4 How Technology Transfer Will Expand the Development of Unconventional
Gas, Worldwide
TOC
Start Holditch, Stephen A.
Harold Vance Department of Petroleum Engineering
Author
Texas A&M University
Search 3116 TAMU
College Station, Texas 77843-3116
Help
Print 8.5
x 11 Abstract
For more than 50 years, the U.S. natural gas
industry has been developing unconventional gas reser-
voirs. Production of natural gas from eastern Devonian
Shales and tight gas sands in Texas and in the Rocky
Mountain and Midcontinent regions has been the prov-
ing ground for many innovations in well drilling,
completion, and stimulation. Over the past two decades,
successful gas production from coal seams and from
shales, such as the Barnett Shale, has led to new drilling
and completion technologies. In 2007, unconventional
gas production was 9.15 Tcf, accounting for 47% of the
U.S. dry gas production, and eight of the top ten U.S.
gas plays were producing from unconventional reser-
voirs. Unconventional gas reservoirs, led by shale, are
expected to provide the majority of the U.S. gas supply
growth in coming decades. Clearly, many basins world-
wide contain large volumes of unconventional gas
Unconventional Energy Resources: Making the Unconventional Conventional
Ayers, Walter B.
Harold Vance Department of Petroleum Engineering
Texas A&M University
3116 TAMU
College Station, Texas 77843-3116
resources that have not been assessed. As conventional
oil and gas reservoirs are depleted in those basins, inev-
itably, unconventional gas reservoirs will be developed.
The key to successful development will be the proper
application of existing technologies and the continued
development of new technologies.
Over the past 5 years, a team of engineers and
geoscientists in the Crisman Institute at Texas A&M
University have worked to capture the critical geologic
and engineering properties of unconventional gas reser-
voir in 25 North American basins. The primary
objectives of this research are to (1) understand the gas
resource distributions and the best technologies for
unconventional gas recovery and economics, and (2)
assess the volumes of unconventional gas in basins,
worldwide, beginning with North America, using the
concept that resources are log-normally distributed
150 
 (resource triangle). Our evaluations of North American
4 basins indicate that the Technically Recoverable
3 Resource of unconventional gas in any basin will be
approximately 5-10 times greater than the ultimate
7 recovery (cumulative production plus proved reserves)
TOC from all conventional oil and gas reservoirs in the same
basin.
Start
Our research shows that historic unconventional
Author gas drilling and production have been impacted
strongly by technology and gas prices. The oil and gas
Search
Help Introduction
For more than 50 years, the natural gas industry
has been developing unconventional gas reservoirs in
the U.S. Unconventional gas production has grown over
the past 3 decades, until today, it nearly equals produc-
tion from conventional gas reservoirs. Unconventional
gas is the term commonly used to refer to low-permea-
bility reservoirs that produce mainly dry natural gas.
Many of the low-permeability reservoirs that have been
developed in the past were tight sandstone, but increas-
ingly large quantities of gas are being produced from
low-permeability carbonates, shales, and coal seams.
To optimize the development of an unconven-
tional gas reservoir, geoscientists and engineers must
optimize the number of wells drilled, as well as the
drilling and completion procedures for each well.
Often, more data and more engineering manpower are
required to understand and develop unconventional gas
reservoirs than are required for higher permeability,
Holditch and Ayers
industry should continue developing new technology to
access unconventional gas reservoirs in diverse settings.
The Research Partnership to Secure Energy for Amer-
ica (RPSEA) is supporting the development of new
technology to optimize recovery of unconventional gas
resources in the U.S. In coming decades, this technol-
ogy that is being developed in the U.S. will be deployed
worldwide to increase natural gas production from
unconventional reservoirs and to contribute needed
energy supplies.
conventional reservoirs. On an individual well basis,
unconventional gas wells will produce less gas over a
longer period of time than one expects from a well
completed in a higher permeability, conventional reser-
voir. As such, many more wells (or smaller well
spacing) must be drilled in a unconventional gas reser-
voir to recover a large percentage of the original gas in
place, when compared to a conventional reservoir.
The optimum drilling, completion and stimula-
tion methods for each well are a function of the
reservoir characteristics and the economic situation.
Some unconventional gas reservoirs are in south Texas,
while others are in the deserts of Egypt. In fact, every
major oil and gas basin in the world has unconventional
gas reservoirs that can be developed, given the right
combination of gas prices and development costs. The
costs to drill, complete, and stimulate any given well, as
well as the price of natural gas and the availability of a
151 
 gas market, affect how unconventional gas reservoirs
4 are developed. As with all engineering problems, the
3
7 Definition of Unconventional Gas
TOC In the 1970s, the United States Government
declared that tight sands, coal beds, and shales were to
Start
be considered as unconventional gas reservoirs and
Author would be eligible for higher gas prices or tax credits
(Section 29 tax credit). The government defined a tight
Search
gas sand formation as a reservoir where the expected
Help
value of permeability to gas flow would be less than 0.1
md. In fact, the definition a “tight gas” reservoir is a
function of many physical and economic factors, and it
applies to many types of reservoirs. The best way to
define a tight gas reservoir is that “the reservoir cannot
be produced at economic flow rates or recover eco-
nomic volumes of natural gas unless the well is
stimulated by a large hydraulic fracture treatment, a
The Resource Triangle—Unconventional Gas Resource Abundance
The resource triangle concept (Fig. 1) has been
used by Canadian Hunter to find large gas resources
and to build a successful exploration and production
company in the 1970’s (Gray, 1977; Masters, 1979).
The concept is that all natural resources have a log-nor-
mal distribution in nature. Whether prospecting for
gold, silver, iron, zinc, oil, natural gas, or any resource,
the best or highest-grade deposits are small, and once
Holditch and Ayers
technology used is a function of the economic condi-
tions associated with the project.
horizontal wellbore, or by using multilateral wellbores”
(Holditch, 2006).
So what is a typical unconventional gas reser-
voir? The answer is that there are no “typical”
unconventional gas reservoirs. An unconventional gas
