It appears that the oil and gas industry is hitting the brakes. With global oil prices down nearly 60% since June 2014, companies are in the process of deciding whether to continue or stop production. Recently, most appear to be favoring the latter option. According to industry reports, the oil rig count fell sharply in January, dropping from 1,482 to 1,421. In addition, Baker Hughes, an oilfield service provider, just announced that it would lay off approximately 7,000 employees in the first quarter of the year. How did we get here?
Although the answer to that question is complicated, part of the solution is scientific innovation. For the last fifty years, the U.S. oil and gas industry has been developing and advancing the use of hydraulic fracking in oil drilling. Although more expensive, the implementation of fracking has revitalized the competitiveness of the U.S. oil and gas industry. Fracking has done so well that the U.S. has shifted from a net importer of oil to a net exporter.
In fact, when the fracking revolution is coupled with other scientific achievements, like those that have increased the range a car can go on a single tank of gas, the results are a real threat to traditional oil producers like the Organization of the Petroleum Exporting Countries (OPEC).
Recognizing this threat, OPEC has taken drastic action. By not cutting current output, they are hoping to drive the price of oil down to a point where fracking oil becomes unprofitable and therefore drives U.S. companies from the market. This strategy has resulted in the current market oversupply of oil and the steep price drop noted earlier.
However, just as scientific innovation got us into the oil crisis, it can also get us out. Below are a few ways that science is helping the U.S. oil and gas industry be more efficient and continue to compete globally:
- Well Efficiency – The best way to lower the cost of fracking oil is to increase the efficiency of fracking wells. Recently, new technology such as “super fracking” has enabled producers to increase the productivity of wells. For example, sites that have deployed super fracking have seen an increase from 400 barrels a day to 600 barrels a day thanks to the advancement. This lowers the breakeven price of a well and allows them to operate, even with a lower price of oil.
- Increase Recovery Rate – Another problem with fracking wells is that a portion of the oil or gas is lost during the extraction process. In conventional wells, this accounts for approximately 10% of pumped oil. In fracking wells, it can be as high as 40%. However, scientists are working on ways to decrease this amount and improve the total amount recovered. Capturing this loss will also help the oil and gas industry stay competitive at lower prices.
To accomplish these scientific achievements and many more in the future, laboratories that support oil and gas extraction need to become more efficient. This should include implementing digital tools, like an electronic laboratory notebook (ELN).
ELNs offer many benefits to the oil and gas industry, including the ability to involve multiple team members, regardless their geographical location. This is accomplished by centralizing all of the documentation within a database that is accessible to everyone. This allows information to be easily shared between team members, no matter where they may be working.
Although U.S. fracking appears to be cooling, it is not over. As long as companies continue to invest in scientific innovation, the U.S. oil and gas industry will continue to grow, despite low oil and gas prices. ELNs can help this growth by reducing the difficulties and challenges associated with collaborating and sharing information across teams, allowing them to continue to innovate.
For more information regarding the BIOVIA Notebook and how it can help your laboratory, please visit our website today.