The shale revolution came about because drillers combined two technologies—hydraulic fracturing and horizontal well drilling—to successfully plumb hydrocarbons from rock formations that were previously thought to be inaccessible. Now, analysts believe companies could deploy horizontal well drilling in conventional oil fields to boost production. Bloomberg reports:
From Texas to North Dakota, [horizontal drilling] still stands to boost production from old, conventional wells where low permeability has restricted extraction to a fraction of their potential, an IHS Markit studyshowed. Of the 46,000 horizontal wells surveyed, only 10 percent were in so-called tight conventional plays being drilled anew for more crude, signaling there’s considerable untapped potential across the country, IHS Markit said.“When you’ve got the vertical well already drilled and then you drill it horizontally, you don’t have all the costs of initially drilling the well,” said Stephen Trammel, director of North American well and production content at IHS Markit. “You’ve already got pipelines there, you’ve already got infrastructure.”“You’re saving a tremendous amount of money,” he said. “I think it will have implications worldwide.”
There’s a lot that makes sense about this idea. The vertical wells in these old oil fields have already been drilled, and the pipeline infrastructure connecting them to refineries is already in place. If companies can figure out how to restart production in places that have already been written off as past their prime, America’s oil output could be set for a welcome shot in the arm, and our already rosy energy security outlook is going to look that much better.Stepping back a bit, the shale revolution came about because companies took risks—calculated, but risks nonetheless—on the deployment of two technologies that previously were believed to be unrelated. In doing so they made fools of the “Peak Oil” crowd and strengthened not only America’s energy position, but also helped provide the global market with a stable new supply of oil. That same innovative spirit has helped fracking firms stay afloat in a bearish market, and it could also create a host of new opportunities in old conventional fields, if this new analysis is anything to go on.