidites and marine clays. There are also limestone layers in the rock sequence, the remnants of ancient life-forms that had shells and skeletons composed of calcium carbonate.

As each layer of sediment was laid down, its weight served to cause the underlying crust to subside. Thus, the Gulf of Mexico basin essentially "sank" into the Earth's crust under the weight of the new sediments being deposited above.

This sedimentary process, and its associated subsidence, occurred age after age and epoch after epoch. At the end of the Cretaceous Period, the deposition process continued into the Paleocene, then Eocene, Oligocene, Miocene, Pliocene, and Pleistocene times. It continues to the present moment, although human activity has dramatically altered many of the ancient drainage patterns. For a short while, anyhow, as Hurricane Katrina demonstrated last year.

The Oil Window Is Where You Find It

The bottom line in all of this is that, over the past 100 million years or so, the Gulf of Mexico basin has accumulated, in places, a sedimentary column up to 60,000 feet thick. Within this extensive sedimentary column, a vast array of organic matter has, over time, accumulated and formed into extensive deposits of oil and gas.

When sediment and associated organic matter undergoes burial and subsidence, a variety of lithologic and chemical reactions occur. The sediments are compressed by the weight of material deposited above. Water, being all but incompressible, tends to flow out. The sand and clay particles, as well as the calcium carbonate shells of ancient marine organisms, align in ways that tend to be most efficient in conserving volume (like the settling of product in a box of cereal). The discrete sand and clay particles start to bind together (often via precipitation of dissolved calcium carbonate or silica), and the formerly unconsolidated material begins to "lithify," or to become a rock-like substance. Every rock has its own parameters of porosity (the percentage of the bulk volume that is not made up of mineral compounds) and permeability (a measure of the ability of fluids to flow through the pores that comprise porosity). Porosity and permeability are critical items in petroleum geology and engineering.

Also, when sediment and associated organic matter undergoes burial and subsidence, subsurface temperature rises, due to heat flow that is rising upward from the deep crust and mantle of the Earth. The organic matter still within the rock begins a long, slow process of something akin to refining the raw hydrocarbons first into a substance called "kerogen" (which is the immature "oil" in so-called "oil shale") and then into oil or gas. The parameters of depth, pressure, and temperature contribute to defining what is known as the "oil window," the zone inside the crust of the Earth in which oil and gas forms.

Of these "oil window" parameters, the general consensus is that oil forms 7,500-15,000 feet beneath the surface of the Earth. Once the oil is formed, it has been known to migrate to deeper depths and maintain its chemical nature, but with some allowance for alteration. (It tends to become "heavier" as the lighter-chain hydrocarbons are heated and volatilized.) Temperature plays a key role in all of this. At modest temperatures, and even if buried below the accepted depth for the oil window, the oil will retain its essential properties. But temperatures above about 180-200 degrees Fahrenheit will start to break down the oil into shorter-chain hydrocarbons such as natural gas (methane, ethane, propane, etc.). The warmer the rock, the greater the likelihood that the organic matter will essentially become "overcooked" and the hydrocarbon molecules will volatilize and break down into carbonized material that is not oil, and eventually not even natural gas. When this occurs, you have passed "outside the oil window," either in terms of depth or temperature.

Chevron's Jack #2 well was drilled to a depth of about 20,000 feet beneath the seabed. While finding oil at such a depth is not unheard of, it is somewhat unusual, as 20,000 feet is usually considered to be too deep for oil to maintain its properties. Many 20,000-foot wells that are drilled into rock formations that might hold oil yield mere "oil shows," meaning hydrocarbon in insufficient amounts or quality to "make a well." To the extent that deep wells produce anything, they commonly produce dry gas, with no or almost no associated oil. But still, oil window or no, oil is where you find it.

According to the Oil & Gas Journal, more than 99% of oil production in the Gulf of Mexico has come from upper Tertiary formations, namely from rocks of Pleistocene, Pliocene, and Miocene age. As recently as the early 2000s, few observers believed that the lower Tertiary sands would, if they could be reached, yield oil or gas from great depths.

But apparently, there is oil down there. Why? Temperatures down the hole in Jack #2 must be relatively "cool," compared with the temperatures at 20,000 feet in wells located elsewhere. So perhaps the lower Tertiary and Jack #2 well is an example of geological processes, particularly subsidence, defenestrating oil outside of the oil window. How does that work?

It may be that the Gulf of Mexico basin subsided rapidly enough that the sediments went deep faster than heat flow came up to cook them. That is, sediments went down faster than heat could come up. Is this what happened? Good question, but why would that happen? Did something slow the process of heat flow, or otherwise act as a barrier? Could something have served to, in essence, "insulate" the organic matter buried so deeply?

Maybe we should take another look at that Jurassic salt. After all, in the deep-water Gulf of Mexico, it is all about the salt.

I will continue this discussion in another article. Thank you for reading Whiskey & Gunpowder.

Until we meet again...
Byron W. King

P.S.: Will I see you at the Peak Oil conference in Boston, Oct. 25-27, 2006?

I want to take the opportunity to let you know that the Association for the Study of Peak Oil-USA (ASPO-USA) and Boston University (BU) will co-sponsor the 2006 World Oil Conference, Time for Action: A Midnight Ride for Peak Oil, on the BU campus, October 26-27, 2006.

The conference will bring together energy experts from around the world to discuss the likely timing, impacts, and intelligent responses to the growing Peak Oil challenge. As you probably know, virtually every sector of our society and economy will be affected by Peak Oil, from transportation, manufacturing, airfreight, and agriculture to homebuilding, city planning, and finance.

"What better place than Boston to hold A Midnight Ride for Peak Oil?" asks Matthew Simmons, chair of ASPO-USA's advisory board. "We are recruiting the best minds in the business -- geologists, industry experts, academics, and environmentalists -- to take up arms with scientific data to meet the historic challenge of Peak Oil." Simmons is author of The Wall Street Journal -listed bestseller Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. For conference details, please see:

In addition to Matthew Simmons and Robert Kaufmann, conference speakers will include Ali Samsam Bakhtiari of the National Iranian Oil Co. (retired), about whom I have written in Whiskey & Gunpowder; Roscoe Bartlett, U.S. congressional representative from Maryland; and more than 20 others. The full list of speakers may be viewed at the Conference Website.

Conference topics include:

· Oil and Gas Depletion (What's the evidence on Peak Oil? What geologic, political, economic, and technical constraints limit oil production? Why is forecasting a date for Peak Oil an inexact science?)

· Mitigation (What responses are available, and when can they be implemented?)

· Alternative Energy (What unconventional petroleum and nonpetroleum energy sources are available, and can they fill the depletion gap?)

· Economics (What economic challenges do decreasing energy supplies present?)

· Transportation (What is the future direction of personal transportation, its limitations and prospects, and how should planners and fleet managers respond?)

· Net Energy (What's the meaning of energy return on energy invested -- EROEI -- and why is it critical to intelligent responses to the Peak Oil dilemma?)

· Energy Security (Can we achieve energy security in a world of escalating competition for a finite resource?)

· Government Policy (What is the direction of energy policy at the local, state, and federal levels? Do these policies need obvious tweaks, or a massive overhaul?)

I am planning to attend, and I hope that many of you who read Whiskey & Gunpowder will also be there.

Note: Agora Financial, LLC has no financial or other business relationship to ASPO-USA, Boston University, or the World Oil Conference. We are running this promotional piece as a public service, and because we believe that the conference offers our readers the opportunity to improve their understanding of the critical topic of Peak Oil.

What do you think? Leave a comment below.

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