Oil drilling technology leaps while clean energy stumbles

Oil companies have used technology to find a bounty of oil and natural gas so large that worries about running out have melted away. New imaging technologies let drillers find oil and gas trapped miles underground and undersea.
By JONATHAN FAHEY Modified: May 2, 2013 at 7:45 pm •  Published: May 3, 2013
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— Technology created an energy revolution over the past decade — just not the one we expected.

By now, cars were supposed to be running on fuel made from plant waste or algae — or powered by hydrogen or cheap batteries that burned nothing at all. Electricity would be generated with solar panels and wind turbines. When the sun didn't shine or the wind didn't blow, power would flow out of batteries the size of tractor-trailers.

Fossil fuels? They were going to be expensive and scarce, relics of an earlier, dirtier age.

But in the race to conquer energy technology, Old Energy is winning.

Oil companies big and small have used technology to find a bounty of oil and natural gas so large that worries about running out have melted away. New imaging technologies let drillers find oil and gas trapped miles underground and undersea. Oil rigs “walk” from one drill site to the next. And engineers in Houston use remote-controlled equipment to drill for gas in Pennsylvania.

A new abundance

The result is an abundance that has put the United States on track to become the world's largest producer of oil and gas in a few years. As domestic production as soared, oil imports have fallen to a 17-year low, the U.S. government reported Thursday.

And the gushers aren't limited to Texas, North Dakota and the deep waters of the Gulf of Mexico. Overseas, enormous reserves have been found in East and West Africa, Australia, South America and the Mediterranean.

“Suddenly, out of nowhere, the world seems to be awash in hydrocarbons,” said Michael Greenstone, an environmental economics professor at the Massachusetts Institute of Technology.

The consequences are enormous. A looming energy crisis has turned into a boom. These additional fossil fuels may pose a more acute threat to the earth's climate. And for renewable energy sources, the sunny forecast of last decade has turned overcast.

Technological advances drove a revolution no one in the energy industry expected. One that is just beginning.

Nearing the end?

The new century brought deep concerns the world's oil reserves were increasingly concentrated in the Middle East — and beginning to run out. Energy prices rose to record highs. Climate scientists showed that reliance on fossil fuels was causing troubling changes to the environment.

“The general belief was that the end of the oil era was at hand,” said Daniel Yergin, an energy historian and author of “The Quest: Energy, Security and the Remaking of the Modern World.”

As a result, Wall Street, Silicon Valley and governments were pouring money into new companies developing alternative forms of energy that promised to supply the world's needs without polluting.

But while the national focus was on alternatives, the oil and gas industry was innovating too. New technology allowed drillers to do two crucial things: find more places where oil and gas is hidden and bring it to the surface economically.

Offshore discoveries

Large oil companies such as Exxon, Chevron, Shell and BP turned up huge discoveries offshore in ultra-deep water with the help of faster computers and better sensors that allowed them to see once-hidden oil deposits.

Onshore, small drillers learned how to pull oil and gas out of previously inaccessible underground rock formations.

For most of the oil age, drillers have looked for large underground pools of oil and gas that were easy to tap. These pools had grown over millions of years as oil and gas oozed out of what is known as source rock. Source rock is a wide, thin layer of sedimentary rock — like frosting in the middle of a layer cake — that is interspersed with oil and gas.

Horizontal thinking

An engineer named George Mitchell and his company, Mitchell Energy, spent years searching for a way to free natural gas from this source rock. He finally succeeded when he figured how to drill horizontally, into and then along a layer of source rock. That allowed him to access the gas throughout a layer of source rock with a single well. Then he used a process known as hydraulic fracturing, or “fracking,” to create tiny cracks in the rock that would allow natural gas to flow into and up the well.

The United States, which was facing a gas shortage five years ago, now has such enormous supplies it is looking to export the fuel in large volumes for the first time.

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