The shale revolution was set off when two technologies—horizontal well drilling and hydraulic fracturing, or fracking—combined in a novel way to tap previously inaccessible oil and gas reserves trapped in shale rock. Critics have cited these wells’ high depletion rates as a portent of a coming bust to match the boom, but fracking firms are so far proving those doubters wrong, as they experiment with a variety of ways to get more out of their reserves. The FT reports:
[E]xperimentation has made Eagle Ford and other shale formations, including Bakken in North Dakota and Permian Basin in west Texas, the oil industry’s equivalents of Silicon Valley.The shale boom is not a one-off event but a permanent revolution, with companies constantly pushing back the frontiers of the technology to cut costs and improve well productivity…“We are a gigantic innovation machine,” says Greg Leveille, Conoco’s general manager for unconventional resources such as shale. “We put a lot of effort into trying to find the optimal combination of fracturing techniques.”
Significantly, companies are extracting more oil and gas per well than ever, as they refine processes and find new tweaks that continue to boost production, for example by changing the contents of the slurries they pump underground to fracture shale.Oil and gas are finite resources, but the end of the shale boom isn’t yet in sight. Malthusians have been predicting peak oil for decades, but humanity keeps proving them wrong by innovating and applying new technologies to access new reserves. All around us, we see evidence of the accelerating pace of technological change. You’d be hard-pressed to find a better example of that than North Dakota’s booming oil and gas fields.