reservoir may be deep or shallow, high pressure or low
pressure, high temperature or low temperature, blanket
or lenticular geometry, homogeneous or heterogeneous,
naturally fractured or not, single layered or multilay-
ered, water productive or not, and it may contain
thermogenic or biogenic gas. It is this complexity of
unconventional gas reservoirs that requires continual
development of new exploration philosophies and tech-
nologies to facilitate discovery and economic resource
development.
found, extraction is relatively easy, straightforward and
economic; the hard part is to find these pure veins of
gold or high-permeability gas fields.
In the resource triangle concept (Gray, 1977;
Masters, 1979), the limited quantities of gas in conven-
tional, high-permeability reservoirs are shown at the
apex of the triangle. Reservoir quality diminishes with
depth from the triangle apex, but the quantities of low-
152 
 grade, unconventional oil and gas deposits are much
4 greater and easier to find than are resources in the high-
3 quality, conventional reservoirs at the apex. The com-
mon theme is that economic development of low-
7 quality oil and natural gas deposits requires applica-
TOC tions of improved technology and higher gas prices than
those required for development of conventional
Start
reservoirs.
Author The concept of the resource triangle (logarithmic
resource distribution) should apply to hydrocarbon-pro-
Search
Help Unconventional Gas Reservoirs in the United States
Unconventional gas has been produced in the
U.S. for more than 50 years, and it has played an
increasingly important role in meeting the U.S. natural
gas demand over the past three decades. Unconven-
tional gas activity in the early 1980’s (e.g., Antrim
Shale and San Juan Basin coalbed methane) was due in
large part to development of new technology that was
encouraged by the Section 29 tax credit. Since the
1990’s, unconventional gas activity has been driven by
new of play concepts and associated technologies (i.e.,
Powder River basin coalbed methane and Barnett Shale
gas), supported by higher gas prices.
Driven by demand and facilitated by tax credits,
higher gas prices, new technology and new concepts,
unconventional gas production has increased from
insignificant values in 1980 to 9.15 Tcf (trillion cubic
feet) in 2007, when it accounted for 47% of the U.S. dry
gas production and 62% of the booked reserves (EIA,
Holditch and Ayers
ducing basins, worldwide. If so, knowledge of the
conventional gas resources of a basin may allow estima-
tion of the unconventional gas in that basin. Then, the
relationship between conventional gas and unconven-
tional gas volumes in that basin may be used to predict
unconventional gas resources in similar basins, world-
wide. Moreover, we should be able to test this concept
in North America, where there is a long history of con-
ventional and unconventional gas production from
many basins.
2009a). Unconventional gas is poised to dominate U.S.
gas production in coming decades (EIA, 2008; Fig. 2).
In 2007, eight of the top ten U.S. gas plays were
producing from unconventional reservoirs (Table 1). In
2007, total U.S. dry gas production was 19.3 Tcf. That
year, tight sands produced 6.2 Tcf, coal beds produced
1.8 Tcf, and shales produced 1.2 Tcf of gas, accounting
for 31.9%, 9.5%, and 6%, respectively of the total dry
gas production (EIA, 2009b). Recent success of the
Barnett Shale play triggered widespread North Ameri-
can shale exploration, leasing, and production, resulting
in numerous new shale plays (Haynesville, Marcellus,
Eagle Ford, etc.).
As a result, unconventional gas annual produc-
tion, reserves, and resources are increasing rapidly.
Production and reserves of shale gas reservoirs are
gaining rapidly on coalbed and tight sand reservoirs. By
2007, shale gas reserves have grown to 21.5 Tcf, nearly
153 
 equal to reserves of coalbed methane (21.9 Tcf), and
4 each accounted for more than 9% of the total U.S. dry
3 gas reserves (225.2 Tcf) (EIA 2009b).
Although annual production and reserves of all
7 unconventional gas reservoir types have increased in
TOC the past decade, shale gas production and reserves
(Figs. 3 and 4) are growing more rapidly than those of
Start
tight sands and coal beds. Unconventional gas, led by
Author shale gas, is expected to provide the majority of the
U.S. gas supply growth in coming decades (EIA, 2008).
Search
Help Worldwide Unconventional Gas Development
Historically, most of the production from uncon-
ventional gas reservoirs and most of the technology
used to produce these reservoirs have been developed in
North America. However, it is clear that this unconven-
tional resources technology will be applied globally. In
coming decades, the production of natural gas from low
Effects of product prices and technology
As the price of a resource increases and technol-
ogy improves, industry should be able to dip deeper
into the resource triangle and produce more of the
unconventional resources (Masters, 1979). BP
(www.bp.com) provides information on the effects of
geopolitics and technology on oil prices (Fig. 7), and
Flores (2008) presents a list of the major changes in
product prices and technology in the U.S. oil and gas
industry over the past century (Table 2). Flores (2008)
Holditch and Ayers
Already, unconventional gas reservoirs are the major
contributor to recent growth in natural gas production in
the Lower 48 states (Fig. 5). In fact, owing to the
intense development of unconventional gas, EIA fore-
casts have consistently under-estimated annual
unconventional gas production (Fig. 6; Navigant,
2008). Certainly, the tremendous and growing success
of unconventional gas reservoirs in the U.S. bode well
for a robust international unconventional gas industry in
coming decades.
permeability gas reservoirs (tight sands, coal beds and
shales) will occur in every major oil and gas basin in the
world (Holditch, 2009), driven by increasing energy
demand and depleting conventional energy supplies,
and facilitated by higher prices and development and
application of existing and new technology.
clearly validates application of the resource triangle
concept to oil and gas production. Using numerous data
sets from North America, she demonstrates that when
prices increase, owing to geopolitical or other causes, or
when technology improves, more wells are drilled in
unconventional reservoirs and more oil and gas are pro-
duced (Tables 2 and 3, and Figs. 8 and 9). Changes in
oil and gas prices, plus improvements in technology
affected the number of wells drilled and the oil and gas
154 
 produced from unconventional reservoirs in 1973,
4 1978, and the mid-2000s. The effect of decreased of oil
3 price in 1986 and 1998 (Fig. 7) resulted in fewer pro-
ducing wells and plateaus on the cumulative
7 productions curves (Figs. 8 and 9). Flores showed that
TOC technology improvements, such as hydraulic fracturing
