Although energy producers have utilized fracking since the 1940s, today’s fracking revolution results from recent technological advances and new oil and natural gas discoveries. Hydraulic fracturing, or fracking, extracts oil and natural gas from shale rock by drilling thousands of feet below the earth’s surface and then injecting water, sand, and trace chemicals under high pressure to create cracks in the shale formations, thus releasing oil and natural gas.
By some estimates, fracking could raise average the U.S. household income by $2,700 per year and create 1.2 million new jobs by 2020.
“The United States is not just the world’s leader in natural gas production, but now produces more natural gas than the entire Middle East combined. The reason for this is hydraulic fracturing combined with directional drilling and advanced underground imaging technology. These technologies allow people to literally produce natural gas and oil from solid rock,” explains Dan Simmons, vice-president of policy for the Institute for Energy Research.
Cracking the Shale Code
The technologies of hydraulic fracturing and horizontal drilling are revolutionary, says Mark J. Perry, Ph.D., a scholar at the American Enterprise Institute.
Both were developed by a fringe group of “petropreneurs” like Harold Hamm and George Mitchell over many decades of trial and error, Perry said.
“Oil companies and petroleum engineers and industry insiders have known for years oceans of shale oil and shale gas were trapped in shale rock formations miles below the ground, but they couldn’t figure out the right drilling and extraction technologies to economically access the shale resources until about 2008, when the fringe wildcatters managed to crack the shale code, which involved the right combination of water, sand, and additives to crack the shale rock and release the shale resources,” said Perry.
The fracking revolution has increased U.S. crude oil production 80 percent since 2008 (from 5 to 9 million barrels per day). This has resulted in an 88-cent drop in average retail gas prices since April 2014 ($3.71 to $2.83 per gallon) translating into about $118 billion, or more than $1,000 per U.S. household, in savings if prices remain low for the remainder of 2014.
Kenneth Artz ([email protected]) writes from Dallas, Texas.