<< Chapter < Page Chapter >> Page >

Rapid decline rates in shale wells are not only reasons for caution in predicting U.S. oil independence over the next few years. Fracking as practiced in the U.S. is expensive ($5 million per well and up). High prices, reaching a peak of over $120 per barrel (2014) have attracted high investment levels in shale-bearing regions. Fracking operations turn out to be quite sensitive to oil prices. From June 2014 to mid-November 2014, oil prices per bbl. (Brent prices)

The reader should be aware that there are two distinct benchmark prices for petroleum: the Brent price and the price for West Texas crude. The Brent price (named after the Belgian port) is typically used in reference to prices in Europe, Africa, South Asia and parts of East Asia. The West Texas crude price is ordinarily quoted for U.S.-source crude.

The Brent price is typically 10% to 15% above that of West Texas crude. In July 2014, the Brent price was $115 per barrel, versus $106 for West Texas crude. Both prices dropped sharply by December 2014: the Brent price was $60/ bbl., while that for West Texas crude was $55. This figure is based on a sample of operating costs in eight large independent firms. Some firms, however, have costs exceeding $40/bbl. The sample is cited in the Economist, December 6, 2014. p.81.

fell by 30%, to $82.00 and then to $62.00/bbl. in mid-December. The International Energy Agency predicted that this price decline, if not reversed, could lead to a 10% decline at least in U.S. shale investments in 2015. This would eventually place at risk any sustained energy independence for the U.S. By January 2015 the price of Texas crude had fallen to $48.00/bbl. Even if oil prices were to fall below $50/bbl, wells that are already in place would continue to produce, because capital costs have already been sunk. Operational (variable) costs lie well below $50 for all but the most inefficient firms. Operational costs of independent drillers in 2014 averaged less than $20/bbl. This even at $50/bbl oil would continue to flow from wells already in place, but at the rapid decline rates noted above.

In any case, it is apparent that the combination of the innovation of directional drilling and octopus drilling with changes in fracturing practices that has been responsible for the huge recent increases in gas and oil output reserves in the U.S. and elsewhere, especially from shale formations.

By 2015 the shale boom in the quest for hydrocarbons has hardly begun in the rest of the world, especially in emerging nations (see Figure 15-6).

The reader may wonder why the discussion on shale, directional drilling/fracking has been presented in such detail. There is in fact a very good reason. These developments have already begun to materially change the world energy picture, not only as it pertains to developed nations, but to emerging nations as well. Notable environmental risks may also be involved. But that is not all. The reverberations from shale will resound down through the next 30 years, and will affect the lives of hundreds of millions worldwide.

Questions & Answers

what is variations in raman spectra for nanomaterials
Jyoti Reply
I only see partial conversation and what's the question here!
Crow Reply
what about nanotechnology for water purification
RAW Reply
please someone correct me if I'm wrong but I think one can use nanoparticles, specially silver nanoparticles for water treatment.
Damian
yes that's correct
Professor
I think
Professor
what is the stm
Brian Reply
is there industrial application of fullrenes. What is the method to prepare fullrene on large scale.?
Rafiq
industrial application...? mmm I think on the medical side as drug carrier, but you should go deeper on your research, I may be wrong
Damian
How we are making nano material?
LITNING Reply
what is a peer
LITNING Reply
What is meant by 'nano scale'?
LITNING Reply
What is STMs full form?
LITNING
scanning tunneling microscope
Sahil
how nano science is used for hydrophobicity
Santosh
Do u think that Graphene and Fullrene fiber can be used to make Air Plane body structure the lightest and strongest. Rafiq
Rafiq
what is differents between GO and RGO?
Mahi
what is simplest way to understand the applications of nano robots used to detect the cancer affected cell of human body.? How this robot is carried to required site of body cell.? what will be the carrier material and how can be detected that correct delivery of drug is done Rafiq
Rafiq
what is Nano technology ?
Bob Reply
write examples of Nano molecule?
Bob
The nanotechnology is as new science, to scale nanometric
brayan
nanotechnology is the study, desing, synthesis, manipulation and application of materials and functional systems through control of matter at nanoscale
Damian
Is there any normative that regulates the use of silver nanoparticles?
Damian Reply
what king of growth are you checking .?
Renato
What fields keep nano created devices from performing or assimulating ? Magnetic fields ? Are do they assimilate ?
Stoney Reply
why we need to study biomolecules, molecular biology in nanotechnology?
Adin Reply
?
Kyle
yes I'm doing my masters in nanotechnology, we are being studying all these domains as well..
Adin
why?
Adin
what school?
Kyle
biomolecules are e building blocks of every organics and inorganic materials.
Joe
anyone know any internet site where one can find nanotechnology papers?
Damian Reply
research.net
kanaga
sciencedirect big data base
Ernesto
Introduction about quantum dots in nanotechnology
Praveena Reply
what does nano mean?
Anassong Reply
nano basically means 10^(-9). nanometer is a unit to measure length.
Bharti
do you think it's worthwhile in the long term to study the effects and possibilities of nanotechnology on viral treatment?
Damian Reply
absolutely yes
Daniel
how did you get the value of 2000N.What calculations are needed to arrive at it
Smarajit Reply
Privacy Information Security Software Version 1.1a
Good
Got questions? Join the online conversation and get instant answers!
Jobilize.com Reply

Get the best Algebra and trigonometry course in your pocket!





Source:  OpenStax, Economic development for the 21st century. OpenStax CNX. Jun 05, 2015 Download for free at http://legacy.cnx.org/content/col11747/1.12
Google Play and the Google Play logo are trademarks of Google Inc.

Notification Switch

Would you like to follow the 'Economic development for the 21st century' conversation and receive update notifications?

Ask