and horizontal drilling, as well as oil and gas price
Start
changes, affected drilling activity and production from
Author the Austin Chalk formation in Texas. The updip Austin
Chalk produces oil, whereas the downdip Austin Chalk
Search
produces gas. Flores converted the natural gas produc-
Help tion to barrels of oil equivalent (BOE) to enable
graphing production as a single unit (Figs. 8 and 9, and
Table 3).
Worldwide unconventional gas resources
The resource triangle concept should be valid for
all natural resources in all basins of the world. Thus, it
is logical to believe that enormous volumes of gas will
be found in unconventional reservoirs, developed and
produced in every basin that now produces significant
volumes of oil and gas from conventional reservoirs.
Various organizations have analyzed parts of the UCG
resource base in specific regions of the world. However,
no organization regularly publishes a comprehensive
estimate of the volume of gas that might be found in
unconventional reservoirs, worldwide.
Rogner (1996) has estimated significant volumes
of unconventional gas worldwide (Table 4). It is note-
worthy that the largest volumes of unconventional gas
Holditch and Ayers
The production of oil and gas from the Austin
Chalk formation was affected by the inventions of
acidizing, hydraulic fracturing, and horizontal drilling.
Also, the sudden oil price and gas price increases in the
1970’s instigated a drilling boom that turned this mar-
ginal oil and gas play into a play that has already
produced more than 2.24 BOE. In another of several
examples, Flores (2008) showed that price increases in
the 1970’s, tax incentives to drill tight gas reservoirs,
and the improvements in hydraulic fracture technology
resulted in a dramatic increases in drilling and gas pro-
duction in the Cotton Valley formation in East Texas
(Fig. 9).
are attributed to North America, which of course, is the
region where there has been the most exploration,
development, and production of unconventional gas. As
such, there is more information available to evaluate the
unconventional gas in North America, and there are
more gas estimates available from multiple organiza-
tions. However, it is evident that unconventional gas
resources in North America have been underestimated,
and it is quite likely that Rogner (1996) has underesti-
mated the worldwide volumes of UCG. If we apply the
concept of the resource triangle, the volume of gas in
unconventional reservoirs around the world should be
much larger than the volume of gas in conventional
reservoirs.
155 
 North America as an analog to worldwide UCG resources
4
A recent study suggested that one should be able
3 to estimate the volumes of gas contained in low-quality
7 reservoirs in a specific basin by understanding the rela-
TOC tionship between the volumes of conventional and
unconventional resources (Old, 2008; Old et al., 2008).
Start To test the resource triangle concept (logarithmic distri-
Author bution of resources), Old (2008) used published
resource data to compare the volumes of conventional
Search oil and gas reservoirs to the volumes of technically
Help recoverable gas in unconventional reservoirs for eight
North America basins that have resources estimates for
most conventional and unconventional reservoirs. Two
of the eight basins (the Uinta and Piceance basins) were
combined and treated as a single basin due to the way
the resource information is combined for these two
basins by several reporting agencies.
The conventional oil resource value was con-
verted to gas equivalent and was added to conventional
gas for combined volumes of conventional hydrocarbon
resources in each basin. Then, the volumes of gas in
coal beds, tight sands, and shales were summed for the
combined volumes of unconventional resources. Con-
ventional and unconventional resources were summed
for the basin-wide total recoverable resources. All total
recoverable resources values are considered technically
recoverable, but not necessarily economic. More com-
plete details of the methodology used are in Old (2008)
and Old et al. (2008).
Holditch and Ayers
The results of the analyses of total recoverable
resources, by resource type (conventional or unconven-
tional) and total basin resource were determined for the
seven basins, and the ratio of conventional to unconven-
tional gas was calculated (Fig. 10). For these 7 basins,
10 to 20 % of the hydrocarbon resources are conven-
tional and 80 to 90% are unconventional, which is
consistent with the concept of the hydrocarbon resource
triangle (Fig. 1). The Black Warrior and Wind River
basins (79 and 80% unconventional gas, respectively)
did not have publically available shale gas resources
values. We have subsequently reviewed the data on total
recoverable resources for 17 other basins in North
America with similar results, but there is still a lot of
uncertainty in the results, because many large gas shale
assets, such as the Haynesville, Eagle Ford, and Mar-
cellus shales were not included in the databases used to
calculate values of total recoverable resources.
From our analyses of 25 U.S. basins, it appears
probable that for every 1 Tcfe of oil and gas produced
from conventional reservoirs, there will be 5 to 10 Tcfe
of total recoverable resources gas from unconventional
gas reservoirs in those same basins. The total recover-
able resources approach requires that we know where
the gas is located, and we can use existing technology
to drill and produce the gas. However, it may or may
not be economic, depending on the gas prices and the
finding and development (F&D) costs. More work
needs to be done to determine how much of the total
156 
 recoverable resources can be produced economically
4 for various assumptions of gas price, F&D costs and the
3 location of the asset. For example, a lot of unconven-
7
Technology Requirements for Unconventional Gas Reservoirs
TOC
In coming decades, the production of natural gas
Start from unconventional gas reservoirs will occur in nearly
Author every major oil and gas basin in the world. Technology
transfer will be the key to economically developing
Search these worldwide unconventional gas resources. Most of
Help this technology has been developed in North America
during the past few decades. Yet, new tools and technol-
ogies are needed. The technologies that will most affect
the ability of the industry to successfully and economi-
cally produce gas from unconventional reservoirs fall
into several categories, including petrophysics, geosci-
ence, hydraulic fracturing, horizontal drilling, micro-
seismic analysis, water management, environmental
issues, and gas-to-liquids technology. Many of these
needs are being addressed by RPSEA.
RPSEA is a not-for-profit organization that
administers a $37.5 million annual research portfolio.
Petrophysics
Petrophysicists use well log, core and well test
data to describe the physical properties of formations
