Thursday, February 10, 2011

Horizontal Fracturing To Raise Crude Production 20%

New technique estimated to be able to reduce oil imports by half, increase domestic production 2 million barrels per day – more than what is produced in all of the Gulf

A new fracturing technique combined with horizontal drilling into strata of shale is expected to pull U.S. crude production of out a two-decade slump in domestic production.

International bankers such as Ed Morse, head of commodities research at Credit Suisse, claim that the nation's domestic production could be boosted as much as 20 percent over the next 5 years. By 2015, engineers say, new fields in which the Bakken technique is used could yield as much as 2 million barrels a day – more than the entire Gulf of Mexico produces now.

Drillers first tried it in a 25,000 square-mile area of North Dakota and Montana called the Bakken field because the company that developed the technique is named Bakken Production.

“That's a significant contribution to energy security,” said Credit Suisse's Mr. Morse.

Within 10 years, U.S. petroleum imports could be reduced by more than half.

Drillers then proved up the Bakken technique in the Eagle Ford field in South Texas. By using certain chemicals in the fracturing process, they were able to free up more oil by a factor of 11-fold – at low enough cost to make it a viable alternative to importing oil from halfway around the globe.

The technique employs what has been called an “environmentally questionable” method of drilling horizontally into shale, pumping water, sand and chemicals into the hole under intense pressure to crack the soft rock and allow gas to flow up from lower deposits, and pumping the crude out of the well.

Because the oil molecules are much larger and very sticky, engineers at first thought they wouldn't be able to squeeze out enough oil to make it economically feasible to drill this way.

But the efficacy of the Bakken method has been used to squeeze out record amounts of oil and gas all over North Dakota, Colorado, Texas and California. Energy companies are pouring billions in investment on the hunch that the Bakken method will make them beaucoup return on the investment.

"We've completely transformed the natural gas industry, and I wouldn't be surprised if we transform the oil business in the next few years too," says Aubrey McClendon, chief executive of Chesapeake Energy, which is using the technique.

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