The Evolution of the U.S. Shale Revolution
Shale drilling across North America has proven to be a game changing phenomenon for the energy industry. The present momentum has inspired experts to project that most of the growth in oil demand will come from shale plays in the coming years.
The lion’s share of that growth will come from shale fields in the United States, where drillers are harnessing state-of-the-art technologies in hydraulic fracturing to tap into oil and gas trapped within shale rock formations.
Technological innovation has been the driving force in the fracturing world, and the results have been nothing short of revolutionary, allowing drillers to access oil and gas reserves once thought to be irretrievable.
In little more than a decade, hydraulic fracturing technologies have lifted U.S production of gas retrieved from shale rocks from almost nothing to an astonishingly productive 50 bn cubic/ ft per day as of 2017, this according to the U.S Energy Administration. In November of 2017 U.S oil production surpassed 10 million barrels per day which eclipsed the previous all-time high reached back in 1970. Further expansion of U.S shale drilling is projected to reach up to 12 million barrels per day by 2019, which would exceed both Russia and Saudi Arabia to assert the United States as the top oil producer in the the world.
Soaring U.S. output has cut the nation’s oil imports by a roughly a fifth over the last decade, providing lucrative jobs in rural communities and lowering consumer prices for domestic gasoline by as much as 37 percent from the price peak seen in 2008. The subsequent boom experienced in American shale fields has been dubbed a “Shale Revolution” accordingly, and the impact has been global.
Everything Has Changed
The consequences of the so-called “Shale Revolution” have created a chain reaction of positive side effects for the O&G industry. Abundant U.S gas production created a cheap energy source that displaced the use of coal for electrical power. Additionally, any demand for importing natural gas was curbed as the United States instead became self-sufficient in production, which has created a reversal of fortune that has allowed the U.S to become an exporter of both coal and natural gas.
The ripples felt by the “Shale Revolution” extended to oil production as well, which has seen U.S operators propel American production to the point of rivaling the Middle East , and forcing OPEC nations (namely Saudi Arabia) to try and flood the market in an effort to undermine the profitability of American oil production in hopes of driving away their U.S competition.
Initially, the fall in the price of oil caused by the Saudi scheme to flood the market had a detrimental impact upon U.S shale production, forcing some operators to downsize or cease drilling. But the resilience of operators to innovate and survive led to overhead cost cutting fueled by the adoption of technological advancements.
Shale drilling has evolved to adapt to changing market demands, and presently operators as a whole are mostly able to break even at $50 per barrel prices, and in some instances lower. At the time that this article was published oil is trading above $64 per barrel, which is lucrative enough for a number of U.S. producers to expand drilling and attract investors.
In response to the recent boom, Congress repealed the 1973 ban on the exportation of American oil, and U.S. energy exports now compete with OPEC for buyers in Asia. The United States now exports an estimated 1.7 million barrels per day of crude, and this year the U.S is expected to boast a capacity to export natural gas at 3.8 billion cubic feet per day.
All this is to say that technology has created a paradigm shift, and U.S shale production has been the most instrumental agent of change for the global market. The expectations about what is achievable through drilling have been transformed and the status quo has been challenged as worries about resource scarcity have been placated, at least for the moment, by the promise that supplies are plentiful.
Looking back the industry will owe it all to the “Shale Revolution” within the United States that sought solutions for overhead obstacles and promoted technological innovations as a road map past market volatility and geopolitical challenges.
But innovation never rests, and the market will have to remain adaptable to the ever changing realities of drilling as new technologies and complications arise.
Forward-Thinking Industry Leaders Recognize that Technology is the Key to Innovation
The innovations that Stage Completions systems provide has resulted in potential cost reductions for fracturing operations. And a number of operators have experienced better real time control during pumping operations, and more accurate treatment modeling has translated itself into improved production results across the board.
The trending emphasis on choosing the best completion practice for each well application should encourage the industry to collectively give serious consideration to these systems.
To date, the industry has been resilient in responding to new technical challenges. And engineering a way past this latest set of market driven obstacles will have very tangible applications for how the industry as a whole tackles shale plays.
As the global demand for fracking continues to climb, operators will have to innovate to meet new challenges in the field and to the bottomline of doing business as they emerge. Stage Completions seeks to be an innovator on global terms, able to impact the industry and sustainability of our world as a whole with forward thinking initiatives that have the potential to become industry standards.
About This Blog
In this blog, we hope to engage the oil and gas community with information about multistage fracturing. We think analyzing and offering our expertise about the ways our industry is evolving will help others seek the most innovative technologies and practices as they become available. If there’s a subject you’d like to know more about, please let us know. Thank you for joining us in the conversation.