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Fracking Smarter
Can “Walking” Rigs Carry Shale at $45?

Shale producers are rolling out a new kind of oil rig that’s capable of moving from one well to the next…all on its own. Bloomberg reports:

Some of the newest rigs can travel hundreds of yards to the next well under their own power, lurching along like 150-foot-tall robots on hydraulic legs that raise the equipment five inches at a time, nudging forward at about a foot per minute. While that sounds slow, it is faster and cheaper than dismantling a rig and trucking the parts to a new site nearby.

More efficient drilling rigs that cost a third less than just a year earlier are changing the face of the U.S. shale industry, helping boost per-rig output in the four largest fields by at least 40 percent since the crude price plunge began in 2014.

Sure, the thought of an oil rig lurching from one pad to another on pneumatic stilts may sounds a little strange or even unsettling, but it’s one of many innovations that is helping shale producers keep the output up at levels well below what many predicted would be prohibitively cheap for fracking.

Much has been made about the dramatic drop in the U.S. rig count since the beginning of the year, but that metric is looking increasingly dated with the number of innovations the industry has produced. Rigs are able to drill multiple wells from one pad, and they’re able to do so quicker and ever more productively. Now, apparently, they’re able to move from one well to the next without requiring disassembly and transportation by truck, yet another time saver.

These sorts of tweaks aren’t going to stop. The shale industry is going to continue to find ways to streamline processes that will enable it to continue to drill and turn a profit, even in today’s bearish market. And as good as that is for American energy security, it’s even worse for the Saudi-led OPEC strategy of choosing not to cut production in the hopes that U.S. fracking would fold first. That petrostate cartel is playing a high-stakes game of chicken with our shale producers, and those companies are showing no signs of backing down from the challenge.

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  • Jacksonian_Libertarian

    I’ve been saying all along that I would put my money on the American Shale Oil Developers that are exposed to the all important “Feedback of Competition”, over the Government Monopoly owned State Oil Monopolies of OPEC. I’ve even mentioned the drilling of numerous wells from the same site with each well heading off in a different direction like spokes of a wheel, as a reason for the massive drop in oil rigs even while production was continuing to skyrocket. It also needs to be said that the American Shale Oil Developers are for the most part small companies, with unrecognizable names and without the burden of the limited monopolies that Big Oil Businesses like Exxon, Shell, or Chevron carry. It should also be recognized that it is exactly those Big Oil companies that foreign governments have been hiring to develop their Shale Oil Deposits, and have miserably failed with a diverse number of likely excuses for their failures.

  • Andrew Allison

    Any evidence for “the Saudi-led OPEC strategy of choosing not to cut production in the hopes that U.S. fracking would fold first.”? The bulk of OPEC production is light crude, of which the US currently imports essentially none. In other words, OPEC is competing with non-US producers.

    • f1b0nacc1

      “Forget it Jake, it’s Chinatown”
      This is their obsession, and they aren’t going to give up on it anytime soon…

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