that affect the production of oil and gas. Because
unconventional gas reservoirs are generally low poros-
ity, low permeability, multi-layered formations, the use
Holditch and Ayers
tional gas may be producible but not accessible to a
market.
Approximately half of this budget is goes to ultra-deep
water research, with much of the rest directed to uncon-
ventional gas resources. RPSEA issues annual requests
for proposals and uses a matrix (Fig. 11) developed by a
Program Advisory Committee to guide its selection of
projects to be funded. The unconventional gas projects
fund will be distributed among coalbed methane (10%),
shale gas (45%), and tight sands (45%) reservoirs
(Fig. 11). Within each reservoir type, research needs are
prioritized as high, medium, or low (Fig. 11). The
objective is to fund projects that are most likely to
affect increased energy supply. High priority is given to
drilling, stimulation, completion, reservoir engineering
and exploration technologies in both gas shales and
tight sands (Fig. 11). More information about RPSEA
and upcoming requests for proposals are available on
their website (http://rpsea.org/).
of open-hole well logs to determine the formation prop-
erties is extremely important. We need better
technology to really pin-point the best layers in thick,
multi-layered formations. Also, we need much better
petrophysics methods and tools to characterize gas
157 
 shale reservoir properties and to recognize the best
4 zones to complete and to more accurately predict ulti-
3 mate gas recovery.
Specifically, we need to properly apply existing
7 logging tools that provide resistivity arrays, sonic
TOC arrays, imaging logs, and nuclear magnetic resonance
to determine porosity, permeability, and to describe the
Start
natural fractures. We must improve methods of combin-
Author ing well log analyses with special core analyses to
Search
Geosciences
Help
The use of seismic data to find the best locations
(sweet spots) to drill and complete unconventional gas
wells is extremely important. We need better methods
for multi-azimuth seismic diffraction imaging for frac-
ture characterization in low-permeability gas
formations. Also, we need seismic improvements that
allow evaluation of fracture systems and stress fields
within gas shale reservoirs, such as the Marcellus Shale.
Another recent technology that both needs to be
further developed in North America and applied world-
Stimulation and completion
To economically develop an unconventional gas
reservoir, every well must be successfully fracture-
treated to produce at commercial gas flow rates. In most
sandstone and coal seam reservoirs, most wells are ver-
tical. Nearly all recent gas shale reservoirs have been
developed using horizontal wells. In all cases, the wells
Holditch and Ayers
determine the proper number of flow units and to corre-
late flow units. In addition to porosity and permeability,
we also need petrophysical methods to measure
adsorbed gas in gas shales and coal seams, as well as
capillary pressure, relative permeability, and mechani-
cal properties for all rock layers. New logging tools,
like the recently developed sonic scanner (Fig. 12) may
be used to understand better natural fractures and per-
meability anisotropy.
wide is the use of microseismic mapping to determine
the extent of induced hydraulic fractures. When frac-
tures are induced in formations by pumping fluids at
high pressures, microseismic activity occurs in the rock
near the fracture (Fig. 13). With properly placed geo-
phones, we can map the microseismic noise and
determine the orientation of the fracture and, in gas
shales, the volume of rock that is affected by the
fracture.
must be fracture-treated. During the past few decades,
the industry has made many improvements in the frac-
ture stimulation technology for unconventional wells.
However, there is still much to be done to optimize
stimulation treatments.
158 
 When developing unconventional gas worldwide,
4 not well developed.
the first step is to export existing stimulation and com-
3 pletion technology from North America to the basin
7 under development. This is easier said than done,
TOC because it requires a very sophisticated and experienced
service company infrastructure that does not exist in
Start
many countries. Although Australia, China, India, and
Author
some countries in Western Europe have investigated
Search tight sands and/or coalbed methane projects for as
Help
Water management and environmental considerations
Nearly every source of energy, including wind,
solar, nuclear, and biofuels, as well as oil and gas, has to
consider both water and environmental issues associ-
ated with the production of the energy. Today, we
recognize that the use of water developing in many
sources of energy, such as biofuels, could be a limiting
factor. As such, the oil and gas industry must continue
doing research on ways to limit water use and to protect
the environment while still meeting the energy
demanded of the public.
Because water management issues are very
important in the domestic oil and gas industry, and
worldwide, RPSEA has awarded research contracts to
look at Barnett Shale and Appalachian gas shale water
management issues. The horizontal wells drilled to
Holditch and Ayers
much as a decade, in most cases, the infrastructure is
In addition, we need better fracture fluids and
better propping agents that can be transported in frac-
ture networks to keep the hydraulic fractures open. In
Figure 14, we illustrate that sustaining fracture area and
conductivity of gas shale reservoirs for enhancing long-
term production and recovery is very important, and
new products need to be developed to help keep frac-
tures open.
develop gas shales require a lot of water for both drill-
ing and fracture treatments. We need to develop
technologies for cleaning and reusing the returned frac-
ture water. In addition, we need to continue research to
reduce the environmental foot print as we develop
unconventional gas reservoirs. Along those lines,
RPSEA is working with the Houston Area Research
Center and Texas A&M University to manage the Envi-
ronmentally Friendly Drilling Systems Program, which
looks at a broad range of environmental issues. The
Environmentally Friendly Drilling program has spon-
sored disappearing road contests and is evaluating ways
to reduce the footprint of drilling operations in highly
forested areas, along seashores and in desert terrains.
159 
 Uses of natural gas
4
There are several types of energy that the public
3 and the industrial sector can select. Electricity can be
7 generated from boilers using oil, coal or natural gas or
TOC
heat from nuclear or geothermal sources. Electricity can
also be generated using wind farms or solar panel
Start farms. Critics point out limitations with every energy
Author
source, including water use, nuclear waste, land-use
footprints, endangering birds, and emitting carbon to
