2018 OFFICIAL PUBLICATION OF THE MONTANA PETROLEUM ASSOCIATION
OIL AND GAS 101
By Montana Petroleum Association
e rst step in any oil and gas development is exploration and discovery.
Petroleum hydrocarbons are the product of millions of years
of plant decay which now inhibit porous rock formations. roughout
history, oil seeps (above surface) have been discovered around
the country, including Montana’s very own Glacier National Park in
the early 1900’s. While this provides a clear indication to explorers of
proven reserves, most discoveries are not quite as simple as stumbling
upon a bubbling pool of “Texas tea”.
ousands of feet below the surface, shi ing and movement of
tectonic plates has created traps for these deposits. Salt domes, for
example, are created in sedimentary rock by the upward force of a
salt mass, creating a dome-like trap for oil and gas. Prior to the 1901
oil discovery in Beaumont, TX, using salt domes as an indication of
potential oil was unheard of.
Today’s exploration geologists have advanced methods to help locate
oil and gas, including typographical maps, aerial photography,
sound waves, and 3D seismic projections to detect traps and potential
deposits below ground. All these resources accompany more than a
century of oil and gas exploration and production history in the U.S.
Success rates in discovering petroleum have increased dramatically
with improvements in technology. is means that fewer dry holes
are drilled, which is good news for the environment. Better technology
= less environmental impact and more productive wells.
In addition to new methods of discovery, modern drilling practices
have led to exponential growth and production in the oil and gas industry,
which in turn has helped to energize the U.S. economy. Most
notably, innovation in the ability to recover substantial amounts of oil
and natural gas from shale has ended the conversation about peak oil.
e oil and gas industry is made up of a broad spectrum of explorers,
producers, laborers, environmental consultants, geologists, and
engineers, to name a few. A er the exploration phase, it takes several
steps and an enormous amount of labor, expertise, and investment to
bring oil and gas from below ground into our everyday lives. To make
this possible, there are three sectors; upstream (exploration, drilling,
production), midstream (pipelines), and downstream (re ning).
A er researching where potential reserves may be, the next step is
for companies to secure lease rights from mineral owners, along with
the necessary regulatory approvals, including an approved application
for a permit to drill (APD).
en, a crew is brought in to prepare the drilling area. e drilling
rig is brought in and set up to commence construction of the well
bore. is is a 24/7 operation, with rotating crews to keep operations
going at all times. As drilling takes place, operators are continuously
monitoring activity to keep workers and the environment safe.
Wells can be drilled vertically, which has been the most common
method until recently, or directionally. at means that operators can
gradually turn the drill pipe laterally into a formation until it is completely
Once the well is drilled and proves economic to put into production,
the rig is taken o the location and a completion (frac) crew
moves in. Most horizontal wells today utilize hydraulic fracturing to
free up trapped oil and natural gas from non-permeable formations
like shale. is process utilizes a high-pressured mixture of water,
sand, and chemical additives to bring oil and gas to the surface.
Once a well has been frac’d, or a er the well is drilled and found productive
without hydraulic fracturing, the location is made ready for
production. is involves setting up a tank battery (storage tanks) to
collect oil and produced water, which is a natural by-product of this
kind of recovery. Storage tanks hold uid until it is shipped by truck or
pipeline to nishing locations (gas plants/re neries/or disposal wells).
A er drilling, a pumping unit is placed on the wellhead. It pumps
oil (and water) into owlines that send uid to what is called a treater.
e treater (or separator) uses the natural e ects of gravity, along
with heat, to separate oil, water, and gas. From the treater, oil and water
move through owlines to the tank battery, and gas is either ared
on location as allowed by law or captured and sent to a processing
facility through a pipeline known as a gathering line.
Stored oil and water is recorded daily by lease operators (aka
Pumpers) who measure the tanks each day and provide noti cation
when it’s time for water and oil haulers to pick up a shipment. Oil and
natural gas can also be shipped from location by pipeline or trucked
o to a railhead for re ning, where that age-old plant decay is nally
made into feedstock or fuel for everyday consumer use.
Learn more at www.montanapetroleum.org
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