In 2022, almost 7.8 million barrels of crude oil daily were produced from so-called tight oil resources. The other name for these is unconventional resources. Yet a third and a lot more popular name is shale.
Shale is a porous rock that traps hydrocarbon molecules in its pores and makes their release tricky. Or it used to be tricky. Back in the early 20th century, a technology called hydraulic fracturing was developed that allowed the extraction of those hydrocarbon molecules from the pores of the shale rock.
Some trace the origins of fracking back to the 19th century when some producers used liquid and solid nitroglycerin to stimulate yields from oil wells in several U.S. states. Modern fracking, luckily for all involved, does not use nitroglycerin. It uses water, chemicals, and sand.
Although known for decades, fracking only gathered pace in the early 2000s after a landmark study by the Environmental Protection Agency, which concluded that hydraulic fracturing does not pose a contamination threat to drinking water resources. What followed this study was aptly named a revolution.
A historical U.S. oil production chart by the Energy Information Administration reveals a fascinating story. Until about the end of 2010, production grows gradually and consistently, with a few dips here and there following the industry boom and bust cycles.
From 2011 onwards, growth is no longer smooth and gradual—it is a literal spike from around 5.6 million barrels daily at the end of 2010 to 13 million barrels daily by late 2019. All thanks to fracking.
Fracking, which not everyone in the oil and gas industry likes, by the way, because it was used as a euphemism for a curse word on Battlestar Galactica, turned the United States into the world’s biggest oil producer and also the world’s biggest gas producer. It was gas production that hydraulic fracturing was first used for, and only later expanded to oil.
To date, despite slowing production growth and forecasts from some analysts that the revolution is over for good, hydraulic fracturing still contributes the bulk of U.S. total oil and gas production and keeps it higher than anyone back in the 1970s, for instance, could have expected.
The process of hydraulic fracturing is simple, on the face of it. It involves drilling a well into the shale rock and injecting into it a mixture of water, chemicals, and what the industry calls proppant, or a special sort of sand, that lodges in the porous rock and keeps the pores open so the oil and gas can ooze out and be collected from the well.
Yet simple does not mean easy. Fracking requires massive amounts of the abovementioned materials—the longer and deeper wells become, the more water, chemicals, and sand fracturing them requires. Then there is the wastewater problem.
A few years ago, Oklahoma drew media attention because of the significantly increased frequency of earthquakes since the start of the shale boom. The state, one of the big oil producers in the U.S., had negligible seismic activity before 2009, when fracking really took off. By 2016, Oklahoma was recording an average of two quakes a day—what was earlier the average for a year. To date, quakes are just as frequent.
Some blame hydraulic fracturing for unsettling the rock and stimulating seismic activity. The U.S. Geological Survey conducted a study and found that it’s not fracking itself that is the problem. The problem was the massive amounts of wastewater that get disposed of in underground reservoirs after the fracturing process is completed.
Wastewater wells, the USGS said in its study, operate longer than it takes to frack a production well, and they absorb greater quantities of fluid. This is what causes increased seismic activity, according to the USGS, which only found a causal link between fracking and quakes for just 2% of quakes in Oklahoma.
Wastewater disposal regulations have expectedly tightened since that study was published but opposition to hydraulic fracturing has not diminished—at least outside the United States.
Amid the energy crunch last year in Europe, some from the industry called on European governments to start exploiting their own, sometimes considerable, shale oil and gas resources. The backlash was immediate and powerful, just as it was years earlier when it led to fracking bans in France, Bulgaria, Denmark, and the Netherlands.
In some cases, however, it’s a question of economic viability. Poland, for example, has ample shale resources, but extensive exploration failed to find a way to extract these economically. Norway, too, declared its shale resources uneconomical, focusing on conventional offshore drilling.
Whether hydraulic fracturing has been a boon or a bane depends on the perspective. From an energy security perspective, it has most certainly been a boon, and not just for the United States.
Argentina is now drawing on U.S. producers’ experience to develop its own shale oil and gas riches in the Vaca Muerta formation, and Europe has enjoyed a steady flow of American oil and gas, most of them extracted from the same shale formations exploiting which Europe’s shale-rich countries have banned.
Yet in a reminder that there is always a tradeoff, Oklahoma still experiences earth tremors on a much more frequent basis than it did before the shale revolution began. There is also growing pressure on the industry to reduce its methane emissions, which are considerable. The industry is working on that. After all, methane is a marketable product—another fruit of the shale rock.
By Irina Slav for Oilprice.com
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