Search the atmosphere.
However, we need fuel for homes, cars, trucks,
Help
trains, boats, and planes. The fuels now used for trans-
portation are gasoline, diesel or jet fuel made from
crude oil. In the future, we should look more to biofu-
els, compressed natural gas and liquids made from
natural gas as other sources of transportation fuel.
In the very near future, natural gas will be used
more for generation of electricity, to replace coal as the
primary fuel. Many environmental organizations are
behind the efforts to use more natural gas to reduce car-
bon emissions as a short term solution. The oil and gas
industry in North America, and most likely in China
and India, can find enough gas in unconventional reser-
voirs to make this a viable option.
Conclusions
On the basis of decades of publications by many
engineers and scientists, and from the work our gradu-
ate students have performed during the past few years
Holditch and Ayers
Also, we can use natural gas as a liquid fuels and
for chemical feedstock. For example, natural gas can be
converted to liquid fuels (Fig. 15) using the Fischer-
Tropsch process. There are gas to liquid plants in South
Africa, Malaysia, and Qatar. At today’s gas prices,
these plants are economically marginal, but they repre-
sent a step in the right direction. More research should
lead to technical breakthroughs or even radical new
processes to convert the gaseous molecules into liquid
molecules that are more easily transportable.
Some individuals and organizations suggest that
we are running out of natural gas, because we have
experienced shortages periodically in the past. How-
ever, we now know that there is an extremely large ‘gas
resource’ both in North America and in the world. The
key to tapping that resource in a consistent, reliable
manner is to expand the market for natural gas. As the
size of the market increases, we can develop the known
accumulations, look for new accumulations in all oil
and gas basins, worldwide, and develop the technolo-
gies required to economically produce resources that
are deeper in the resource triangle.
that has been touched upon in this paper, we offer the
following conclusions.
160 
 1. Our evaluations of hydrocarbon production and
4 resource data from North American basins that
3 have produced large volumes of unconventional
gas confirm the concept of the resource triangle,
7 as suggested by Masters (1979).
TOC 2. Natural gas resources are distributed log-nor-
mally in nature and can be thought of in terms of
Start
a resource triangle. As gas prices increase and
Author technology improves, more natural gas can be
developed and produced.
Search
3. Thus far, our evaluations of North American
Help basins indicate that the technically recoverable
resource of unconventional gas in any basin will
be approximately 5-10 times greater than the ulti-
mate recovery (cumulative production plus
proved reserves) from all conventional oil and gas
reservoirs in the same basin.
4. In 2007, unconventional gas production was 9.15
Tcf, and it accounted for 47% of the U.S. dry gas
production; eight of the top ten U.S. gas plays
were producing from unconventional reservoirs.
Acknowledgments
We would like to thank the members of the Cris-
man Institute for Petroleum Research for providing the
funding for the students who have been working on
well stimulation and resource assessments of unconven-
tional gas reservoirs for the past 5 years. Also, we thank
graduate students Husameddin Almadani, Kirill
Holditch and Ayers
5. Unconventional gas production, reserves, and
resources are increasing rapidly; unconventional
gas, led by shale gas, is expected to provide the
majority of the U.S. gas supply growth in coming
decades.
6. Unconventional gas resources in North America
have been underestimated, and most likely, the
worldwide volumes of unconventional gas are
much greater than reported.
7. Unconventional drilling and gas production are
strongly impacted by technology and gas prices.
The oil and gas industry should continue develop-
ing new technology; we have touched on only a
few of these needs in this paper.
8. To develop unconventional gas resources world-
wide, it will be necessary to transfer the technol-
ogy developed in North America in the past few
decades to international oil and gas basins. The
application of industry best practices in every
phase of unconventional gas reservoir develop-
ment will be critical to success.
Bogatchev, Kun Cheng, Cecilia Flores, Nick Groves,
Raj Malpani, Obinna Ogueri, Charles Ozobeme, Sara
Old, Nicholas Pilisi, Sunil Ramaswamy, Kalwant
Singh, Nick Tschirhart, Yilin Wang, Yunan Wei, and
Ram Yalavarthi, whose research results are partially
incorporated into the ideas presented in the paper.
161 
 References
4
3 BP, 2009, www.bp.com.
EIA, 2008, Annual Energy Outlook 2008 with Projections to
7 2030: Energy Information Administration, U.S.
TOC
Department of Energy, Washington, DC 20585, DOE/
EIA-0383, p. 215.
Start EIA, 2009a, Annual Energy Outlook 2009 – with Projections
to 2030: Energy Information Administration, U.S.
Author Department of Energy, Washington, DC 20585, DOE/
Search EIA-0383, p. 221.
EIA, 2009b, U.S. Crude Oil, Natural Gas, and Natural Gas
Help Liquids Reserves – 2007 Annual Report: Energy
Information Administration, Office of Oil and Gas,
U.S. Department of Energy, Washington, DOE/EIA–
0216, 50 p., Appendices.
Flores, C.P., 2008, Technology and Economics Affecting
Unconventional Reservoir Development: Texas A&M
Univ. M.S. Thesis.
Gray, J.K., 1977, Future gas reserve potential Western Cana-
dian Sedimentary Basin: 3rd National Technical Con-
ference, Canadian Gas Association.
Holditch, S.A., 2006, Tight Gas Sands: Journal of Petroleum
Technology, Distinguished Author Series, p. 84-90.
Holditch and Ayers
Holditch, S.A., 2009, Stimulation of Tight Gas Reservoirs
Worldwide, Paper OTC 20267-PP: Offshore Technol-
ogy Conference, p. 12.
Kawata, Y. and K. Fujita, 2001, Some Predictions of Possible
Unconventional Hydrocarbon Availability until 2100:
Paper SPE 68755, SPE Asia Pacific Oil and Gas Con-
ference, p. 10.
Masters, J.A., 1979, Deep Basin Gas Trap, Western Canada:
AAPG Bulletin, v. 63, No. 2, p. 152-181.
Navigant, 2008, North American Natural Gas Supply Assess-
ment: Navigant Consulting, Report prepared for
American Clean Skies Foundation.
Old, S., 2008, PRISE: Petroleum Resource Investigation
Summary and Evaluation: Texas A&M Univ. M.S.
Thesis, 127 p.
Old, S., S.A. Holditch, W.B. Ayers, and D.A. McVay, 2008,
PRISE: Petroleum Resource Investigation Summary
and Evaluation: Paper SPE 117703, SPE Eastern
Regional/AAPG Eastern Section Joint Meeting, p. 16.
Rogner, H. H., 1997, An Assessment of World Hydrocarbon
Resources: Annual Review of Energy and the Envi-
ronment, v. 22, p. 217-262.
162 
 4 Table 1. Top ten gas producing fields in the U.S. in 2007. All but Hugoton and Prudhoe Bay produce from
3 unconventional reservoirs (data from EIA 2008).

