Committee on Resource Evaluation

Mid-year Meeting

December 10, 2001

Minutes

The Committee on Resource Evaluation (CORE) met for its Mid-year Meeting at the Ellison Miles Geotechnology Institute (Brookhaven College) in Dallas on December 10, 2001. The meeting commenced at 8:30 am; following members and invited guests were present:

Members:

Bob Gunn
Earl RitchieVice-Chair
Ben Hare
Suzanne Weedman
John Ritter
Ron Grubbs
Pulak Ray
Bill Pollard
Paul LaPointe
Richard Nehring
Rusty Riese
Naresh KumarChairman

Invited Guests:

Dave CookMineral Management Service (MMS)
Gary LongEnergy Information Administration (EIA)
Steve GrapeEnergy Information Administration (EIA)
Ken MallonSociety for Petroleum Engineers (SPE) Representative

(The items in italics represent action items. The name of persons responsible are also shown)

Following welcome remarks by Naresh Kumar, the meeting started with a presentation Gary Long and Steve Grape from the Dallas office of EIA. Gary presented a review of the “Campbell/Laherre” curve which “predicts” a world oil production peak in the year 2004. Using a 3 Trillion Barrel ultimate recovery, and various economic growth factors, EIA estimates see the peak arriving sometime between 50 and 100 years! The big difference is field growth, which Campbell and others chose to ignore. Gary also talked about the domestic gas production issues. For the US, gas production is directly tied to wells drilled. In fact, almost 30% of the gas reserves come from wells that are less than one year old. Hence, economic conditions necessary to keep gas wells drilling are critical for maintaining the domestic gas supply. EIA has also looked at issues concerning the reserves that are reported by various state agencies. Some of this data gets significantly revised later on. Thus, good reporting by various state agencies is critical for having good reserves data available for the nation. Gary also talked about the requirements mandated by EPCA Section 604, a bill passed in 2000. This requires federal agencies to estimate the total endowment of all federal lands, ultimate recovery for all producing fields from federal lands and the access and production regulations applicable to these lands. This work is being carried out by USGS, BLM, and EIA and will be reported to the Congress in 2002. Steve Grape summarized the reserves and production figures for 2001 and compared them to 2000. Because of higher prices there were more exploratory wells and development wells drilled in 2001. Gas well completions increased by 34% and development drilling increased by 45%. Additionally, because of better application of technology, total discoveries per gas well drilled increased by 30%. Gary’s presentation has been circulated among the committee members. Steve’s presentation, if made available, will also be circulated among the committee members.

Suzanne Weedman gave a review of various assessment activities ongoing at the US Geological Survey. Following the release of world petroleum assessment in 4 CD-ROMs, the survey is now going to assess a few of the boutique provinces that were not assessed for the 2000 report, and will continue to focus on specific global energy issues. These include Arctic Resources, reserve growth in the North Sea and western Canada, and petroleum systems of global deltaic systems. The final goal is to develop a model that explains variations in the abundance and type of oil and gas in deltaic complexes that provides a quantitative prediction of the distribution and scales of various reservoir types. Some high potential "boutique provinces" will be assessed in the coming year, including the Mackenzie Delta. A report for the Energy Policy and Development Act (2000) on five Rocky Mountain basins will be released in April of 2002. This study will produce a GIS with data layers of energy reserves and resources on federal lands and the restrictions and impediments to their development. The NPRA assessment is expected to be released in May 2002, at the regional AAPG meeting in Anchorage (prior to the June, 2002 BLM lease sale). An assessment of continuous gas resources for 25 US basins is also ongoing, and the first releases are expected in 2002. Suzanne mentioned that an NRC workshop on gas supply issues is being planned for April/May 2002. This workshop will be hosted by the USGS and she would invite CORE's participation in it (Weedman).

Dave Cook and Pulak Ray reviewed the layout and data recently released by MMS in two CD-ROMs: “Atlas of Gulf of Mexico Gas and Oil Sands as of January 1, 1999” and “2000 Assessment of Conventionally Recoverable Hydrocarbon Resources of the Gulf of Mexico and Atlantic Outer Continental Shelf as of January 1, 1999”. The data is organized by age and by depositional systems. MMS has defined almost 100 plays in the Gulf and Atlantic areas. This data can also be loaded into a GIS and utilized by individual organizations in conjunction with their own data. Because the deep-water and subsalt plays are fairly recent, the 2000 assessment shows significant increase in resources over the 1995 assessment. There has been little new activity in the Atlantic OCS. However, because of the Canadian discoveries, the resource allocation in this area has also increased.

