The goal of the Stripper Well Consortium (SWC) is to enhance the ability of the domestic production industry to keep stripper wells producing at economic production rates in an environmentally safe manner, maximizing the recovery of domestic hydrocarbon resources.
The Pennsylvania State University (Energy Institute), University Park, PA 16823
The United States has more oil and gas wells than any other country. As of December 31, 2004, there were more than half a million producing oil wells in the United States. That is more than three times the combined total for the next three leaders: China, Canada, and Russia. With nearly as many producing natural gas wells, the United States is the worldwide leader in that category as well. However, most of these wells produce relatively small volumes of oil and gas, often on an intermittent and marginally economic basis. Wells that produce 10 barrels of oil or less per day, or 60 thousand cubic feet (Mcf) of natural gas or less are commonly called “stripper” wells. The Interstate Oil and Gas Compact Commission (IOGCC), which reports the annual status of U.S. stripper wells, recorded 394,016 stripper oil wells producing an average of 1.9 barrels of oil per day, and 326,750 stripper natural gas wells producing an average of 19.3 Mcf per day, as of January 1, 2010.
The number of producing stripper wells changes depending on how many wells enter the ranks (by declining in production) and leave the ranks (by increasing production or being plugged and abandoned) each year. The United States’ stripper oil well population has been gradually declining over the past decade. Although a net of about 8,000 aging oil wells drop to stripper status each year, roughly another 14,000 are plugged and abandoned, leaving a net reduction in the oil well total of about 6,000 wells per year. At the same time, a net of nearly 14,000 gas wells per year, on average, have dropped to stripper well status over the past decade (about 17,000 per year during 2000 – 2003). Roughly 3,000 – 4,000 stripper gas wells are plugged and abandoned in the United States each year on average, resulting in an average net increase in the stripper gas well population over the past decade of about 10,000 wells per year.
The SWC is a partnership that includes domestic oil and gas producers, service and supply companies, trade associations, academia, the Department of Energy’s Strategic Center for Natural Gas and Oil (SCNGO) at the National Energy Technology Laboratory (NETL), and the New York State Energy Research and Development Authority (NYSERDA).
Leadership and active industrial participation are essential to making the SWC a success. The SWC has a constitution and bylaws, and each SWC member appoints one representative to a Technical Advisory Committee. The Technical Advisory Committee is responsible for steering the technical direction of the consortium and for electing a seven-member Executive Council. The Executive Council is responsible for selecting from solicited proposals, the research projects to be funded.
Research is conducted in three broad areas identified as key challenges to stripper well productivity: reservoir remediation, wellbore clean-up, and surface system optimization. Research outside of these three areas may be considered pending approval of the program sponsors. Specific research projects are developed by the membership using a standardized proposal template. Proposal submission is limited to full members of the consortium and collaboration among full members is encouraged. Projects are funded on an annual basis. Project participants must contribute at least 30 percent of the cost of each project in the form of cash or in-kind support.
Of the current total of 65 members, more than 80 percent are companies within the domestic industry, split roughly between producers and service/supply companies.
Each year, the SWC holds two open technology transfer workshops where the results of the research are presented to the industry. The SWC also publishes a newsletter on its website and highlights specific projects in other DOE publications. A complete listing and abstracts for all of the funded projects, as well as other SWC information, are available online at http://www.energy.psu.edu [external site].
Stripper wells contribute to the economy by supporting employment in smaller communities throughout the United States, and by helping to avoid an even greater transfer of American wealth overseas in return for imported oil. Because most stripper wells are operated by small companies in communities far from major cities, the economic benefits from stripper production remain focused at the regional or local level. The IOGCC estimates that for every $1 of stripper oil or gas production, $1.01734 of economic activity is created. About 10 American jobs are dependent on each million dollars of stripper production.
One way to look at the economic impact of stripper wells is to calculate the loss to the economy when stripper wells are plugged and abandoned. For example, roughly 160,000 jobs are dependent on stripper well production. If the U.S. had to import all of the oil and gas currently provided by stripper wells, it would cost Americans nearly $45 million each day. The loss of severance tax revenue from stripper wells plugged in 2003 cost producing states more than $19 million dollars. If all stripper wells were to be plugged, the states would lose nearly $700 million in annual revenue.
The Stripper Well Consortium (SWC) develops low-cost technologies that help keep these stripper wells operating. The benefit to the rural areas where stripper well production plays an important economic role will be job creation and enhanced economic growth. The benefit to the larger citizenry will be reduced oil and gas imports.
The Stripper Well Consortium (SWC) has been active since 2001, funding between 9 and 14 projects per year. A total of 91 projects have received cost-share funding under the SWC program. This project summary focuses on work completed since May 2004. Some of the technologies that have been successfully developed by the SWC include:
Technology transfer is very important ot th success of this project. The SWC has published a brochure, "Keeping the Home Wells Flowing: Helping Small Independent Oil and Gas Producers Develop New Technology Solutions,” that highlights the importance of stripper wells and the role they play in helping to meet the nation’s energy demand. They have also developed a Public Broadcasting program, “Independent Oil: Rediscovering Americas Forgotten Wells,” which presents a similar message. Both of these products have been widely distributed.
Since May 2004 the SWC has completed a number of tasks:
The project is complete and all R&D projects funded under this agreement have been completed. PSU is in the process of writing their final report and closing out each subcontract. The SWC is continuing under agreement DE-FE0003616, which runs through 2016. Details and results from the projects funded through the SWC can be found on the SWC website [external site].
“Keeping the Home Wells Flowing” brochure available upon request at http://www.energy.psu.edu
“Independent Oil: Rediscovering America’s Forgotten Wells” video available upon request