Over the past five years exploitation of abundant gas and oil bearing shale basin formations by combining and augmenting two long-standing technologies has revolutionized North American energy markets. If you are at all involved in the energy industry you know that these technologies – horizontal drilling and hydraulic fracturing - are bigger than Bieber right now. Maybe bigger than Taylor Swift. Today we explain how they work and why they are so important.
Shales and Unconventional Reservoirs
When oil and gas explorers (think bushy beards and splattered overalls) talk about shale they generally refer to “unconventional” reservoirs. Conventional reservoirs are underground geological structures that trap oil and gas in porous rock formations where the molecules can flow like liquid in sponges. These reservoirs are the low hanging fruit of the oil and gas universe. You do a lot of fancy work with sound waves and computers (seismic) and then you drill a hole in the ground. If you drill in the right place the oil (or gas) comes gushing up and you are a hero. Trouble is, nearly all the low hanging fruit in North America is gone now. You have to go looking in far off, dangerous places and deep in the oceans.
In unconventional reservoirs the oil and gas is trapped in tight formations such as tight sands and shales. Producers have always known that the shales and similar formations were the ‘source rock’ for oil and gas that percolated over millions of years into the conventional reservoirs. Knowing it was there did them no good because the oil and gas in the rock is unable to flow very far due to the low permeability of these formations. So they could drill into the formation but very little oil or gas would flow into the well bore.
That’s where hydraulic fracturing comes in – but first a word on drilling techniques – vertical and horizontal.
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