7 2007 Estimated
Rank Field Name Locate (State) Production Discovery Year
TOC (Bcf & %)
Start 1 San Juan Basin Gas Area CO & NM 1,320.7 1927
Author 2 Newark East (Barnett Shale) TX 1110.3 1981
Powder River Basin (Coal-
Search 3 MT & WY 442.0 1992
bed)
Help 4 Jonah WY 366.3 1977
5 Hugoton Gas Area KS, OK & TX 357.8 1922
6 Pinedale WY 313.4 1955
7 Carthage TX 231.7 1936
8 Natural Buttes UT 170.4 1940
9 Wattenberg CO & NM 169.0 1970
10 Prudhoe Bay AK 168.7 1967
Top 10 Volume 4,650.3
Top 10 Percentage of U.S.
22.90%
Total
3

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 4 Table 2. Oil industry major events since the discovery of rotary drilling (Flores, 2008).
3 Period Global Events Effect
7 1930s
Rotary drilling. Rotary drills become standard technique (1930s). Acidizing is invented (1932)
TOC Acidizing. and becomes a wide spread technology
1950s Hydraulic fracturing. Development of hydraulic fracturing (1949) and widespread use in the 1950s.
Start
Price Increases 1st Oil Crisis: Arab Oil Embargo (1973). Oil price increases from $3 (1973) to
Author 1973 $12 (1974) per barrel.
Fracturing Better hydraulic fracturing technologies are developed.
Search
Price Increases 2nd Oil Crisis: Oil price increment from $14 (1978) to $36 (1981) per barrel.
Help 1978
Seismic Seismic technology to locate fractures, sweet spots.
Horizontal drilling Horizontal wells and water treatment fractures. First horizontal well in the Aus-
tin Chalk, Texas (1985)
1980s
Price Decreases Oil price Collapse (1986) reduces prices from $37 (1980) to $14 (1986) per
barrel.
Better technology. 3D seismic horizontal drilling and better hydraulic fracturing technology
1990s
improve flow rates and recoveries.
Price increases Oil price increment from $29 (2000) to $65 (2006) per barrel to $140 (2008)
2000s and the widespread use of multilateral drilling improves well performance, as
Multilaterals well as continued improvements in hydraulic fracturing.
3