Richard Nehring presented an outline scheme for evaluating resource assessments. He described four criteria that should be applied to any assessment: Specificity, Replicability, Falsifiability (Verifiability) and Selection and Use of Appropriate Methodology. Ben Hare suggested that assessments should specify the resources being assessed. They should also describe the data that was available and utilized. Following additional discussion, it was decided that members of the committee would provide Richard feedback on his draft. A copy of Richard’s original write-up is enclosed. Richard would try to revise this document in the format of “Policy Statement” for consideration by the full committee for its annual meeting in March 2002 (Nehring).

Earl Ritchie described to the committee the efforts he has undertaken to design the Committee’s web site. Robbie Gries, the President of AAPG, has emphasized that she would like to see Committee Web pages complete, informative and current. As a group, we need to decide what we want to include in this web site and then we can decide how and where to host it. Ideally, we would like it to be directly linked to the AAPG web site but we would like to be easily accessible within the AAPG site. AAPG would probably let each Committee custom design its own web site. If that is not feasible, we could put the information required of the Committee by AAPG on the AAPG site and host the rest at an independent site at a cost of approximately $400 per year. Ron Grubbs and Naresh Kumar agreed to help Earl in his web site design effort. Committee members also agreed to provide Earl feedback on what is needed on our website (Ritchie, Grubbs, Kumar). As an example, these minutes need to be on the AAPG part of the committee web site (Ritchie)

Ben Hare circulated a draft “policy statement” on Atlantic OCS resources. This statement is primarily based on Ben’s May 2001 to the House Energy and Minerals Subcommittee testimony. The discussion centered on the format of the document. The general feeling was that it should be focused, and should generally follow the format of other policy statements already approved by the AAPG Executive Committee. Committee members agreed to provide specific feedback to Ben in time to have a draft for the Committee to consider at the March 2002 meeting (Hare).

Bill Pollard led a discussion on the need to educate the “common public” on resource and energy issues. Although AAPG has been active in reaching its own membership and has made efforts to educate the lawmakers through various testimonies and position papers, these efforts reach a very small audience. He offered his experience in publishing an article on Global Warming in Fort Worth Star Telegram as an example of challenges faced by the industry in reaching the public. Rusty Riese mentioned that other organizations are already attempting to do so and we should collaborate with them in this effort. He offered project NEED as an example. BP funds this project and its objective is to train High School teachers on energy issues. It was agreed that Naresh Kumar would ask the AAPG President and the Executive Committee to form a committee for the express purpose of developing materials suitable for the general public (Kumar. This letter has been already sent to Robbie Gries).

Ken Mallon attended the meeting as SPE representative. He reviewed for the committee joint efforts that have already taken place among SPE/WPC and the AAPG in publishing the resource definitions and the supplement volume that accompanies these definitions. He would like to see some arrangement that would allow the marketing of these publications through AAPG channels. Some major companies are already using these definitions. Naresh Kumar will direct Ken in contacting the right person at the headquarters staff. Naresh Kumar will also approach Larry Nation to recommend that Explorer consider giving publicity to these joint SPE/WPC/AAPG efforts (Kumar).

Ken also asked the committee if AAPG would continue to work with SPE in discussing issues related to resource definitions and their use, topics covered in the supplemental volume and their use, and the correlation of definitions among various countries, organizations and companies. As an example, a glossary of petroleum terms is being considered at this time. The committee informed Ken that we would be happy to actively continue cooperating with SPE in these efforts.

Richard Nehring raised the question of assessment issues outside the US. So far, the committee has evaluated USGS methodology for World Assessment but has not considered other international assessment topics. If any of the members have any suggestions, please provide them as soon as possible.Naresh Kumar will contact Wolfgang Schollnerger and ask for recommendations. We would like to have presentation at the Annual Meeting in March 2002 on a non-US topic (Kumar. Naresh has already contacted Wolfgang, he has passed our query to Francis Harper at BP. We should hear from BP soon.)

Richard Nehring also expressed his personal appreciation for Bill Stanton’s work while a member of the committee. Bill was instrumental in expanding the committee’s charter to cover international matters. In order to honor his memory, the committee decided that individual members would consider making donations to the AAPG Foundation, Distinguished Lecturer Fund. AAPG would keep tab of these individual donations but would also recognize them on behalf of CORE. Richard also reminded the group that because of tax considerations, it would be preferable to make these donations by December 31, 2001. Naresh Kumar agreed to contact AAPG Foundation on this matter The committee would also recommend to the Distinguished Lecturer Committee to consider inviting speakers who are expert on resource issues. (Kumar. Naresh has already spoken to Sherry Hyer at the Foundation and has sent a note to all the committee members. Paul Weimer, chairman of the Distinguished Lecturer Committee has also been informed of our wishes).

The meeting adjourned at 2:30 pm.