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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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What about oil?

The common wisdom in the industry was that the process Mitchell had invented for natural gas wouldn't work for oil. Oil molecules are bigger and stickier than gas molecules, so petroleum engineers believed it would be impossible to get them to flow from source rock, even if the rock were cracked by fracking. But Mark Papa, the CEO of a small oil and gas company called EOG Resources, didn't accept that.

“The numbers were too intriguing, the prize was so big,” he remembered.

He thought there could be as much as a billion barrels of oil within reach in Texas, North Dakota and elsewhere — if only he could squeeze it out.

In 2003, he had a “eureka!” moment while poring over pictures of rock. Sections of a 40-foot-long column of source rock had been run through a CT scanner, the same type used to peer into the human body.

He saw something in the source rock sections the rest of the industry didn't know was there: a network of passageways big enough for oil molecules to pass through. Papa believed the passageways could act like rural roads for the oil to travel through. Fracking could then create superhighways for the oil to gather and feed into a pipe and up to the surface.

EOG began drilling test wells, and in 2005, Papa got some results from one in North Dakota that made him realize oil could flow fast enough to pay off.

“It was kind of like holy cow,” he said. “My first thought was we need to replicate this, make sure it's not a freak result.”

It wasn't.

New expectations

Papa thought the Eagle Ford might hold 500,000 barrels of oil. The Department of Energy now predicts it holds 3.4 billion. Some even expect 10 billion, which would make it the biggest oil field in U.S. history.

But even after drillers figured out how to find oil and gas deep offshore and in onshore source rock, they still needed to develop technology that would make it economical.

At the tip of every oil or gas drill is a rotating mouth of sharp teeth that chews through rock. In the past, these drill bits could only dig straight down. Now they are agile enough to find and follow narrow horizontal seams of rock.

And behind the drill bit, attached to a long line of steel known as the “drill string,” is an array of sensors that collect data about the rock and underground fluids.

The data, which is sent to engineers via fiber-optic cables, is run through supercomputers as powerful as 30,000 laptops to create a picture of the earth thousands of feet below the surface.

“To the layman, it looks like dumb iron, but you'd be shocked about what's inside,” says Art Soucy, president of global products and services at Baker Hughes.

Moving forward

When the drilling is done, the rig itself can “walk” a hundred feet or so to another location and start drilling again. In the past, rigs had to be taken down and reassembled, which could take days.

“It has made possible things that were unthinkable 10 years ago,” said Claudi Santiago, managing director at First Reserve Corp., a private-equity firm that invests in energy companies.

Renewable technologies have had their successes. Solar now generates six times more electricity in the U.S. than it did a decade ago, and wind produces 18 times more. Most major automakers offer some type of electric vehicle.

But the outlook for wind, batteries and biofuels is as dim as it's been in a decade. Global greenhouse gas agreements have fizzled.

Dazzling discoveries have been made in laboratories, and some of these may yet develop into transformative products, but alternative energy technologies haven't become cheaper or more useful than fossil fuels.

More changes?

It's certainly possible the world will change direction again in the next five years. After all, experts didn't see the oil and gas boom coming five years ago.

There are hundreds of companies, including fossil fuel giants, working on renewable-energy projects. And despite growing supplies of oil, prices remain high because developing nations are consuming more.

But EOG's Papa says oil and gas companies will just invest in even more sophisticated technology. He estimates that current techniques pull only 6 percent of the oil trapped in source rock to the surface. Learning to double that would yield yet another enormous trove of hydrocarbons.

“Now we go into the next phase of technology,” he said. “How are we going to get the rest of it out of the ground?”