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 4 Table 3. Events affecting Austin Chalk production (Flores, 2008).
3 Year Event Cumulative Production (MMBOE)
7 1932 Acidizing 27
TOC 1949 Fracturing 139
1970s Increased prices 890
Start
1990s Horizontal wells and improved fracturing 2,240
Author
3
Search
Table 4. Distribution of unconventional gas resources, worldwide (from Kawata and Fujita, 2001; after Rogner, 1996).
Help
Coalbed Shale Tight Sand
Total
Region Methane Gas Gas
(Tcf)
(Tcf) (Tcf) (Tcf)
North America 3,017 3,840 1,371 8,228
Latin America 39 2,116 1,293 3,448
Western Europe 157 509 353 1,019
Central & Eastern Europe 118 39 78 235
Former Soviet Union 3,957 627 901 5,485
Middle East & North Africa 0 2,547 823 3,370
Sub-Saharan Africa 39 274 784 1,097
Centrally planned Asia & China 1,215 3,526 353 5,094
Pacific OECD 470 2,312 705 3,487
Other Pacific Asia 0 313 549 862
South Asia 39 0 196 235
World 9,051 16,103 7,406 32,560

3
Holditch and Ayers 165 
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Figure 1. Resource triangle for natural gas (from Holditch, 2006; after Masters [1979] and Gray [1977]).
3

