Over the past decade, the biggest story in the US energy sector has been hydraulic fracturing, also known as fracking. This drilling technique has enabled oil and gas producers to extract oil and natural gas from shale rock, thus increasing oil and gas production inside the US.
Media pundits have claimed that this form of oil and gas extraction is a technological breakthrough, which has enabled the US to become the world’s largest oil and gas producer, and will enable the US to become energy independent by the year 2020.
While there are a lot of myths that surround this technology (it poisons the drinking water, or it causes cancer) the biggest one myth, is that, it’s new technology. Related: Huge 100 Billion Barrel Oil Discovery Near London
The Civil War and its Fracking discovery
The History of Fracking can be traced back to 1862. It was during the battle of Fredericksburg VA., where civil war veteran Col. Edward A.L. Roberts saw what could be accomplished when firing explosive artillery into a narrow canal that obstructed the battlefield. This was described as superincumbent fluid tamping.
On April 26th, 1865, Edward Roberts received his first patent, for an “Improvement” in exploding torpedoes in artesian wells. In November of 1866, Edward Roberts was awarded patient number 59,936, known as the “Exploding Torpedo.”
This extraction method was implemented by packing a torpedo in an iron case that contained 15-20 pounds of powder. The case was then lowered into the oil well, at a spot closest to the oil. From there, they would explode the torpedo by connecting the top of the shell with wire to the surface, and then filling the borehole with water.
This invention increased oil production by 1200 percent from certain wells within a week of being implemented. This also led to the founding of Roberts Petroleum Torpedo Company, which charged $100-$200 dollars per rocket, plus a royalty of 1/15 of the profits generated from the product. Related: Why The Oil Price Collapse Is U.S. Shale’s Fault
The Birth of Commercial Hydraulic Fracking
The first form of fracking innovation didn’t take place until the 1930s, when drillers used a non-explosive liquid substitute called acid, instead of nitroglycerin. This made wells more resistant to closing, thus increasing productivity.
Even though the birth of fracking began in the 1860s, the birth of modern day hydraulic fracturing began in the 1940s. In 1947, Floyd Farris of Stanolind Oil and Gas began a study on the relationship between oil and gas production output, and the amount of pressurized treatment being used on each well.
This study lead to the first experiment of hydraulic fracturing, which occurred at the Hugoton gas field, located in Grant county, Kansas in 1947. In this experiment, 1,000 gallons of gelled gasoline and sand were injected into a gas producing limestone formation with a depth of 2,400 feet. This was then followed by an injection of a gel breaker. While this experiment failed to produce a significant production increase, it did mark the beginning of hydraulic fracturing.
Despite the failure in the Hugoton gas field experiment, research continued. On March 17, 1949, Halliburton conducted two commercial experiments; one in Stephens county Oklahoma, and another in Archer County, Texas. These results were much more successful.
After achieving experimental success in 1949, fracking quickly became commercialized. In the 1960s Pan American Petroleum began using this drilling technique in Stephens county Oklahoma. In the 1970s, this extraction method was being used in the Piceance Basin, the San Juan Basin, the Denver Basin, and the Green River Basin.
This widespread use even garnered the attention of President Gerald Ford. In his 1975 state of the union address, President Ford promoted the development of shale oil resources, as part of his overall energy plan, as a means of reducing foreign oil imports (Power Plays, Robert Rapier, P. 222). Related: North American LNG Export Dream Evaporating
Modern Day Fracking
Modern day fracking didn’t begin until the 1990s. This originated when George P. Mitchell created a new technique, which took hydraulic fracturing, and combined it with horizontal drilling.
The Shale Oil Boom
The technology known as hydraulic fracturing isn’t new, and has been around for 100 plus years. Like the cell phone, computer, and automobile, it’s been innovated, and renovated over long periods of time. The question remains: why did this shale oil production boom occur so long after the technology was created?
The correlation of these two charts, which show production trends dating back to the 1990s and price trends dating back to 2000, will help explain why.
Energy Information Agency (EIA)
In conclusion, what enabled the oil and gas industry to extract oil from shale rock over the past 7 years was higher prices. If it weren’t for higher oil prices, the capital investment needed in the oil and gas sector, wouldn’t have occurred, and US oil production would have continued to decline.
By John Manfreda of Oilprice.com
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John majored in Pre-Law at Frosburg State Universtiy and received his MBA at Trinity University. He has co-authored The Petro Profit report and dividend stock… More