Fracking is an innovation of unlocking the local shale resources that is not acceptable to many countries. These countries are not open to free flow of ideas and investment. They are afraid of local competition. The commercial production of oil and gas from shale is not a new principle because the history of any industry will show that using shale resources has been done in the past.
While other countries lock themselves from fracking, North America and Canada continuous to rise. Very soon these countries will become natural gas exporters. They have cut their importation of oil by 50%. In the United States crude exportation is still constrained by law, but the country is enjoying the benefits of cheaper crude by exporting refined products which is legally allowed. Last year the US had the biggest increase in oil and gas production.
What is the Effect of Fracking on Oil and Gas Production?
- With the abundant supply of natural gas, the locality becomes an attractive place to do business, especially for energy-intensive industries. Some oil companies have announced plans to construct petrochemical plants around the proximity of natural gas production. There is an emergence once more of manufacturing opportunities. Pipe and tube producers are building factories for seamless pipes that can be used for fracking.
- Oil and Gas production will increase significantly because many companies will be using fracking which is by far, less costly than oil rigs for fossil fuel.
- Even if shale gas is cheaper, with abundant supply oil and gas production is assured of continuous revenues.
- Local competition cannot be avoided, but since there is abundant supply, there is always fair share for all companies producing oil and gas.
Re-fracking is another development for oil and gas production. The term refers to the practice of going back to older shale wells that have been fracked and using newer and more effective extraction technologies, go deeper and doubling the lateral sections of the well. It is less costly that investing on new wells. They will just maximize their investments in order to reach a larger production area from a single surface drilling location. It is also a way of boosting the number of stages of the well that has already been fracked. There are more than 50,000 existing wells in the United States that are potential candidates for re-fracking. This is a possible market for oilfield services companies.