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Figure 2. Onshore unconventional gas production is the only growing component of the U.S. gas supply (EIA, 2008).
3

Holditch and Ayers 167 

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Figure 3. U.S. annual shale gas production (Navigant, 2008).

3

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Figure 4. Coalbed and shale gas proved reserves, 2006 and 2007 (from EIA, 2009b).
3

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Figure 5. Recent growth in natural gas production in the Lower 48 States, attributed largely to unconventional gas
(EIA, 2009a).
3

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Figure 6. EIA AEO unconventional gas production forecasts consistently under-estimate actual production (Navigant,
2008).
3

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Figure 7. Technology and economic events affecting the oil industry (www.bp.com).
3

Holditch and Ayers 172 

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Figure 8. Affects of price and technology on Austin Chalk production (Flores, 2008).
3

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Figure 9. Affects of price and technology on Cotton Valley production (Flores, 2008).
3

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Figure 10. Percentages of conventional and unconventional hydrocarbon resources in 7 reference basins.
3

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Figure 11. Technology needs for unconventional gas reservoirs (courtesy of RPSEA). A RPSEA Program Advisory
Committee recommended that funding be prioritized with CBM receiving 10% and shale gas and tight sand projects
each receiving 45% of the allotted unconventional gas research funds. Within each reservoir type, research needs are
prioritized as High, Medium, or Low.
3

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Figure 12. Use of sonic scanner to interpret reservoir anisotropy (courtesy of Schlumberger).
3

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Figure 13. Use of microseismic mapping to optimize fracture stimulation (courtesy of Schlumberger).
3

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Figure 14. Evaluating conductivity of induced fractures during shale gas reservoirs stimulation (courtesy of Schlum-
berger).
3

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Figure 15. Use of natural gas as feedstock for other products.

3

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