American Shale Energy and the Global Economy by Andrew R. Thomas

Author:Andrew R. Thomas
Language: eng
Format: epub, pdf
Publisher: Springer International Publishing, Cham

Photo Courtesy of the Ohio Oil and Gas Association

When drilling into a hydrocarbon bearing formation 100 feet thick, vertical drilling would allow an operator to contact 100 feet of rock, which would reduce the potential recovery to whatever oil or gas might flow into that length of pipe. Horizontal drilling now allows these same operators to drill and set pipe for a mile or more horizontally through this same rock formation. The driller is now contacting and fracturing 5200 feet of rock rather than 100 feet, which exponentially multiplies expected well recovery rates and provides massive economies of scale.69 The technology employed is so advanced and exacting that drillers today can hit a target at the end of a drill string that is 10,000 feet vertical with a mile-long horizontal section that is no more than a few inches in diameter.70

In the USA over the past 12 years, the precision and scale of hydraulic fracturing and horizontal drilling have combined with unique American characteristics to give the nation’s shale energy revolution its full weight. Carbon-containing shale rock is located in many different regions around the world. It is not exclusively within the United States. The fracturing and drilling techniques now being used are widely known to anybody with an Internet connection. Still, the shale energy revolution remains almost an exclusively American affair. This is not to say that other nations are not exploring—or already exploiting—this natural resource. The UK, Argentina, Ukraine, and China, among others, are ramping up their domestic shale energy industries. Yet, it is in America where the results have been truly staggering. The reason for the tremendous success in the USA can be attributed to some particular moving parts that have coalesced around shale energy to make it all possible.

First, of course, is geology. In this respect, nature has been tremendously kind to the USA. The conditions needed to unfold over hundreds of millions of years to generate carbon-producing shale rock occurred in many places across America’s geology. Luck seemingly has its privileges.

Next is the distinctive American way that property rights and mineral rights are viewed. In every other nation in the world, the owner or leaser does not hold any mineral rights attached to any piece of private property. Instead, the national government controls them. Any decision on how to access those minerals is a government decision at the highest levels. In the USA, the opposite is the case. Mineral rights are privately held and can be passed to the new property owner, or held separately. This has meant that those who own mineral rights are able to allow energy exploration companies to do their work.

Doing the work is no easy matter. America’s long history of energy development throughout the Carbon Age has created generations of the world’s top geologists, petroleum engineers, geophysicists, surveyors, pipeline layers, drillers, welders, and journeymen. The collective learning in these fields over decades has given America all the labor she’s needed to make the shale energy revolution come to life.

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